Ted Levitt, the late, great Harvard marketing theorist, turned this idea on its head. People don’t buy products, said Levitt. They buy solutions to problems; advertising is panacea to nothing. To sell, to succeed, companies must innovate—at very least, pursue incremental, non-disruptive innovation: e.g., the sixth blade on a new razor. Give customers more value than rival products, a better mousetrap, a better solution to their problems, and they’ll beat a line to your door. Advertising plays a role here too, but strategically speaking, it’s a different role, advancing the notion of customers as intelligent agents actively calculating and organizing their needs and values—albeit still as less-than-equal players in the determination of how demand is created and sustained.

Recently, I’ve been wondering about what Levitt would say if he had witnessed our revolution, the one wrought by the Internet. What happens when customers become the equal, or even the better, of advertising and marketers? What happens when advertising no longer plays the dominant, pursuers’ role in this relationship, and consumers hold the cards because their choice—e.g., their Google searches—is the leading edge of need and demand? Or to put this another way: When advertising becomes commoditized and consumer intent becomes self-organizing, how do companies organize self-organizing demand?

Post-advertising solutions

As AdSense and AdWords and PageRank show, it’s not as if you can count out the importance of advertising. Birds do it, bees do it, even Google does it, so it must be good: Advertising still serves a purpose in the atomized, anarchic world of search, even if that purpose is now merely to make algorithmically relevant matches between consumer need and products.

Even in this world of predictive matching, however, advertising, even advertising with well-written SEO, is losing its edge. This is particularly true of brand advertising’s expensive flattery (banners and brand campaigns). Not because brand ads don’t tell good stories or rivet brands to emotion (take a look at American Express’s My Life, My Card campaign), but rather because (as Chris Anderson says in his new book), customers basically orgasm when they get shit for free, and brands haven’t yet figured out how to compete in this environment. As long as price is a major consumer pain point—and that’s forever—you can bet your bottom dollar that advertising will continue to decline against Free. You can build the best mousetrap in the world, but if consumers find a mousetrap that delivers 90% of the value at zero percent of the cost—you’re sunk, dude.

Of course, most companies still haven’t accepted the idea that free products in free markets are good-enough consumer substitutes. They still think they are competing against advertised rivals instead of these reviled free purveyors/pirates. “The way to compete with Free,” says Anderson, “is to move past the abundance to find the adjacent scarcity.” I agree. But “adjacent scarcity”—e.g., the premium content consumers you supposedly going to offer for purchase to customers—isn’t easy to sell either. And it doesn’t leave you with much of a business model for the free stuff you’re giving away. So it’s back to square one: what’s advertised (and supposedly higher quality) versus what is free and frequently good-enough.

Another solution is to get consumers to do your advertising for you—what passes for much of what is called social media today. The theory goes that if advertising won’t work, influence will. You can zap a commercial, but you won’t zap your best friend’s blog or the tweets and (surreptitiously sponsored) Facebook status updates of someone you sortakinda trust. This kind of “social marketing” certainly seems to be gaining traction right now, at least among so-called social marketers. But saying you need social marketing strategy today is a little like saying you need dial tone strategy. The promotional stuff you load up on Facebook or Twitter isn’t social media, it’s social selling. Slathering “Follow us on Twitter” on your websites, emails, products is a kind of pure silliness that mistakes advertising for engagement. It falls absurdly short of the sophistication that self-organizing audiences require. And it reminds me of nothing less than the bubble pronouncements of Web 1.0, when every company trying to “get the web” slathered “Follow us at www.anycompany.com” on its products. It doesn’t work, except to create awareness that you’re advertising in a new medium. To which most consumer say: meh. (Counterexample: Coke.com. Its home page is nothing but a link to Facebook.)

Social media 2.0

So, if advertising is commoditized and “social marketing” is commoditized, what’s left? How do you organize self-organizing demand?

Well, first let’s look again at why purely promotionally focused marketing in nano-niches over Facebook, MySpace, Linkedin items doesn’t work. Why shouldn’t you advertise the latest feature by Author A in the new issue on a Facebook page; promote that new concert via a MySpace page; advertise a 10% discount off “allready [sic] low prices” via Tweets. After all, these do their part to a media buy.

