Federal Communications Commission Chairman Julius Genachowski's remarks on Monday backing new net neutrality rules drew widely divergent reactions from broadband advocates, network providers, and policymakers. Some advocacy groups like Free Press and Public Knowledge cheered Genachowski's comments, while also saying that his proposals do not mark a significant departure from prior rulings. But the two Republican FCC members disagreed, arguing that Genachowski's suggested new rules "would appear to be a reversal of decades of precedent." And Sen. Kay Bailey Hutchison (R-Texas) responded by introducing an amendment to the Interior Appropriations bill that would prevent the FCC from even taking up new neutrality rules. Five other Republican senators signed on as co-sponsors. Speaking at the Brookings Institution on Monday, Genachowski said the FCC should codify its 2005 Internet policy statement, which set out four neutrality principles -- that consumers have the ability to access all lawful content, applications and services, and that they can attach devices to the network. He also proposed two other mandates -- that network providers not discriminate against any lawful content and that they fully disclose traffic management practices. In addition, Genachowski said neutrality principles should also apply to wireless networks. Advocacy groups Free Press and Public Knowledge said Genachowski's proposals would not set a new course as much as clarify existing standards. Free Press Policy Director Ben Scott said Genachowski's proposals were a "logical extension" of several key actions, including last year's groundbreaking decision to sanction Comcast for blocking peer-to-peer traffic. Gigi Sohn, president and co-founder of Public Knowledge, said the new rules will make it clear that Internet service providers must adhere to common carrier principles of nondiscrimination, as was explicitly the case until 2005. That year, the FCC introduced some murkiness into the picture by saying that ISPs were no longer subject to the same rules as telephone service providers. "Net neutrality rules will not be radical government intervention and will not deter investment," Sohn said, adding that ISPs invested in their networks in the pre-2005 era, when they were considered common carriers. The two Republican FCC members issued a joint statement expressing doubt about the need for new neutrality regulations. "We are concerned that both factual and legal conclusions may have been drawn before the process has begun," they said, adding that the Commission should not adopt rules "in an effort to alleviate the political pressures of the day, if the facts do not clearly demonstrate that a problem needs to be remedied." They also said the new rules appeared to mark a reversal of "the Clinton-Gore Administration's bipartisan policy to allow a diverse assortment of technical experts, rather than politicians and bureaucrats, working in loosely knit non-governmental organizations to make such engineering decisions." They added that Genachowski's proposal to codify the 2005 Internet policy statement "appears to admit that the Commission did not have enforceable rules at the time of last year's Comcast/BitTorrent decision." Comcast is appealing that ruling on the grounds that the FCC lacked authority to sanction it for violating a policy statement that had never been enshrined in regulations. Comcast Executive Vice President David Cohen said in a blog post that it's "fair to ask whether increased regulation of the Internet is a solution in search of a problem." Sena Fitzmaurice, executive director for corporate communications at Comcast, added that the company "applauds Chairman Genachowski's goal of ensuring that the Internet remains open as it is today," and will work with the FCC in the proceeding. AT&T's Jim Cicconi, senior executive vice president for legislative affairs, said the company had concerns about the proposal to extend neutrality rules to wireless networks. "We have applauded this FCC for emphasizing that its regulatory decisions would be data-driven. We would thus be very disappointed if it has already drawn a conclusion to regulate wireless services despite the absence of any compelling evidence of problems or abuse that would warrant government intervention," Cicconi said in a statement. Meanwhile, Democratic lawmakers including Rep. Ed Markey (D-Mass.) and Sen. John Rockefeller IV (D-W.Va.), praised Genachowski's comments. And although Hutchison's amendment drew some GOP support, it wasn't expected to pass.
