E-Commerce and E-Media

When are e-media companies going to start honoring the "e" in "e-media?" When are they going to start acting like e-commerce companies?

E-commerce and e-media

Everyone knows what e-commerce is. You can look it up on Wikipedia, where there's a major series of articles on the subject. Simply put, it's the electronic version of retailing, a.k.a. e-tail (which redirects to e-commerce on Wikipedia).

You might think that the same thing would happen to media. But we know it's not so! They are so different that "e-media" doesn't mean much -- e-media doesn't even have an entry in Wikipedia! How pathetic is that?!

So what is E-media?

If "e-media" means anything at all, it's got to mean the electronic, on-line version of media. So if plain old media includes, for example, the New York Times, then e-media has got to be the electronic, on-line version of a newspaper. Right?

Yes, of course that's right. There are lots of on-line news sites, and they're mostly the on-line editions of print or broadcast media. If you know what to expect from the paper or the broadcast, you can get something similar at a website, with a few enhancements such as frequent updating. And that's exactly what's wrong with e-media!

Putting the "E" in E-commerce

You would have thought (as many did at the beginning) that being a big, resourceful, successful retail company would give you a huge advantage on the web compared to a bunch of nerdy computer types who, when you glance at them, don't make you think "good at customer service." You would have thought that e-commerce would be dominated by names like K-Mart, Sears and Walmart. Of course, it didn't happen. All the fancy executives at the brick-and-mortar giants were certain they would crush the nerdy wanna-be's. All the fancy executives at the brick-and-mortar giants were wrong. Dead wrong.

Let's look at some of the most obvious things that distinguish e-commerce from its bricks-and-mortar forebears:

• Web-centric leadership. This might be the most important factor. Jeff Bezos of Amazon is the poster child for this point.
• Web-centric approach. This is a tough one. When you look at the web from the perspective of long experience in retail, you can't help but seeing the commonalities; after all, in both cases you've got real people coming to a "place," viewing goods and deciding whether to buy them. In their essentials, they're mostly the same, aren't they? This is exactly backwards. Succeeding on the web depends on seeing what's unique about the web and how to exploit it to advantage. Think for example about how Amazon knows it's you and presents you with things you might like, and tells you in real time how other people decided among the alternatives you're considering, lets you read what other people think, etc. Going "native" works.
• Technology embracing. Sure, retail companies use technology. Walmart is famous for their data warehouse, for example. But Walmart didn't invent anything -- they amazed the world and flustered their competitors simply by using state-of-the-art data warehouse technology. By contrast, the leading e-commerce companies not only use the latest technology, they advance it and invent new technology. Sometimes they do such a good job, they even sell their technology to other companies (again, Amazon is a case in point here). Retail companies may use technology, but e-commerce companies are immersed in it and create their own.
• Driven by Data. Again, Walmart is well-known for collecting and using data to retail advantage. They do it by product and by aisle. But the consumer has already made their most important decision simply by driving to the store. On the web, "driving" to another store is a matter of a couple clicks. The level of competition this results in is unheard-of in the world of bricks-and-mortar. In the e-commerce world, you can track everything, second by second and click by click, and the successful people do exactly that. They test, track, measure, modify and repeat.

Putting the "E" in E-media

It's pretty clear that today, we're just at the beginning of creating a true e-media. The way these things usually work, they will follow much (not all) of the path taken by the e-commerce folks. Here are a couple of the key points:

• Web-centric leadership. This is a tough point for most successful old-media executives to accept. But the burden of proof is on them: why is it exactly that they will succeed when all their brick-and-mortar fellows failed miserably?
• Web-centric approach. When you look at the web from the perspective of long experience in print (for example), you can't help but seeing the commonalities, and focusing on characteristics shared by print and web. After all, aren't you in both cases presenting a visual lay-out of words, graphics and pictures? Aren't headlines important? In both cases, it's real people consuming the product, and their reactions are the same, aren't they? This is exactly backwards. Succeeding on the web depends on seeing what's unique about the web and how to exploit it to advantage. I'm not going to spell out exactly how this can be done, because it's at the heart of e-media winning on the web. But the principle is clear: Going "native" works.
• Technology embracing. In the print world, printing presses are somewhere "else," and no one important invents anything technological. When editing and typesetting went digital, the media industry certainly went along. But they didn't invent it -- they just bought and used it. By contrast, the leading e-media companies not only use the latest technology, they advance it and invent new technology. The programmers aren't just functionaries beneath the notice of the "important" people in the company -- they are essential engines of innovation, and a good part of the success of the enterprise depends on their work. Media companies may use technology, but e-media companies are immersed in it and create their own.
• Driven by Data. You've got some data in the print world, but it's kind of pathetic in web terms. You put out a paper that has international, national and local news; sports; arts and entertainment; ads of all kinds, including classifieds; and other things -- and you have no idea who is spending how much time reading which part of the paper or how they're responding! It's like running a department store and being able to see how many people come and go, but not which sections of the store they visit or what they buy! Talk about flying blind... In the e-media world, you can track everything, and the successful organizations will do exactly that. They will test, track, measure, modify and repeat. 

No one knows how e-media will evolve. But the best companies (some of them Oak investments such as Demand Media, Federated Media and Huffington Post) are already marching down the road I've just described. While it's clear there's a ways to go, the leading companies following these principles are increasing their leads from the pack.