Thursday, March 26, 2009

The Problem With Old Media is... It's Old Media

I had the honor of meeting marketing guru Regis McKenna a few weeks ago as he is an advisor to our lead investor, Opus Capital. I like to think that we at iWidgets are on top of our social media game, but I went into the meeting thinking that I could get some advice on positioning iWidgets, how to differentiate in a noisy marketplace — in other words, the usual marketing stuff, but this time from one of the all-time marketing gurus. Little did I know that I would walk out of the meeting with a new perspective on the transition to social media and the web.

It was a great conversation with Regis. I described the iWidgets social syndication platform to him and told him about the traction we’ve been getting in online video with customers like CBS. I outlined our move into the music vertical since a lot of songs also had video, and that all of this video and audio was easily monetizable due to the prevalence and acceptance of short pre- and mid-roll ads.

But while video and music uptake has been awesome, I shared with Regis that one issue we are facing at iWidgets is that we have a lot of inbounds and self-service customers with text-based content, accompanied by photographs, that is increasingly difficult to monetize. Usually text content is monetized by adwords or banner ads, and as I have blogged before, adwords and banner ads have abysmal CPM rates on Facebook.

Regis made a pronouncement on the transition to digital media that is still reverbating with me weeks later. "Text is dead," he said. "Those publishers will have to transition to video and audio or they will languish. Focus on the growth businesses."

In one sentence, Regis explained why newspapers are failing, why banners ads are decreasingly effective, and why video ads are booming. Brilliant!

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