Borrell Local Online Ad Conference

Dave Morgan On The Future Of Local Media

Dave Morgan founded two innovative Internet ad companies, and he's on his third startup, in television. But data-driven TV is only one of the huge trends emerging to shake up local media.
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NetNewsCheck,

You ain't seen nothing yet.

That refrain sounded again and again as Internet advertising pioneer Dave Morgan shared his view on the future of local media with the Borrell Associates Local Online Advertising Conference in New York City on Tuesday.

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Morgan is the founder of two pillars of Internet advertising companies – 24/7 Real Media in the ad server space, and the Tacoda behavioral targeting service, which sold to AOL for $247 million. He is about a year into his third start-up, Simulmedia, which mines television viewing data.

He laid out several emerging trends that he believes will shake up local media in the next 3 to 5 years, making a passionate case for each along the way. He shared some of his biases up front – his first prediction, for instance, may be rooted in a fondness for local media and newspapers since his pre-Internet days as a lawyer for a state newspaper association.

Here are excerpts from his predictions about the future of local media:

No. 1. Newspapers -- “I believe print newspapers will still be an important part of local communities in 3 to 5 years,” Morgan said. “However, they won't be as dominant as they have been for many years,” or command the same pricing or other advantages in the face of new competition.

No. 2. Local News -- “There will be more competition, more robust and more diverse products in local news - escalating competition because it costs less to produce. I think that's great, for consumers and for advertisers.”

No. 3. Local Ads -- “For those offering local ad and marketing services, likewise. More robust competition.  If you think Google and Yahoo have robust local services today, you haven't seen anything like what you'll see in 3 to 5 years.

“You're going to have to step up your game significantly in the next 3 years – a lot more competition is coming at a lot lower cost than ever before.”

No. 4 Real-time Web and continuous updates -– “Real-time web services will be more significant in their impact on local markets than search was. Twitter. Facebook status. Foursquare. …

“if you are not personally using some of these services to learn about them, you will be left behind and not know how to compete in local news services. The real opportunity will be the ability to combine expertise with real-time updates."

No. 5 Social gaming -- “Watch it, play it, understand it. One of the most powerful real-time opportunities,” said Morgan, who began to take notice when his 40-something high school friends began to update Facebook pages with status reports for online games like Farmville, Fishville and Mafia Wars. “This is fundamental, this is mainstream, this is eating up lots of people's time. … Imagine when you start to use these to run better promotions and marketing campaigns.”

No. 6 Location-based services -- “What I've been looking for (as a consumer) for 19 years is finally available with location-based services.  … FourSquare is one these with social gaming and mobile check-in elements – many people see it as the next Twitter....

“I believe that this could be one of the platforms to transform local marketing. If you're a media company in a local market, you could be a kingmaker in extending these services and using them to extend your own business. …

“The APIs (to technically integrate the services) are free and available now.”

No. 7 Television Next -–  “After 19 years in online media, I got into television. Not interactive TV. I mean linear TV as it is delivered today.

“Why? First, usage. In spite of intense competition from the Internet that has dramatically decreased time the average American spends with newspapers and other media, TV has held and actually grown share since 1995. The platform has dramatically improved (with  hundreds of content channels and HD). … People will watch TV for the next 2 to 3 decades. ….

“I basically sold online display ads for 17 years (through his ad-serving and targeting companies), but I never sold a display ad that had the emotional impact of TV commercials...

“And now TV is undergoing massive disruption. Not just in how it's piped, but in how the data is used.... TV ads are a $65 billion market – it's huge but only 10% is data-driven. …. Most ads are sold based on opaque panel data – and it's wrong. I know, because I've looked at millions of anonymous set-top data (through his new venture Simulmedia), and the ratings are wrong.”

When asked whether Simulmedia would be the “Tacoda of television,” Morgan said “No.” So far, the company's research has focused on how TV channels promote different programs and how to improve the effectiveness through targeting.

He ended with this general advice for media companies: “Media companies have not lost value because their content has less value. They have lost value because ad sales and services have fallen behind what's available in the market."

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RustbeltAlumnus2 Nickname posted over 2 years ago
|
Terrific. A 3-5 year projection. This guy is really sticking his neck out, projecting the future that far down the road. [Sarcasm] 2 to 3 decades for linear TV? That's utterly loony. My kids don't even watch TV.

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