With the economy going south, pink slips raising their ugly heads, and the weather turning cold on the Left Coast, sometimes its the small things that really warm you inside, like keeping cash in your pocket and listening to some of the brighter minds in the changing landscape of that pre-internets invention known as television.

On November 13th, in San Francisco, NewTeeVee Live will feature such luminaries as Reed Hasting, CEO of Netflix, whose recent announcement that NetFlix will offer video delivery to my TiVo has me ready to renew my NetFlix membership after a two year absence, as well as Jason Kilar of Hulu fame, and who to me represents all the things great about the internet delivery of television style programming.

NewTeeVee Live will sure to be a major stop on the “events for the in-crowd” tour for video entrepreneurs and influencers and may also be a great place for you to bring some resumes or reels in case the downturn of the economy has you on the hunt for a better gig. And the good folks over at GigaOm are offering a $200 discount to our readers to join me at the event. Follow this link to register for the event on November 13th. And then DM me on twitter so I can look forward to meeting you in the City By The Bay.

And a special shout out to the great folks at Marketing Alchemists who have arranged for us to blog from the event in case you are stuck in Philly, reminiscing about The WIn, but wishing you were at NewTeeVee Live. We will bring you updates and insights from the event so be sure to check in with us on the 13th.

The new digital landscape and modern consumers are dramatically different

The new “digital landscape” is dramatically different from the environment into which TV, print, and radio ads were launched no more than two decades ago. Even today’s Web 2.0 environment is different than the Web 1.0 environment of a decade ago. As the Internet led to the more facile accumulation and dissemination of information and as social networks brought even mainstream consumers online, the power of consumers has increased significantly relative to advertisers. For example, they will search for information when they want it and ignore all other forms of interruption media pushed at them. They will look for independent and objective reviews of products or services and distrust brand messages put out by advertisers touting their own virtues. And they will rely on the actions of the community to help them filter and prioritize the best “stuff” from the ocean of available content.

Audience fragmentation caused by the proliferation of niche cable channels (e.g. the fly fishing channel) and abundant online video channels means that “mass media” is not so “mass” any more — there are no longer massive audiences tuned into a single television program at the same time. “Media” is now two-way or many-to-many — i.e. consumers tend to talk amongst themselves. But many advertisers and their agencies still rely heavily on one-way tactics - pushing a carefully crafted message out at target customers.

Globalization, information proliferation, and socialization have irreversibly changed industries

Other macro forces are also re-shaping the industries, in particular the advertising, marketing, and communications industries.

Globalization means that, for example, coding can be outsourced to India, graphic design to Australia, or television production to Asia, all at a fraction of the cost of “in-house” resources. The wide availability of tools like online photo editing tools (picnic.com), video editing sites (motionbox.com), and even high-end 3D and special effects software (Blender.org) — all of which are open source and free — fuel the perception that such digital capabilities and services should be lower cost, if not free. These trends mean that agencies whose revenues were derived from these services are facing constant downward pricing pressure.

The proliferation of information has also irreversibly changed the perceptions, behaviors, and habits of consumers. The abundance of information online conditions users to search for information and form their own opinions through research. They also expect more detailed information than can be typically delivered through TV, print, or radio ads — e.g. they want to see the product brochure online, do price comparison shopping across dozens of retailers, and read peer and expert reviews before buying. And they will do the above on their own time (e.g. planning a family cruise vacation at 1 am when the kids are asleep), which destroys the concept of targeting using day-part or show content.

The socialization of consumers online means that the conversations that used to happen among a few people around the watercooler are now happening online for all to see. The collective complaints or praises of products and services now become inputs to many other users doing research online before their next purchase. Furthermore not only is the spread of information much faster online, but the impact could also be dramatically larger —  for example, 1) by the end of opening weekend, hundreds of user reviews of a movie can immediately determine its fate — a mega hit or a “straight-to-DVD” movie, and 2) the action of a single person who found an unsavory clause in AT&T’s Wireless’ “fine print” and posted it online caused such a community uproar that AT&T made a public statement that it would be removed.

