Attendees at the LeWeb conference held earlier this month had an extra organizational tool at their disposal: a custom iPhone app.

I cannot believe how much sense this makes. As app frameworks become more common, and development costs come down, I can see a point in the next two years when conference apps move from novelty to must-have. Sort of like Wi-Fi (but hopefully more reliable).

And let's not forget the sponsorship opportunities here, either. A smart sponsor could use the app to send a hyper-targeted message to a hyper-targeted audience. Toss in some sort of booth contest, and you've got the marketing equivalent of the Death Star's tractor beam.

Reports suggest Microsoft is courting European publishers for some sort of Bing-based news thing. Meanwhile, Rupert Murdoch continues to shake his fist at Google. Cory Doctorow connects the potential dots at Boing Boing:

So here's what I think it going on. Murdoch has no intention of shutting down search-engine traffic to his sites, but he's still having lurid fantasies inspired by the momentary insanity that caused Google to pay him for the exclusive right to index MySpace (thus momentarily rendering MySpace a visionary business-move instead of a ten-minutes-behind-the-curve cash-dump).

So what he's hoping is that a second-tier search engine like Bing or Ask (or, better yet, some search tool you've never heard of that just got $50MM in venture capital) will give him half a year's operating budget in exchange for a competitive advantage over Google.

Toss in the growing idea that Twitter, Facebook and other recommendation-based results are now more important than Google traffic and we've got a very interesting set of signals.

Remember how DVRs were going to kill TV advertising real bad? Yeah ... about that:

Against almost every expectation, nearly half of all people watching delayed shows are still slouching on their couches watching messages about movies, cars and beer. According to Nielsen, 46 percent of viewers 18 to 49 years old for all four networks taken together are watching the commercials during playback, up slightly from last year. Why would people pass on the opportunity to skip through to the next chunk of program content?

I love the explanation for this seemingly impossible turn of events:

The most basic reason, according to Brad Adgate, the senior vice president for research at Horizon Media, a media buying firm, is that the behavior that has underpinned television since its invention still persists to a larger degree than expected. "It's still a passive activity," he said. [Emphasis added.]

Sure is! Never underestimate the power of passivity.

The New York Times deserves kudos for writing this story because, far too often, the Chicken Little projections of execs and analysts are left unchecked. Consumer behavior and disruptive technologies are moving targets, so remember that the next time the latest iPhone killer or Kindle killer or ad killer or media killer is touted. Reality is contextual and complicated.

It often seems that major content companies and platform firms walk in lockstep when it comes to digital distribution, but two articles published today reveal significant philosophical differences.

Here's an excerpt from a Bloomberg story on Viacom's uneasy relationship with online viewing:

Viacom has to ensure that placing television shows and films online adds to its profit, through sources such as advertising sales, subscription fees and revenue from enabling users to buy content by downloading it, [Philippe] Dauman said. The viability of such a model relies on strong intellectual property safeguards, he said. [Link added.]

And here's a passage from an AP story looking at a similar online offering from Comcast:

Comcast executives said the company plans to generate revenue by adding more and different types of ads on the sites. But the company's goal is not necessarily to profit from it but to keep subscribers happy enough so they don't cut the cord or defect to a competitor. [Emphasis added.]

The content creator is worried about direct revenue from the content, while the platform provider is more concerned about keeping its subscribers happy. It'll be interesting to monitor Comcast's mindset if/when that NBC deal goes through.

In an interview with CNBC, Gary Hoenig, general manager for ESPN The Magazine, says the economic downturn put advertising in the hot seat:

... the overdependence on advertising is a real crutch for media and this is an opportunity for us to actually get to the consumer and say, "Hey, what are you willing to pay for"?

The advertising conundrum is something I've run up against throughout my career. In an odd way, my focus on Web content forced me to confront the detriments of advertising earlier than my print and broadcast comrades because Web ad rates have always been low. The rest of the industry is learning what Web folks already know: ad revenue kinda sucks.

When I started to conceptualize a sustainable model for online content businesses -- a project I've been working on for quite a while -- I pushed advertising to the back burner. It's still present, and money can certainly be made in the online ad realm, but it's a rickety foundation for a content business. That's why I diversified the revenue streams across naturally scarce products (education, consulting, research, in-person events), sponsorships, and advertising. The aggregate is far more stable than advertising alone.

And speaking of that sustainable model for online content businesses project: each section includes a comments area, and I welcome all suggestions and criticisms. The model's fundamental concepts aren't original, and I'm certainly not positioning this as anything revolutionary. Rather, it's a collection of ideas, theories and guidelines that I collected over the years and arranged into a structure. What it becomes and where it goes are up in the air, but I found the organization and writing process quite useful. The framework helps me parse the vast number of perspectives and innovations I run across.

Jon Bernstein wisely questions the relationship between current economic woes and the advertising slump, particularly as it applies to knee-jerk revenue ideas:

Maybe this rush to find other ways to monetise will be a passing phase and when the economy picks up so too will online advertising revenues.

After all, what's the alternative?

