Ray Schilens: It's Ray Schilens and Brad Forsythe on The Advertising Show, where you do hear that commercial. Our special guest out of New York City this weekend is Jon Fine, the media columnist for Business Week magazine. I spoke to Jon just a few moments ago and he said, "You called me Joe." And I said, "Well I'm sorry, Bob" [laughs]. So, Jon Fine, welcome to The Advertising Show, when we promise to get your first name right.

 

Jon Fine: Fabulous.

 

Ray Schilens: For the rest of the show. Now after the show, that's another story, ok.

 

Brad Forsythe: Yeah, did you see that guy on the show this past weekend, you know, Bill?

 

Ray Schilens: No, his name is Jon, but anyway, welcome to The Advertising Show, Jon. It's nice to have you here.

 

Jon Fine: It's great to be here be here, guys.

 

Brad Forsythe: Yeah, and Ray, I had the pleasure of looking at a little longer bio than you're looking at there, and Fine's apparently background with bands, which is right up your alley, Ray, because you're a former band member yourself. This guy has not only released CDs, but just to date himself, he's released LPs, and performed in 10 foreign countries.

 

Jon Fine: Well, that includes Canada, which I guess counts as a foreign country.

 

Brad Forsythe: Well, and of course, we've all performed in Mexico, but that's a whole 'nother program.

 

Jon Fine: What happens in Mexico.

 

Brad Forsythe: So you were in bands, Jon?

 

Jon Fine: Yeah, I continue to be, actually.

 

Brad Forsythe: And born in Texas, by the way, right? Raised in, as they say, the wild suburbs of New Jersey. Any CDs out we would know about, any bands that we would know?

 

Jon Fine: Certainly. I was performing with a band called Don Cavajero in the late 90s so I released a couple of records and previous to that, I was in a band, forgive the name, Bitch Magnet, which also had several CDs out, which, I believe are actually also available on Amazon.com and places like that.

 

Brad Forsythe: You know, it's interesting, you talk about, we were talking about the Grammy's last segment, Bono(mispronounces) and U2, they did some.

 

Ray Schilens: Bono.

 

Brad Forsythe: Bono?

 

Jon Fine: Bill, Bob, whatever his name is.

 

Brad Forsythe: Yeah, you're right, Joe, I think it is. Anyway, my wife heard this particular song he performed there on the Grammy's and she goes, "That's the song from that iPod commercial, isn't it?" [laughs] Of course, my wife's a little younger than myself and she also likes to say, "I know Paul McCartney was in a band before, I've heard Wings.".

 

Ray Schilens: I know she knows of the Beatles, now come on.

 

Brad Forsythe: Yeah, let's get some inside scoop. You use to work for AdAge, who'd you piss off at Crain to no longer be working there?

 

Jon Fine: Oh, no, no, no, no. All of them I think at one point or another.

Ray Schilens: Well that's good for you, congratulations.

 

Jon Fine: Hardly, actually, that was a blast. I look back fondly on those days. But about, gosh, close to a year ago, Business Week called me with the proverbial offer that I couldn't refuse, so, I went.

 

Ray Schilens: You actually called Rance Crain, Joe. Sorry, Mr. Crain.

 

 

Brad Forsythe: Let's talk a little bit about the future of media distribution, which of course, I think, the future of media distribution may be now, actually. As consumers gain more control over media consumption, what can media companies do to get some of their distribution control back, or can they?

 

Jon Fine: Well, wow, that's really an enormous question and if I knew that I'd probably be calling from a disclosed location, if I actually had the answer to that. Broadly speaking, I think what's really comfortable now is that media companies have to get use to giving up a degree of control that they've never really done before. There's this thing, as we all know, called the Internet, which we're all soon to be sort-of hooked onto intravenously several hours a day, and what really works on the internet is not just putting your content out there and having people access it, but putting your content out there and having people play with it. The next generation of consumers is being teethed on sites like MySpace and Flickr, where, you know, you put something up and people make comments and maybe they edit a little bit, and you kind of have this, forgive the term, group grope happening around content and content morphing and changing as it gets passed from one end to another. This is completely different from anything, you know, your traditional big media company is use to doing. They're use to putting the TV show out, the radio show out, the newspaper out and that's pretty much it. You know, about 10 years ago, they thought "Great, the internet will just put the newspaper on the internet." What they found is that, you can certainly drive a certain amount of traffic that way, but, what we've seen in the past few year or so is that, the new model, the model where content is something to be played with as opposed to something just passively consumed, that really has legs. I'm not sure any big media company has figured that out to any degree yet, and it's certainly the big challenge on their plate, or at least one of many right now.