Don't think of social media as a separate marketing channel, but as a fabric running through all advertising and promotional efforts. That was the central theme that emerged from a panel at the OMMA Global conference Monday bringing together social marketing experts from brands, agencies and advisory firms. The key isn't so much how to unlock the secrets of social media as to figure out how it plugs into campaigns across other media. Rob Master, North American media director for Unilever, recalled being flummoxed at a conference two years ago when asked how unsexy brands like Hellmann's Mayonnaise and Lipton Tea could harness the growing popularity of online social networks. Looking back, he wondered: "Could I have been that unimaginative? The answer is 'Yes, I was.' At Unilever, we've gotten a lot more focused and a better understanding of where the consumer is going," said Master. He added that the consumer packaged goods giant now looks at social media as playing "a role underneath everything we're doing." Jordan Bitterman, senior vice president of media and content at Digitas, echoed that view when asked about how American Express approaches the social media marketplace. "It's very important that we look at social media as part and parcel of distribution," he said. "It's not something where the client should say: "Is Twitter on my media plan? It's not something that can be disaggregated from other campaigns." The comments also reflect the embrace of social networks as "earned media," used to generate favorable publicity and word-of-mouth through things like Facebook "fan" pages or a Twitter feed that are not part of paid media. These platforms can be used to support broader ad campaigns without marketers having to cough up more money to publishers. That's not to say that social media marketing doesn't require internal company investments in staffing and education. Master explained that Unilever has committed significant resources to boost the institutional understanding of social media, including a day-and-a-half-long off-site meeting on the topic. It's also in the midst of a companywide education effort on using Twitter. Because of the greater emphasis on social media, it's also a good time for junior folks to move up the corporate ladder faster. "Young people in your organization are more important than ever," noted Master. Whether or not marketers boast a host of Facebook or Twitter mavens, the critical skill they should hone is listening, according to Deborah Schultz, a partner in the innovation practice at The Altimeter Group, a consulting firm focusing on social media. "The amount of time in telling and selling mode is shifting to listening," she said. That translates into more gathering and analyzing consumer feedback through social sites and relaying that information back into the company. That transition may be difficult for agencies to make as well as their clients because of their traditional fee-for-service compensation structure. "The fundamental problem is the agency model of remuneration," pointed out Phil Cowdell, head of Mindshare North America. In other words, they want to get paid big fees for creating more traditional campaigns that rely chiefly on paid advertising.
Dennis Miller, general partner at Spark Capital, which is a large investor in Twitter, declined to answer Media Link Chairman and CEO Michael Kassan's question "What's the home page of Twitter worth?" -- but did provide a perspective on the company and social media in this turbulent economic environment. "You're better asking the other folks here in terms of perception," Miller said, turning toward the packed room at the OMMA Global New York conference on Monday for feedback. "Whatever it is today, it will be worth more tomorrow." Miller called today's environment for traditional ad agencies and media "daunting," because the principal assets are 30-second spots supported with 80% local advertising. It's no secret that margins are thin, and the average CMO has only been on the job 21 months. Many don't have institutional knowledge or the relationships required to succeed. There's tremendous pressure from clients on ad agencies to become successful in all types of social media platforms, and yet the amount of labor involved in buying effectively online is daunting, Miller said. But as applications become interconnected, buying media could become more complicated. For example, MySpace reported Monday that it has added functions such as status updates that allow people to sync-up with Twitter. News Corp., the parent company of MySpace, says the new features are part of an ongoing effort to make it simple for people to share their status beyond MySpace and allow friends and followers to interact with content across the Web. Miller still continues to "lean in" when analyzing investments of companies relying on an ad-supported model to generate revenue. The advertising and the media businesses are so "screwed up" right now, because there's so "much paranoia and little clarity" that it's a good time to be an arbitrage investor. That's what venture capital investors typically do -- take big risks and hope they pay off down the road. Spark Capital has invested heavily in social media. And while Miller is "bullish that money will follow the eyeballs" in social media, it's not clear that people who Twitter will keep up the tweets. Crowd Science will release a study Tuesday revealing that 24% of Twitter users have never tweeted or have stopped tweeting. Only 27% of Twitter users tweet daily, while 46% check updates. Thirty-two percent of people who tweet feel they spend too much time using social media; nearly a quarter -- 22% -- say they have written things on social media that they've later regretted; and 16% report that they often neglect important activities to spend time on social media. And while people have regrets about saying more than they should online for all to read, a quarter of those who tweet say social media is their favorite leisure activity, compared with 14% of non-Twitter social media users. The Crowd Science study on Twitter and other social media users was conducted across more than 600,000 visitors to multiple Web sites within the Crowd Science open research network. The survey, targeting social media users age 12 and up, was conducted Aug. 5-13.
