Free Rise

One week down at Google. As we wait for Kid #2 to arrive (and my too-soon paternity leave to commence), Kid #1 has already taken a shine to some of my schwag.

Conan O’Brien, last night: “NBC announced they plan to lose $200 million on the Winter Olympics next month. Folks, is it just me, or is that story hilarious?”

NBC’s talk show lineup was doomed from the start. Its failure was less of a surprise than AOL-Time Warner, Terrell Owens’ tenure with the Cowboys, or Olestra anal-leakage potato chips. And the disaster is unrelenting for NBC, now with every personality on NBC — and CBS — taking shots at the cellar-dweller of the legacy broadcast network division.

This isn’t just a FAIL. It’s an EPIC FAIL. Let’s count the individual failures at work, and see what we can learn.

1. A failure of imagination. For its supposedly radical yet retro concept (a nightly talk show in prime time), The Jay Leno Show concept was shockingly conservative.  It assumed that America wanted to sit back and watch the same guy do a show every night, because that was the late night model for the prior 50 years. Now as NBC tries to fix its mess, it’s sticking with this conceptual model. How about moving Leno back to The Tonight Show and letting Conan host a prime-time variety/sketch show two nights a week? How about trying out something — anything – that’s really different? The times demand innovation.

2. A failure to think about competition. At 11:30pm, a talk show has traditionally competed with other, similar talk shows, news, and syndicated reruns. The 500-channel environment and DVRs didn’t change that so much. But 10pm is still called “prime time” for a reason. It’s a place to showcase top-quality content that grown-ups watch on their couches, and against that, Leno interviewing sit-com actresses looked like piffle.

3. A failure to understand the customer. The ratings at the end of a late-night talk show is a fraction of that of the beginning of a show. After the initial monologue and comedy bits, people tend to bail out, flip around, or just turn it off and go to bed. At 10pm, audience retention is critical, since affiliates make all their money at 11 on the local news. And the real reason why Leno is being kicked out of the 10pm slot is because his show’s format didn’t retain its audience, thus killing NBC affiliates’ 11pm news ratings.

4. A failure to consider revenue. Tina Fey declared a few years ago that working in broadcast in the ’00s was like working in vaudeville in the 1960s. The old model has been disrupted by technology and choice — four networks, replaced by hundreds of networks plus iTunes plus web video plus DVDs plus on-demand, ad infinitum –  but the new models produce revenue, too. An hour-long drama can cost millions per episode, and failure is expensive. But success is also richly rewarded via syndication, DVD sales, and international rights. The Jay Leno Show is cheap but low-margin, and most episodes are nearly worthless the minute after it airs.

5. A failure to think downstream. The Leno-to-10pm move was in part a move to retain Conan O’Brien, who had toiled for more than 15 years at 12:35am. But with Leno sucking up the A-list in prime time, Conan got left with the B-list. A Friday episode of The Tonight Show used to mean a top draw. But a few weeks ago, their Friday lead guest was Jeff Garlin, a funny guy but not at the level you’d want in that slot.

6. A failure to plan for failure. The current ad-libbing on the part of NBC execs reveals that they never considered what to do next if Leno’s show were to underperform. It’s easy to cancel Knight Rider and find something else to fill its slot for a few weeks. But Leno occupies five hours of prime time, and even after returning from Winter Olympics programming next month, NBC simply won’t have enough content in the pipeline to deliver an audience to advertisers. Meanwhile, the treatment of O’Brien (and his Late Nite replacement Jimmy Fallon) makes NBC look like a network that doesn’t know how to handle its talent. Now who would choose to run a show there, over another network?

A year from now, this controversy will seem distant. Leno will be on at 11:35. Conan may be on at 12:05, or he may be launching the Late Night division at Fox.

But NBC will still be in fourth place.

Last night’s episode of AMC’s Mad Men, the best episode ever, was “brought to you by DirecTV.”

DirecTV, which claims to offer “more of your favorite channels in HD than anyone,” does not carry AMC in HD.

Ironic, eh?

Google announced today that as part of their growing push into display advertising, they’re finally going to target users instead of sites. Google calls this “interest-based” advertising, and they intend to run it as a beta test through AdSense.

Google has been a laggard in behavioral targeting, on one hand because of a simple lack of capability, and on the other because of the deserved scrutiny they’ve received for their dominant market share in both search and display advertising following their DoubleClick acquisition.

Yahoo and others have been doing BT for a while. The skyscraper ad you see embedded to the right (click on it to see the whole thing) is one that rendered for me today on Yahoo’s IM web client. How did they know I wanted to go to Kauai? Because I searched for a vacation to Kauai (from San Francisco) on Orbitz a couple days ago.

The secret sauce, Google claims, is that users will have control over the buckets in which they get placed, once they find the Ad Preferences tool. But how will users know the tool exists? A user can also opt out of targeting, but this requires them to find the Google Ad Privacy Center, or to install a browser plug-in if they clear their cookies frequently.

That said, ad privacy is something that primarily riles people up in theory. Sure, maybe you’re uncomfortable with ad networks tracking your sites, but when you see an ad that interests you, do you really feel violated? Making a user feel okay about being targeted – especially microtargeted – is all in the execution. Transparency looks good in press releases, but most users will never set their preferences, or even know the settings exist. So the targeting must be subtle, the messages must be relevant, without being over-personalized.

If you over-personalize, or if you make the targeting too obvious, you get the in-your-face iris-scan Hell of Minority Report. And nobody wants that.

YahooVibes interviewed me about the past, present, and future of My Yahoo!, the Yahoo Open Strategy, and whether the new Yahoo.com isn’t just more peanut butter.

YahooVibes: Interview: Eric Meyerson, ex-SPM of My Yahoo!

The seizure and failure of credit markets are the most serious economic issues of our time. And so far, neither Republican candidate has demonstrated the slightest inkling of understanding of them. Here’s Gov. Palin on the campaign trail yesterday:

Transcript: “The fact is, Fannie Mae and Freddie Mac, they have gotten too big and too expensive to taxpayers. [Applause.] The McCain-Palin administration will make them smaller and smarter and more effective for homeowners who need help.”

How can we expect economic leadership from this ticket?

My beloved, beleaguered, bedraggled Dolphins released Zach Thomas yesterday.

The team is purging salaries now, which is really the only possible direction following its dismal, hopeless 1-15 showing.

But saying farewell to Zach is devastating. Over his 12 years with the team, Zach did his business with excellence — stuffing egomaniacal running backs, picking off ill-advised passes, turning tight end receptions into incompletes, and basically taking away the middle of the field.  He made every player around him better. He never went for the big hit or the big ad campaign, never got arrested in a nightclub, never said a discouraging word. He just racked up Pro Bowls (seven of them) and screwed up the plans of the league’s offensive coordinators.

He may end up with another team in 2008, but his Hall of Fame bust will say Miami. Zach, don’t go!