But compared to the real gains these companies could create by creating service to their customer base through conversation and engagement—or conversely, concentrating promotional power at the touchpoints of specific use-cases—these promotions look like wasted spend chasing cheap dollars from customer segments. There’s no margin worth chasing here, and the instant someone else makes a better offer (or this consumer is convinced that Torrents aren’t the end of the moral universe), they’ll be gone. (See the recent Stephen Fry brouhaha on this very subject.) Of course, the counter argument is that the power of cheap promotion is all in the long-tail—it’s a volume game. But if you’re going to be in the shmatte business instead of branded fashion, you’d better be prepared for low margins, heavy debt to support inventory, and nasty, fast-paced churn as your customers run. I’m not saying it’s never worth it, only if you’re building a brand, it’s a distracton from finding that “adjacent scarcity.” A tough game to play

A more interesting game—more rewarding to brands and more lucrative, with less churn and higher margins—is the one that builds conversational and engagement gambits based on already existing social relationships, digging into what John Seely Brown and John Hagel called the social life of information: the information that lives, breathes, and functions in and through social relationships, online and off.

From this point of view, all media are social—the big question is how you unlock their social power. Just as we say that the only communities worth building online are those that already exist between people—that our job in building community should be to unearth and facilitate the communities that already exist—we can also say that the only media that can break free of commoditization are those that exist within an inherently social construct. The trick is finding the social tentacles  already at work in the DNA of the brand.

Of course that’s easier said than done. Where’s your brand DNA? Cue the consultants, right?

Well, here’s a different answer, one thankfully less indebted to bright shiny object syndrome but still somewhat novel: Don’t think of social media as a construct placed on top of your media, instructing or seducing consumers to accept the ventriloquistic subterfuge of influence., of advertising. Don’t even think of it as sharing or collaborating or creating a conversation. (Although that’s certainly better.) Think of social media as the social construct of every piece of data your organization already owns or can own. Not as an object in a database but rather as part of an exchange—between customer and company. That involves understanding every single utterance your company (and your customers) make as a scarce social bits that must be organized into context(s) and arrayed with that understanding.

Condensed to a single thought: social media can’t exist without content strategy—and vice versa.

Without social context, content strategy is arid taxonomical merchandizing contained by (and girding) user architecture. But social media without content strategy is typically promotion-by-another-name. Together, audience creation and social connection make beautiful music. Together, content strategy and social media perform superhuman feats of revenue creation. Together, they create real service to the customer, unlocking the riddle of “organizing self-0rganizing demand” over the lifetime value of the customer, and not in response to a cheap promo.

And what’s cool is that they don’t do it through Flashy multimedia SEO-immune trickery by the Silverlight of the moon. (And please don’t tell me the solution is custom publishing, unless you’re willing to put your custom published content into the market against paid content.) They do it through the remix and mashup of the content already in the storehouse, the treasure trove of digital assets most companies build or aggregate every day—whatever objects they generate through data creation, including documents, text objects (captions, pullquotes, etc.—) photos, music, video, Tweets… no matter whether they are made by your authors and contributors or your users.

As Andrew Savikas says, Content is a Service Business, but how, exactly? How do you go from “we have a lot of tweets about business that intersect our brand” to ExecTweets, a Tweet aggregator about business; from “we have stuffed suggestion boxes about how to improve our stores” to MyStarbucksIdea; from “we have a ton of blogs about small business” to OPENForum. From registered Democrats to the Obama campaign’s amazing social strategy? Or (to borrow from my own examples above) from promotional chitchat about the latest performance at that big Las Vegas hotel to an entertainment community that brings aggregated news of who’s playing with user comments from FB, MS, etc. Or travel listings that bring aggregated news and blogs about hot destinations with users’ tweets, geodata, and photos—and rankings of hotels, travel agents, and airlines.

The secret sauce

In fact, it’s not so secret—and if you’ve been prescient enough to have some kind of end-to-end XML-based CMS behind your operation, you probably already have a start. Because all it takes it the metadata you and, one hopes, your users, attached to those assets.