Traditional agencies rely on old business models (and other challenges for traditional agencies)

Despite the new landscape conditions of no more mass media and consumers doing their own research online, many advertisers are still doing traditional advertising. And many of their agencies are still relying on old business models (agency of record) and being paid for production. Creative ideas are still being given away for free during the pitch process; if the pitch is won the agency then gets to bill against production of assets. But freely available tools or production and abundant lower cost producers are causing clients to question costs.

Other challenges plague traditional agencies. All clients want to “go digital;” but digital is seen to be a “bolt on” capability among big agencies and smaller agencies are perceived to be more digitally savvy. Further, “clients find it hard to know how much digital stuff costs,” says Peter Cowie, Managing Partner of Oyster Catchers, a search consultancy based in London. “Many clients are using in house capability to save costs and retain control.” Cowie continues, “many clients are deeply insecure about digital marketing” partly because of its novelty, but also, practically because of the wide array of new disciplines, including for example, social networking, mobile, gaming, search, analytics, user interface, Flash, AJAX, e-commerce, online ad networks and media buying, etc.

The new digital agency plays the role of a strategic advisor and subject matter expert

So what is the role an agency can and should play in this new landscape? We believe, the role of a strategic advisor to calm clients’ insecurities and ensure a cogent and smooth incorporation of digital. Smaller agencies that grew up in digital may not have the expertise in traditional disciplines nor a global footprint and enough staff to handle large global clients. However, large traditional agencies, with a few key changes to business model, organizational structure, and internal processes will be able to guide clients through the shift towards digital, by changing the marketing mix and ensuring that all channels are integrated, working together, and reinforcing to each other.

These changes may include 1) managing a network of independent specialists (who serve on SWAT teams for client projects) instead of in-house FTEs, to account for the wide variety of new skills and disciplines 2) shifting away from the business model of being paid for production to being paid for managing a network of geographically disperse low-cost providers, and 3) providing thought leadership as subject matter expert in digital disciplines, strategies, and tactics.

Recently there have been a lot of articles regarding the decline in the popularity of CPM and Banner (read brand advertising) on the web. I think its obvious by now that the scarcity model that drove impression based pricing in TV, Radio, and Print doesn’t work on the web now because its a two-way channel that anyone can contribute to.
Surely this will continue to be unsettling for many publishers that are used to this model, but their inventory is still of value and usable with performance pricing, so there shouldn’t be too much panic on the train at this point. Advertising has finally evolved to what marketers have always sought (at least on the web): Pay for performance.

There is nothing wrong with this evolution for online media and there is a lot of money to be made (look at GOOG). If publishers can learn to live with the new rules of performance pricing and become experts in inventory management, they will learn lessons from this evolution in pricing and potentially apply it to older media channels.

If publishers are willing to evolve and admit that these pricing changes will dramatically change the model, then there can be a smooth transition. However, if they continue to try to foist old models on new media, then its going to be a multi-stop local with pain in every car.

Here are a few of those link referenced above:

Silicon Alley Insider: Online Display Ads Will Fall Sharply In 2009

Life2Beta: The slow death of CPM on the web

ClicketyClack: Thoughts On The Display Ad Market And Monetization

What do you all think?

Slide:ology - Quite possibly the best book ever written on presentation design.

I met Nancy Duarte many years ago. We were both working for agencies that supported Apple. I was at Web Associates as a strategic account manager, and Nancy was at the company that has her name above the door - Duarte Design. We took a few meetings together, explored ways that our companies could work together, and even had dinner with her family at their home. More recently I stopped by her office to chat about emerging media, and her new way of building teams and planning the future of her business. She had mentioned that she wanted to be sure that everything was ready before her agency was moved into a more visible market role. Kinda cryptic, right?