Amid broader cutbacks, is your company close to killing some marginal digital project? "Don't do it," advised Martin Nisenholtz, SVP of digital operations at The New York Times Company. "If you ever find yourself in a recession, and you're thinking about killing a business that's burning a little cash, don't do it," he told attendees at OMMA Global on Monday. And Nisenholtz should know. Two of The Times Co.'s three biggest digital fumbles -- by his estimation -- involved shutting down projects during the first dot-com bust: its Abuzz community-building and information-swapping service; and its locally focused New York Today news service. (The Times' third major mistake was failing to parlay its rich archives into a thriving search business, according to Nisenholtz.) Failing to make The Times' stinker list -- again, according to Nisenholtz -- was the company's decision to nix its subscription service TimesSelect at the end of 2007. That is despite the fact that the company is presently reexamining the prospect of such a service. "The tension that runs through all this is between open and closed networks," he said of the media industry at large. "We've been going back and forth on this project for a number of years ... We're taking a look at it again." Echoing earlier remarks by News Corp.'s chief digital officer Jon Miller, Nisenholtz said "a dual business is just a better business; it just is." Along with News Corp. head Rupert Murdoch recently declaring war on free ad-supported content online, Nisenholtz noted that there is "potentially a zeitgeist change going on," as "people realize that they might have to pay for some of this stuff in the future." Where has the Times had success in the digital sphere? On Facebook, the publisher now has roughly half a million "friends," which is providing real "symmetry" for the Times' demographics, according to Nisenholtz. Indeed, 70% of that group are women, and nearly 85% of under the age of 35 -- atypical for the Times' online audience, which skews older and male, he said. So far, Nisenholtz is also very happy with the Times' handling of Twitter. The company now has about 200 feeds on the micro-blogging service, while the main feed presently has about 2 million followers, and is adding about 15,000 followers a week, he said. "It's a big deal," he said of Twitter, and the real-time Web. "We take it very seriously."
A Houston book author has sued document-sharing site Scribd, alleging that the site "shamelessly profits from the stolen copyrighted works of innumerable authors." The author, Elaine Scott, alleges that a copy of her 1984 book "Stocks and Bonds" was uploaded to Scribd without her permission and then downloaded by other users 100 times. "I bring this complaint because I believe that just as it isn't right for children to steal words, it isn't right for websites like Scribd.com to do it either," she said in her complaint, filed in federal district court in Texas. Scott is seeking class-action status. As with separate cases against Google's YouTube, the complaint against Scribd essentially alleges that the company has built its business on pirated work. "Scribd reaps substantial direct and financial benefit from copyright infringement," the complaint alleges. "Their misuse of copyrighted works attracts more users to their website, which in turn increases the advertising revenues." Scribd, which is already facing a separate copyright infringement lawsuit in federal district court in California, said in a statement that Scott's case was without merit. The company also said it complies with and "goes above and beyond" the Digital Millennium Copyright Act's safe harbor provisions, which generally protect sites from liability based on users' copyright infringement as long as the sites take down pirated material upon request. Video site Veoh recently prevailed in a similar copyright case after a judge found the site was protected by the safe harbor provisions. Scott also alleges that the measures Scribd deploys to stem piracy in themselves violate her copyright. When Scribd learns that a particular document has been uploaded without authorization, the company allegedly maintains a copy of that document and then immediately removes any future versions of that document, according to the complaint. Scott alleges that this system infringes her copyright. "Ms. Scott did not give Scribd permission to make use of her work in their copyright protection system. Even in their purported attempts to 'help' authors, Scribd continues to infringe for private gain," the complaint alleges. But Scribd might have a valid fair use defense to that allegation, said Internet law expert Venkat Balasubramani. Another company, Turnitin, has already prevailed in court with a similar argument. In that case, a federal district court judge in Alexandria, Va. found that Turnitin did not infringe on students' copyrights by compiling a database of term papers for a plagiarism detection service. The judge ruled that Turnitin did not violate the students' copyright because the company's storage and indexing of the students' work constitutes fair use. The law firm that is representing Scott recently defended alleged file-sharer Jammie Thomas in a lawsuit brought by the record industry. That case resulted in a jury verdict ordering Thomas to pay $1.92 million, but it's not yet clear whether that award will be slashed by the court.
