State of the Media

There is gold in them thar hills

The biggest question I hear now is "Can you make money off of media?"  That question isn't just about social media, but all kinds of media.  For traditional media, most people are leaning toward a "no" answer, even though many people are still trying.  For new media (blogs, social networks, podcasting) most lean toward "no" but with a question mark because they are hoping they are wrong.  they think they might be able to, but they can't figure it out.

Speaking from personal experience now (experience over the past 6 years since I got into this, I've decided upon a definite "yes" for both.  There is a "however" attached to it.

Media can be a profit center, but only when you change your definition of what a profit center is.  There was a time when revenues were directly attributed to media investment (primarily advertising) But there was never a direct correlation.  The more you invested in media, the greater your revenues grew.  That seemed to be a direct enough correlation for any company.  Then the internet came along and people believed that it would be able to give that direct correlation that everyone really wanted.  Well, not everyone.  Just bean counters and engineers.  And what's more, investing in internet media was going to be a lot cheaper than print or broadcast.

Well, the last part was definitely true.  It was cheaper.  And because it was cheaper, companies started investing in internet media while dropping their overall investment in media in general.  The result was that revenues started to drop and when the companies started using the wonderful measurement tools the internet promised them, they could not find the direct correlation between revenue and media investment.  So they cut their budgets even more.  And revenue dried up even faster.

The media industry went into recession long before the rest of the world and it started when they began telling customers that they could give them the detailed information and connection they needed with the most important customers that would raise revenues.  They were wrong and they shot themselves in the foot, ankle, kneecap and hip in the process.  They may never recover.

Unless they, and all the rest of us decide to relearn what media does for the bottom line:

It engineers opinion in the marketplace of ideas.

The keys in that phrase, that has been around for more than 100 years, are "opinion" and "ideas."  Neither of those two phrases are concrete.  They are abstract, wibbly wobbly balls of concept.  For some people they can be very clear, for many others they cannot.  But both are incredibly powerful tools for driving success, and they are influenced more by emotion than intellect.  You can't really measure it.  You can't really control it.  It's not science.  It's art.  And that makes bean counters and engineers very nervous and wary.

As I said, I've been kicking around the world of social media for about 6 years.  I sat back and stared at it for two years before that.  About three years ago I started sharing what I had figured out about social media with friends and colleagues.  Something really strange started happening for some of them who decided to take what I was saying bout it to heart.

They started to make money.  They got better jobs.  Their companies started turning around.  They started hiring employees.  Then one of them finally came to me and said, "Lou, you really should be charging for this kind of information."

Physician, heal thyself.

For the next few weeks I'm going to start sharing some things that I've discovered in the past few years.  It will be enough to get you interested, but not enough to get you to the other side.  I've decided to stop giving away what I know.  I now have a couple of clients who are actually paying me to share this information, and you may be hearing about them in the coming months.  

It can be done.  You can make money off of media investment.

BusinessWeek on the block and on the skids

News today is that Bloomberg is buying BusinessWeek from McGraw-Hill.  According the Eric Savitz at Barron's the selling price is a bargain basement $2M to $5M.  Of course, it also includes acquisition of $40M in debt.  BW has more than 400 employees but has been cutting staff steadily for a decade, so you know how big it once was.  It's name is mentioned with the same gravitas as the Wall Street journal, Barrons, even the New York Times.

I remember sitting in on an interview by Kathy Rebello, then a senior editor, after a product review at CES.  For the company (not a client) it was a major coup to get a live sit down with a BW editor, especially Kathy.  And I watched as she took the story apart and reduced the CEO to tears begging for her not to write the story.  Every client I had wanted to be in BW and every time they said it I told them about that time.  BW was never a friend of any business, but they were always a real watchdog for investors and the public.  To get a positive story was a big deal (and I did it twice), but you really had to do your homework.

Bloomberg will keep the name and claims it will keep the print publication alive.... you can believe that if you want.  We'll still have the website for a while and our memories of what was once a vibrant publication that really covered business.

BusinessWeek on the block and on the skids

News today is that Bloomberg is buying BusinessWeek from McGraw-Hill.  According the Eric Savitz at Barron's the selling price is a bargain basement $2M to $5M.  Of course, it also includes acquisition of $40M in debt.  BW has more than 400 employees but has been cutting staff steadily for a decade, so you know how big it once was.  It's name is mentioned with the same gravitas as the Wall Street journal, Barrons, even the New York Times.

