Of course, any advertiser involvement in a news operation is a tricky affair. Keeping the lines clear between church and state — editorial and business — has always been an uneasy balancing act between editors and business executives. Local TV news reporters have done in-depth pieces about a less-than-scrupulous’ local automotive dealerships, and newscasts have paid the price with lost local automotive advertising business.

I’ve thought about this a lot over the years, and my view has changed considerably. It’s a conflict of interest, because we say it is. We’ve supposed that the “wall” to which Wayne refers is necessary for us to remain “objective” in covering the news. There’s an honor, of sorts, in not breaching that wall, and so we never consider that the wall itself might be the problem in a news-as-a-profit-center paradigm. Moreover, we think that the (stupid) audience needs us to be pure, because we could easily pull the wool over their eyes.

You all know how I feel about objectivity, but here’s the thing: I don’t believe the audience of “Morning Joe” would sense or suspect a conflict of interest if a negative story about coffee did come up. But let’s take it even further. Let’s assume that the producers of the show felt an affinity to the people paying them, so they stayed away from the negative story about coffee. Think about this before you react, but in today’s world of thousands of news sources, what is really wrong with that? And wouldn’t people feel that the one place they could get the Starbucks’ “side” of the story would be “Morning Joe?”

If you assume that you are the ONLY source for news and that you have to market yourself as such, then the need for such purity is pretty obvious. But if you can bring yourself to accept that you don’t need to be the ONLY source for news, then the fundamentals of purity don’t matter as much. News is ubiquitous today, and that’s different than it was in the past, when the newspaper in the community was truly the only source of news and information for the people.

I fully realize this is heresy, but we need the courage to challenge the basic assumptions of journalism, ‘lest we find ourselves unable to support the practice any longer. Besides, I keep coming back to the reality that the audience just isn’t as stupid as we think they are and that transparency beats artificial objectivity any day of the week.

There is considerable debate about all of this, and of course, agencies aren’t giving up without a fight. At the very core of that fight is the world of data, the Holy Grail of the Web, and whoever or whatever is able to manage data for the benefit of clients in a cost-effective way will likely have a seat at tomorrow’s media table. Even this, however, is uncertain, for one of the big unanswered questions of the day is who owns the data about visitors to a website, the publisher or the advertiser who’s running ads on that site? This is one of the issues in the publisher revolt started last year by ESPN in announcing they would no longer accept ads from 3rd-party ad networks. The networks think the data belongs to them. Publishers think otherwise.

A recent New York Times article (Put Ad on Web. Count Clicks. Revise.) featured the work of an ad agency built on the use of online data.

From the “Mad Men” era until now, advertising has been about a catchy tagline, an arresting image, the Big Idea. But Mr. Herman (Darren Herman, president of Varick Media Management) and his competitors are bringing some Wall Street-like analysis to Madison Avenue, exploiting the huge amounts of data produced by the Internet to adjust strategy almost instantly.

If your site is part of an “ad exchange,” your remnant ad spaces will be grouped together with others of similar demographic and psychographic nature and sold through one of these data-centric agencies. The idea is that the eyeballs that visit your site are more valuable when grouped with other similar eyeballs, and the exchange allows publishers to earn more per ad impression than they would otherwise.

Jarvis Coffin of Burst Media wrote in response to the Times article that this data-centric approach should eventually lead to offline as well. He took the Times to task for missing the real story, which is the use of data in behavioral ad networks.

Indeed, searching for the new heart of Madison Avenue has been the past-time of many people inside and out of the industry for years. Maybe love has finally found a way. Once again, information is power and much of it derives from the sort of relationships that ad agencies have continued to enjoy — albeit in serf fashion — with their clients. Sitting atop copious amounts of campaign data, which they have watched get turned into fortunes by vendors with shifting attachments to the strategic welfare of a client, ad agencies have decided they are - and ought to remain - media planning and buying vendors of first and last resort.

Good for them. Now they just have to figure out how to get paid for it, but the excitement and opportunities increase when they consider how data can begin to play a livelier role given the expansion of digital media technology to all places offline, especially TV.

One of the cornerstones of Media 2.0 is data, and local media companies are facing the dawn of the database age with no idea of its requirements, scope or the tools necessary to compete. This needs to change and change quickly, ‘lest all local media companies find themselves at the wrong end of the online value chain. The making of expensive content is not the best revenue position for tomorrow. That seat belongs to those who manage the data of the local market.

Gordon Borrell has seen this evolve in his own work. One of the characteristics of what he calls “Green Zone” performers — those media properties that do above average online revenue market share — is an incredible thirst for data. He told me in an email that most media companies are still stuck in the past.

I think analog media reached the zenith of their youthful beauty a few decades ago, and what we’ve seen since the mid-1980s is an obscene amount of cosmetic surgery and make-up. Newspapers moved from talking about “subscribers” to a much bigger metric called “readers,” figuring that if a newspaper hit the doorstep of a household had 2.5 adults in it, there must be 2.5 readers in it. TV started talking about TV households, figuring that if a household had a TV in it, people must be watching it. And radio invented cume — which is a fancy way of saying that if the radio is left on long enough, a lot of people might actually listen at some point.