Why metadata?

Because that’s the system—on either the authors’ or users’ sides—through which you’ve made yourself searchable. Increasingly, tags are no longer second-order data—they’re the brass lamp in Aladdin’s cave, without which nothing can be illumined. Rub the lamp, and you can turn all those programming stacks into the most scalable, continuously profitable revenue generating data you own. Leave it as pure content or a promotional bolt-on from advertising, and you’re not only failing to create the layer of customer service that drives user loyalty, you’re failing to create the rich and inherently social content experience that users expect today. And as the metadata get better and richer, as the capabilities of OWL and RDF and SPARQL and the rest of the anagrammatic programs of the semantic web (sometimes called web 3.0) become more mainstream—and newsier: like these International Press Telecommumications Council “newscodes” (now being ripped off by AP)—we’ll get to evercooler and more useful mashups of news data, with greater revenue earning potential than ever.

So is anyone doing this now? (Apart from the OpenCalais project already initiated, albeit phlegmatically, in a handful of websites.) OK, here’s a trick question: What is the most successful media company in the world using metatag data to whip-up self-organizing demand?

OK, I give: It’s Apple.

As Kontra (a self-described “veteran design and management surgeon”) wrote in a post a few weeks ago on counternotions, Apple has created an entire universe of metatag strategy and dynamic metatag management via the App Store. Kontra points out that there’s always been a trove of metatag data in iTunes, more relevant to pre-packaged, static content than dynamically updated content. But thanks to changes in iPhone OS3, the App Store now allows for content to be upgraded recurringly and connected to other apps—you can even alert customers that new data is available via push-based numbered badges hovering over your app icon.

You don’t have to be a genius to see where this can go, but in case you can’t, Apple tells you about potential business opportunities push notification and metadata open up in black and white right  on its website: “Create a subscription magazine app where you ask for payment on a monthly, yearly or periodic basis of your choice. Sell extra levels to extend the experience of your game. Build a general-purpose city travel guide app and let your customers pick the city guides they want to purchase.” Obviously a lot more too.

So what’s this got to do with media? After all, publishing hasn’t been central to Apple’s business model until now. Bob Cringely, the brilliant tech (and now mortgage) writer I read as soon as he posts, recently said that Apple is moving slowly and steadily toward becoming primarily a content provider with Apple TV as Jobs’s Trojan Horse. Preposterous though it sounds, Cringely may be right: I’m a (hacked) ATV lover, and I can see where and how Apple might use the aggregated metadata knowledge it acquires from my purchases to create new programming. Genius playlists, in my experience, already do this so well, they’re a total substitute for dj playlists and mixtapes. Could ATV do the same thing for networks and channels? Scary thought if you’re NBC.

But now start to apply Apple’s brilliantly counterintuitive strategy—using broad distributed networks as the foundation for a moated ecosystem—to drive revenue in other media. To steal Jarvis’s WWGD idea: WWAD (What Would Apple Do?): How would you build a metadata strategy for more traditional media companies (magazine companies, newspapers, book publishers, online programmers) using Apple’s model? For book publishing? For a candy company? A digital camera manufacturer? For vertical search with travel, real estate, or auto listings?

This post is long enough as is—mea culpa—but let me finish by pointing to one of the biggest companies to have applied Apple’s lessons to its own business to date, creating a wave of disruptive innovation that may actually succeed where so many others have failed. I’m talking, obviously, about Amazon’s amazin’ Kindle. The correspondence isn’t one to one. You can’t compare the depth or pricing genius behind the App Store with the more conventionally priced Amazon Kindle bookstore. And—to return to the argument I made above about finding “adjacent scarcity” in competition with free models—I’m not so sure how much I’d bet on a DRM-based publishing model when there are so many amazing substitutes out in the wild.