I remember sitting in on an interview by Kathy Rebello, then a senior editor, after a product review at CES.  For the company (not a client) it was a major coup to get a live sit down with a BW editor, especially Kathy.  And I watched as she took the story apart and reduced the CEO to tears begging for her not to write the story.  Every client I had wanted to be in BW and every time they said it I told them about that time.  BW was never a friend of any business, but they were always a real watchdog for investors and the public.  To get a positive story was a big deal (and I did it twice), but you really had to do your homework.

Bloomberg will keep the name and claims it will keep the print publication alive.... you can believe that if you want.  We'll still have the website for a while and our memories of what was once a vibrant publication that really covered business.

It's a start...

    Just finished  the launch of a social media program for a public company in the electronics sector and it was a great experience.  We had a packed room with about 50 people live and around another 10-20 on line around the US.  Got a few pointed questions and answered pointedly with several stepping up and say they want to learn more... even in marketing!

    That's an important statement.  In 2007 Time magazine reported a study that 55 percent of technology customers used social media to decide what to buy but only 34 percent of marketers in technology companies were using social media to reach their customer base.  Last week, PR Week put out a study showing that decisions makers are only increasing  their dependence on social media, yet marketers in tech are at best, still holding at 34 percent.  In fact, the survey showed on 6 percent of companies using social media are incorporating input from customers on social media into customer service efforts.  So when marketers step up to adopt social media in an electronics company, that's big news.

    I'm particularly encouraged.  This was the first of several projects I'm planning to help companies create effective social media efforts, all of them with companies that might be considered in financial distress or, in the least, with very little market visibility.  The marketing chief of the company I just started with said he thinks we are entering a period where sociologists and communication experts will be doing important studies on the effect of social media on the economy and business that will be rewriting how business is done on our world.  In a couple of years, certain segments of the electronics industry will have new leadership and it looks like social media will have a real impact on who those leaders will be.

    Like I've said before.  It is a brave new world...

Correia leaves Software Test & Development

This one slipped by me.  Eddie Correia, long a fixture at BZ Media, apparently is not longer there.  Got an update on Linkedin that he was looking for freelance work.  He was one of my favorite editors to work with in the embedded world; always up to speed on the latest technology and news and a heck of a writer.  BZ sold Software Test & Performance magazine to Redwood Collaborative Media back in January, and Eddie moved over with the rest of the team.  He also ran the conferences associated with the magazine, which is where the money is in tech media now.

Anyone looking for a good writer should look him up.

The view from the boys in the press room

I did a boatload of podcast interviews with EDA companies at DAC in July and on my last day I got together with Dylan McGrath and Nic Mokhoff of EE Times regarding the issue of how the industry is communicating with its customer base. I think it’s interesting to note that while Dylan kinda agrees with me that he doesn’t see the evidence that engineers get all the information they need by talking to each other amd getting it off press releases, Nic generally agrees that engineers can get all the information they need off the web now, and will be able to do it even better in the future. What that means for traditional media, they aren’t sure. Note: The sound level on this is a bit wonky because my computer was trying to balance my big mouth with Nic’s soft basso. You’ll probably have to turn up the sound to hear Nic.

What transparency costs

Something happened this week that brought up the issue of transparency, journalistic independence and why both are needed for a vibrant media that properly serves the industry.  As many of you know, I was asked to start a blog on EDA Cafe back in June and started a series of podcasts focusing on the bottom line of design automation.  in other words, finding out the industry could justify its existence financially to its customers.  

We started out with a couple of interviews with the CEOs of Magma and Tanner EDA and then of the Real Intent CEO.  The first two readily admitted that figuring out the real ROI of EDA tools is something that has not been done well and needs to be done better.  The third interview had the same revelation, but you might notice that the interview is no longer available on EDA Cafe.  Real Intent lodged a complaint to EDA Cafe regarding the statement in the interview from the CEO that they could not accurately estimate the ROI but were sure they had the right price point on their tool.  I also pointed that out in the written introduction.  They wanted the interview taken down, and since Real Intent pays for their presence on EDA Cafe, their demand was met.  One complaint and it's gone.

So that's what we have to deal with.  Many publications on the internet are ultimately controlled by the companies they cover.  Those publications believe the companies supporting them will pull that support unless the toe the line.  That means, ultimately, you can't really trust the content on those publications.  It's not that the publications are unreliable, just the content they allow on the site because they don't really control it. Specifically, EDA Cafe has not violated any form of journalism ethics because their business model is not set up to maintain them.  They are paid for industry happy talk.