About a year or so later Al Gore’s An Inconvenient Truth began to make the world stop and take notice about the issue of Global Warming. We also noticed the work of Duarte Design for the first time on a global scale. Nancy’s team worked with Al Gore on the presentation deck he used, the one that won him a couple of Academy Awards as well as The Nobel Prize. And with that, the world of presentation design changed overnight.

And then Nancy wrote the book. Slide:ology is without a doubt the best book written about presentation design. In fact, it is so much more than that. Sure, she talks about the “tools” and the “techniques” as do many authors in this space. She also talks about the passion, and the art and the truth and all those other things that make a presentation great! Her book examines not only the “hows”, but the “whys” through a series of case studies and first hand knowledge from working with some of the most compelling presenters in the world.

As I mentioned in my video piece - just go buy it. If you read this blog, at some point in your career you will be required to make a presentation deck. This book will show you how to do it well. As for me, I am a month or so away from beginning to re-examine how we present at MediaTrust and I can’t wait to tear our slide deck apart and utilize the things I have learned from Slide:ology.

Here are the links I promised - Click here to go to the blog post about Nancy’s work with Guy Kawasaki, and click here to purchase the book from Amazon. Enjoy the read. Trust me, you will become excited about presentations again, especially your own.

By: Christopher Smith & Scott Parent

SHOW ME THE MONEY! SHOW ME THE MONEY!

Ok.. now that we got that out of the way… yes, affiliate marketing is about making money. We all work to make money to provide for the things that are required in life, and to acquire the things that we desire, whether it is a flat screen TV, a trip to Portugal, or a nice dinner out with friends. Let’s also be clear about another thing: we are just like you. We have seen the same things you’ve seen in this industry. We are not satisfied. It’s time for a change.

Before we lay out our plan for change we need to establish a few things. Many hours have been spent crafting sentences, deleting whole paragraphs (similar to balling up a sheet of paper and tossing across the room) and sitting in a hotel room in Boston recounting the previous few days. You see, we have recently attended the Affiliate Summit East in Boston and everything we thought we knew about this industry was tossed into Boston Harbor like our forefathers did decades before as if the Queen of England wanted to tax the sales of Wu-Yi Tea.

We have been to many conferences in our combined careers. The string of 3-6 letter acronyms synonymously representing technology, entertainment, consumer products, music, big pharma, porn, and yes, an occasional educational event. Our frequent flyer miles pinpoint the destinations - Austin, SF, NYC, LA, Chicago, Vegas, St. Louis, Memphis, Cleveland and of course, Boston. How fitting is it that the place that hosted one of the most notable boat parties in history was also host to our company’s boat party that ignited this manifesto.

We should also point out that we work for a company that is firmly rooted in the industry that is struggling with it’s identity, it’s soul, and for reasons to wake up every day and go out and kick some ass. Who we work for doesn’t really matter, because you can swap out one company name for the next and we believe you won’t even notice a difference. What is important is that we work in marketing. As part of our job we speak with, and listen to, hundreds of people every year about what is wanted, what is missing, what would be nice, and what needs to change in the affiliate marketing industry. As part of our job we tick and tie numbers, we graph out trends and project long tail, groundswell, and shark jumps. We believe that we’ve identified quite possibly the most important thing that needs to be recognized, acknowledged and understood in our industry.

We want credibility for the work we do every day. We want to stop lying to each other and to ourselves. We want to hold our head up high when someone asks us what we do for a living. We want to be able to say “hello”.

In order to understand what is driving this “statement” or “manifesto,” you need to understand a bit more background. When we entered this industry we were told that “all affiliates care about is revenue.” Revenue and T-shirts. From what we’ve been told ad-nauseam, potential customers don’t care what we say as long as they hear something about higher revenue, faster payouts, and exclusive deals. These things should be looked upon not as differentiators, these things should be look upon as commodities, as common and expected as out-of-date magazines in the doctors office, the crying child on an oversold airplane, or a dail-tone when you pick up a phone. This takes us back to the point we want to make.

