In his latest column for B&T, industry rabble-rouser Robert Strohfeldt argues there’s one small problem with our digital addiction and that’s a possible lack of fact checking…
I look at the digital era from the year 2000-on – when the tech wreck started recovering strongly (it is also a nice round number).
Media ratings have always had legitimate detractors, but TV, radio and print audience research compared apples to apples. And there were not that many apples back then.
The majority working in marketing and advertising would strongly disagree with the following yet, Google publishes the following and hardly a peep is heard: “Our latest research with Ipsos suggests people are 3x more likely to pay attention to online video ads vs. television ads.1 And within online video, people pay nearly 2x more attention to video ads on YouTube than they do on other social media.2 That’s because on YouTube, ads are more likely to be seen and people are more likely to arrive with intent to watch video—2X more likely than other online platforms.”
And enough has been written and said about the accuracy of Facebook’s claims of advertisers’ audiences.
“Content” has become a staple and people making videos to plonk on YouTube in the hope of earning money is reminiscent of the late 1800s gold rush days. Tens of thousands set out to make their fortune, but only a tiny percentage found enough gold to cover living expenses, let alone a fortune.
According to YouTube, it would take a person around 60,000 years uninterrupted to watch every video on YouTube. A Lotto entry has far greater odds of succeeding. Social media has made it possible for an individual to become a publisher from their bedroom. But whether it is the pre or post digital era, creating content that has huge appeal is extremely difficult and requires luck along with talent. The people who do make money are more than likely those who “teach” how to make money on YouTube
- Total audience of 1.3 billion.
- Over 30 million visitors per days
- Almost five billion videos are watched every single day.
- The average video length was four minutes and 20 seconds
- Basic maths gives you the average visitor spending over 700 minutes a day (bit over 12 hours, every day?)
Recently I watched an interview, on YouTube, shot at Cannes with a person who had developed a successful content business. (The most interesting element was counting the number of times the person being interviewed used the word “like”. I lost count at 50).
Some very insightful observations were made:
- “Like, every brand has to own a minute” (I was left wondering what the price of a minute was and if bought in bulk, was a discount given?).
- “Your content needs to make the consumer’s life, like, better”
- “At every dinner party conversation is like, ‘what video are you binging on?’” (Suggest, as Google would say, expand the friendship base to people who have more in their life than trolling the internet for videos,)
- “Consumers have a voracious appetite for video” Like wasn’t used, though it left me wondering what consumers were being spoken about.
In Social Media Examiner I read an interview with some guy who has developed over 50 videos each with a million or more, well not quite sure what, as no accurate method has been derived to measure online audiences.
But I am glad I did. This gentleman unlocked the secrets to success. Before making a video, make sure you know:
- Who is it for? (I think that is called Target Market. Very 21st century)
- What it is about? (Fuck me, now it was getting complicated)
- What makes you different?
- Value proposition. (Another 21st century concept, though I am struggling to understand the difference between this and point three).
- Find a niche that will grow. (Do you water it, or add nutrients?)
And he seemed to really understand Millennials. He used a hypothetical video about food as an example: “Millennials want to know how to make nutritious food with the least amount of effort and time.”
I thought that a lot of people who are time poor would be interest in this, but apparently, it is age dependent.
The basics of marketing and advertising have not changed, but the environment has changed enormously. Consumers are inundated with advertising (have seen estimates ranging from 4,000 to 10,000 a day) and try buying something and not receive a survey asking you to rate your experience. (It the Virgin lounge last Sunday morning, I received three texts from them within a 20- minute period.)
Also amusing (though not for investors), is the value the market puts on just about anything “digital”.
- $47 billion, WeWork is one of the world’s most valuable start-up’s — but the way its business works is widely misunderstood. The company filed its S-1 earlier this month and reported $1.4 billion in operating losses in H1’19 alone.
- Netflix, prior to the hook up with Foxtel was trading at a P: E of 174:1 (If you invest a dollar, will get it back in 174 years).
- Uber lost $5 billion in the second quarter of 2019. Yet it has a market cap of $75.5 billion. Lose well over a $1 billion a month and you’re worth is far greater than any “traditional company”.
- Tesla, a darling of the digital era, had revenues of $4 billion in 2018, but posted a loss of $520 million. They did make a $139 million profit in the final quarter of 2018. A profit the third quarter was the first time in its 15 – year history that it posted two consecutive profitable quarters. But, alas, the 2018 full calendar year result was a billion-dollar loss.
What other company could run for 15 years, losing money and still be around?
The list of non-profitable “digital players” goes on and on.
Blue sky is obviously the most valuable commodity of the 21st century.
There are many who say marketing has changed completely in the “digital era”. Interestingly, this belief is always expressed by people who were not in the industry before the year 2000 i.e. in the pre-digital days.
The best explanation how the basics have not changed is the example of people having always wanted fast delivery. Twenty or thirty years ago, that may have been several days. Today it is overnight.
The problem is not digital per say, but how it is used. Having an interconnected world has opened many opportunities and benefits. But there also many traps and cons. A pre-digital saying is still highly relevant -“user beware”. In the world of “digital advertising”, be very aware.
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