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Articles by: "Michelle Manafy, Editorial Director – DCN"

Industry-Research

Three lessons the Pacific Northwest can teach local media everywhere

The transformation of the media business shows no signs of slowing. While all areas have been disrupted, local news has been among the hardest hit. These neighborhood news providers have seen steady cuts and closures. This has left “news deserts” in which wide swaths of America have a troubling shortage of local news coverage. Undoubtedly, local news remains important to the communities it serves and its survival essential.

The report, Local Journalism in the Pacific Northwest, explores the experience of 10 local media outlets in the Pacific Northwest. Through expert interviews and analysis, the report offers insights into a microcosm of how digital disruption is impacting local journalism more widely across the United States.

Like all media, local journalism faces enormous economic pressures and continues to evolve to address these issues. The report finds that continued experimentation is essential to success. However, some of the older digital formats — newsletters and podcasts — are experiencing a resurgence both in popularity and revenue generation. The upheaval in local journalism has also produced new possibilities for journalists and storytellers.

Here are three key takeaways from Local Journalism in the Pacific Northwest:

1. The practice of local journalism is evolving.

The report finds that role of local journalists is changing. Even the notion of objectivity is being reexamined as journalists seek to authentically engage audiences and reestablish trust. This includes elements of engaged journalism, with an emphasis on listening to communities, as well as harnessing digital platforms to tell stories in new and interesting ways.

Video and social media are already well-established means to engage audiences and share the news. Local journalists are also increasingly enthusiastic about exploring different approaches to their work. This includes solutions journalism and a recognition that you can maintain journalistic independence and integrity while still being active— and visible—in the community. We can expect to see a greater emphasis on the role of analytics to shape content and inform the beats that newsrooms focus on, as well as an increased importance attached to journalists with data and visual—particularly video—skills.

2. Local media needs to be more diverse in staffing and content.

While the report unsurprisingly finds that local newsrooms will continue to shrink in terms of staffing, it emphasizes that newsrooms must become increasingly diverse. Efforts to this end are essential so that these publications better reflect and engage the communities they serve. As those interviewed point out, many communities have seen a significant change in the racial and economic profile of their readers since the bulk of staff were hired. Thus, they need to improve their understanding of their audiences, as well as the priorities and expectations of these audiences. And, in addition to staffing up newsrooms that look more like the communities they represent, the skill-set of these journalists needs to address emerging digital formats and analytic tools. Engaging local journalism must reflect its community and their information needs while leveraging multimedia storytelling.

3. Outlets are experimenting with multiple ways to increase revenue.

The report outlines the significant pressures on the local ad-based business model. These include the fact that many advertisers are focused on ad targeting at scale and only willing to pay “digital dimes” rather than “print dollars.” It also looks at offline pressures on local advertising such as like shift of Main Street businesses from local shops to national chains.

Thus, local media providers are exploring with a range of ways to expand their revenue base. These include paywalls, subscriptions (including special offers and sales through third parties, such as Groupon), events, income from foundations, sponsorship, and membership models. These efforts are part of a wider move to diversify revenue and reduce reliance on print advertising and subscriptions—which are declining overall. Finding the right revenue mix to support local journalism is a strategic priority and, typically, a combination of methods is required for success.

The report explores several more significant takeaways based upon the research. They cover issues that include metrics, on and offline engagement, the rise of visual content, and the need to create unique content. As the report states, “We can see the positive impact local journalism can make on communities and the wider news/information ecosystem on a daily basis. It supports community, democratic, and civic needs and remains valuable to audiences and communities alike.”

Local journalism bears a great responsibility and must evolve to reflect the diverse communities it serves. At the same time, it most continuously experiment with engagement and delivery tools, as well as monetization models in order to remain relevant and economically viable.

Perspectives

The fight for a free press continues, in the U.S. and abroad

According to a recent survey conducted by the University of Pennsylvania’s Annenberg Public Policy Center, more than a third of Americans can’t name any of the rights guaranteed by the First Amendment (check your knowledge here). So, perhaps it’s not surprising that we are seeing a rise in negative sentiment and action against the press here in the U.S. Yet press freedom is essential to a democracy. The public must be informed so that they can actively participate in the governance of their community and country.