We all want to belong. And it’s not just about money. It’s about community. It’s about validation. It’s about respect.

At no other conference have we ever had more people remember who we were. We’ve had people in the affilaite marketing industry cross the street to extend their hand and say “hello - I remember you from ad:tech SF last year” or “hey - you bought me a drink at eTail in Chicago and if you are free I would love to return the favor.” We know what you’re thinking right now; they are friendly because they are getting ready to sell us something, ply us for information or switch their draft beer order to a dirty Kettle when we insist on buying drinks. But you are wrong. We are looking for our group. We are acknowledging our own. We are reaching out and saying “hello” because we want to. Because we need to.

Now, please do not confuse this with thinking that we are saying we need friends. We all have plenty of friends. Most of our friends aren’t in this business. But we are connectors. We are deal makers. We are believers in each other or we wouldn’t be doing what we are doing.

HELP ME, HELP YOU.

Here is what we are proposing - If you want to differentiate yourself as a performance marketing network, you need to provide more personal attention to your customers. They can’t be looked at solely as a pipeline to revenue. Ask yourself, when was the last time you looked at the revenue numbers and picked up the phone and called that under-performing affiliate and offered some assistance? When is the last time you spoke to an advertiser and worked with them to make their offer unique and engaging? We spend such a large amount of time asking where the money is, but we spend very little time really trying to differentiate ourselves with relevant content and real innovation. This industry is extremely dependent on both the publisher and the advertiser, yet we rarely put the two together in the same room and the same conversation. Why? Advertisers understand their product or service better than anyone. Publishers know what their audiences want. Why not collaborate and give your campaign the best possible chance for success?

Affiliates have a wealth of knowledge about the industry, based on both their successes and failures. They are, in fact, the best teachers for success. Yet, when was the last time our industry invited them to participate in a conversation about the future of the space, where this industry should be going, and how to provide that change? When was the last time a group of publishers sat down together and discussed how they work without fear of “stealing” each others’ methods? There needs to be a better level of trust, collaboration, and cohesiveness if this industry is going to continue to grow and establish more credibility. We need a better sense of true community - one where we are willing to engage in dialogue that is helpful to each other.

So there you have it. In a nutshell, we believe that the affiliate marketing industry wants to belong, wants community and wants to be a functional group. Did anyone else see what we saw in Boston? Has anyone else felt the need or desire to change this sense of mistrust and dysfunction? Let’s make a pact to make a real effort. We can do it better. We can do it with more integrity, community, and transparency.

So in the words of Jerry Maguire - who’s coming with us?

It occurred to me the other day that many of you may not understand the relationship of how MediaTrust, RS, and Advaliant go together. I thought I’d take a minute to introduce the family and tell you about our new little brother, the Advaliant Blog.

MediaTrust is the parent company of Relevantly Speaking. This blog/podcast started out as an experiment to see if we could create a legitimate voice in the digital marketing space. Our mission was that we would write and talk about nearly anything relating to doing business in a changing digital world. With the steady growth of our audience each month, you’re telling us that we’ve succeeded!

Advaliant is our pay-for-performance platform. If you’re interested in affiliate marketing - either as an advertiser or an affiliate, then Advaliant is the place for you to be. Over the next couple months we’ll be redesigning that website, but for now, feel free to hang out in our comfortable well-worn home.

The newest member of our family is the Advaliant Blog. Before we launched last Friday, a few of you had asked me what the difference would be between that new blog and RS. I think its fairly obvious now - Advaliant is all about pay-for-performance marketing and RS is the kitchen sink of digital business.