Some people might put New Tech Press into that same category because all the content is sponsored, often by the company that is being written about, but this is where maintaining independence and transparency comes in.  New Tech Press requires sponsoring companies to accept the condition that they can only control the factual content of the material, not the way it is presented.  We maintain the right to contextualize the content.

We recently had an article sponsored and were all ready to publish it when the sponsoring company said they didn't want to be identified as the sponsor.  We refused to publish it on New Tech Press because that request not only violated our agreement, it also violated our commitment to transparency and independence .  I'm sure we will never be approached by that company again, but then, we wouldn't accept their business again either.

My point is, and always has been, that ethics only count when you actually have a choice to maintain them.  I was approached by EDA Cafe to start doing this podcasts and I made it clear, then, that since I am not getting paid to do any of it, I am going to ask the questions I want to ask and post the answers I get.  I don't have to be honest about it.  In fact, some people think if I engage only in happy talk, some companies might be more interested in hiring me.  But I didn't go into this business because I thought I would get rich from it.  I'm in it for truth and to help the industry right itself.

I still have several interviews to finish editing and posting from my time at DAC.  Not sure if EDA Cafe will allow them to be posted, but I'm going to finish what I started.

Oh, I wasn't entirely accurate about the Real Intent interview being taken down.  It is taken down from EDA Cafe.  It is still available on iTunes (search under Lou Covey or the title From the outside in), here, and soon on New Tech Press and the NTP Network partners.

And the answer is... again ... marketing

Couple days ago I asked for some help in figuring out the DAC numbers and one of my readers let me to an article by Kevin Morris at the FPGA Journal about the same thing, but getting into the discrepancies with much more depth.  Answered all of my questions (thanks Kevin) and like I thought, it took an engineer.

But far into the article, Kevin said something very insightful:

"EDA has ignored the majority of electronic designers in the world - who are not doing ASIC/SoC design. Probably 95% or more of the people designing electronic systems in the world today are not designing ASICs, but are instead using FPGAs and commodity processors on custom circuit boards. With a few exceptions - EDA has not invested heavily in serving this 95%, but has instead put the bulk of their development resources into supporting the high-flying 5% doing nanometer IC design."

He was making the point that if trade shows and conferences like DAC, DVCon, DATE, etc. are going to survive they have to go beyond their comfort zones and expand their customer base.  There is only one problem:  You have to invest in marketing -- real marketing -- to be able to do that.

Companies in the electronic design automation, embedded hw/sw, and fabless semiconductor industries just don't do that.  "We know who our customers are, we don't need marketing."  That's been the attitude for the past decade.  The smaller companies used to ride on the coattails of the major players marketing budgets in the 1990 until the latter smartened up and cut their advertising and trade show expenditures, which killed the media for the industries.  But because the smaller companies follow whatever the large companies do, they started cutting back on investment in marketing too.  

So now all of the companies know all of the players in their traditional but rapidly dwindling market, but they lack the resources, understanding and skill to find new markets.  There are zero marketing-driven companies in those industries.  They barely are sales driven.  What they are is engineering-driven. 

And that's why the trade shows are foundering.  It's not the conference committee's responsibility to bring in new customers.  They are there to serve the needs of the current community.  It's the exhibitors' job to bring in fresh blood.  They just don't know how.

End of rant.  Here's the good news.

I talked with a little over a dozen companies at DAC.  That's a better than a 5 percent sample.  More than half admitted they "effed" up in marketing and are looking to increase budgets.  They are looking for real help.  Not the SOS marketing of cranking out news releases and spending 90 percent of the budget on languishing exhibitions, but real marketing with research, social media programs, surveys and long-term strategy.

The conferences are going to have to adjust.  It may mean bringing the size down and going back to hotels with conference facilities (like DVCon) or lower-cost convention halls in out of the way towns (like DATE is doing).  It's going to take time to rebuild the industry, but it sounds like some people are getting with the program.

Well that didn't take long... Bloggers eschew press releases

A few weeks ago I wrote a post wondering how long it would take for bloggers, now being recognized as legitimate media in -- of all places -- Electronic Design Automation, to crumple in a disgusted heap under the weight of bad marketing techniques from EDA companies.  The answer to that question is: almost immediately.