Rep. Jeff Fortenberry (speaking); Abdülhamit Bilici and Margaux Ewen

In his opening remarks at a press freedom event co-hosted on September 13rd by the Newseum Institute, Reporters Without Borders, and Digital Content Next, Nebraska Congressman Jeff Fortenberry remarked on the average American’s lack of familiarity with many of the foundational principals of our government. It is easy, he suggested, to become complacent and shirk the obligations that come with democracy.

“Rights are inextricably intertwined with responsibility,” Rep. Fortenberry said. He reinforced the need for individuals to take an active role in government, but also pointed to the responsibility of the media to represent the interests of all Americans and varied viewpoints in order to meet their responsibility to inform the public.

The road to destruction

Panelist and former editor-in-chief of the Turkish newspaper Zaman Abdülhamit Bilici described the disintegration of the free press in his country and offered a disturbing roadmap for how government-initiated negativity toward the press can lead to a catastrophic outcome. His paper’s coverage of the Turkish Ministry attracted the ire of President Tayyip Erdogan, who began to publicly malign the publication. When that failed to silence them, he denied their reporters access to press conferences. Then came calls to fire journalists and threats to those who advertised in Zaman. When these efforts failed to change the coverage, Bilici says that “Erdogan had to use the nuclear option.”

The Turkish President enlisted the court system to help the government take control of the paper and initiated a police raid on the headquarters. Tear gas and water cannons were used to quell protests against governmental control of the media. Newseum Institute COO Gene Policinski pointed out that Turkey was once viewed as a beacon of hope for democracy in the Middle East. “Turkey was not a perfect democracy, but it was on the way,” said Bilici. His careful breakdown of the dismantling of press freedom in his country and how it sped up destruction of its budding democracy was certainly a warning to all in the room.  

Fight for your rights
Abdülhamit Bilici, Margaux Ewen, Gene Policinski, Simegnish Mengesha, and Tim Crews

Another panelist, Tim Crews, editor/publisher of The Sacramento Valley Mirror, said that his journalists have been threatened on numerous occasions both online and in person. He has also experienced censorship and an uneven application of the law when it comes to prosecuting those who threaten or assault members of his staff.

Ethiopian journalist Simegnish Y. Mengesha, has seen many colleagues imprisoned “for doing their jobs.” She said that we must remain vigilant in protecting our rights because undermining press freedom “is a gradual process, it doesn’t happen overnight.”

Mengesha also sees that the danger goes beyond the threats to journalists themselves. “People are afraid to talk to the media; they are afraid to use their own social media accounts [to discuss news].” This, she says, strips citizens of their basic right to being informed about what is going on in their own country.

Governments in different parts of the world have shown a willingness to block social media platforms and even shut down the internet to stem the spread of information, as Margaux Ewen, Advocacy and Communications Director for Reporters Without Borders pointed out. She also noted the disturbing pattern of harassment, doxing, and outright threats made to journalists via social media channels.

Another alarming trend Ewan has observed is that “The authoritarian strong man model of government seems to be sneaking it into places we didn’t expect to find it.”

Lead by example

Bilici sees an unnerving parallel between what happened in Turkey and trends in America. In both cases, he said, “a popular elected person is putting pressure on the media.” Policinski from The Newseum reminded the audience that here, our President refers to the press as “enemies of the people.” And, as Ewen pointed out, the administration’s anti-press stance has a negative effect on journalists in other countries although she noted “I have to keep reminding myself that this didn’t happen overnight.”

“An important question we should ask ourselves,” said Bilici, “Is why isn’t the media getting the support from the public when we claim to speak in their name?”

Rep. Fortenberry said the media must carefully consider its diminished estimation in the eyes of the public. “There’s cynicism toward the institutions that uphold the idea of press freedom.” He called upon members of the press to support “an authentic dialog and public service for the good of community.”

