Media in the Digital Age
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Media in the Digital Age

What is happening right now is the phenomenon that we call the economics of attention. And we can listen to music and do homework at the same time, but we cannot watch two channels or read the newspaper and surf the web on the iPad at the same time. As a result we have to choose our primary channel for information. The rule we have in economics is basically that content is king and communication is commodity. I don’t really care which channel is broadcasting the Super Bowl, I’m going to flip channels until I get to the Super Bowl. My loyalty is not to channel X, Y and Z, but to the event itself. As we move our attention to the cable television with dozens an dozens of offerings and the Internet. They get fewer viewership, less advertising, as a result less money for preparation of the news. That’s something that one expects. It’s a technological transition from the sailboat to the steamboat to the diesel engine. Many of us are still like the information aggregator. The Wall Street Journal, The New York Times, The USA Today, and so forth. On the other hand, there is a great thirst for localized news. What happens in my village? What happens to my friends? So you see this division of attention. Social media grabs a lot of our time because it talks about the individual which you are close with. It’s our family, our friends our work environment and so forth. As a result we spend much less time on reading the printed media. To me the printed media is on the last leg of its life. It’s going to disappear in the next five to ten years. It’s too expensive to print several dozen square feet on paper and deliver it to tens of thousands of houses in the average American city. Media companies are here to stay, but they are going to produce a lot more of the soft media and the print on paper is a model that is pretty much dying out. We’ve always done a little bit of targeted advertising with the printed media. But now we do micro targeting on individual by individual based upon your location, based on the time and based on your past purchases. The idea is, you want to be far more focused because that yields the highest return for the buck. The question is basically whether the advertising we see on Google is effective or not given that we see so much of it. Advertising on Facebook is dramatically different than advertising on Google And why is that? When a user goes on Google, they are searching to solve a problem. How do I fix my car or what is the best model of BMW that I’m interested in. When I’m going on Facebook, I’m not going to solve typically a problem, I want to entertain myself. I want to see what’s going on with my friends, my family. So I’m looking for different things and thereby advertising on Facebook while expensive has not been proven to be as effective as Google advertising. With social media it gives a lot of power to the grass roots. Companies are listening to what people write about the product, product support, pricing and features. And if there are a few unhappy customers, it’s like fire in the summer. You can’t stop it. Same thing we see with the politics in the Middle East recently. So both politician and business leaders are paying tremendous attention to the great power that goes bottom up from the customer field base.

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