 

Brad Forsythe: Yeah, you know, you talk a lot about the daily newspaper of tomorrow on your blog, and by the way, if you're interested in learning more about Jon's blog, it's businessweek.com/innovate/fineonmedia and you mentioned that, some of your suggestions are that, today's newspapers, in order to attract more of an audience, is to increase local coverage and redesign to more of a premium product. Talk a little bit about that.

 

Jon Fine: Well, I guess there's sort-of two ways to look at it. One is, the assumption is that everybody is going to be able to get sort-of the generic news on the day online. The one thing that your average daily newspaper can offer that no one else can touch is that they have a bunch of reporters in a very specific geographic area, and generally, the newspaper is going to be the best and have the biggest manpower, in terms of covering the local area. They have the most bodies they can send out and do local stories with. That is really the one killer app that they can leverage. Now, whether or not if they just start doing more local stories is going to do it, isn't it alone. What you can sort-of see here is if the assumption is that people are going to get a lot of generic news online, newspapers could try a two-tiered approach, which would be, they put out a fairly, standard news, short-take, free daily. You've seen this in many cities, New York, Boston, Philadelphia, Dallas, that's just a few and then they can do a more designed, premium news product, hopefully as a chance to earn a little more money from the upper-crust of the local demographic, but local news is really kind of the secret sauce here because that's the one thing that newspapers can do that really no one them can.

 

Brad Forsythe: Yeah, you know, USA Today, David Leiberman, wrote an outstanding story earlier, I guess it was February 1st, on newspapers and how they're evolving to look to new ways of attracting an audience and certainly, he mentions, a hyper-local news approach and gives Bluffton Today, a publication out of South Carolina, a town of 28, 000, and how they do a more focused local news approach. I guess the jury, the idea would be can you pull that off in a major market, and not a market like a 28, 000 person, South Carolina marke? But the other thing that I found interesting, Jon, about the article, was mentioning Naples Daily News in Florida and how they're using a variety of media to realize that the traditional newspaper really needs to look to technology to attract new readers. Talk a little bit aobut that if you're familar with the Naples Daily News.

 

Jon Fine: Well, actually, I've got to confess. I'm not familar with this specific Naples daily News experiment. Are they just sort-of doing radio, internet, or is it something more specific.

 

Brad Forsythe: Well, actually, they're using iPods, cell phone, PlayStation, TV, radio, as well as magazine as a means to, I guess now the buzz word is platform agnostic.

 

Jon Fine: Yeah, certainly, I think any newspaper worth its salt has been using the web for probably close to a decade now, and if you're in a smaller community like Naples, Florida, like Bluffton, where you can really dominate where the really isn't going to be, a local radio station, or any other real competing media, you can surround the consumer in ways you can't do elsewhere.

 

Ray Schilens: We're going to take a break here, Jon, in just a moment here on The Advertising Show, Brad, looking at the news feed, here's something, brand new in Texas, "Vice President Dick Cheney Shoots Hunting Companion." You think I'm making this up.

 

Brad Forsythe: No, that happened Saturday. The vice president can shoot someone on Saturday and have it reported on Sunday. The guy's doing fine. This is the new version of Homeland Security. By the way, the name of the golf tournament is AT&T Pebble Beach. They did pick it up, as a matter of fact. Jon Fine is up next here, and we also have the dumbest moments in advertising, not with Jon, this is the wacky worl of marketing, coming up. Now, Jon Fine is not infamous, he's famous. He's the media columnist for Business Week magazine, talking to us out of two feet of snow in New York this weekend. Glad to have you on The Advertising Show, and welcome.

 

Jon Fine: Not a problem, glas to be here.