The Internet isn’t as lucky. It has things like pageviews, clickthroughs, unique visitors, time spent online, “bounce” rates, and connection speeds. While some of those statistics can be misread or manipulated, there’s a helluva lot more to go on than a mere telephone survey or diary sent to less than one percent of the population.

Borrell added that data has become incredibly important and that he’s witnessing “a great divide” between those who know how to collect and read that data and those who don’t.

Helping advertisers understand just how many people saw their message, how many clicked on it, what times of days produced better responses, and what people did after they clicked — are all wildly powerful pieces of information. The collection, analysis and manipulation of data will continue to be more important in the media landscape, thanks to the application of computing power to advertising. I think information is still power, but the collection of vast amounts of data magnifies the potential.

Add to the equation the reality that some well-informed local advertisers are themselves becoming extremely well versed in data, and you can see the problem for media companies who just sit on their hands in the Media 2.0 world.

We feel strongly that the window is open for smart media companies to move in and seize this space at the local level, becoming, if you will, ad agencies themselves. That window won’t stay open forever, and the sooner we adapt to a data-driven marketplace, the sooner we’ll be able to grow significant revenues online.

(Originally posted in AR&D’s Media 2.0 Intel Newsletter)

Bullshit.

From “2005: A Year of Trouble for Broadcasters,” published in December of 2004:

A given is an assumption that is taken for granted. A serious examination of events and trends over the past couple of years reveals there are five important givens that all decision-makers must accept as we look to the new year:

• The audience isn’t coming back.
• Disruptive technologies will continue to empower viewers.
• Our brands mean less with each passing year.
• Reinventing ourselves isn’t a choice.
• There are ways to make money beyond on-air advertising.

Of all the challenges facing broadcasters, none is greater than ignorance born of denial. Locked into old formulas and business models, the industry hasn’t paid enough attention to teaching and training itself and its employees about what’s been happening in the media world around them. The challenges faced by media companies — especially broadcasters — have been bubbling and brewing for years, but few have had the courage to act on them.

I am not the only one who has been relentlessly pounding the realities that we currently face. People like Cory Bergman, Steve Safran, Jeff Jarvis, Doc Searls, and many, many others have been saying the same kinds of things for years.

All I can do is shake my head when media executives play the victim. You could argue that the economy was a surprise, but you’d have to dismiss the work of Umair Haque and others to believe that was a real surprise either. We have entered a new era in Western culture, one that demands ways of thinking beyond simply balancing margins, and media companies face even bigger challenges than that. The disruption in the world of advertising continues unabated, and how this escapes the view of otherwise smart people is beyond me.

Having the content to secure a mass audience does not guarantee you’ll find sponsors willing to pay what you want them (or need them) to pay in the years ahead.

“The guidelines are coming,” Bridis promised. “AP’s main concern are not the bloggers that excerpt a relevant passage, and then derive some commentary. What happens an awful lot is just wholesale theft. So those are the ones that will find the cease and desist letters arriving.”

OK, we said. How will you define “wholesale theft?” If somebody publishes a paragraph of AP copy with a link to the AP story, will that be theft?

“Not at all,” Bridis replied. “I don’t think AP would have any problem with that.” We didn’t want to give the impression that we were bargaining, but we pressed on as to exactly how one would disturb AP’s comfort zone. Was this about not posting links?

No, Bridis replied. “What I’m talking about, and what has really riled up our internal copyright folks, are the bloggers who take, just paste an entire 800 word story into their blog. They don’t even comment on it. And it happens way more than most people realize.”

Go read the full article. It really does clarify things for everybody.

Puh-leeze.

In Mr. Dumenco’s attack on Ms. Huffington (he congratulates her first, of course), he bitterly chides both the Newhouse School and organizers of the awards for what he clearly believes is a blight on the profession of journalism.

It’s one thing for a journalism school to draw attention to itself — to make a naked grab for the sort of heightened “visibility” Ken Lerer values so highly — by creating a self-referential journalism-about-journalism award. And it’s natural for the organizers of the awards ceremony to align themselves with highly visible media people to attempt to heighten that visibility. But it’s quite another thing to give recognition to people who damage the very profession of journalism.

Huffington damages journalism, in Dumenco’s view, by not paying journalists, and this is the essential problem with his argument, for if money existed to pay journalists, we wouldn’t be having this argument (and many others) in the first place. The money is gone, Mr. Dumenco. It’s gone, and it’s not coming back. No amount of nostalgic wishing is going to bring it back, and any argument based on the notion that it is (or worse, that it’s still there) is just chasing the wind. It’s also sloppy thinking, for if Mr. Dumenco had his way, the only outlets for journalism would be those that paid the writers (a living wage), which is silly when there is no money. No money, no journalism? History says otherwise.

