Digital media divides

Today’s “duh, who knew?!” newsflash comes to us from this yarn in the NYT which reminds us that Internet companies like Yahoo!, Google, Facebook, MySpace etc collect copious amounts of personal data.

This idea has of course already surfaced before in the form of different ideas, such as the attention economy and the attention trust. The point is that all of us implicitly or explicitly make an exchange when we use the Internet. We get access to oceans of content and data, and some of the service providers collect tolls along the way – in this case the search engines and digital media companies that store, mix and exploit personal data. And that data is valuable. There’s no great socialist conspiracy here (to the best of my knowledge) – it’s simply the way the ‘net works.

But food for thought raised here is that there’s been a shift in the balance of power away from traditional media. In times past, media companies drew their strength from understanding and knowing reader behaviour. An editor is at his or her best when decisions about editorial and the media business are heavily influenced by reader behaviour.

Now, that situation hasn’t changed. Editors still understand their readers and publications. But the vast computing power being deployed by Internet giants continues to change the game regardless. Here’s a quote from the NYT piece:

The rich troves of data at the fingertips of the biggest Internet companies are also creating a new kind of digital divide within the industry. Traditional media companies, which collect far less data about visitors to their sites, are increasingly at a disadvantage when they compete for ad dollars.

The major television networks and magazine and newspaper companies “aren’t even in the same league,” said Linda Abraham, an executive vice president at comScore. “They can’t really play in this sandbox.”

During the Internet’s short life, most people have used a yardstick from traditional media to measure success: audience size. Like magazines and newspapers, Web sites are most often ranked based on how many people visit them and how long they are there.

But on the Internet, advertisers are increasingly choosing where to place their ads based on how much sites know about Web surfers.

So where does this leave big media? Do you rush out and buy sophisticated web analytics services or software? Wait for the consumer privacy outrage to swing the pendulum back in your favour? It would be foolish and simplistic to say there was one easy answer.

But for me, an interesting subtext to this piece is that what counts more than ever is the opinion of advertisers and marketers when it comes to online spending expectations. In Australia, we’ve got some really savvy online marketers, and plenty of others who sadly think digital media still equals a flashing web banner.

Reminds me of a video that I helped Foad Fadaghi produce for BRW (bottom right side of the page) for his Digital Generation report. If advertisers want accountability and metrics, and you’re in the media game, then now would be a really good time to evaluate or re-evaluate online measurement tools.