 

Ray Schilens: Yeah, you know, Jon, you've told your readers repeatedly, both in your weekly column at Business Week, as well as your blog, to steal from Google. So, what are we supposed to do here, Jon.

 

Jon Fine: Well, they've got a lot of money, see.

 

Ray Schilens: Yeah, right.

 

Brad Forsythe: So does Fort Knox, Jon.

 

Jon Fine: Well, that's true, that's true, basically what Google has done in terms of advertising i that they're coming to advertisers with a very simple return on investment proposition. You know, you put up a text ad, and if people click on it, you pay, and if they don't, you don't, and you can sort-of track if they're going to the website from Google, you can do some little calculations on your own as to how much of that traffic is converted to a sale. This is so many miles beyond what you can do with printer TV advertising, it's almost not worth talking about, and it's this sort of thing that network execs and newspaper execs and magazine execs spend a lot of time worrying about. I'm not sure they spend as much time worrying as they do trying to find a way to do this themselves. Certainly there's ways they can create ads that have their own viewer indicators, but they seem to be very slowin adopting this. Basically, old media seems much more into complaining than innovating these days, unforetunately. And I say that unforetunately, because last time I checked, I was working for a very established old media brand.

 

Brad Forsythe: Right, that happens to be wise enough to have an online version, and a very easy to navigate, well presented online version at businessweek.com and I'm not being paid to say that. Google, let's stay with Google for a second. They've been in the news lately, both last month and this month with some interesting announcements. As of just Friday, they mentioned that they're going to be delving a little deeper into the print advertising and online auctions that are now holding to sell print ads in some 27 magazines in three categories, automotive, lifestyle, as well as technology. And unlike, their dabble, a while back, last year's selling of ads through their AdWords system, this new one is going to be, I think, a little more involved, in terms of both the product offering as well as the various size ads that you can purchase. Last month, Jon, as you may know, you probably do, Google announced its plan to acquire a company called DMark, a company that's apparently going to be helping Google assist in the selling of radio ads. What are your thoughts on this, Jon? Can Google really change the way traditional media's being bought and sold today?

 

Jon Fine: Well, I think, just in terms of as an influential, it will change the way media is bought and sold with traditional media. I have to say, I'm a bit of a Google skeptic to a certain degree. I think there's only going to be certain things they can do really well. They did try out a magazine buying utility a year ago. Actually, I'm sorry, not a year ago, but last year and, not to put fun or anything, but the ads that they came up with loked really dreadful. They were basically home page ads that were cut into 16 one inch strips and each strip was an ad. I can't possibly see how that would be effective in the context of a magazine where there's already plenty of ad pages. I just think people would fly right by it. They are going to refine it with this next wave of ads they're doing for magazines. You can sort-of mix and match the size you want. They're going into magazines that people know and love like Martha Stewart Living. But I think, ultimately, with this and the radio ads, it's just a function of advertisers, giving them a little more utility and obviously, it's not that Google is going to come in and suck all the ads out of your magazine. You have to opt in for them to do this and I would assume it'd be the same for radio as well. What they're offering is essentially an extension of an auction marketplace that they worked very well on. I hate to be so un-columnist like and say it remains to be seen how well that goes, but I guess, just in general, I'm not so sure that the sky is falling for traditional media just because of Google and I do think this could be the year when we see there's actually limited to how much Google can do, and do well.

 

Brad Forsythe: Well, I'm a bit skeptical myself. You know, they own the real estate with their own site and search results, and so forth and they don't own the real estate with both of these particular categories, radio and magazines. So I think the jury's still out on whether that's going to come to life.

Ray Schilens: The question is don't blink, though. Watch your back.

 

Brad Forsythe: Yeah, we'll see, we'll see. Real quickly, last summer we interviewed the online film creators of Epic 2014, Sloane and Thompson. For those unfamilar with the film, it's basically just a short film that takes actual events of the last several years and combines them with a future timeline suggesting the evolution of future media, and one of their predictions, Jon, as you well know, is that in '06, Google will combine all of its services, GMail, Google News, etc. Along with others such as TV and Blogger into what will be known as a Google Grid of sorts. How close are we to this actually happening, Jon?

