TR EMERITUS

New York Times, 26 October 2009 It was a good day for newspaper websites when Mercedes-Benz USA introduced its updated E-Class cars this summer. Mercedes bought out the ad space on the home pages of The Washington Post, The Wall Street Journal and The New York Times, and had those sites create special 3-D ads for them, at an estimated cost of US$100,000 (RM350,000) a site. The days after were not as good. While Mercedes was happy with the newspaper sites’ performance, it shifted money to cheaper, more tightly aimed ads bought through networks, which bundle ad space from many websites. When Mercedes advertises its more basic models next year, it will largely avoid newspaper websites and rely on networks. That lets Mercedes “be very targeted and efficient with our dollars,” said Beth Lange, digital media specialist for Mercedes-Benz USA. But that also explains why newspaper sites are not holding on to ad dollars, even while overall Internet advertising is creeping back. Newspaper sites are the patent-leather stilettos of the online world: they get used for special occasions, but other shoes get much more daily wear. The beneficiaries of this behaviour are networks and exchanges like Advertising.com from AOL and DoubleClick Ad Exchange from Google, which dominate the buying and selling of extra space. At non-newspaper sites like Yahoo and Google, revenue from display advertising — the image-based ads on Web pages — seems to be returning. Yahoo’s display revenue on its websites increased 2 per cent in the third quarter, though it was down from a year earlier. Display revenue increased at Google from a year earlier. Overall, the Internet is the only advertising medium expected to grow this year in the United States, rising 9.2 per cent, to US$54.1 billion, according to figures released this month by ZenithOptimedia, a media service firm. Newspaper sites cannot seem to catch that wave. The New York Times Company reported a decline in ad revenue at its newspaper websites of 18.5 per cent this quarter compared with the third quarter last year. Advertising revenue at Gannett’s newspaper sites also declined. The McClatchy Company was an exception, with online advertising revenue rising 3.1 per cent from a year ago, though the rate of growth slowed. (Other major newspaper companies have not yet reported their revenues for the most recent quarter.) That is a sobering trend for newspaper executives, who once hoped that online revenue would make up for plummeting print revenue. At The Times, the dip in online advertising revenue was largely a result of disappearing classified ads, said Denise Warren, senior vice-president for advertising and chief advertising officer for The New York Times Media Group. She declined to give specific figures about how third-quarter online display advertising had fared, but said, “the performance is in the positive territory.” An internal analysis suggests that the site is outperforming the general display market, she added. And while much of the Times’ online ad revenue came from big campaigns, “we still have a very sizable portion of our business that is run-of-site advertising,” she said (ads that appear anywhere on the site, rather than in guaranteed high-traffic spots). At McClatchy, while classified advertising also declined, revenue from online display ads rose. Retail ads rose 58 per cent, to US$17.7 million, and national ads from marketers like Staples and Wal-Mart rose 36 per cent, to US$5.4 million. Christian A. Hendricks, vice-president of interactive media at McClatchy, attributed the rise to the company’s focus on online-only ads and its selling of local ads, rather than national brand campaigns. “There’s so much inventory,” or places to put ads, “at the national level, and so fewer advertisers compared to the local marketplace,” Hendricks said. Chris Saridakis, senior vice-president and chief digital officer of Gannett, which owns sites like USAToday.com, said classified advertising was weak but display advertising rose in the quarter. One reason newspaper sites do not appear to be bouncing back as much as the overall Internet is price: after advertisers introduce their splashy campaigns on news sites, they can follow up with cheaper ads all over the web. “You get the big audience reach on your national brands, and you guarantee that by buying USA Today or The Times or other properties. And a secondary buy, you buy inexpensive, low-c.p.m. ad networks,” said Saridakis, using the industry shorthand for cost per thousand times an ad is shown. A display ad that might cost US$10 to US$20 per thousand at a site like USAToday.com could cost around half that amount when it is bought across an ad network of similar sites. “They’re basically trying to buy the same audience at a third of the price,” he said. Given that high-end sites cannot sell all their ad space right now and so hand off the extra to networks, “networks are a fairly good way of finding that,” he said. However, he said, when marketing spending increases and extra space becomes scarce, he thinks ad-network prices will rise. At that point, he said, he expects advertisers to return to the high-end sites, since the price difference will not be as pronounced. But price is not the only draw of networks — they also focus on who sees the ad. Mercedes, for example, plans to route its ads for its basic cars next year to people with household income of more than US$75,000 or those whose leases are about to expire — a much more specific audience than, say, people visiting The Washington Post’s auto site. And as long as an ad looks good, it does not matter whether it runs on a fancy site or a lower-end site, some research indicates. “By far the most important thing for driving success is the quality of the ad,” followed by aiming at