The Federal Communications Commission by a 3-2 vote today voted to reclassify broadband internet service as a public utility. This will prohibit Internet service providers from blocking Web traffic or charging websites for priority service.
Jason Kint, DCN CEO, commented:
We appreciate the FCC’s action today because it starts with the premise that the consumer experience should not be compromised. Consumers’ access to great content and experiences on the Internet should be protected. Under these rules, future and current content creators will continue to have the ability to innovate and connect with their consumers.
They were the perfect foils: Chris Cox, Chief Product Officer of Facebook followed by Nick Denton, CEO of Gawker. After dinner on day one of Code/Media, host Peter Kafka interviewed Cox and Denton in a brilliant bit of programming, which juxtaposed these two viewpoints:
Cox represented the evil platform intent upon vacuuming up all data, content and humanity to maximize clicks by us, the “human” robots, to support Facebook’s almighty quest for shareholder growth.
Denton represented the modern-day media czar who candidly–even caustically–fights off the controls of the platforms to protect the sustainable, independent voice for the future.
The problem was that I believed everything they both said.
While original content creators have had a love/hate relationship with Facebook for many years, there was no denying Cox’s eloquence in expressing Facebook’s current ambition to provide better consumer content experiences, particularly on mobile, by hosting content on Facebook rather than on publishers’ own sites. He deftly answered Kafka’s pointed questions about Facebook’s News Feed changes, publisher relationships and user experience decisions like auto-playing video.
Re/code’s Peter Kafka interviews Chris Cox, Chief Product Officer of Facebook. Photo credit: Asa Mathat for Re/code
But I can’t deny that Cox was the most authentic speaker I’ve ever seen from Facebook. As a rule, Facebook speakers usually leave me feeling a bit disappointed; like I’ve received the corporate playbook. But Kafka didn’t throw a lot of softballs Cox’s way and Cox wasn’t ducking.
I witnessed an hour of genuine answers that, regardless of whether or not I agreed, left me feeling like Cox was candidly sharing many of the complexities of Facebook’s global business. He explained how Facebook is different from all “archaic platforms” like Yahoo!, AOL and Google in that it’s held together by the notion that your friends and family will deliver the best content and info to you. If you agreed with Chris Cox, you should aggressively license content to Facebook’s platform where the largest audience congregates and the most conversations happen every day.
Needless to say, this is not a world view Nick Denton shares.
Denton smoothly shifted gears, channeling (if not quoting) Fred Wilson’s wise counsel to “Be Your Own Bitch.” While not quite the fiery Denton of yore, he deftly navigated Kafka’s many challenging questions. He didn’t flinch from topics that included Gawker’s publishing decisions — including the Sony files and Charlie Hebdo covers — and Gawker’s relationship with its audience, employee culture, Denton’s public exchanges with his reporters, GamerGate and anything else in the world according to Gawker, where controversy breeds like rabbits.
Denton made it clear that he doesn’t want to be informed about the news by the selections of his friends and family, which take place through some sort of democratic vote. He said that his news habits are aspirational and that he looks to brand experts to make what’s-newsworthy decisions for him. If you agreed with Nick Denton, you would defend your independence from any single platform and focus on engaging in conversations with your audience on your own platforms.
As I stood outside the spectacular Ritz Carlton waiting for my car at the end of the night, I found myself talking to a young student from California Marymount — recalling that BuzzFeed Publisher Dao Nguyen has often pressed me to find millennials to talk to about their media habits. So I asked this student what he thought of the event. He highlighted how much he had learned from listening to one of the event’s earlier speakers, New York Times CEO, Mark Thompson, and then Cox and Denton.
The young man said he was just thrilled to be in attendance as the topics covered at <Code/Media> aren’t likely to be discussed in his classrooms. In his words, “the history books on digital media haven’t even been written yet.” He’s absolutely correct. We’re writing them now. And I have zero doubt that the names Chris Cox and Nick Denton will appear in those books. And I bet, as we look back at this phase of the media business, we’ll find that they were both right. Content matters. Audiences matter. The conversations between the two matter. And great content conversations can happen everywhere.
Top photo: Re/code’s Peter Kafka interviews Nick Denton, CEO of Gawker Media
Lower photo: Kafka interviews Chris Cox, Chief Product Officer of Facebook
I could not be more thrilled at the enthusiasm for great content across the media industry— whether in the advertising, press, investment or journalism communities. That enthusiasm was never more apparent than at the 13th Annual Digital Content Next Summit last week, which gathered senior executives from across our membership to explore opportunities and innovation. We also came together to tackle challenges. And, in my opening remarks for the Summit, I captured four common themes that challenge content companies as they strive to reach their full potential in the digital transformation:
1. Pressures on display advertising. The flat to declining ad prices, which have resulted from abundant supply, have triggered a downward spiral that can only be slowed by the quality dimension. The transition to viewability will help, but the viewability conversation is mired in a malaise of too many inconsistent ad solutions and buyers taking advantage of the transition.
Fraud in the digital display chain is also massive problem: It tops the list of marketer concerns. And let’s not forget about the shift to mobile, which continues to accelerate. This shift is a good thing because it provides opportunities for personalized, useful content experiences. But we need to keep in mind that ad pricing on mobile is 30% of that on tablets and desktop.
The result, which I wrote about in The Trust Principle, is a marketplace that is mostly bought and sold on direct response without value for environments and brands. Google, Facebook and countless intermediaries have swallowed up the roughly 65% growth in digital advertising that has taken place in the past three years, while content companies’ revenues have remained flat overall.
2. The Attention Economy. It’s in full swing. We now have the opportunity to consume media 24/7 on countless devices, unleashing significant opportunities for content companies.
Here’s the rub: Anyone can be a media company. Individuals now compete with century-old institutions. Non-profits go head to head with for-profits. The competition is fierce whether the company is pre-revenue, or raking in billions.
I would argue the goal of capturing a consumer with 30 minutes of entertainment once a week is dead. Capturing 30 minutes each more morning with a newspaper is dead. Now we’re all trying to get a consumer to come by for a few minutes each day. We must provide a service to them—whether it is entertaining or informing and make sure to use their time well.
3. Business model innovation. The days of brainstorming non-advertising revenues as an opportunity are gone. It’s now a requirement to innovate your business model. Companies can’t simply compete by attracting mass audiences and serving ads against them. Being a great media brand is not enough. Today, organizations of any size or longevity need to think like start-ups and continuously experiment and innovate.
Yes, brands must own the relationship with individuals and monetize that relationship through advertising, but also in countless other ways to bring value back to their business—by delivering value to their user.
4. Protect our art. Data is all the rage, but it is art that defines us. Whether it be the journalism and free speech we fight so hard to protect, or copyright and content piracy, this so-called “content” is precious stuff. It is why consumers rely on us, and trust us and it is how we get to know them in the process. So yes, protecting our first party data (which comes out of customer relationships, as well as those with marketers) is also essential. But we build our businesses on this art and we need to protect it to make sure we can continue to fund and pay for it in the future.
Big challenges: Hell yes. But we are facing them as an industry, together.
Hit me up on Twitter (@jason_kint) if you want to dive deeper into any of these challenges or if there are others that you think we need to focus on.
I was thrilled to see an industry visionary like Ev Williams tackle the measurement discussion with his post “A mile wide, an inch deep” and advocate the use of a dimension beyond simply unique visitors.
In terms of measuring the quality of an audience, Ev’s “rectangle analogy” nails it.
Ask any junior high student which rectangle is bigger, one that is three inches wide or one that is two-and-a-half inches wide, and they’ll tell you it’s a nonsensical question unless they have more information — specifically, the height.
And yet, we literally say one company or service is “bigger” based on a single number — specifically, number of people who have “used” it in the last 30 days.
A site that attracts one million visitors for 30 seconds per month is an entirely different business than one that attracts one million visitors for 3 hours per month. The same holds true for brand advertising. We will continue to urge the industry to debate and discuss a time-based measurement world, what it means to brand advertisers and how it more correctly aligns the incentives for creating great media. As Ev so eloquently puts it: “Most Internet companies would build better things and create more value if they paid more attention to depth than breadth.”
It’s an Attention Economy. Content is everywhere and so are the consumers. We need to be in the business of making the most of their precious and valuable time. We’ll be exploring this topic in depth at the 13rd Annual Digital Content Next Summit later this month. It is members-only but we’ll be reporting on the insights and major themes on InContext after the event.
Like many in the media, I ended the day Wednesday reading Farhad Manjoo’s column on the Fall of the Banner Ad: The Monster That Swallowed the Web. My immediate take was that, although Manjoo’s overall premise about the problems with online advertising isn’t incorrect, he unfairly puts the blame on “the evil banner” perhaps just because it is visible; in the troubled world of online advertising it’s the one thing we can easily put a face on. However most things in digital are not that simple. Here, the real culprit lurks in the darkness and I believe Manjoo buried the lede; in fact, he says as much at the end of his article: “You can’t blame the web’s decline entirely on the usability nightmare perpetuated by banner ads.”
Industry leaders, including the IAB’s CEO Randall Rothenberg, are responding to Manjoo’s column with their own opinions (read Rothenberg’s In Defense of the Banner Ad) all expressing differing opinions and healthy dialogue. However, I believe that, as stewards of the future of a great industry that we’re still building, opinions that simply defend the status quo and broadcast “all is well” are irresponsible.
The banner didn’t swallow the web. The banner is simply a format, merely a pattern of pixels on the screen. Pixels can entertain, pixels can inform, pixels can influence. But pixels can’t single handedly gobble up the digital ecosystem. The shape and format of the pixels is the art on our canvas and has nothing to do with the challenges that Manjoo rightly points out. The banner is the most popular, and therefore most maligned, format so it’s the easy scapegoat but we’re foolish if we think the banner is the villain. If any other format replaces the popularity of banner ads, we’ll have the exact same issues unless we solve the real problems which Manjoo buried in the column.
So who or what swallowed the web? The trust parasites. The real problem is that, in a gluttonous race to easy short term revenue, the web breeds bad actors. Let’s break this down a bit:
Problem #1:The industry never constrained the supply of banners in a desperate attempt to grow as quickly as possible. Unlimited banners could be placed anywhere on a page, below a page, off a page, automatically refreshed, hidden under a pixel (where I grew up, we called this fraud).
Solution: Only when pinned against the wall have we now begun to address the roots of these problems with anti-fraud efforts and the move to transacting on “viewable impressions.” The mistrust in the supply chain has led to an imperfect market that has delivered great business opportunities for the intermediaries sitting in between the brand marketers and the brand publishers. Up to this point, the market has spawned hundreds of companies profiting from this arbitrage business. A number of these incumbents are attempting to abuse the transition to viewability as a tactic to garner short-term wins.
Problem #2:The industry has allowed any single banner to usher in dozens of third parties that provide little or no value for the marketer, the publisher and, most important of all, the consumer. One ping from an ad server often fires off dozens of tracking cookies and data collection beyond any consumer’s worst expectations. This has resulted in consumers trusting online advertising less than any other platforms whether print, radio, television or billboards.
Solution:Consumers still need a more simple and effective way to opt-out of third party data collection across digital media. It’s my belief that the Do Not Track setting in the browser is that solution if the industry would stop resisting progress on behalf of consumers.
Problem #3: The industry allowed the success of the banner to be defined by the interaction with it rather than the time in which it was exposed. As soon as the industry began to judge success and failure based on clicks, the creative artists left the room and the data scientists took over. Rather than marrying the art and science together in a powerful way that only the web can do, the banner became the greatest direct response vehicle in the history of media. With free flowing data and the lack of postage and printing costs of postal mail, advertising solved many problems for marketers. It’s worth noting that Rothenberg’s defense of the banner ad included a comparison in yield to direct mail. Point made.
Solution:Moving to metrics that actually measure the exposure of an ad impression. The significant discussion around time-based measurement is interesting and at Digital Content Next we’ll continue to explore the possibilities for the industry.
The banner is not the problem. It is a convenient target given its visibility to those of us in the industry who are frustrated with the state of digital advertising. We cannot afford to allow ourselves to focus on a symptom. We need to put our efforts into eradicating the underlying rot and constructing a viable digital advertising ecosystem that delivers sustainable revenue derived from effective marketing and consumer value.
This year may go down as one of the most pivotal years in the digital revolution as we transition into an AV world (After Viewability).
Vivek Shah, CEO of Ziff-Davis and Chairman of the IAB did a terrific job earlier this month at IAB MIXX and in a WSJ op-ed reinforcing why viewability is critical, while also explaining the important work that still needs to be done. This coincided with the reconvening of the Blue-Ribbon Committee (which I served on in its first phase to define the standard). It also led to the MRC’s advisory to media, which included these important guidelines:
If an impression’s viewability can’t be measured, then it doesn’t mean it’s not viewable or worthless;
It is not realistic (or even possible) to expect 100% viewability so there needs to be a more a measured set of expectations during this complex transition. As Vivek stated, no other media has attempted this level of measurement.
Publishers can’t bear the cost of the entire transition and, as such, the agencies using this opportunity as a price-negotiating tactic are doing a great disservice to the industry, their clients and publishers. Additionally, any marketplace confusion is not helpful in establishing this new currency. It’s why a group of advertisers, agencies and media companies agreed on the standard of 50% of a display ad for a minimum of one second.
Let me illustrate why these points are essential in evolving viewability with a personal story: I have a bedtime routine with our two toddler boys where they can ask dad any question they want to. Any parent reading this will realize that dad often doesn’t know the answers to their questions. Last week, our five year old made some significant inquiries into the nature of bricks: What are they made of? Why are they all the same size? Why do they sometimes have holes in them? How are they so strong? And like many parents out there, after a kiss goodnight, I headed straight to Wikipedia so that I could have better informed answers ready at the breakfast table. It turns out bricks are the same size so that they fit in the mason’s hands and are interchangeable. The mason’s craft shapes these bricks into something useful and enduring.
Viewability is our brick. If we–marketers, publishers and everyone who serves their interests–don’t get it right and make it as strong as it can be, then our building will crumble. Our first go at building this digital landscape was built off of impressions defined by pings of ad servers. It turns out that those ads served weren’t viewable as much as 80% of the time. When technology improvements allowed us to see this problem, the need for a different standard for an impression became clear, preferably one not based on clicks and direct response metrics that undervalue the trust and equity of brand marketers and high quality content companies. The good work of the IAB, ANA and AAAAs has now given us a standard for our brick that is fair to everyone. Rolling it out won’t happen overnight and we all need to share equally in that effort.
But if we can agree that viewability is the brick, then what are we going to build? I believe the answer is the house of time and attention.
I was thrilled with all of the discussion and positive reaction to my column during Advertising Week on Why Attention is Worth More than the Click. Transacting on time was something that we discussed early on in 2012 as the natural next step of viewability and it is clear that, in the intervening years, progress has been made on this front. Here at Digital Content Next (formerly the Online Publishers Association), we conducted research among our members to examine time-based measurement and just last week we released a whitepaper “How time-Based Measurement is Grabbing Digital Publishers’ Attention,” which explores the results. We also had the opportunity to discuss the topic with industry leaders at a private member event.
And the evidence is clear: The time is right to build a more robust and resilient digital ecosystem in which we evaluate engagement and measure impact on something sturdier than crumbling clicks. Viewability is the brick from which we can build meaningful time-based measurement. This will require both strategic and technological changes. At DCN, we recommend that organizations reassess their measurement capabilities; implement viewability (if you’ve not already), report the total attention time on campaigns, whether advertisers ask for it or not; and equip ad operations and yield management teams with the tools to understand the value of the time your audience spends with your content. As Mike Donahue, EVP, 4A’s noted to me recently, this isn’t a quick fix but we know the steps: “Once we have the opportunity to see (viewability) nailed as a first step cross-platform currency, the sequential next step currency is engagement. Short of scalable, affordable neuro measures (of emotional response), time is the best surrogate to measure engagement.”
Here at the OPA, we are excited to begin a new phase in our evolution, as we continue to support the trusted brands that publish the content people love. We welcome a new leader, CEO Jason Kint, who kicked off his tenure with a note to the OPA Board, setting the tone for his tenure and providing a bit of insight into where the organization is headed:
Board Members –
Thank you for the kind introduction at our meeting two weeks ago. I’m thrilled to officially begin my new role. I’ll be working aggressively to sit down with each and every one of you over the next sixty days. Your perspective on our digital world holds unique value as each of you has a role in the impact and importance of its future.
I have recently been on a journey through the research and application of trust in the digital ecosystem. I find myself fascinated by the evolving relationship between consumers, marketers and digital media. The opportunity I now have to strengthen these relationships is one I don’t take lightly.
It’s critical to understand that the Online Publishers Association is the only organization that exclusively represents the unique and diverse needs of high-quality digital publishers who manage trusted, direct relationships with consumers and marketers. We have the lofty responsibility of representing the future for the most respected brands in the professional content industry.
Consumers come to our brands because they trust what will be delivered. Whether it’s comedy entertainment, live action, financial analysis or investigative reporting, consumers know we’ll honor their many choices in how they spend their time and relentlessly advocate for their respect.
Marketers also have more and more choices across a growing multitude of platforms. Their world gets more complex with each day. It’s on all of us to shine a light on falsehoods and misconceptions. Marketers choose to invest dollars in our content and brands to associate with the high-quality, trusted experiences that we deliver.
I assure you that we will be aggressive in having a seat at the table whether it be with the press, policy makers, marketers, academia or the many informal discussions across social media. We’ll be transparent in the way that we operate and the positions we take. Additionally, our members and staff will be a trusted source of information and thought leadership as you make decisions.
It’s on all of us to pave the future for high-quality digital media. I will look to each of you to help make the valuable connections and engage directly in our conversations about digital innovation and the future. If we do this right, we’ll create opportunities not only for many of our members but, just as importantly, for consumers, marketers and the high-quality digital media companies of the future.