 

Jon Fine: You know, well, Google, to their credit, do stuff very slowly and very quietly, which is probably the best way to do it because there's so many people waiting to comment on every move they make. I think we're a good year or so away from any kind of grand unified theory of Google taking place. They're kind of testing out various things. They're also testing out Google Base, which can be considered to be their shot at getting into newspaper classified ads, but it hasn't really been integrated yet. One really important thing to keep in mind with Google is that there's a lot of stuff they do that people don't think of and that stuff really hasn't succeeded that well.

 

Ray Schilens: We've got to take a break here with Jon Fine, here on The Advertising Show. By the way, according to out Advertising Show staff meterologis Lou Pressure, in New York City there is lighting, 60 mile per hour winds, and 26.9 inches of snow on the ground for you Jon.

 

Jon Fine: That would be a record snowfall.

 

Ray Schilens: It would, since 1869, it is. Back in just a moment with more on The Advertising Show.

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Ray Schilens: Jon Fine has been a freelance reporter, writer for GQ, Spin, ESPN: The Magazine, Colombia Journalism Review, also has been quoted on a broad topic of media-related issues in outlets ranging from CNN to Entertainment Tonight to NPR to the New York Times.

 

Brad Forsythe: And now The Advertising Show.

 

 

Jon Fine: And now The Advertising Show, indeed.

 

Ray Schilens: Yeah, put that down on your resume.

 

Jon Fine: Assuming I've said something quotable by now, and I'm not sure I have, but hey.

 

Brad Forsythe: Well, we'll go back through and we'll just edit in new words that you've not said yet.

 

Ray Schilens: We have the capabilities, Jon. Just be cautious.

 

Jon Fine: Maybe you can start doing that to my columns to, actually.

 

Ray Schilens: Probably so, no problem. Also, but the way, you mentioned this last hour as well, Brad, Jon's blog is at businessweek.com/innovate/fineonmedia.

 

Jon Fine: It's also accesible via the front page of businessweek.com.

 

Ray Schilens: What'd you buy a banner or what?

 

Jon Fine: Oh, well, we have ways, we have ways.

 

Ray Schilens: He knows the programmers.

 

Brad Forsythe: And you know, we'll mention your blog a couple times in the future if you would trade us a link. No, I can't get into that right now, can I? You know, if you want to mention us in your column, or on your blog, theadvertisingshow.com, and you know, surge our online listeners beyond what we already have, which are huge, that's your call. Have we had enough with Jon? Well, we'll see you later Jon. No, you know, we do have a worldwide audience and 25% of our audience is beyond North America and we want to welcome our listeners areound the world and we've talked a little bit about podcasting, Ray mentioned last hour about theadvertisingshow.com and we're very familar with podcasting online, live streaming, for example, that we adopted back during the launch of our show in the fall of 01, podcasting since last year. On your blog, Jon, you pose the question, "Can podcasting do business?" Ray and I want to pose a question to you. How do we make a buck or two on our podcasting?

 

Jon Fine: Basically, the most intereesting thing I've heard about, in terms of podcast advertising, is that the company that makes Dixie cups, which I believe is Kimberly Clark, but don't quote me, they approached the women who run a very popular podcast called "The Mommy Cast, " which, surprise surprise, is for your parents and basically they just gave them a chunk of money and as far as I can tell, the women doing the podcasts are just going to make a couple of podcasts that are basically about Dixie cups or whichever product that Kimberly Clark wants them to do. So, it's sort-of product placement, but it's sort-of, like, jsut being ensured that you're going to be talked about. The women at the Mommy cast swear that they'r just going to say whatever pops into their head, and that they're not just doing an infomercial or anything. That's one of the most interesting things I've heard about in terms of podcast advertising. It's such a new form that there's no obvious ad model. And it's uncertain whether or not people want to pay for podcasts, when in fact, there's so much free stuff out there, it's hard to believe they will. But, as with any brand new medium, there actually is a chance to do something totally different and what Kimberly Clark has done with the Mommy Cast, is pretty much an interesting idea. So, I guess you guys just have to find someone to convince you to sit around and do a riff on them and boom you're in the clover.