On the other hand, Kindle—or maybe an Apple tablet, we’ll soon see—will I believe one day change the whole way we think of the media product. No longer will we buy a “book”—one day we will buy a relationship to a title. Home reno: we’ll buy a title and a continuing stream of articles and community relationships. (Or you can flip this into a freemium strategy—we’ll get involved in nano-niche communities, and buy their books and teeshirts when they finally appear.) Nothing, not even fiction, will be untouched by the Kindle model: Instead of buying fixed narrative, we will be purchasing a touchpoint in a story, one likely to have living prequel(s) and sequel(s). Whether we fix a badge to the content unit to let you know there’s new material waiting to be pushed or whether you just download it per Kindle, the key to organizing the self-organizing community will lie in unlocking the value of the socially affective (and effective) metatags that can power revenue-generating media. Call it social media, call it content strategy, call it whatever you want. I think it’s the future, but it’s already well under way today.

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When I first heard he was creating Junta42, a marketplace for custom publishers and brands, I thought we were in for another ad network play, a jobsite, or a competitor to the Custom Publishing Council’s referral service. J42 is most of that and a whole lot more. Pulizzi is one smart dude: When he sees a wind blowing, he tacks right into it. Custom: got that. Publishers’ referrals: got that. Digg-like aggregation about custom content: got that too. J42 has even managed the trick of coopetition with the CPC, no easy feat.

Pulizzi’s best trick, however, is turning this little windup toy about custom publishing into a model for his business: he really eats his own dogfood. J42  collects user-submitted articles to be voted up by registrants, and Pulizzi emails the best to his user, marketing his own custom publishing company (Z Squared) while simultaneously taking a cut on referrals—at this point more than 100 matches between brands and custom publishers who pay $4395USD a year—compared to membership in the CPC (from $1,700-21K/year (depending on company revenue) for roughly the same service. Between sales and referrals (no real advertising here), that’s a nice business. You have to give this guy props.

And yet.

As a onetime custom magazine publisher whose roots and tendrils have always been unambiguously digital even when he was working with print, I can’t reconcile the reality of custom publishing with distributed brand intelligence.

I sense Pulizzi knows this too: his definition of custom is nothing dogmatic, rather a big tent accommodating everything from the classic brand monologue, print or online, no matter how well or poorly produced, to the most up-to-the-minute social media and content marketing schemes. The Junta42 model, which Pulizzi explains in a white paper is based on the rising costs of interruption economics (brand advertising), the sinking fortunes of media companies, and the seeming bliss of consumers who seem to be just as open to blogs as they once were to big media brands and their partners in brand advertising. Inside this big tent, it’s all content marketing and it’s all good. As brands get bigger, savvier, and realize that their content—even their spec content—is gold, they will only pay more to bet smarter about content strategy, content marketing tactics, and content management, and Junta42 will be there to guide them.

Good stuff. Pulizzi is clearly onto something. If I had money, I might even join J42; I could use a new client or two, and if he’s doing as much volume as it seems, the $4K might even be a good investment. Unfortunately for me, I don’t have the cash—and (perhaps more important) can’t summon up the same enthusiasm for custom publishing. Don’t misunderstand: I believe there’s plenty of good brand-sponsored publishing to be done, nearly all of it online. Brands ignore the remixed associated value of their content—repeat: remixed, associated value of their content—at their peril. Understanding how to innovate down to the bit, relearning brand storytelling across the datasphere in new story forms is why I’m here.

Custom for dummies?

But that’s not custom publishing. The competitive essence of custom publishing is its ability to write and publish in the style of popular journalism—mimicking the real thing in look and feel—but wholly disassociated from the credibility and competence of newsgathering. Custom aims to boost and protect a brand. It’s not about you. Not that there’s anything wrong with that. There’s plenty of consumers who could care less about the news curve. But let’s call this what it is: a disguise, a feint, a kind of editorial ventriloquism. As if readers/users won’t know the difference between content related to news and content related to marketing, promotion, and sales. Here: take this magazine and remember us the next time you have a problem with your car! Here: take this magazine and remember us the next time you accuse us of not having any imagination! Here: take this magazine and remember us the next time you can’t find a product in our giant database. Here: take this magazine and FOR PETE’S SAKE WOULD YOU SHUT UP—we’re giving you this gorgeous magazine FOR FREE!