What can I expect on the Advaliant Blog? Well, I’m glad you asked! First, we’ll be writing about trends and happenings we see going on in the affiliate industry (as you see here from Mike Carney). Second, we want the blog to be a place where newbies can come and take the intimidation out of getting started with affiliate marketing. So, to that end, we’ll be offering tips and tricks. You can see Richard Okolo’s excellent advice HERE. Finally, since it is OUR blog, we’ll be pimping our own stuff. For example, did you know we have an insane series of contests going on? For August we’re blowing our several prize packages of the Ultimate Gaming System!

In a nutshell, Advaliant’s here to make money. That is the name of the game in the pay-for-performance space. We think we can help you make money too. Along the way we’ll show you how to do it efficiently and ethically - ’cause that’s how we roll.

Stop in and say hello!

The subject of good design has been popping up a lot recently both in our business and out on the web.

In 2007 Apple went from 0% to 27% market share in the smart phone market via the introduction of well designed hardware and intuitive software that the average person can access and utilize. Further, through both software and hardware design differentiation Apple maintains a gross margin of 33.6% versus Dell’s GM of 18.5% .

A nice visual analogy of Apple’s design approach versus Microsoft’s is depicted below:

An even more interesting stat comes from a January Reuters article:

In data provided to the New York Times, Google disclosed that it received more traffic from iPhones this Christmas than from any other mobile device, despite owning only 2 percent of the smart-phone market and less than 1 percent of the overall mobile-phone market. That means that while fewer people own iPhones, those who do possess the device use it to access the Internet much more than those with competing handsets.

Apple is essentially a design company. Their hedgehog principle is good design. They innovate and command market share by making technology simple to use by everyone. The simple fact that both of my parents are making active use of the web, web services and multiple (and synced) devices illustrates that with good design, you can teach an old dog new tricks (sorry Mom and Dad!).

As the world becomes more technically complex, design is commanding a more important role in our lives. Tech has been notoriously bad at making its amazing advances and productivity tools accessible by a mass audience. This is changing rapidly. The devices of yesterday are becoming real products before they come to market by necessity…the market is demanding it. William Davidow wrote a great book about the difference between devices and well designed products years ago…and its a worthy read for any marketer, product manager, engineer or CEO.

From a January article in the Journal:

With all the fuss, PC makers have begun hiring more people with degrees in industrial design and related disciplines — and listening to their opinions. “We found people designing from the outside in, not the inside out,” says Mooly Eden, vice president and general manager of Intel’s mobile systems group. “This was the revolution.”

So as we go about marketing our customers campaigns and offers via our Advaliant performance marketing platform, we are seeing the fruits of this ‘differentiation by design’ ethos.

Our customers come to us with a simple goal in mind: acquiring new customers. Many of them have their own creative that they wish to use and some of it is very well designed and the user experience is well thought out. Generally, we have seen these campaigns perform better than the lesser designed ones that make their way onto the platform.

Recently, we have been taking some of the offers that don’t convert well into our design studio and creating an alternative design direction and user experience (with client approval, of course). We then split-test these offers versus the original. Nine times out of ten the re-design performs better. The reason: we have taken the time and effort to make sure each campaign is designed to more simply communicate the benefit to the customer.

Not surprisingly, our expertise in the area of helping our advertisers generate more appealing campaigns has kept their loyalty and engagement with our platform. Further, because the campaigns perform better, our affiliates and publishers are happier because better designed campaigns help improve their bottom lines.

While direct response performance marketing can be a complex process, the same principals in the use of design to differentiate has enabled us to deliver our business constituents more value from our platform.

Got any other examples of good design making a “direct to bottom line” difference? Please share below!

So last night I dusted off one of my favorite movies, the 1973 classic martial arts film Enter The Dragon. While watching it I began to see some great marketing wisdom in the dialog and found it be extremely timely and quite relevant concerning a current project I am engage in. I thought I would share with you the highlights of Enter The Dragon: Competitive Marketing.

“Do not concentrate on the finger or you will miss all that heavenly glory”

Too often we have tight timelines, many moving parts, multiple contributors, and general the general chaos and distraction of life surrounding us while we are getting our go to market plans ready.It is very easy to focus solely on the tasks at hand with out stepping back and looking at the big picture. Often that picture is pretty fantastic, even while the current project you are working on may be a pain in the ass. Don’t forget that you are part of a team, and a business unit, and company all striving for the same thing - success in business and a great quality of life, however that is defined by both your industry, your company, and your family. Look up from your desk, take a walk, talk with a colleague and acknowledge the goodness in your efforts.

“Boards don’t hit back”

Practice. Practice. Practice. and then practice some more. Run your presentation by a group of peers before the keynote. Double check that persona one more time before running the scenario. Go back through notes, your email, your gut checks. Because there comes a time when you will be faced with real competition and must respond in real-time, to real threats, and must fight real battles in your market space, or at a closing meeting with a new client, or with the CMO of your company about how you think that a solution based positioning isn’t really an advantage for the market pentetration of the product and wont differentiate it in an already over crowded…. anyway. I digress.

Han: “Your style is unorthodox”
WIlliams: “But effective”

Many times we have to look deeper than our established bag of tricks, especially in a market that is fast moving, constantly changing, and that requires creativity, confidence and stamina to win. And not just win once, but to win repeatedly. I have always considered myself to be a bright guy, and the smartest thing that I do is to surround myself with people smarter than me. (or is it I. Smarter than I.. have to call my wife on that.)

Anyway, the point that Williams was making is that one should strive to be effective no matter what the method of action may require. I call on those around me to shake up my snow globe of ideas and see if they find patterns or data or insights that I may have missed. The way we finally get to a result may be a little odd, but those results are not.

“Never take your eyes off your opponent, even when you bow”

You never know the exact moment of opportunity and must be ready to either strike or defend in real-time. Defensibility in the market space is a one of the primary reasons certain startups don’t get handed their lunch by the fourth week of school. Great companies are constantly looking to defend and strengthen their position at every opportunity. And its not so much the “best offense is a good defense” mentality. It’s more to the point of be aware of your surroundings. If you are looking to gain a position in the market, you are damn certain your competition is looking to do the same. Just be sure not to get caught looking. Be prepared to act.

“Provide your customers with products they need and, uh, charge a little bit to stimulate your market and before you know it customers come to depend on you, I mean really need you. “

Ok, so in the flick they were talking about drug smuggling and corruption, but its the classic case of creating a need in the market, fanning it with desire, and capturing the trust of your clients. During my storied career as a tech sales guy I never really sold the product (which might be why I eventually was fired.) What I did sell though was need - need for the product or service that we could provide. And I would compare that to my competition, noble warriors all, but just not quite as good as what we had to offer. And then I would show them how they could trust me, and that I had our mutual best interest in hand. Oh, and if they bought now I would take off an additional 12% on signing. Need + desire + dependency. Its not just for romance novels anymore.

“You must attend the morning ritual in uniform.”

Come prepared. Most reasons we miss that window of opportunity is that we don’t recognize it as it is coming toward us, see it only as its passing by, or see it early but just cant get ready to anything about it. Come to work ready to work. Go to a house party ready to party. Be present and appropriate and provide both context and content for whatever you are doing. And that goes for your marketing plan as well. A key word here is ritual. Practice, reverence, and habit can be key to developing a winning marketing strategy.

Enter The Dragon is only one of many examples of films that provide nuggets of introspection and learning within the dialog. Now its up to you. I would love to hear about your movie insights and how they align with your industry. Post them in the comments. If they are especially good, I’ll send you the movie of your choice as a “thank you”.

Bonus points if you can define Market Readiness from The Big Lebowski. Have fun.

Nine Inch Nails are giving away their newest album titled, The Slip, on their website. There is no gimmick. There are no strings attached. Simply go to their website and download the album free and clear. Hell, you even get to choose the quality and the format you want it in (i.e. mp3, m4a lossless, FLAC, and hi-definition WAVE 24/96).