 

Brad Forsythe: We're easy to riff. We're easy to be bought off too. You know, we talk a little bit about measurement tools and podcasts and I understand that there's a lot being written about companies getting into that business. Any widely accepted metrics being bannered around out there, industry wide, that organizations are look to for podcast measurement that you know of, Jon?

 

Jon Fine: Podcast measurement, I mean, measurement of established media, like television and magazines is actually kind of problematic right now, as you know, marketers are starting to say things like, ok, well, you know, these copies go out there, or these TV sets are on, but are people actually paying attention to the ads. What you have with podcasts, is that it's an even more recent medium than either of those. You can track how many people are downloading podcasts and since podcasts are pretty short, you can guess that the people downloading them number one, are going to hear the entire thing, number two, becuase podcasts still are young enough that you have to look for the stuff you want, it's a good bet that the people listening to them are very engaged, which is something advertisers want. But in terms of there being Nielsen ratings or anything like that for podcasts, no, that hasn't come up yet. I would bet it would be a while, just because the peoplethat are really obsessing about measurement are worried about the stuff that goes to millionss and millions of people and podcasts, when you get right down to them, are a pretty small part of the world right now, growing very quickly, but not enough to compare it to people that listen to a major metropolitan area's radio show, for instance.

 

Brad Forsythe: I think I agree, the key, going forward will be that people are actually consuming and seeking out podcasts, and interested enough to seek out that content that makes it a value to the sponsor or advertiser. I want to go back to your Mommy's podcast that you mentioned. We've all heard a lot about companies and their employees who create a blog site with the intention of favorably promoting the companies products or services and of course under the guise of being a real blog, so called covert blog strategy, if you will. Can something like this work today considering today's savvy online consumers?

 

Jon Fine: The covert blog? Or the Mommy Cast sort-of situation, or both, really?

Brad Forsythe: I'm thinking more, not so Mommy Cast, because you said the sponsor separates any influence that they're wanting to put content of the particular podcast, but in the case where a blog site is actually developed by an employee or a company pretending to be an independatn source, but yet really trying to control or trying to distribute favorable content about a company's products or services.

 

Jon Fine: I think that that kind of stuff getsvery tricky. I think, first of all, that that tends to be ignored pretty quickly because people are fairly savvy about what they read and you can just sort of tell. You know, if it walks like a duck, but it barks like a dog, chances are it's not really a duck. People are pretty adept to telling ducks from dogs these days.

 

Ray Schilens: Well there's your quote.

 

Brad Forsythe: Yeah, it's true. We'll put that on Animal Planet next week.

 

 

Jon Fine: That sounds great. But seriously, back to the notion. Certainly, there are corporate blogs and various degrees of goodness, but I have a hard time believing that the covert stuff can really work.

Ray Schilens: We've got to take a break here as we are talking with Jon Fine out of New York CIty, the media columnist for Business Week, and we're going to take a break here in just a moment, we've got, what is is, Jeffery Jittemer on the way, talking about value. A good word, and a good thing to have value in your brand. Do you? We'll find out. We'll find out how to get it, I should say, in just a couple of minutes. A little bit later on this hour, it's Andy Borowitz, recapping Super Bowl XL, and it has something to do with our good president, not Dick Cheney, who is quail hunting. I wonder if Dan Quayle was out there, Brad, at the ranch in Texas and he shot the other guy instead, who knows. Anyway, we'll be back with mor with Ray Schilens and Brad Forsythe and it's The Advertising Show. Stay with us.

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Ray Schilens: The Advertising Show is back with Ray Schilens and Brad Forsythe and our special guest out of New York City, snowy New York City, Jon Fine, media columnist with Business Week, Jon, welcome back to The Advertising Show, it's great to have you here.

 

Jon Fine: Thanks guys, great to be here.

 

Brad Forsythe: Yeah, Jon, what do you think the biggest media business story is going on right now? I mean, there's a lot out there. I know I'm putting you on the spot. Just pick one.

