Saturday, September 22, 2007

Google's plan to poach election traffic

Google's plan to poach election traffic

Google is road-testing a major initiative capable of hijacking a good deal of the web traffic the mainstream media ordinarily would get during the 2008 election in the United States.

Fortunately for the MSM, Google's ambitious new online publishing project went on public view last week in Australia. So, American newspapers interested in preserving as much of their flat-lining web traffic as possible should waste no time in taking a look at Australia Votes, the up-and-coming way of presenting the political news from Down Under.

Australia Votes signals a significant strategic shift on the part of Google to become a primary web destination, as opposed to restricting itself to its historic role as a supplemental, though highly valuable, research tool. As such, it eventually could compete head to head with not only the likes of CNN, the Washington Post and all the other media biggies but also with the tiniest of tiny weeklies.

If you don't think the mainstream media are vulnerable to Google's greater growth, look at the data.

As you can see in the graph below from Alexa.Com, Google and its new subsidiary, You Tube - respectively the third and fourth busiest sites on the Internet - have been gobbling market share over the last three years at the expense of the mainstream media (and, of course, certain other competitors, too). The combined traffic of Google and You Tube would lift them well above Yahoo and Microsoft, the top two sites.

Meanwhile, ABC, the highest-ranking MSM site, has dropped to No. 48 today from a position in the 20s three years ago. And the New York Times, the highest-ranking newspaper site, has fallen to 209 today from the top 50 in the early part of 2006.

The Google election project, an elegant mashup of Google's arsenal of search, mapping, video, widget and other technologies, is a preview of how all but the most technologically recalcitrant consumers will expect to get political - and many other types of - news in the future. In addition to delivering a wealth of well-packaged election information and interactive tools, Google has created four content-pushing widgets and a number of ways for users to express their opinions via forums and home-brewed video.

I'm going to save myself a bunch of typing (and you a lot of reading) by linking here to the promotional video on the project that Google has posted at the explosively growing You Tube. Before you go, however, let's consider the implications of this latest affront to the once-unchallenged power and glory of the legacy media companies:

Australia Votes - and the all but certain sequel, America Votes - demonstrates emphatically the lopsided competitive advantage Google (and similar but less formidable web publishers) has over the traditional media companies.

While the MSM bear the enormous costs of producing content and delivering it via capital-intensive print or broadcast infrastructures, Google (a) pays nothing for the content it scours off MSM web sites, (b) incurs essentially no costs in selling advertising and (c) spends a trivial percentage of its more than $13 billion in annual sales on the 24/7 data centers that require human intervention only when they go awry.

Although Google is brilliant at finding, aggregating, indexing and rapidly presenting the collective wit and wisdom of the web, dozens of libraries worth of books and a growing array of public documents, Australia Votes, like all Google products, contains zero original content produced by Google, if you don't count the promotional video. Instead, Google is populating Australia Votes with original content provided for free by the mainstream media companies whose lunch, as previously reported here, it already has begun to eat.

Now or in the future, Google can make money off the large and expanding audience of sites like Australia Votes by selling advertising to marketers who use a totally automated, self-service system that gives them immense control over their buys and the instant gratification of minutely tracking the success of their campaigns. What Google does not have is the sort of large, highly compensated sales staff that is employed by every newspaper, magazine and broadcast outlet in the country (save for public broadcasters, who rely on the support of listeners and viewers like you).

Unlike the humans creating content, selling ads and producing products at the legacy media companies, Google's massive computer arrays do not require lunch breaks, sleep, vacations or union representation. To be clear: I'm not against lunch, sleep, vacations or union representation, each of which I have enjoyed to a greater or lesser extent in the course of my career.

But Google's boldest-yet intrusion into the formerly sacred space of the MSM underscores the urgent need for legacy operators to cut their embedded costs to be able to compete in the future with Australia Votes and the many similar initiatives surely coming down the line.

Among other efforts, the MSM need to take a page from Google by learning to publish efficient, compelling and customizable database-driven sites like Australia Votes or Chicago Crime. And they need to emulate the frictionless online advertising platform that fuels Google's high-margin success.

And here's one more out-of-the-box idea: The MSM may want to start thinking about charging Google for their valuable content before they discover they can't afford to produce it any more.

UPDATE 9/17/07: The cautionary note in the above paragraph goes double for the New York Times, which announced today that it will stop charging for access to its premier columnists.

The decision sort of makes sense, given the steady deterioration in the newspaper's web traffic since Times Select launched two years ago this month (see graph below). While this decision may arrest the declining ratings of the Times web site and create a decent number of new premium advertising opportunities, the comparatively small amount of fresh ad revenue generated by this decision will not sustain over the long term the formidable expense of generating the content for which the Times is rightfully admired.

Accordingly, the Times and the other MSM need to work harder than ever to cost-effectively produce engaging new-media content to compete with initiatives like Australia Votes that threaten to take ever-more-meaningful chunks out of the mainstream media business.

No comments: