Is Context King?

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by: John Sviokla

con·text (kŏn'tĕkst') n.

  1. The part of a text or statement that surrounds a particular word or passage and determines its meaning.
  2. The circumstances in which an event occurs; a setting. (source:

In our $11 Trillion economy there is roughly $1 trillion dollars chasing demand, of which about $600 billion is spent in advertising and promotion, and the entire telecommunications, media and technology cluster – those industries which create and deliver that trillion — have transformed from mature industries with defined products, customer segments, and production methods, to a dematuring markets with customer behavior changing, core creation technologies morphing, and the number of equivalent competitors increasing.  (See my blog on Google: The best damn demand chain management company.) In short, the production and consumption of information has changed more in the past ten years than any other consumer good, and will continue dematuring for the foreseeable future.

In this innovative soup, the highest market cap competitors are the companies that manage context, not just content, with Google and Yahoo leading the way – and they not only have gross margins at or above 50%, they are growing fast (Yahoo at 47% from 04-05, and Google at 97% in the same time period – with both now about as big as McGraw-Hill that venerable company that publishes many things – including Business Week, and larger than the New York Times at a paltry $3.4 billion). 

Why do these context kings do so well?  Because Yahoo & Google (like Direct Marketing before them) makes advertising spending more measurable, and targeted, thereby providing more control, measurement, and productivity.  Will other types of media go away?  No! However, everything; every location, every television show, every information interaction will become more and more measurable, and those companies that influence the context will capture differential value. Is content generation now, finally, commoditized?  No.  Great storytelling is as important as ever if not more so.  Yet, many strong content brands are not taking advantage of their possible role as a context player.   

How do these context kings manage context and what can strong content brands learn?  Contextulizers customize wherever possible, with simplicity guiding their design. They accomplish much of this customization by managing not only nodes, but links.  They are inclusive of other peoples content – in other words, they are a platform, not just a content location.  In the physical world of the newspaper or magazine, the job of the editor is to create the context.  Editors decide what goes where, and what goes next to what, and how content links.  In the online world, it is simultaneously a much more constrained and expansive space.  It is much more constrained because a screen is only one “page” and most of the action happens on the first page – as any search engine, or other research would tell you.  At the same time, it is a very “deep” space – because you can go well beyond the page count of any magazine.  The challenge is that every segment wants to experience that “deep” differently, depending on the content they want to see and why.  There are at least two ways to handle this shallow/deep problem.  The first is to try to design the perfect set of menus and options to serve the deep needs of the majority of the readers – which is what established players seem to be doing today.  The other, and I would submit easier path, is to modularize content so that the viewer can assemble his or her version of context in a way that meets their needs. 

Look at the content modules of Google and Yahoo.  People create their own context by adding or subtracting modules of content – whether they by areas (e.g. BBC) or functionality (e.g. Maps, Froogle).  Likewise, Business Week, the New York Times, Forbes, and Fortune should modularize their content so that readers can add or subtract what they want to see and what they don’t want to see — and can add from competing or complementing sources.  This is part of the process of managing context — and taps the user's desires to manage context. 

Why should any company care?  Well, if you are a media company, relevant context draws more targeted eyeballs, and thereby is more appealing to advertisers – because they know that the people who are "watching" have chosen the content themselves.  Second, and this is relevant for any content provider — not just media companies — the audience can tell you what they put together, by the modules they pick.  Third, it allows a firm to insert other people’s content on a trial basis to see what works together.  For example, if there is a useful Standard and Poor’s report (which is owned by McGraw-Hill) on a company and someone reading Business Week has an interest in that company, and if the magazine were modular, it will allow McGraw-Hill cross sell other McGraw Hill products without having to have deep editorial coordination, and production management.  Just make the interface requirements known to the other groups, and they can publish to your audience.  Such a modular structure can also allow you to cut deals with other non-competing entities.  Modularity lets the user manage the complexity to his or her desired level. 

The end user generated revolution is a key part of this as well.  Simply adding more and more blogs and RSS feeds do not create a targeted and personalized context.  Every new piece of content added, needs to be balanced off by some new customization capability.  If one begins to design any context in  in a modular way, it is a method to manage the complexity – both for the reader – because you let them manage the complexity, as well as for you as the producer, because it will be much easier to tap into the bubbling soup of end user generated content.  By having an “interface” to the context, you can tell the world what format they need to conform to in order to be included – and you can still decide if you want them to be part of your context.  This is relevant for user generated content.  Not only that, but when Jack and Susie Welch opine in Business Week magazine, they should have links in the electronic world (and maybe pointers in the physical magazine) to the fact that Jack has at least three books, two of which are published by McGraw-Hill.  Right now, that coordination only happens sporadically between the book and the magazine groups.  If they were to have an interface and modular mentality, those types of mashups would happen naturally (within the firm when marketing) and outside the firm when someone wanted to feature Jack Welch's thinking or speaking or both.   

Again, why should anyone care?  If the context is more tailored, the targeting of the ads and the content itself will be more powerful.  Rich, relevant context invites interaction — which today is often measured in click-throughs.  Response increases.  Voila!  Seth Godin understands this all too well which is why he launched Squidoo, a site full of end user generated lenses on thousands of topics.  These are contexts — which help folks find things and interact.  The power of context is that is makes content relevant, and helps navigation — which is more challenging all the time.

It is said of Tip O'Neill, the legendary politician from Cambridge, Massachusetts that he felt "all politics is local" — so too, meaning is often local — and context is the neighborhood for content. 

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