Does Data Defy Definition?
An increasing challenge in InfoCommerce Group's business of monitoring the data publishing industry is to maintain a good working definition of what constitutes a database product. In the good old days, it was easy to spot a data product because it was held in database form. But now, it seems almost all content is stored in a database, from press releases to magazine articles.
The simplest definition of a data product focuses on the fact that it is highly structured and fielded content. But since publishers of news and textual materials have gotten wise to the power of taxonomies and content tagging, and with the widespread adoption of XML, that definition no longer serves.
Most recently, it seemed that workflow integration could uniquely define a data product. While lots of publishers have jumped on the workflow integration bandwagon, it was clear that only data products could truly become integral to a user's workflow, because they alone could be married with software to not only provide information, but take action.
Well, two recent deals by Congressional Quarterly, just days apart, are now challenging this definition as well.
A number of years ago, Congressional Quarterly saw the writing on the wall and began migrating its print publication, which provides news and analysis on Congress, politics and public policy, to its flagship website CQ.com. It all seemed oriented to news and not data, and particularly when you applied the workflow integration test, it didn't seem to qualify as a data product.On July 25, however, Congressional Quarterly announced the acquisition of Political Money Line, a database of election campaign contributors that will be integrated into the CQ.com offering. Now a database will sit alongside text-oriented content, complicating an otherwise easy label for CQ.com.
Then on July 26, Congressional Quarterly announced it was teaming up with Potomac Publishing to provide a new service that will greatly reduce the time it takes to determine how legislation will affect existing public law. Called CQ Legislative Impact, the service brings together CQ's enhanced Bill Text service with two new databases provided by Potomac Publishing -- the U.S. Code and Public Laws.
CQ Legislative Impact will allow users to call up a bill -- from this Congress or previous sessions -- and instantly see which parts of Public Law or the U.S. Code would be altered, or were altered, by the bill. Similarly, users can find laws they care about and easily see how various bills have been amended in previous years. Certainly, this is automating work processes previously done manually, and probably quite slowly. Smells like workflow integration.
Some poking around on the CQ.com site also led me to another existing service that tracks changes to the text of legislation as it moves through Congress -- still another example of adding workflow integration capabilities to what traditionally would be viewed as full-text products.
So what is CQ.com? Is it a data product? Is it a text product? Both? Neither? The answer is simple: CQ.com is one very smart product, and that's the message here -- none of us should be afraid to move outside traditional media boundaries or definitions if we are creating products that meet real and important customer needs.
Rick Wainschel
VP, Marketing Research & Brand Communications
Kelley Blue Book
Will Be a Speaker at InfoCommerce 2006
Is the Long Tail an Old Tale?
The hot buzz term for some time now has been the "long tail," and the concept is now the basis for a new book by Wired magazine editor Chris Anderson called " The Long Tail: Why the Future of Business is Selling Less of More."
On a surface level, the premise of the book is straightforward: Anderson believes that the 80/20 rule, where 20% of products represent 80% of sales, is increasingly being inverted by companies that have found they can make more money, more dependably, selling lots of little items as opposed to focusing on selling big blockbuster items.
Anderson focuses heavily on retail media companies such as Amazon, Netflix and iTunes, so his insights would seem to apply to the larger media/information industry. Yet the more I looked into it for implications for the specialized publishing industry, the more I asked myself: what about the long tail concept is new?
It's hardly a secret that while many book publishers chase blockbuster titles in the hope of making big money fast, most of them are sustained by what's called their backlists -- the hundreds or thousands of titles they have already published that sell a few copies here, and a few copies there over a long period of time. Assemble a sufficiently large and good quality backlist and it seems to me you've got the proprietary equivalent of a long tail.
The same is true for movie studios, that get sold for obscene amounts not because of the hits they might provide in the future, but because of the solid library of films they have produced in the past and still own. The bigger the library, the bigger the revenue opportunity. Another proprietary long tail. Ditto this for the music business.
In the data publishing world, our product is more perishable, but still we have our own variant of the long tale: by slicing and dicing our databases into ever more specific pieces, we have found we can produce more sales, and at higher prices, by providing customers the exact data they want. No particular selection of data may sell a lot, but a lot of selections selling a few copies each still approximates the long tail effect.
So is the "long tail" an old idea dressed up in a trendy new catchphrase? Yes and no. I think the buzz has distracted us from the more important, underlying point: that the Internet has made it significantly easier for buyers and sellers to find each other. By creating a more efficient marketplace, we can now consider making and selling small-volume products that wouldn’t be economically viable in a pre-Internet world.
The truly important message of The Long Tail is that the Internet has freed all publishers, including data publishers, from having to exclusively chase "home run" new product ideas, because it's increasingly possible to do quite well with a collection of singles and doubles. And that's a tale worth listening to.
It's Always Blurry Before the Dawn
We coined the term "infocommerce" six years ago to convey a fundamental transition that was occurring within the publishing industry. Today, publishers are applying infocommerce in many ways, and it has become the essential key to redefining their roles and value propositions. As a result, the lines between information and commerce are becoming more and more blurry.
What's the difference between a database product and a catalog? At one level, the simple distinction is one takes orders for the listed merchandise and one doesn't. But in terms of the underlying content, distinctions blur quickly. One of the finest examples of this is Amazon.com's brilliant evolution of its Internet Movie Database subsidiary, which is successfully defying conventional wisdom with an explicit strategy to be all things to all people.