Brian Bailey posted in his Verification Vertigo on Chip Design August 5 that press releases and marketing practices he is being subjected to are crap and admitted to ash-canning everything he got for DAC.  He stated that only on one FAQ was he able to find anything of real interest and it had nothing to do with the announcement.  He bemoaned to requirement to sign NDAs on information that companies wanted to make public, He gagged on repetitive, unimaginative presentations.  And Harry the ASIC guy agreed with him.

Let me quote Brian directly:

"I don’t care if so-and-so just landed a new customer, or that the latest release of the tool runs 20% faster or has an extra feature that was already available in the competitors tool offering. I don’t care that two tools that were obtained through acquisitions have just been integrated or that the company big-wig will be presenting somewhere. This is all irrelevant information to the blogosphere. Keep giving that to the tradition press – they know what to do with it!"

This is the same issue I've been hearing from the press for 10 years, and what I have been telling clients as well, but to deaf ears.  The only contention I have with Brian's position is the last sentence.  A lot of bloggers without a journalism background believe that the traditional press wants to see all that dreck.  It's not important to them either, Brian.  Nor is it important to the market.  The only people it is important to are the people announcing it.  Most of the time, the "partners" would prefer that nothing was said at all.

So with that in mind, I'd like to welcome the blogosphere to the real world of journalism.  The kind of investigation necessary to sift through the dreck has to be done for free at present. But that is going to change...real soon

Day one at DAC and the myth of the conversant engineer

Real interesting first day at DAC.  Free Monday seemed to bring people out of the woodwork in the morning  and traffic seemed to die out after lunch, but it wasn't for lack of trying on the DAC committee's part.  The DAC Pavilion was generally filled whenever I wandered by and the organization is trying mightily to deal with the issue of what to call bloggers.  Essentially the philosophy is a work in progress but there are some cutbacks.  John Cooley was "upset" that there was no food in the press room, but other than Paul Dempsey and John Donovan it looked like we could all cut back on the pastries.

I could have had a full access pass if I asked for one, but I only needed to get interview rooms so I saw no need... even though the bag would have matched my orange tie as Georgian Marzsalek pointed out.  Some members of the press were upset that the default access was exhibits only, but as I have said, we all have to be flexible in these times.

But all that is trivial compared to the disjointed conversations I had regarding to conventional wisdom of "engineers talk to each other."

It started out with a comment one engineer blogger made when we bumped into each other in the press room.  He's one of those guys that believes that the conversation between engineers in the EDA industry is vibrant enough that having a healthy press isn't really necessary to get information around.  "Hey, just because the financial paradigm is changing doesn't mean journalism is going away."  OK, I'll be a glass half-full guy.

A couple hours later, Georgia buttonholed me about an idea for a session.  Her idea was to put together a panel of EDA customers, traditional press and bloggers, and PR people to talk about how to engage the user directly to the media.  "We wouldn't have anyone from an EDA company, just those people."  Her idea came out when she was crossing the 4th Street and saw all the DAC badges, most of whom she didn't know.  "I know the high-level people we always get for panels, but not the mid-level managers, and those are the guys that have to buy the tools for EDA companies to survive... and for me to have a business."

So I brought her into the press room and sat her down with a couple of established, traditional journalists with the idea.  "Sounds great, except that engineers don't want to engage."

Wait a minute, I said, I keep hearing that engineers DO talk to each other and we don't REALLY need the press to spread the information about tools and technologies.

"You're right," one replied.  "They do talk to each other, but only within their own companies.  Never outside." He pointed out that on the show floor, there were maybe 200 design engineers and they are not hanging out together.

I chalked that up to sour grapes.  After all, traditional journalists still think they are the keepers of all wisdom, right?  Of course they aren't going to buy into the wisdom that "engineers talk to each other."

Next stop was the Synopsys Conversation Central Tweetup for a roast beef sandwich and some dishing among bloggers.  So I put the question directly to Rick Jamison, the Synopsys online community manager.  He said, essentially, that engineers inside Synopsys rarely talk to each other.  Synopsys maintains a social network behind the firewall with several blogs, but Rick said there is not much discussion even there.  "Most of the conversation is still in email form and that is impossible to coordinate."  

OK, so the engineers don't talk to each other at trade shows.  They don't talk to each other on external blogs.  They don't talk to each other on internal blogs.  They listen to presentations and papers presented at conferences but they don't discuss it among themselves at the conferences.  They talk among themselves in their own "hermetically sealed" work groups. 

Yep, the industry really doesn't need a vibrant media, does it?