Adobe announced intentions to acquire Omniture for $1.8 billion last week. On Monday, the company began rolling out a new set of services allowing advertisers and publishers to distribute Flash-based applications across social networks, mobile devices and the desktop. The online suite of services offers tools to help promote, monetize and track campaigns. Online Media Daily spoke with Omniture CEO Josh James about the impact of the acquisition on the analytics firm, as well as advertising and marketing companies. Online Media Daily: How will Adobe's $1.8 billion acquisition of Omniture change the advertising industry?James: Today, you have many manual ways to track online advertisements, but Adobe products could automate the process. It's one thing that continues to challenge marketers that we can now make easier. You have Flash ads and Flash applications on Web sites. Go to Nike.com and you will see that pretty much everything is designed and built in Flash. Mobile applications have built-in Flash. People use Dreamweaver to make Web sites. Nearly every company uses Photoshop. Integrating Omniture technology into Adobe applications means you can drop tags into projects created in applications, such as Flash, Dreamweaver and Photoshop. Today, customers call us to walk them through setting up and tagging pages. We hope they tag all the pages on the Web site, but that's one of the challenges. We hope in the future you can just push a button and know the tags are already there. Perhaps you might have a feature in Adobe's products to automatically create the tags as you build the Web site or the advertisements. OMD: Is this a way to increase commitments from advertisers and agencies?James: The combination of Adobe and Omniture accelerates those relationships. We were a company focused on independence. In many cases we have developed those relationships from the bottom up, but every CMO knows Adobe and its products. Conversations we have been having in the past few days have accelerated, and people are taking more interest. OMD: Some analysts believe this acquisition will give Adobe an increased role in measuring online advertising. How do you see that playing out?James: Dreamweaver and Flash are interesting to our customers. Most customers use Flash in advertising. We spend a lot of time helping customers try and figure out how to track and measure. This will take 'how' off the table, so they can concentrate on other things. It will give them a way to track the Flash ad. OMD: How long before all Adobe's products integrate Omniture's ability to monitor, track and analyze online advertising?James: They are working on some new launches for products right out of the gate, and Omniture will become part of that integration. That's a major goal. It's part of what drove the timing of the acquisition -- being able to complete the integration for the launch of their next products. Adobe wanted the deal to have an impact on the new product launches. It's important to Adobe for the acquisition to have an impact on the advertising industry sooner than later. OMD: What are some of the goals, benefits and hurdles for Omniture from this acquisition?James: One of the goals for Omniture has been to reach $1 billion in revenue as fast as we can. Combining Omniture with Adobe give us a bigger brand and access to markets we would have had to wait to enter or expand in. It gives us access to overseas markets in Western Europe and Asia where Adobe gets 60% of their revenue and we get 28%. The acquisition also gives Omniture access to government markets where Adobe has a large business and Omniture practically none at all. There there's education and mobile. So, the deal accelerates our product road map in geographic regions and markets. Typically, in these situations, you start with between five or six really good ideas. Then during the first few months you get all the engineers and the product development people together and get double the number of ideas. Hurdles are what exists today. We're removing those hurdles. OMD: What is your view on the best way for advertisers to measure online advertising traffic and sales?James: Not only is it important for advertisers to understand the clicks, but the type of commerce it turned into. How many customers were acquired from the advertisement and what did the customers do? When you have analytics plugged into your system you can see the effectiveness overtime. This lets you optimize toward not what generates clicks, but what generates customers. Companies measured clicks because it was easy. OMD: Now that the negotiations are done, what keeps you up at night?James: You always want to make sure in a transaction like this that you take care of your people. Fortunately, Adobe recognizes that the most important intellectual property you have in the company walks out of the door every day. So, it's imperative they feel loved and understand their role. Adobe's focus for this transaction is to grow the business. They want to increase revenue. Like with every transaction, there's a bit of overlap, but the majority of the people will stay and we'll hire more.
Envisioning a bright future beyond cost-per-click, contextual advertising shop Pulse 360 on Monday launched a "cost per acquisition" display ad network, Online Media Daily has learned. Supporting historical trends, the CPA market has seen a resurgence amid a weakened ad marketplace in which less inventory can be sold on a CPM basis. Per the new network, ad targeting will be driven by the audience composition and context-based targeting approach used on Pulse 360's existing sponsored links network. CPA advertisers will have several levels of control, such as targeting to content channels including news, sports and entertainment, day-parting and geo-targeting. The primary account management responsibility, however, falls on Pulse 360 as CPA advertisers only pay for verified transactions, sales, and leads, according to Jaan Janes, CEO of Pulse 360. "A lot of small and mid-tier ad networks are having success, but picking which ones is not easy," said Janes. "The optimization is on us." The thinking behind Pulse's existing model is that performance-based text ads get better matching based on demographic or psychographic characteristics versus keywords, which in turn generates a higher CPM. Added Jeff Kamikow, president of Pulse 360: "Marketers in today's economy are performance-sensitive, and as a result we are seeing more and more advertisers -- including big brands -- commit ad dollars to performance-based campaigns." Pulse 360 is owned by Seevast Corp., a venture capital-backed holding corporation that also owns pay-per-click text ad specialist Kanoodle. The 50-person company is headquartered in New York City with an additional office in Buffalo. Existing publisher clients include CBS TV stations, Gannett Digital, Comcast, World Now, the AP, Newsweek.com and MSNBC.