 

Jon Fine: The biggest media story, as of right now, has been the enormous rise of MySpace and sites like it. MySpace, MySpace.com to be specific, is a site that's sort of been described as social networking. It's really deceptively simple. It basically allows its users to put up webpages about themselves, they can post pictures, they can post music, they can share it across the platform. As I said, it sounds deceptively simple, but it's just gotten ginormous. I think, last month, if I remember my numbers correctly, they counted 40 million unique users, which is somehting like a five or six fold increase from about a year ago. The site's only been in existence for aobut two years. Last summer, Rupert Murdoch's news Corps purchased them for 580 million dollars and at the time, people were kind of shocked that it got that much money, and now, if anything, they're thinking maybe he might've gotten a deal out of it.

 

Brad Forsythe: Yeah, social networking is really, I guess, the trend of where the online community is going. Don't you think Jon?

 

Jon Fine: Well, pretty much. I think it even goes beyond that. I would argue that this is the one mass medium by which, to reach a large audience of Americans under the age of 25 right now. I mean, you pretty much can't do it through TV, you pretty much can't do it through radio anymore. You're definately not going to do it through newspaper. Some magazines, perhaps, but the numbers are pretty undeniable. When you're trying to reach teens and twenty somethings, your best bets are places like MySpace, and for guys, video games.

 

Ray Schilens: You know, just to let you know that we're watching you online and on every step you take, Jon, you were recently on a panel, at the McGraw Hill media summit, talking about DVR and VOD technology as a disruptive market for.

 

Jon Fine: Yeah, that's true,yes.

 

Ray Schilens: Well, you don't have to tell me that, we could tell you what you're doing right now. Those boots that you're wearing are very nice looking boots. They're a little wet though. The Comcast, I don't know if you've caught this, just recently came out with some sponsored research suggesting that VOD had no negative effect on viewership habits, so, is it disruptive, or could it be argued, as Comcast would like for you to believe, that actually, it adds to viewership.

 

Jon Fine: Well, I mean, it does add to viewership, the problem is, does it add to people viewing ads? And the answer to that is no. Advertisers get really freaked out about technologies like TiVO and Video On Demand, and there's something behind why they're upset, but there's a heck of a lot of ways to skip ads, and not all of them were invented in the past three or four years. You know, the kitchen break, the bathroom break, even before the remote control. Video on Demand, I don't think there's any question that people are going to watch more TV because of it. The question is, if they're really in control of how this stuff is coming to them, are they going to see ads? How are they going to see ads? What kinds of ads are they going to stop and watch? How are they going to deal with product placement and show. The fact that people are watching more TV doesn't mean it's a more disruptive technology to advertisers.

 

Brad Forsythe: Many years ago, we didn't have as many outlets to be writing and talking about as we did back in the early 60s, and Ray and I were certainly young children at that time, but cna you imagine the hoopla over putting buttons on radio? God, they're going to skip the commercials. So, I mean, how far can you go back with this? you know, there's always been concern, and I think what it really comes down to is you create a great spot, whether it's TV, radio, whatever, and grab the attention of the viewer or the listener, and you will catch them, and they'll listen. Do it in a way, that's a bit in your face, and all about you, and what you want to sell the consumer and it's a turn-off, no matter what. I think the advertisers just need to be a little smarter aobut what they do. Do you think ad agencies have to push the 30 second TV spot today to their clients because of their financial model of being dependant upon that?

 

Jon Fine: The short answer to that is yes. If they're smart they're going to start getting away from that. Television, doing 30 second spots is the most profitable form of advertising if you're from an ad agency. There's also subtle cultural factors that go into that as well. A 30 second spot to an advertising agency person is their chance to do Hollywood. It's like their movie. And everyone wants to be on TV. The problem is that there's more and more data showing it's not the best way to go when it comes to reaching consumers, and is 30 seconds the right way? I don't know, maybe 15 is better these days.

 

Ray Schilens: Certainly the trend is to go shorter. We have about a minute left here. In December, you wrote an article about Bob Greenwood and the public groups New York based interactive agency RGA and his survival guide for today's ad man. You suggested that he said you need to create marketing, or a marketing experience. What did you mean by that?

 

Jon Fine: Well, basically, you want to creat something that's different, you don't want to just do a print ad or a 30 second ad. This is a guy who did an interactive billboard in Times Square where people could point their cell phones at it and change the design of a sneaker. I think there were chances to actually win major prizes doing that. These are just sort of cool ideas for people to play with and inteact with media in the guise of marketing. They can sort of stand or fall.