What's the difference between a list compiler and a database publisher? Here, the distinction is even murkier, though both types of businesses live in their own worlds and consider themselves vastly different from the other. The fact that compilers, just like data publishers, are being forced to gather deeper and more valuable data is a guarantee their paths will cross if not collide in the near future. D&B offers proof of this as it creates new products to capture more of the small business market. InfoUSA offers another great example as it moves to expand its presence with the big business segment of the market.
We are even seeing a blurring of traditional roles among B2B magazine publishers. Once content to passively introduce buyer and seller through advertising in their printed pages, many of them are now moving to more actively exploit their central market position, and are operating call centers to develop sales leads, conducting market research, creating vertical search portals, offering print and online custom publishing capabilities, and much more. It's going to be hard to recognize much less categorize these publishers in a few years.
So while this re-definition heralds an evolution of the industry, it's also confusing and destabilizing because the frames of reference we once depended on to understand how things work are all in flux. The good news is that those who are creatively embracing change are uniformly re-shaping themselves into better, diversified and stronger companies, with much more exciting growth and profit opportunities that will usher in the dawn of a new golden age of publishing. But at the moment, it's still a bit blurry.
Get Real
In its recent issue, BtoB Online discusses the growing excitement among B2B marketers about the powerful advertising affect inherent in "word of mouth."
It's long been known that word of mouth is a potent force. What dismays me is that once again, marketers are off chasing another trendy fad and trying to turn something natural and spontaneous into something that is mechanical and artificial. It's not that I am a purist; rather I simply don't think it can be done successfully.
Think about your own experience with word of mouth "advertising." Yes, there is some value if a friend or associate alerts you to something new. But the real power of word of mouth is when your friend or associate actually endorses something – putting their good name and reputation behind a product or service. That's why advertising agency campaigns that get people to merely pass around funny videos to their friends falls short. This may qualify as a form of viral advertising, but it fails to deliver an honest, objective endorsement, so as word of mouth advertising it hits far short of the mark.
It's the same thing with buzz, that mysterious point of critical mass when the world seems to be looking at you because enough influential people have chosen to talk about you at roughly the same time. This excitement about the power of buzz has spawned companies that claim they can manufacture buzz for a client on demand. I submit that whatever these companies can deliver in terms of buzz can only be a pale imitation of the real thing.
I have the same issue with the concept of community. All publishers know it's a good thing to create online community because it reflects loyalty and builds traffic. Yet, like buzz and word-of-mouth, I don't believe you can manufacture community. The communities that are real and worthwhile are driven by enthusiasm, deep interest, needs and passions. You can't fake that.
Rather than spending our energies trying to manufacture things whose power lies in the fact they cannot be manufactured, we should simply stick to the knitting. If we are creating information products that our customers really want and need, delivered in a way that is truly useful and valuable, then we've set the stage for buzz, word-of-mouth and community to happen naturally. If they don't, you've still got a viable, profitable product delivering value to its users. And you can't get more real than that.
Does CPA Add Up To Trouble?
News is flying across the blogosphere that Google is testing a new advertising program based on "Cost Per Action" or CPA. The implications are potentially enormous.
In the current model popularized by Google, both Google and its publisher affiliates get paid when a user clicks on an advertisement. It doesn't matter if the user does anything more than click; Google and its affiliate publishers still get paid. There are two main flaws with this model. First, advertisers who think they are so clever because they are "paying for performance" often find they rack up big bills with little to show in the way of increased sales. Second, the model is wide open to fraud.
This new CPA model addresses both these issues. To get paid, the user will not only have to click-through, but take a specific next step such as registering, requesting more information or making a purchase, all in the same user session. It's virtually fraud-proof, but the message it sends to advertisers is something of a two-edged sword.
The first is that clicks alone don't count. That’s wonderful news for smaller, focused B2B sites with real, repeat traffic from qualified users interested in a specific industry or topic. It's bad news for those who have gotten good dragging vast numbers of visitors to their sites by hook or crook.
The second message is that it is now okay to pay only when something concrete happens. Google's huge success with pay-per-click advertising revolutionized the advertising business by forcing inappropriate ROI metrics onto advertising, and shifting advertising risk from advertiser to publishers. Well before this Google test, we detected a distinct trend among advertisers to ask for the logical next step in this progression: pay-per-sale. Google will now be teaching advertisers that the smart way to advertise is to only pay when something happens. What "something" do advertisers want most? A sale, of course. This could easily get out of control.
It may have been fair to re-balance advertising risk between advertiser and publisher a bit, and pay-per-click did just that. But pay-per-sale goes too far. Can any publisher build a business that depends on the ability of the advertiser to close a sale? What if the salesperson is the slacker son-in-law of the owner? Do we only get paid if he decides to show up to work, actually responds to an inquiry in a timely fashion, can make a coherent sales presentation, and is able to offer the right price and terms?
If CPA takes off with advertisers, and I think it will, we have to watch it closely. If it remains limited to publishers getting paid (hopefully a lot) for generating hard sales leads, that's one thing, and a number of us could do quite well in this environment. If it morphs (as I predict it will) to advertisers demanding to pay only when they make a sale, we as an industry have to draw the line. The purpose of advertising is to stimulate interest, not guarantee profits.