Charlie McCarthy: Editorial ventriloquist

This is why Luce wanted a Chinese wall between editors and business, Church and State. Why ASME still insists on labeling advertorials. Why nearly all custom cannot compete for brand advertising, even in unrelated categories. (Custom publishers say they create high perceived value with consumers but if that was the case, why wouldn’t they compete for customers and advertisers?) And (perhaps I don’t need to say this), it is why user generated content exists. To blow a hole in this mockery of independent judgment and reporting, of pseudo-news and real news. To put an end to dummy-to-dummy publishing—passive consumer to monologuing customer publisher.

Making the bridge from conversational farce (ventriloquism) to conversational, customer dialogue and customer service seems to me an almost impossible leap. As I said above: I just can’t square custom publishing with distributed brand intelligence. Juntas aren’t distributive democracies. Period. (Does anyone see the irony in naming a business that promotes popular ideas about publishing for a term that is all about a military brand monologue?)

Of course the custom publisher/content marketers of the world don’t see it this way. Since most big companies are dropping their expensive custom magazines, all they see is fresh opportunities, whether by sticking with the magazine model—locking content behind DRM systems such as Zinio and Idio or DRM-protected emags or even PDFs fit for the utopian ideal of a color Kindle. Or they are going the social media route, adding marketing blogs or other social media conventions to massive online brand destinations. Ad infinitum, ad nauseum: Follow us on Twitter! Check us out on Facebook! Hear our brand soundtrack on MySpace! Join our FunClub/Ambassadors Club/MeClub. We get it—even if we don’t know what we get out of it (but check out our white paper for the mumbo jumbo on why you should be promoting your brand on My Twitface including the 10 best ways to turn 140 characters into great marketing 22 times a day!). Welcome the age of content marketing!

Not. The problem with all of this is that content marketing, like custom before it, craves control and abhors real conversation. You don’t need a paternity test to see it’s the same DNA. This is the same ol’ same ol’. Content marketing prefers the lopsided asymmetry of promotion to real customer dialogue. Why do you think Twitter is the tool du jour of content marketers? If you have something to promote, what better way than getting into a realtime stream with asymmetrical follow? Why do ya think company after company is craving so-called social media experts and why an army of self-proclaimed social media expert is rising up to meet this demand. The whole thing gives me a strong sense  of déjà vu. I’ve seen this movie before, maybe even a couple times already: These are the same folks who made the “dot com” revolution. Who crowed about Web 2.0. And who are now heralding a new age of content marketing.

Conversation for dummies

Not all content marketing is so ugly. Since one of the hats I wear is “content strategist,” I’m among the first to recognize that there’s significant value in propping up marketing in the Orwellian newspeak of the distributive web. My experience is that when content marketing is conversational marketing—when it maintains authentic dialogue and conversation rooted in the use cases of real people who actually use the products, when it aims at participation instead of passive ingestion of brand factoids—it has the potential to be way cool. Conversational marketing may sound oxymoronic but it is a job that needs to be done. I’ve been saying for a decade that the web turns every company into a media company, whether they like it or not. A Citibank/HP/BP/Audi/Levi Strauss can spend money on brand advertising or they can touch consumers directly with brand-associated content through self-assembling evangelists. (By the way, I take it as obvious in the extreme that the first job of content strategy is helping companies get a grip on the fundamental audit, positioning, CMS, sort, and content creation routines that are the bread and butter of CS.)

But evangelism, especially self-organized evangelism, ain’t easy. Brand advertising works less and less. Web-site destinations are plummeting in popularity. Last week, David Armano, a top UX designer now working on Jeff Dachis’s stealth SaaS collaboration software,  wrote that he was killing his own website, and that almost everyone else should too. “Your website should provide value to all of your users,” wrote Armano. “If you can get them to participate, then do what ever it takes achieve that. In other words, it doesn’t matter if your site looks more or less like a blog, what matters is if you’re doing something to transform behavior from the passive to the active.” I couldn’t have said it better myself.

I’m not saying companies shouldn’t have brand publishing initiatives, or websites, or that they not undertake marketing initiatives via Facebook, Twitter, LinkedIn and the rest. Go for it. But if you do, try to make such initiatives be an invitation to active participation, to dialogue, to content that enjoins and extends a company content into a shared customer ecosystem of connection, conversation, and collaboration that is inherently uncontrollable—and highly prone to influence.