It reminds me of Mark Cuban’s whining about Google and YouTube last week at the D: All Things Digital conference in Carlsbad, Calif. Cuban complained about the unfairness of Google subsidizing YouTube, noting that YouTube wouldn’t exist without the subsidy. Cuban wants a world without subsidies or YouTubes, because then the money of the status quo would have all the fun, including Cuban and his (new found) billions. You’re entitled to make money only if you play by certain rules, in Cuban’s view, and anybody who breaks those rules is, well, cheating. Damn those cheaters at Google!

Same with Mr. Dumenco. He thinks Arianna is stealing journalism without paying for it (cheating), when she’s actually creating a model with a different kind of currency: links. She hasn’t asked, but if she did, I would gladly write for Ms. Huffington, because I recognize that the value of journalism isn’t in what I’m being paid but rather in what I’m saying, and if I can’t find a creative way to pay myself with the kinds of traffic I’d get from The Huffington Post, then the problem is with me, not the lack of money to pay me. Simon Dumenco has the cart before the horse.

Meanwhile, the “publication” is revealing interesting ways to combine and display items to make for a smooth user experience, and who’s to judge the HP of tomorrow by the HP of today?

The problem, from my perspective is enormous, because the disruption that’s killing legacy media isn’t about content, it’s about advertising. The assumptions of any content play are that its value is so great that expensive, adjacent advertising will support it and that the mass attractive to advertisers can be created through scarcity. Neither of these assumptions is viable online, and the real problem is that both must be present for significant revenue to be realized.

Advertisers don’t need mass anymore, because the Web efficiently allows them to directly target potential customers in a variety of ways. Gordon Borrell has a great post today (Are We NUTS?) on why legacy media companies don’t believe the size of his revenue projections at the market level.

With the Internet, however, you can’t fathom the universe of companies and individuals selling things like email advertising or search advertising or banners. In a lot of cases, they aren’t even companies, but individuals who don’t have business licenses and thus cannot be tracked at all for their “ad revenue” receipts.

The amount advertisers are spending is truly stunning, and much larger than most people imagine. Those who understand the true breadth of opportunity are more likely (in my humble opinion) to get a larger share than those who underestimate it.

News content online is a ubiquitous and increasingly commodified community, and attempts to restrict access so as to create scarcity will only result in the isolation of those who need most to be a part of the discussion, professional journalists. If you think newspapers will be able to restrict ANY reference to articles they publish, I’ve got some oceanfront property in Arizona that I’d like to sell. And even if they could accomplish such a monumental task, the disruptions in advertising will continue make the model of ad-supported content increasingly problematic.

The newspaper industry is obsessed with an old model, and rather than trying to fit its square peg into the round hole of Media 2.0, it makes much more sense to focus our attention elsewhere. We should nurture our legacy products as best we can, but we simply must separate our ability to make money from our dependence on the content we create.

The key to that is in defining, understanding and developing the Local Web.

The shrinks are working on a treatment, but I’ll save ‘em a bunch of trouble: forgiveness.

That’ll be 5-cents, please.

This day, we watched live coverage of the merger of AOL with Time Warner, in what was to become the poster child of the bursting bubble that, of course, we hoped would just keep on going. I remember a few things about that day. As a guy running a Web business back then, I was always stunned when businesses that were losing money were rewarded. I just couldn’t do the math, and that included incredible valuations for companies, including AOL. Here was Time Warner, a prosperous film and entertainment empire with a valuation of $120 billion merging with AOL with a valuation north of $160 billion. How could AOL, in just a few short years, be worth more than Time-Warner, I wondered.

I also remember very clearly this statement by then Time Warner CEO Gerald Levin: “The market valuations in the Internet space I accept, because I think something profound is going on in this century.”

Later that week, we had a guy from a venture capital company come to the incubator to answer questions of the various tenants. I asked if he’d seen the press conference announcing the merger. When he said yes, I repeated that statement by Levin and asked him to explain what it meant. The guy said something about the old world giving way to the new, and I just drifted off. One week prior to our first offering, the bubble burst and with it went our hopes of ever getting an outrageous valuation.

I would think that of all the things Mr. Levin ever regretted in his life, it was that one statement of acceptance. Blue smoke and mirrors; that’s what it was. Levin wasn’t alone, however. Greed has a way of blinding even the sharpest of eyes.

The rest, as they say, is history, and I wish the new AOL well. I only hope they don’t destroy the anti-portal strategy of their MediaGlow unit has built in attempts to resuscitate the AOL brand, which in the opinion of this observer, is f-a-i-l spelled sideways.

One of the things I try to teach clients is that the metaphor of a Web “site” is misleading, because nobody actually “visits” any thing or any place. The code that comprises the back end of the Web talks to individual browsers on desktops, laptops or mobile devices. So everything about the Web flows TO THE USER, and not the other way around. This is useful in helping people understand that the serving of ads, for example, can be disconnected from the serving of content. But the newest iteration of the Web makes this kind of knowledge critical, for we’re moving from a static, destination-oriented Web to one that is real-time and alive. The new metaphor is “the stream,” and it will demand new strategies and new tactics for anyone wishing a seat at the media table in the future.

The Web’s Widening Stream