Indeed, the participants—speakers, panelists, and attendees of Press Freedom: Lessons Learned From Around The World—would all agree that open discussion is essential to shoring up this key aspect of equitable government here and abroad. Yet even as the event was being arranged, Mexican journalist Martin Mendez Pineda, who has received death threats for his work, was denied a visa to participate. According to Ewen, the program was not deemed “important enough” to allow him to enter the United States.

 

Industry-Research | Video

The top five opportunities in streaming video—and the challenges that come with them

Streaming video on demand—also known as OTT viewing –is becoming the norm in video content consumption today. It also presents an incredible opportunity. The combined size of the OTT market was estimated at $29.4 billion in 2015, and is expected to grow to more than $64 billion by 2021. Parks Associates reports that one-third of US homes have a streaming player, which is one of the most popular ways to view video today (other than traditional TV). Though mobile already accounts for more than half of all video viewing.

In its report, Top 5 Video Trends in an IP-based World, Parks Associates examines both the challenges and opportunities presented by the rise of OTT video viewing. In addition to outlining these trends, the report looks at larger market challenges such as allowing content distributors to own the consumer relationships and the evolution of storytelling, content production and delivery in an IP-based world.

According to the report, these are the top 5 video trends today:
  1. Users expect opportunities to interact with their content.

This presents challenges in terms of flexibility and responsiveness, but provides an opportunity to learn more about—and appropriately monetize—audiences.

  1. Global, IP-based video services will be the next big revenue pool for content makers.

This presents challenges to reaching a global market for everything from technology to legal and localization issues. However, the opportunity for monetization at scale and in hyper-local and niche contexts is huge.

  1. Live TV is not dying; it is shifting to connected devices.

The technological demands of delivering live content at scale are quite high but audiences are attracted to real-time content, which creates a must-watch revenue opportunity.

  1. Consumers will demand new, diverse types of content.

Creating new content types is never easy, but for those who do, audiences and earnings are sure to follow.

  1. Artificial Intelligence (AI) will play a key role in the success of video services.

Though already being effectively implemented in a range of media settings, AI is hardly a perfected technology. There’s plenty of work to be done. That said, Parks sees it as the key to the evolution of personalization, with monetization opportunities to match.

For each of its key trends, the Parks Associates report offers real world examples while outlining the associated challenges and opportunities. And this, of course, is the most practical way to capitalize on digital’s promise: Understand and address the challenges while creating solid revenue strategies that support a long-term strategy

Innovation

What AccuWeather’s Facebook chatbot says about AI

Artificial Intelligence is a term used to describe everything from Apple’s Siri to Google’s Deep Mind and is being leveraged for a wide range of applications from shopping to quantum computing. At its core, AI is the capacity of computing to perform tasks that correspond to decision making and learning by humans. True AI doesn’t just infer or make deductions, it understands natural language, and can develop based upon experience.

Today, AI powers everyday tools used by millions of people. With the rising popularity of voice-based interfaces such as Google Home and Amazon Alexa – and the increasingly-accurate recommendation tools offered by the likes of Netflix and Pandora – AI tools are becoming embedded in people’s everyday activities and expectations.

Meet the Bots

Chatbots are another booming implementation of AI. That said, not all of them are powered by AI. As Trish Mikita, AccuWeather’s VP of Digital Media Strategy points out, “There are plenty of dumb bots out there. Many bots are based upon simple decision trees that use a scripted format to (eventually) deliver answers to common questions. Mikita says AccuWeather experimented with this approach in the past, however its latest chatbot leverages true AI.

The company has just launched AccuWeather for Facebook Messenger. The AI-powered weather assistant handles plain-language questions from users and provides easy weather-related answers. According to Mikita, Facebook Messenger was the natural choice for this launch given its large user base and the fact that AccuWeather fans were already communicating with the company on Messenger. “Messenger is a great platform that extends our conversations with customers in a natural way.”

Natural Language, Real Answers

AccuWeather’s chatbot—which was dubbed Abbi in beta — strives to be natural in its conversation. “The goal with us is for users to be able to ask a question, for our chatbot to come with an intent, and then answer the question in a meaningful way,” says Mikita.

So, while Abbi can answer questions about the weather forecast, she can also advise on appropriate attire for the day. The idea is for the chatbot to provide an accurate response given the context of a run in Cape Cod or a business meeting in Manhattan.

According to Mikita, being able to respond, “no it’s going to be 75 and sunny, no need for a jacket today” is a great first step. However, as the chatbot evolves, she looks forward to answers like “not today, but you’ll need an umbrella if you are going to be out later tonight.” To get there, AccuWeather is logging all of its audience interactions with Abbi. “This helps us with all of our products, so we can better understand users’ intent.”

Evolution of AccuWeather AI

Another step in AccuWeather’s chatbot evolution will be developing a personality. “A bot absolutely needs to have a personality, though it is a big challenge.” First, says Mikita, you must understand intent and get the outputs to be accurate. “The next phase is that personality piece. Natural interactions should have a personality. But having a personality doesn’t mean it has to be irreverent, or jokey. It can be a science nerd. Getting that personality to match our brand voice is a very important aspect.”

Mikita says that in addition to the continued development of Abbi (which may well have a name change in her future as the bot’s personality and functionality evolve), we can expect more AI-based launches coming within the next few months. The long-term roadmap also includes wrapping the intelligence piece into the AccuWeather API and incorporating these functions into its subscription products. AccuWeather’s presence on Alexa – as well as its evolving chatbots and plans for improved and innovative implementations of AI in its premium products – offers what Mikita describes as an “innovation opportunity that helps our other ad supported platforms.”

The company is already seeing efficiency savings with customer service. And they look forward to emerging opportunities to monetize these innovations directly. In the meantime, however, the company’s investment in AI is paying off in its ability to better interact with consumers, to get to know them better and to better serve their needs.

Industry-Research

Optimism conflicts with reality in digital transformation, but startup partnerships show promise

Today, business leaders across the US are aware of the importance of digital transformation, regardless of their industry. However, as most know, it is not an easy undertaking and needs to go well beyond buzzwords to truly change an organization.

It is helpful to understand how leaders prioritize digital transformation and how they evaluate their progress. To that end, digital consultant and company builder etventure, with the support of market research firm YouGov, has published the results of their study “Digital Transformation and Cooperation with Startups.” The aim of the study was to ascertain the current state of digital transformation in mid-to-large companies. It looks at the significance of digitization; progress and barriers; digital transformation activities; and the impact on employees. The report also examines cooperation with startups as a means to accelerate digital transformation in larger, more established organizations.

The State of Digital Transformation

The report identifies three levels of digitization: incremental, transformative and disruptive. Incremental digitization involves the digitization of existing business processes and customer experience. Transformative digitization involves new digital business models, while disruptive digitization is a radical reinvention of the existing business. Digital transformation, for the purposes of this study, include transformative and disruptive digitization. However, the report does not view incremental digitization as transformation.

Survey respondents recognize the importance of digital transformation and have made it a top priority. Unfortunately, while the overwhelming majority of companies surveyed rank digitization as critically important to their businesses, the study found that many of the activities classified as digital transformation are actually incremental changes. According to the report, “many businesses have a false sense of security.” They also find that transformation is often delegated rather than aggressively driven from the top.

Other key takeaways include:

  • There is a heavy reliance on IT teams to deliver transformation initiatives, even though many IT teams lack the entrepreneurial DNA required for true transformation.
  • Although survey respondents rank digital transformation as business-critical, only 3% of business state their CEOs are directly involved with management of digital transformation.
  • Nearly all survey respondents are currently undertaking some form of digital project. However, these projects are rarely disruptive or transformational.
  • Traditional business environments are poorly suited for digital transformation, as true transformation cannot be a part-time exercise.
  • Businesses lack an appreciation for how true transformation might lead to a fundamental shakeup of business, with a significant impact on employees at all levels.
  • The majority of businesses surveyed do not see startups as a threat.

Moving Forward

While it is heartening to read that leaders believe that the vast majority of their staff are equipped to undertake digital transformation, they point out that it is unrealistic to assume, as survey respondents indicate, that 90% of employees are ready for the challenges make an impact on revenue or market share in less than one year. Digital transformation isn’t just about digital processes and business models. Instead, true digital transformation requires significant cultural change. Thus, it is essential to help employees prepare for digital transformation.

While many businesses put all their energy into driving digital transformation themselves, another way of coping with digital transformation is to cooperate with the disrupters themselves: startups. Most startups are in dire need of what traditional businesses have – an established customer base, market experience and reach. For traditional businesses, collaboration with startups enables them to get on the fast track to true transformation – with low risk. Cooperation between corporations and startups brings together two very different cultures, which can be challenging. However, the report views corporate/startup collaboration as typically a win-win.

Innovation | Revenue

When shift happens at Telemundo, opportunity knocks

For years, Telemundo was viewed as a distant second to Univision’s domination of America’s Hispanic media market. Then, shift started to happen. Now, “Every week, prime time ratings are a nail biter,” according to NBC Universals’ EVP of Digital Media and Emerging Businesses, Peter Blacker. But—like most overnight success stories—this shift, which the company will highlight with it’s theme “Shift Happens” at the Upfronts on May 16, has been happening for some time now.

Blacker traces the origins of Telemundo’s strong and steady growth trend to its decision a few years ago to focus on “Generation M.” No, that doesn’t just stand for the desirable millennial demographic. Telemundo’s definition includes two other major factors that are impacting media: multiculturalism and mobile.

The racial breakdown of the American consumer is steadily moving towards a multicultural majority made up of non-whites. From a programing perspective, that means that audiences are more socially complex and less starkly defined. Combined with the technological forces of social and mobile, a wave of innovation is occurring at NBCUniversal overall, and Telemundo in particular.

Authentic content and ongoing relationships

According to Blacker, this is readily apparent in their approach to social content. They consider the unique properties of each social platform and aim to create distinct experiences and programming for each one. As an example, Blacker noted the shift in their social efforts around their popular Telemundo series El Señor De Los Cielos, which boasts 8.5 million Facebook fans. “We used to approach these shows as very connected to television programming. When the show was on the air, we were very active. Then, when the show ended, we went on to the next show.”

However, those millions of fans had a year-round appetite. With the help of some additional staff, his social team worked with the show’s writers to create eight-minute mini-episodes to “feed the fan base all year.” Other social-specific content may take the form of a simple gif or meme. The important part, according to Blacker, is that it is that the quality and tone accurately reflect what the audience loves about the show itself. And the strategy seems to have paid off. And the strategy seems to have paid off. According to Shareablee’s 2016 data, “not only did Telemundo come up as the biggest inside NBCU, top three across all media companies.”

When the developers on Blacker’s team approached the studio about creating a second-screen app experiences for El Señor De Los Cielos “they wanted to kill us” because of the added complexity. The app, Double Acción, uses audio queues to sync up access to secret archives, exclusive photos, videos, trivia, games and more. The impact of their complex request was softened when AT&T signed on as app’s debut sponsor.

Much Ado about innovation and monetization

Blacker notes that the ability to work closely with the larger creative team at NBCUniversal helps keep Telemundo’s social strategy authentic to their show brands. He also points to NBCUniversal’s investments in companies like Buzzfeed and Snapchat, as well as its own innovation lab, as inspiring and informing experimentation.

Blacker hinted at multiple pioneering projects that will be announced at the Upfronts in May, including virtual reality and ad innovations. An advance preview can be seen in his partnership with Buzzfeed on a digital telenovela “Much Ado About Nada.” The program will take the form of 10-minute episodes that will be distributed on a weekly basis across Telemundo and BuzzFeed digital platforms. It was created in response to research about what resonates with Generation M, this younger, mobile-oriented and multicultural audience.

The ability to identify and engage Generation M has supported continued investment in innovation, Blacker said. “Our partners are trying to connect with a multicultural millennial audience on mobile devices. That is the future of their business.”

Ultimately, said Blacker, “the reason why we’ve been able to continue to invest in virtual reality and new pioneering formats like the Buzzfeed project is because we’ve been able to connect with sponsors and advertisers. We’ve developed a reputation for innovation that we can back up with scale.”

Industry-Research

The Associated Press offers a guide to artificial intelligence in the newsroom

At the Associated Press, the news department leaders were the first to suggest trying artificial intelligence. They were motivated by two mega trends in the media business: “the relentless increase in news to be covered and the human constraints associated with covering it.”

In 2013, the AP teamed up with Durham, North Carolina-based Automated Insights to automate the production of certain types of news stories directly from data. They started with sports and then extended the initiative to corporate earnings reports. Since then, the AP has continued to experiment with AI and recently published “A guide for newsrooms in the age of smart machines” based upon on its own learnings as well interviews with dozens of experts in the fields of journalism, technology, academia and entrepreneurship.

What they’ve found is that “artificial intelligence can do much more than churn out straightforward sports briefs and corporate earnings stories. It can enable journalists to analyze data; identify patterns, trends and actionable insights from multiple sources; see things that the naked eye can’t see; turn data and spoken words into text; text into audio and video; understand sentiment; analyze scenes for objects, faces, text or colors — and more.”

Key Takeaways

Among the key takeaways in the report is that, in the field of journalism, AI has potential to:

  • Attend to menial tasks and free journalists to engage in more complex, qualitative reporting.
  • Enhance communication and collaboration among journalists.
  • Enable journalists to sift through large corpuses of data, text, images, and videos.
  • Help journalists better communicate and engage with their audience.
  • Empower the creation of entirely new types of journalism.

In addition to providing insights into the practical journalistic applications of AI, the report covers the relevant technologies in this field—including machine learning, supervised learning, natural language processing, robotics, computer vision, and more. It looks at the potential impact of AI on journalists and journalism. It also considers ethical, philosophical and practical implications of implementing AI within media environments.

Above all, the report focuses on the potential for AI-human “collaboration” in which journalists are freed from many of the craft’s more mundane or repetitive tasks. Rather, leveraging AI can save organizations time and money, while being better equipped “to keep pace with the with the growing scale and scope of the news itself.”

Perspectives

A timeline of the YouTube brand safety debacle

The link between a positive sentiment around context and ad effectiveness has been established. And, though there’s not yet been definitive research on the subject, the reverse seems an intuitive given. Ads running in negative or unfavorable contexts would be less effective.

So, it might seem that the recent uproar around Google YouTube ad placement could be seen as a boon for premium publishers. But as has been well-documented, a lack of marketer trust in digital advertising is bad for the entire ecosystem, not simply the bad (or careless) actors. So it is with great interest that our industry has watched Google’s YouTube brand safety saga unfold.

Here are the highlights of how the story has developed so far:

March 16, 2017
March 17, 2017
March 21, 2017
March 22, 2017
March 23, 2017
March 24, 2017
March 25, 2017
March 26

FT | Advertisers seek Google discounts in video backlash

March 27, 2017
March 28, 2017
March 29, 2017
March 30, 2017
March 31, 2017
April 3, 2017
April 4, 2017
April 28, 2017
May 15, 2017
October 12, 2018
February 2019
DCN-Research | Revenue

The power of focus: building a strong niche publishing business

The media industry is in a time of great transition, in part due to the proliferation of digital publications and the growth and popularity of social platforms. While industry consolidation might threaten the independence of some publications, there is also an unprecedented opportunity for publishers to communicate their unique perspective to underserved, targeted audiences.

With this in mind—and with the help of funding from the Knight Foundation—Digital Content Next worked with Ascolese Associates on the research report Niche Publishers: How to Create Sustainable Business Models in a Digital Marketplace, released January 18. This niche publisher research examines how 11 digital publications each capture a unique space, attract audiences, and monetize those audiences.