Conversation is not an enterprise designed to yield extrinsic profit, a contest where a winner gets a prize: it’s an unrehearsed adventure. More like playing to gamble than to win or lose. It’s all about the bet, about the place where different universes meet, acknowledge each other, and enjoy an oblique relationship which doesn’t require or forecast assimilation. It’s the one place where difference really matters.

And as long as brands insist on control, they’re playing a losing bet.

Surrender with your hands up!

So how do you start a conversation? How do you give up control? How do you turn passive brand factoiding into active participation where the inmates are liberated from the asylum of the brand?

There’s a whole ‘nother post to be written about this. But it can be done. In print, online, and in just about any kind of application you’re interested in betting on. Blogs help a lot. Blogs establish voice, deepen authenticity, provide insight and create instant culture. Gawker, for example, is planning to grow its sponsored advertising faster than its brand advertising. Take a look at Bloodcopy, its recent experiment with HBO’s True Blood. Just as Valleywag no longer exists independently of Gawker, so Gawker is publishing Bloodcopy across its various properties— pretty much indistinguishable from its typical editorial “except [said Chris Batty, Gawker’s vice president of sales and marketing] that the blog is written by an undead, bloodsucking ghoul…“If we’re around in three or four years, the majority of our advertising revenue will be in sponsored posts like this.”.

OK, I know what you’re saying. That’s not participatory. It’s not on the newscurve. And it’s not very scalable. But what would happen if, say Dell, sponsored a beat on Jezebel, a Gawker property catering to women, about galtoys—and almost entirely unrelated to Dell technology. Or if Volkswagen sponsored a reporter to test drive a dozen cars running on biodiesel. Or if American Express sponsored a blog about small business and really let it rip, competing directly with the Wall Street Journal. (Oh wait: Amex is already more than halfway there with openforum.com— maybe the best site on small business anywhere.) What if your favorite hotel chain started using Facebook to let you tell the hotel what was terrific—or sucked—about its facilities? What if it helped you connect to someone on the other side of the pool? Whichever side of the continuum of social media avails we choose to enter—from blogs that can potentially exist on the newscurve to Tweets and Facebook pages that go beyond promotion to active engagement with products—the opportunity to engage in conversation over promotion must be true north for content marketing. This is most definitely not custom publishing.  

Indeed as a former ink stained wretch, one of the things I like best about this model is that it contains the opportunity for  brands to expand the reported environment through their own thirst for user intimacy. This works particularly well in microdistributed contexts (Twitter and Facebook) and provides far more returns—quantitatively (and maybe qualitatively)— in terms of content and sponsor value than both mainstream media and branded content marketing (i.e., custom publishing online).

Caveats? You betcha. First: Your Monetize May Vary. If you think this is the way to increased brand ROI, you might be disappointed. You might also be delighted. ROI direct to sales may be limited. But ROI related to brand strength may be strengthened. The question you have to ask is: What job does this campaign need to do? So if you go this route, do it because you want to touch a specific audience who will associate reporting on this subject with your brand. Think associatively, act directly. If you do it because you want to spread info about your company, raise its brand, or even have people think your company is on the ball, you lose. This is about authenticity and independence.

Second caveat: Custom publishing can’t do this. Once you go this route, you become the media. You are making the same wager media companies have taken for years, betting that your brand is strong enough to support and even shine on associated content and vice versa. You are no longer in the realm of brand boosting but consumer interaction in and through media.

So don’t screw it up with layers of control. It’s a conversation—not a monologue. Any dummy knows that!

Are they dummies? Are they custom publishers?

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How about yoga with media? To stretch beyond—for real innovation to take place—you need new business models. But not just. You also need an innovation culture that creates living, breathing media experiments across business and editorial and technology. All of them together. All-One, as Dr. Bronner likes to say. In an agile, networked world where attention is scarce and most news is just randomly filtered data, change in any one of these three chakras by itself won’t cut it. Good content disconnected from context—people or data—is just data. If you want to be seen, you need to do the yoga that twists business requirements together with editorial and technology. And you better get down with the data baby because if you don’t know your XML from your HTML, your metatags from your master narratives, you ain’t going nowhere.