There's no doubt the economy gathered advertising in its arms as it dropped off the cliff, but are we now witnessing advertising's inevitable destruction, or are old-guard publishers mixing all their worries about the Internet, free distribution, audience dispersion and reduced ad margins into a cocktail of fear? My bet is that a rebound in digital advertising -- something that feels inevitable as confidence grows -- will quell talk of paywalls, subscriptions and other counterintuitive schemes.

Via Mindy McAdams' Twitter stream

TechCrunch reports on positive early signs from AOL's Politics Daily, which features long-form original political content:

In the grand scheme of things, AOL's strategy towards monetizing niche content online seems to be working out. And since they've already got the publishing platform with MediaGlow, new brands can be inserted or built at little marginal operating cost. If the brand tanks, which is likely to happen at some point, then AOL isn't losing too much. [Link added.]

What I find most interesting about the iPhone App Store gold rush is the way Apple is combining its platforms -- online, mobile, traditional advertising -- to benefit the company and external developers.

From the New York Times:

IBird was one of three applications that appeared in the [advertising] spot, and while it got only about seven seconds, that was all it needed to become the No. 1 "reference" app in the iPhone App Store, a software star among the 35,000-plus applications now crowding the store's shelf. [Link added.]

On a broader level, the more I study the interaction between the Web, audiences and revenue streams, the more I'm convinced that platform, naturally scarce products, and attention are the most important resources in the digital realm (they're important off-line, too, but geography and other physical elements shift the dynamic).

I know economists would smirk at my elementary platform-scarcity-audience analysis, but there's another component here: sustainable digital businesses arise when all three elements are present. That's one key difference between Twitter -- which has platform and audience, but no scarce products -- and Apple.

Hand-Picked Related Links

• iPhone Ads (Apple)
• Coder's Half-Million-Dollar Baby Proves iPhone Gold Rush Is Still On (Wired)
• iPhone Developers Go From Rags to Riches (Wired)
• There's Gold In Them iPhones (Newsweek)

The Guardian's move to open up its content via an API is garnering well-deserved praise, but the component that caught my eye is the advertising hook:

The Guardian is positioning its Open Platform as a commercial venture, requiring partners to carry its advertising as part of its terms and conditions ... [Link added.]

This is exactly the type of thinking we need. The Web is inherently distributed and its value comes from the organic connections between content. Content and container are no longer tethered, yet established business models rely on audiences interacting with content in specific locations. This discrepancy between how Web content should work and how publishers need it to work has hindered development; publishers just couldn't figure out how to make money by letting their content roam free. But The Guardian's Open Platform flips the model: advertising is tied to the content, not the container.

Of course, free-range content that can appear virtually anywhere is bound to make conservative advertisers squeamish, so it remains to be seen if The Guardian can actually sell ads associated with the Open Platform. Nonetheless, Open Content and similar efforts are an important step in the right direction.

Hand-Picked Related Links:

• What is the Open Platform?
• Guardian launches Open Platform tool to make online content available free
• First New York Times API is Live - Here's Why it Matters
• The Realities and Opportunities of Web Content Business Models
• Piracy and Advertising: An Unlikely Union that Just Might Work

CNN, ESPN, the New York Times and other companies in the Online Publishers Association (OPA) will roll out three new display ad formats in July.

I whipped up a couple mockups based on the OPA's specs. Click any of the following images for larger versions.

From the OPA: "The Fixed Panel (recommended dimension is 336 wide x 860 tall), which looks naturally embedded into the page layout and scrolls to the top and bottom of the page as a user scrolls."

View image

From the OPA: "The XXL Box (recommended dimension is 468 wide x 648 tall), which has page-turn functionality with video capability."

View image

From the OPA: "The Pushdown (recommended dimension is 970 wide x 418 tall), which opens to display the advertisement and then rolls up to the top of the page."

View image

One sentence in the OPA's press release touches on a topic that deserves more play: fewer ads = more value:

Increase the relative proportion of advertising space (in a single unit) to editorial content and, where possible, run fewer but more captivating ads on the page. [Emphasis added.]

The "fewer is better" movement is gaining some traction, and in one case it led to a significant uptick in click-throughs:

SmartMoney cut the number of units on a page from three to two, eliminating a skyscraper ad that ran toward the bottom along the edge. The result: a 21% increase in aggregate click-through rates. [Link added.]

The same Advertising Age article features this awesome observation from Augustine Fou, senior VP-digital lead at MRM Worldwide:

"...advertisers are starting to realize simply having hundreds of millions of impressions isn't that important if they're getting 0.002% click-through rates."

Testify, Augustine!

We may eventually see one, big, useful ad instead of six blocks of poorly-targeted material. That'll be a good day on the Interweb.

Hand-Picked Related Links:

• 27 Huge Publishers Join To Replace The Banner (Silicon Alley Insider)
• SmartMoney Finds Using Fewer Ads Can Boost Click-Through (Advertising Age)
• The Realities of Big Web Traffic and Advertising (O'Reilly TOC)
• The basics of Web advertising (The Independent Publisher)