“I know firsthand that we’re much more nimble than larger news organizations. We can try things out quickly. You know, we can try things out and fail fast, or we can try things out and see some early wins and then build on them. I really appreciate our ability to be nimble and flexible and measure our results and make quick decisions.”
Mary Walter-Brown, Voice of San Diego

The research identified two core focus areas for niche publishers that are vital for their success: content strategy and business strategy. According to the report, these core focus areas are made up of seven tactical components, which are discussed in detail: content development, editorial brand, audience development/ delivery, data, KPI’s, revenue streams and operational efficiencies.

Publishers interviewed agreed that superior content is the core deliverable, but content alone can’t drive a publication to success; an integrated business strategy is necessary. While a quest for scale dominates many digital strategies, niche publishers focus on providing distinctive, even unique content that meets the needs of a very specific audience.

Almost universally, these niche publishers emphasized something that has become a common theme across digital media: the importance of revenue diversification. Additional revenue streams give non-profit publishers more independence from corporate and individual sponsorships and for-profit publishers some independence from advertising sales.

“The number one mistake that media companies make is that they have a journalistic idea, and it’s not done in tandem with a business idea that operates in synchronicity with the journalistic idea.”
Jim Vandehei, Axios

Many niche publishers interviewed cite repurposing content and digital or live events among their revenue streams. However, other avenues include outsourcing internal talent, a “data store,” and a marketing membership program. Notable among these publishers is a willingness to collaborate and create partnerships that allow them to fight above their weight class in terms of staffing and data resources.

Ultimately, the report finds that a niche publication’s smaller size translates into a flexible and nimble environment and, often, a more entrepreneurial approach to their business. Notable among these publishers is a willingness to collaborate and create partnerships that allow them to maximize their staffing and data resources but also to ensure the viability of this segment of the digital media industry.

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Advertising | Perspectives

The Big 10: Media executives call out the industry’s biggest challenges

While it is appealing to start off a New Year with rosy predictions, it is also important to take a clear-eyed look at the road (and roadblocks) ahead. We asked a few of our members what they see as the biggest challenges the digital media industry faces today.

Here’s what leaders at ten diverse media companies see as the biggest challenge in the year to come:

———-

Scott Bailey, President, TEN Automotive Division
@TENenthusiast

Monetizing scaled social audiences and the content made for these channels is a challenge. We see the benefit of being a first mover and building a large social audience. That said, the benefit today lies heavily in the marketing value it provides in driving traffic to our sites and leveraging it to convert fans into paying customers through subscription offerings like Motor Trend OnDemand. We are able to monetize through advertising, but the nature of the monetization on social is more challenging to do at scale, as it requires a more custom approach compared to more traditional, turnkey placements/buys.

Jordan Bitterman, Chief Marketing Officer, The Weather Company, an IBM Business
@JordanBitterman @weathercompany

Our industry must build a parallel world adjacent to the current one dominated by Google and Facebook. This new world must be scaled, intelligent and open. Currently, 85 cents of every new dollar are going to the two biggest players because they have been solving for scaled and intelligent – and have done a great job doing so. But, an open garden is increasingly becoming a requirement for sophisticated advertisers who want partners who are flexible on data and transparent on pricing and performance.

Jim Brady CEO & Founder, Spirited Media
@jimbrady @spiritedmediaco

It’s hard to pick a “biggest” challenge, as there as so many. But, to me, refining user experience remains a crucial one. There are still way too many sites alienating readers for a quick buck by hammering them with pop-ups, unnecessary slideshows, pagination, interstitials and more. Yes, we need to make money. But gouging readers to the point where we drive them away is an abysmal long-term audience strategy. Treat your audience like you don’t care about them, and they will surely return the favor.”