Unfortunately most media companies today are stuck when it comes to innovation. Newspapers still assign writers a single story a day instead of putting themon a beat over the course of a day with constant mini-updates. Business folks are still struggling to balance selling brands and search; seo still seems like a naughty word. Selective inkjet printing and supposed mass-customization are stand-ins for developing products that really embrace context. Designers are still more interested in pretty designs than persona-based user architectures. And although it’s changing,  lots of companies (media or otherwise) are still stuck with five year old content management systems that don’t give them the power of end- to-end XML, seo, metatagging, and multiple outputs to web, mobile, whatever.

So yoga: union. If you want to swim the blue oceans, innovate beyond your competition, the only way forward is to twist together. At the end of the day, editorial unsupported by business strategy and tech is just random data. You’ll be lucky to be spidered.

As I’ve written before, part of what holds back innovation is the rudimentary silos of static church/state (business/edit) relationshp of most media companies. But it’s not just at the operational level. Even the pundits don’t do yoga. Even now, even when there is more momentum to innovate across the wall than ever before, few if any, of our friends are connecting business model to content model: yoga.

Jeff Jarvis has been putting the pedal to the medal with his New Business Models for News project at CUNY. It’s a brillaint study, interrogating the financial dynamics of news companies, asking the fundamental questions of customer acquisition costs, pricing, bundling, net ROI of Googlejuice vs other measurable audience and advertiser metrics (churn, linking, etc.) Jarvis wants to collect the data, model it, and see what implications it has for news companies. Bravo. But it’s still business modeling. Jarvis isn’t reintenting the wheel—nor should he; his objective is to bust out the numbers in order to figure out how news organizations make money.

“The question is not whether content should be free or whether readers should pay; “should” is an irrelevant verb. The question, very simply, is how more money can be made. What will the market support?

The other question, then, is how much journalism the market will pay for? What kind of journalism will it support? This doesn’t necessarily start with the current spending on current newsrooms. Part of the equation, especially in the other models, will be new efficiencies (e.g., do what you do best, link to the rest) and new opportunities to work in collaboration and in networks.

The question Jarvis is raising is what those new efficiencies will consist in: what’s the value of user participation and increased collaboration, inside and outside the newsroom. What’s the value of innovation? His book, What Would Google Do?, provides many examples of media innovation but without the economics; his study will presumably provide financial ballast for new business models. But Jeff’s post begs the question of how you’re supposed to model stuff you haven’t built before. Again, what’s the value of innovation? If you’ve been reading this blog or Jarvis’s post on what he calls The Great Restructuring—or Umair Haque, the guy that inspired both of those posts—you’ll know another answer here is to put monetization (or at least overt monetization) beneath innovation, beneath community. But that’s not yoga either.

So what is media yoga? Wednesday’s FT had a piece about Freakonomics economist Steven Levitt’s new teaching gig at the Univ. of Chicago’s Booth called “Using Experiments in Firms.” I’m a little afraid that Levitt and  his co-teacher John List, both economists, will scientize this, but I suppose it’s a start, and it’s interesting that it’s taking place in a B-School. (Where’s similar focus on innovation in J-School?) There’s a giant world of innovation methods—from the Bass Diffusion curve to Christensen’s Disruptive innovation theory to Kaizen and TRIZ and beyond (way beyond)—some of which emphasize incremental increases in value and others (Christensen and Blue Oceans) that go for more profound leaps in value and technological transformation. We’ll see what comes out of Levitt’s new class, but I’m a little skeptical—economists and business modelers tend to get caught up in scenario setting, and what we need now more than ever is yoga. Left brain, right brain. Business and editorial and tech together. (Which is why, I think, supple management practices such as Agile and Scrum—and disciplines that look across the entire breadth of the media value chain such as IA/UX and content strategy—are beginning to get a bigger toehold today.)

So do media yoga. Fail often. Fall occasionally. And make sure you warm up all your muscles before you get on the mat. Otherwise, it’s savasana for you, bud.

Om.

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