Business Week predicts corporate takeover of blogs

Yipee. Business Week does a cover story on blogging and predicts that publishers will soon dominate the field.

The article makes many bold and valid claims (see below) about the blogging boom and then slips in this astonishing prediction: "Mainstream media companies will master blogs as an advertising tool and take over vast commercial stretches of the blogosphere."

Before we get to that brash claim about the coming triump of their employer's business model, lets watch the BWers drink the blog coolaid:

Go ahead and bellyache about blogs. But you cannot afford to close your eyes to them, because they're simply the most explosive outbreak in the information world since the Internet itself. And they're going to shake up just about every business -- including yours. It doesn't matter whether you're shipping paper clips, pork bellies, or videos of Britney in a bikini, blogs are a phenomenon that you cannot ignore, postpone, or delegate. Given the changes barreling down upon us, blogs are not a business elective. They're a prerequisite. (And yes, that goes for us, too.)...

How big are blogs? Try Johannes Gutenberg out for size. His printing press, unveiled in 1440, sparked a publishing boom and an information revolution. Some say it led to the Protestant Reformation and Western democracy. Along the way, societies established the rights and rules of the game for the privileged few who could afford to buy printing presses and grind forests into paper.

The printing press set the model for mass media. A lucky handful owns the publishing machinery and controls the information. Whether at newspapers or global manufacturing giants, they decide what the masses will learn. This elite still holds sway at most companies. You know them. They generally park in sheltered spaces, have longer rides on elevators, and avoid the cafeteria. They keep the secrets safe and coif the company's message. Then they distribute it -- usually on a need-to-know basis -- to customers, employees, investors, and the press.

That's the world of mass media, and the blogs are turning it on its head. Set up a free account at Blogger or other blog services, and you see right away that the cost of publishing has fallen practically to zero. Any dolt with a working computer and an Internet connection can become a blog publisher in the 10 minutes it takes to sign up.

Sure, most blogs are painfully primitive. That's not the point. They represent power. Look at it this way: In the age of mass media, publications like ours print the news. Sources try to get quoted, but the decision is ours. Ditto with letters to the editor. Now instead of just speaking through us, they can blog. And if they master the ins and outs of this new art -- like how to get other bloggers to link to them -- they reach a huge audience.

This is just the beginning. Many of the same folks who developed blogs are busy adding features so that bloggers can start up music and video channels and team up on editorial projects. The divide between the publishers and the public is collapsing. This turns mass media upside down. It creates media of the masses.

How does business change when everyone is a potential publisher? A vast new stretch of the information world opens up. For now, it's a digital hinterland. The laws and norms covering fairness, advertising, and libel? They don't exist, not yet anyway. But one thing is clear: Companies over the past few centuries have gotten used to shaping their message. Now they're losing control of it.

Want to get it back? You never will, not entirely. But for a look at what you're facing, come along for a tour of the blogosphere.

So far, so good, eh? Wow, everything is changing. Particularly publishing. To repeat: "The divide between the publishers and the public is collapsing. This turns mass media upside down. It creates media of the masses.
How does business change when everyone is a potential publisher?

Sounds pretty grim if you are a publisher, doesn't it? In an astonishingly unself-conscious piece of solipsism, the mag cover says "Blogs will change your business," but the following article would better be titled "Blogs will change OUR business," since lots more is said about the changes blogging will wreak on publishers than any of the thousands of other industries in America.

Which brings us to BW's punchline/backflip.

A prediction: Mainstream media companies will master blogs as an advertising tool and take over vast commercial stretches of the blogosphere.... Take a look at blog advertising today, and it's hard to see a glittering future. Sure, enterprising bloggers make room on their pages for Google-generated ads, known as AdSense, and earn some pocket change.

Umm. Guys? A number of indie bloggers already make more each month than you make. And their year-over-year growth trajectory is a lot greater than yours. And they don't have to worry what the boss thinks. And they've each got a brand name people adore. And they've got the lowest overheads in the publishing industry. Who do people want to work for -- your failing industry, or themselves?

Allow me a prediction: indie bloggers are going to kick corporate ass.

Yes, blogs could be advertising nirvana, admits Business Week:

Still, blogs could end up providing the perfect response to mass media's core concern: the splintering of its audience. Advertisers desperate to reach us need to tap niches (because we get together only once a year to watch the Super Bowl). By piggybacking on blogs, they can start working that vast blogocafé, table by table. Smart ones will get feedback, links to individuals -- and their friends. That's every marketer's dream.

But never fear, says BW, the corporates will reclaim the field:

The big companies have what the bloggers lack. Scale, relations with advertisers, and large sales forces. They can use these forces to sell across all media, from general audience to bloggy niches.

Ahh, salesforces. Expensive, inept, lazy salesforces. Bosses. Managers. Lots of flowcharts.

This assumes, of course, that blog advertising is like advertising on MSNBC or BusinessWeek.com. Take it from somebody who registered the name "blogads.com" in March of 2002... it isn't. If you think publishing has been transformed, don't you think that its twin sister advertising is also being turned inside out? While traditional advertising is about megaphones and cheerleading, blog advertising is about conversing, listening as much as you talk. Think that the 20-management-tier command-and-control structure of conventional advertisers is going to be comfortable with crawling into this bee-hive?

Scale? Who has more scale than the blogosphere?

Relationships with advertisers? (Remember the "relationships" that buggy makers used to have with their customers?)

To take on bloggers, large publishing corporations (themselves slowly collapsing) will have to re-allign their cost structures, organograms, sales channels and mentalities.

Worst of all, they are going to have to cannibalize their own sales. They won't do it.

It is not just publishing that is changing. Corporate publishers are going to have to change their relationships with advertisers. Heck, advertisers are going to have to change their relationship with advertising. (Quick, reread http://www.cluetrain.com/#manifesto.)

Periodical publishers didn't start making money from Gutenburg's invention until 50 years after his invention, in BW's words, "sparked an information revolution" unrivalled until the invention of blogging. Publishers are three or more years late, just catching on to the ideas we were babbling about three years ago. Publishers haven't caught up-- they are still three years behind.

BW writer Heather Green (more on her in a minute) a quote from Clay Shirky that didn't make it into the story: "I am a member of a church of the reform normative, whenever I concentrate on what things should be doing, I miss what things are doing."

Here's a parallel factoid that Virginia Postrel www.dynamist.com included in her NYTimes story about innovation last week: a 3M study "found that product ideas from lead users generated eight times the sales of ideas generated internally - $146 million versus $18 million a year - in part because lead users were more likely to come up with ideas for entire new product lines rather than minor improvements."

In entrepreneurship, there's a constant and healthy tension between dreaming about the next decade and focusing on today's nitty gritty. The advantage bloggers (and their vendors) have over traditional publishers is that they ARE the users and the lag time between idea and execution is weeks rather than years. And the feedback loop is measured in minutes rather than years. So the innovation cycle is exponentially faster. As regular readers of this blog know, I don't envy the corporate publishing incumbents.

Now about Heather Green -- Heather was the first journalist to call about Blogads clear back in September '02 when we sold our first few blogads. The story didn't make it into print.