Why would a band like NIN do this? First, they got rid of their record label. You don’t think Universal, their previous label owner, would allow this do you? Second, NIN understands that selling records is now a very tiny piece of the puzzle. Instead of trying to futilely retain control by cracking down on file-sharing and preventing your music from being played in online radio and podcasts (like most majors do), NIN has embraced the shifting technological paradigm.

Other major artists are doing like-minded things like this. Madonna recently left her longtime record contract with Warner Bros. in favor of signing with Live Nation - a concert promoter. Why would she do that? More on that in a minute. Coldplay is also testing the free-song-download model this week by offering their new single called “Violet Hill” from their website. Better move fast - after this week it goes away.

We’re looking at a fundamental shift in the music business. The recorded product is now the bait and not the fish. By giving away the product for free, artists are doing two things. First, they get to collect your email address. This is very valuable because they now have a way to interact with their fans and tell you about other things you maybe interested in. That leads me to number two: Concerts and merchandise. I get emails all the time from my favorite artists telling me about when they’re playing near me and about new fan items they have available. So, instead of getting $10 out of me for a digital download on iTunes, they potentially get $100 or $150 out of me in the form of concert tickets and merchandise. Plus, the goodwill generated by an artist giving away their latest recording (as opposed to getting a lawsuit notice from their record company) doesn’t hurt their public image any.

This brings me back to Madonna and the deal with Live Nation. She’s essentially brought her career under one roof. Live Nation already promotes your shows and sells your merchandise, why not have them facilitate the release of your music? At this point what does a record company really bring to the table?

Need another example? Bret Michaels has been all over your TV lately as the star of the VH1 show, Rock of Love. His band, Poison, once 80’s superstars have been seen a nostalgia act for the last 10 years. I would argue that they are doing as well as ever. Sure, they haven’t had a radio hit in more than 15 years, but does that really matter anymore? Each summer for the last few years they embark on a 40-city tour. They play to venues that average about 5000 people - and they sell them out. Let’s say the average ticket price is $50 - that’s $250,000 per show, or $10 million for 40 cities. I know that some of that goes towards paying for touring costs, staffing, venues and such, but still, it’s not a bad summer’s work. Considering the average recording artist makes a paltry $1 for every unit sold, there’s no reason for Poison to release a new album when the lion’s share of their income comes from merchandising and live performance, not new releases.

My guess is that record companies will continue to kick and scream over new technology. They’ll continue to bemoan their declining revenues and blame it on piracy. But, if artists as big as Madonna, Nine Inch Nails, and Coldplay are testing these waters, clearly there is a change in the tide.

There is a great article over at Go Big Always today about online media companies dropping the ball when it comes to social media.

“You’d think media companies would be all over social media. I mean, media is their business. No one should be better than they are at leading the way. They’re sitting on a gold mine of assets. Awesome writers, tons of video and images, lots of “Social Objects.” Media companies are the ones who can get the conversations started and keep it going.

But they’re getting their ass handed to them by blogs. Bloggers are on top of the active conversations and participate in the dialogue without forcing you to jump through hoops before you can chime in. They, like companies in other industries embracing social software and principles, are beating the crap out of the later adopters.”

There are essentially two schools of thoughts at work here. The first is that you force participants to sign up to your site - name, email, password etc. This allows you to gather their information and monetize it down the road. The second, better option, is that you let people contribute freely to the conversation with no strings attached.

Instead of forcing them into giving up their personal information, how about giving them something of value in exchange for it? If your site offers something that unique, eventually users will sign up for more access. The true benefit of social media is engagement. When you force people to disclose personal information in exchange for the privilege of interaction, you are putting up an unnecessary wall in front of them. In the end, you’re defeating the whole purpose of utilizing these social tools in the first place.

Media companies have always been shortsighted. You only have to look as far as the RIAA suing their customers to see what I mean. Many companies, unfortunately, still seem to be heading down the wrong road.