an audience, said Ken Mallon, senior vice-president for custom solutions for the research firm Dynamic Logic, part of the Millward Brown division of WPP. “Generally speaking, we don’t see a large range of difference in terms of the website.” Ad buyers are not convinced of the power of high-end sites, either. “They’ll tend to go for something that’s less expensive, because there’s not a lot of proof in the marketplace at this point that what one would call premium inventory — and you could put some newspaper advertising into that category — actually performs better,” said Adam Kasper, director of digital media for Havas Digital’s Media Contacts, which handles advertising for clients like Volvo. Newspaper sites work well “when you’re talking about a product launch, big announcements,” he said, “but the costs are higher for those bigger, splashier units.” Newspaper publishers, scrambling to keep ad dollars, are creating newer, splashier kinds of ads, like ones that expand, then contract, which advertisers say is not necessarily the way to go. This summer, the industry group Online Publishers Association, which most large newspaper sites belong to, introduced three special types of ads that its members could begin selling: one moved down as the visitor scrolled down, for instance, and another spread across the page for several seconds. It was meant to distinguish the member sites from the networks, said Pam Horan, president of the association. So far, though, only a single site — NYTimes.com — is running all three of those special types of ads. Warren said she was “very pleased” with revenue from those ads, though she declined to disclose specific figures. But the distinction quickly disappeared: ad networks immediately copied the special ads. And advertisers were not necessarily thrilled about the more-complicated landscape. The industry had been trying to settle on minimal standard ad sizes, said Kathryn Koegel of Primary Impact, a digital-media consultancy. “What the OPA ended up doing unleashed a whole bunch of people creating new ad sizes,” she said. Kasper suggested that no matter what publishers did, they were in some trouble as ad networks and exchanges continued to sell cut-rate space. “A lot of advertisers are moving towards buying in an auction-style manner, on an exchange or on an ad network, so it’s the market that’s driving this,” he said. “There are things publishers can do to stem the tide, but I don’t think it’s completely within their control.” — NYT  Read More →

From our Correspondent The Senior Minister of State for the Ministry of National Development Grace Fu had spoken out on the wet market saga. She said that though HDB is able to provide space for wet markets in HDB estates, it cannot guarantee that they will succeed. In addition, the HDB cannot dictate which stalls will make up privately-run markets, which is for the operator to decide, she added. Her comments came following a public backlash over the impending sale of five wet markets to supermarket chain Sheng Siong. Shoppers who rely on wet markets for their groceries had urged the Government to step in to preserve these markets and called on the HDB to reject such sales. Sheng Siong was forced to back down from its initial plan to convert the wet markets into air-conditioned markets after HDB announced that they do not fulfil the "criteria" for the conversion. The affected stallholders are concerned that their rentals will be raised after the takeover while shoppers have indicated their preference to purchase their groceries from the wet markets. The saga is a potentially sensitive political issue for the ruling party which can lead to the loss of votes in the looming elections if it is not handled properly. The opposition Singapore Democratic Party has been quick to capitalize on the unhappiness of the stallholders by speaking up on the issue. However, their application from the police to hold a public forum at Bukit Panjang was rejected lately. The state media has been busy of late trying to convince Singaporeans that wet markets are obsolete and should be replaced by modern air-conditioned supermarkets. In another blatantly one-sided commentary piece titled "Wet markets need extreme makeover" by Jessica Lim published today, she claimed that wet markets are becoming "novelty items" which are seldom frequented by young Singaporeans nowadays who prefer to do their shopping at air-conditioned supermarkets like NTUC. The continued expansion and dominance of giant supermarket chains like NTUC, a quasi-government organization is threatening the livelihoods of the small-time stallholders who are unable to compete with them on an equal footing. NTUC supermarkets are now found in almost every HDB estate in Singapore while the once ubiquitous wet markets are nearing extinction. Grace Fu claimed that the operation of wet markets should be left to "market forces", but NTUC has enjoyed an unfair advantage right from the beginning with access to plentiful resources provided by the state. The "timely" intervention by HDB to halt Sheng Siong's move to convert the wet markets into air-conditioned ones is probably a temporalizing measure to allay the anxieties of the stallholders. On the eve of the 2006 elections, the ruling party unveiled a "Progress Package" to dole out cash to Singaporeans. Less than a year later after assuming office, GST was increased from 5 to 7 per cent. It remains to be seen if the wet markets will remain after the next election to be held by 2011.  Read More →