The judges have spoken. The 2009 OMMA Award Winners were announced Monday night at a ceremony in New York. A little bird told us that the social media campaign that could, "Next to Normal, The Twitter Performance," was the Judges Choice in Online Advertising Creativity; ESPN.com took top honors in Web Site Excellence; and Initiative's "How to Eat a Burger" for Carl's Jr. was where the beef was at in Integrated Online Campaigns as far as the judges were concerned. To read about all of the winners in 55 categories across three disciplines go here. Congratulations to all of the finalists and winners. If you're in New York, join us in honoring the 2009 MediaPost Online All Stars on Tuesday and at our Future of Media Forum moderated by Chris Anderson and featuring Martha Stewart, Mark Cuban, Milton Glaser, Judy McGrath, and others on Wednesday.
Business is getting awfully social these days. Not social in the three martini lunch manner but social in the new media context. Digitally conversant consumers applaud and shame companies on Twitter, become brand fans on Facebook and share ideas and innovations about products and services with the companies that make and deliver them. And companies are embracing the new reality of social business by engaging with consumers and employees and re-building the basic constructs of business with new social media mortar. Going forward, a key characteristic for successful business formation and development will be how a company flips over the sign on the door and shows itself to be open for social business. The cacophony of social media chatter gets louder by the second. Facebook now has more than 300 million users, up from 250 million in July 2009. Over 73% of the internet population worldwide use social media according to comScore (June, 2009). Many companies hear this noise and have some sort of presence in social networks and continue to add applications and content for brand followers. Automotive manufacturer Kia has an energized Facebook community for its Soul model with over 14,000 followers full of exciting content such as an augmented reality game that builds on the brand's advertising campaign. A shorter list of companies graduates from social media hobbyist to true social marketer. These businesses use social technologies to monitor what people are writing and doing online, track and build relationships with key blog influencers and websites in the company's particular area of expertise and use micro-blogging platforms like Twitter to answer customer questions and intercept those who have bad brand experiences with relationship building offers. Social media becomes the organic tissue for these companies strung throughout the customer experience pathway. And then there are those that see it like a neon sign in a local store window, OPEN...for social business. Groups of entrepreneurs and seasoned business professionals alike realize that social media offers more than personal engagement and community connection, more than powerful customer insight and relationship management. Social media offers up a transformational set of technologies and communications devices that beg us all to invent new and re-invent existing business models. There are degrees of social business openness for companies. Some declare themselves open to ideas such as Dell and Starbucks. Dell's IdeaStorm website tags itself as the place, "where your ideas reign." Starbuck's MyStarbucksIdea site is the destination where one can share, vote, discuss and see customer ideas for the company. Both sites act as forums for individuals to submit, rank and have ideas selected and produced by the host company. The Strawberry Banana Vivanno Smoothie is an example of consumer taste buds being heard and Starbuck's concocting a new drink. There is a running mantra in companies that great ideas can come from anywhere and these socially open businesses are taking that construct to the next level. Others open access to management. Best Buy's CMO Barry Judge shares his thoughts, addresses customer ideas, involves customers on business activities and informs on company happenings of note on his blog www.barryjudge.com. One recent action of note was Judge's choice this past summer to invite his blog readers to participate in writing the job description for the Senior Manager, Emerging Media Marketing post. Socially open leaders are willing to be led and advised on the best solutions and the right path to take. Before it was CEO knows best, and now it's let's listen to my employees, listen to my customer, my detractors and my fans. In such a model, managers act as powerful filters of concepts, instead of innovation agents themselves. Certain companies go even further and open channels both internally and externally to all employees. Microsoft's relaxed stance toward employee blogging continues to give the company a progressive voice in the tech community. Upstart businesses like Zappos.com take it one step further. Zappos approve and support Twittering and employee posts are shown on the company website. Brian Kalma, Director of User Experience @Zappos, wrote in a recent presentation, "Your goal should be to have as many people as possible be public voices of The Company. Scary? If you answered yes, you don't have the right people." Best Buy actively involves its employees through Blue Shirt Nation, an online workplace community that allows staff members to be connected to each other and to cooperate to share ideas, answer one another's questions and participate in other company developments. Involving employees and allowing them to participate and share thoughts outside of their day to day roles fosters a culture of inclusion that reduces staff turnover and brings to light great thinking. And finally there are the companies that are breaking down business models by opening themselves up to social media. Great examples of these innovators are fashion sites like Threadless and Exuve who sell clothes designed and voted on by crowds. Such sites challenge the private world of fashion and show the power that social media can have in re-inventing a category. Social business requires transparency, inclusion of consumers and employees and a mindset that the possibilities for considering new ways of bringing elements together are endless. The winners in the social business world are the ones that embrace these characteristics and harness them. There are reasons why companies remain closed and shut off from social media but even the most locked up companies will begrudgingly crack a door as they realize that being social is the only way to stay open for business.