OPINION In the opening speech for the Third Amartya Sen Lecture on Sustainable Democracy, the former prime Minister of Thailand, Anand Panyarachun listed seven main pillars for the artchitecture of democracy: elections, political tolerance, rule of law, freedom of expression, accountability and transparency, decentralization and civil society. In order to study and understand the missing pillars of democracy in Singapore, we must first ask ourselves the quintessential question: why do we need democracy? Years of systematic de-politicization by the autocratic regime and relentless propaganda by the state media have diluted the sense of awareness among Singaporeans on the importance of democracy and promulgated two pervasive public misconceptions: 1. Democracy has nothing to do with bread-and-butter issues. 2. "Western-style" democracy is incompatible with an Asian "Confucian" society like Singapore. Unless we debunk the above two misconceptions and educate our fellow citizens on the role played by democracy in their everyday life, we can never wake them up from their deep slumber. How can we ever expect democracy to arrive when we never bother to fight for it? Democracy is not some lofty ideal or concept conjured up by western philosophers to be found only in the books. On the contrary, it is intricately connected with our everyday life from the schools we attend, the taxes we pay and the newspapers we read. Democracy may not be a perfect form of government, but it is the least of all evils for it gives the people the power to determine their collective destiny instead of leaving it entirely to the hands of a few. Singaporeans are perpetually obsessed with the value of their flats, their livelihoods, and other material comforts in life, but they have to realize that without political rights, whatever economic rights they may enjoy now are only ephemeral in nature. For example, GST was raised from 5 to 7 per cent in 2006 by the regime arbitrarily without any consultation with the people. Despite widespread resentment and disgruntlement on the ground against the move, the regime still goes ahead to raise GST anyway. It is able to do with impunity because there is no organized opposition either in parliament or in civil society to check on them. Hong Kong Chief Executive Donald Tsang also tried to introduce GST last year, but was forced to back down after street protests broke out from the Hong Kongers. That's the difference between Hong Kongers and Singaporeans - though Hong Kong is a self-administrative region of communist China, the people enjoy far greater political freedoms and democratic rights than in Singapore and therefore they are in a position of strength to negotiate with the government. Another case study in point: the prices of HDB flats have sky-rocketed in the last two years bringing tremendous hardship to ordinary Singaporeans who have to take up higher and higher loans to finance the mortgage. The regime shows no intention or sign of cooling the property market because they face no external pressure to do so. At the same time, HDB had blatantly refused to divulge the real land and construction costs of each unit of flat to justify selling them pegged at market prices of resale flats. Again, the regime is able ride roughshod over the people with little accountability and transparency because the people have been deprived of the necessary political and democratic rights to resist. In the 1980s and 1990s when the four Asian tigers were creating economic miracles one after another, Singapore strongman Lee Kuan Yew would travel around the globe expousing his "Asian values" as a key contributory factor to Singapore's economic growth. His "Confucian" doctrine were ridiculed by then South Korea opposition leader and later president Kim Dae Jung as an excuse for authoritarianism. Lee would become more subdued in recent years following the success of South Korea and Taiwan in transforming themselves to full-fledged stable and functioning democracy. Both countries were once one-party states like Singapore (and definitely more "Confucian" than cosmopolitan Singapore) ruled by dictators, but they are now vibrant democracies which demolished Lee's argument that "western style" democracy is incompatible with Asian societies. Even Lee's concept of "western style democracy" is inherently flawed for democracy is a system of governance based essentially on certain criteria like the seven pillars as outlined by Anand Panyarachun - it has nothing to do with race, culture or nationality. As South Korea, Taiwan, Japan and to a lesser extent, Hong Kong has shown, economic prosperity and political freedom can co-exist peacefully together without society degenerating into chaos and upheavals as often suggested by the regime. Totalitarian states may prosper for a short span of time for as long the dictator is firmly in control, but once he passes on, the foundation on which his regime is built on will be dismantled and collapsed like a pack of cards as in the example of Indonesia. Ultimately is much safer, reliable and practical for a country to have competing centers of power rather than one single monolithic regime in control of all levers of the government including crucial institutions like the media and police. The people should be the guardians of the state and not the other way round. The role of the government is simply to govern and not to entrench itself in power perpetually. Everybody is equal under the law. No individual or party has the "mandate from heaven" to govern Singapore forever. All governments are merely servants of the people and are subjected to their collective will. Democracy does not mean simply conducting elections every five years. Other integral components such as a free press, an independent judiciary and an active civil society must be present as well without which democracy becomes only a hollow name, a facade put up by the regime to legitimatize its rule. So out of the 7 pillars of democracy, how many are Singapore missing? Find out in part 2 of the article.  Read More →