Steven Smith, President of Digital Media, AccuWeather
@accuweather

In 2017, we continue to hurtle toward a ubiquitous global user audience, accessing data from every imaginable kind of device with a greater focus on personalization, localization, service and mobility. Content providers are going to have to step up to meet the needs of an audience that wants fast, relevant, and localized—and provided consistently regardless of device, from smartphones to connected refrigerators. That makes strong partnerships with vendors a necessity, from Cloud storage providers for scaling data to meet demand demands to robust content management solutions to help port news from format to format and device to device. And of course, the audience will continue to demand content that is more timely and relevant than ever.

Joy Jones, Vice President, Global Products, Associated Press
@AssociatedPress

The biggest challenge we face is building diverse streams of revenue that support innovative storytelling. In 2017, digital media companies must bridge the current divide between creating compelling stories that attract interest and attention, and the opportunities for monetization that are increasingly concentrated on just a few of the largest platforms. The industry is not going to be successful if there’s too much focus on trendy stories that spin up on a one-off basis or so-called native ad content that lacks authenticity. We need immersive and captivating high-quality content that engages diverse audiences and creates a wide fan base across emerging media platforms. That diversification of revenue will be critical to building and maintaining a sustainable engine for digital media innovation.

John Kosner, EVP, Digital & Print Media, ESPN
@JKosner @ESPN

Establishing timely and trusted cross-media measurement is an enormous challenge — but a critically important one. People consume media on an ever-growing number of platforms and devices and we must establish accurate ways to measure the total audience we reach and their engagement with content. That means having clear, trusted standards and metrics — which measure across TV, apps, web, OTT and more — and do so both in- and out-of-home. The connection people have with digitally-delivered content and advertising continues to grow enormously. But so does fake content and ad fraud. Trusted and transparently-measured environments will become ever-more valuable.

Beth Lawrence, EVP of Digital Ad Sales, Scripps Networks Interactive
@ScrippsNet

A big challenge in digital in 2017 will be the ability for clients and consumers to separate the wheat from the chaff. We all know digital is here to stay and continues to be a more important revenue driver every year. But the quality of digital content has been under the radar, and in the final analysis, marketers care what brands they associate with. Period. Content matters; quality content rules. It will be a year of cleaning up, properly measuring and delivering great results in digital.

Matt Minoff, SVP, Digital Platforms and Strategy, Meredith Corporation
@mattminoff @MeredithCorp

The biggest challenge will continue to be capturing consumer attention as existing platforms grow and new platforms emerge.

Vikki Neil, SVP/GM of Scripps Lifestyle Studios
@ScrippsNet

In digital, you must stay open to all ideas that come your way, but disciplined enough to say no to many. You must move quickly and not wait for perfection, but perfect what you do daily. There’s not time to develop a long-range plan like a traditional media business offers. From my seat, the biggest challenge is a combination of making the right bets, and moving as fast as humanly possible to understand the space before your competitors, so that you can build the best offering for consumers and advertisers. It’s impossible to be everywhere across all opportunities, so choose wisely, go quickly and iterate daily.

Alex Skatell, Founder and President, Independent Journal Review
@AlexSkatell @TheIJR

The biggest challenge for media is building community. The strategies that have propelled many digital media companies into large audiences are largely commoditized, so you need to figure out how to connect your content and communities together in a deeper and unique way.

Brendan Spain, VP, Advertising – Americas, Financial Times
@spanishbrendan @FT

The biggest challenge for digital media in 2017 will be for quality publishers to cut through the noise – of ad fraud, fake news, and non-human traffic – to command fair market pricing for their trusted brands and influential audiences. Evaluating and leveraging these trusted environments will continue to be both important and difficult as the market weighs chasing scale and audience against quality and transparency.

Domenic Venuto, General Manager, Consumer Division, The Weather Company, an IBM Business
@dvenuto @weathercompany

As we look at the 2017 media landscape, there is potential for a massive upheaval on multiple fronts with the forecasted political uncertainty. The industry is resilient and adaptable, and we must remain focused on building great products for fans. And perhaps anxiety is unwarranted.

Industry-Research | Video

What you need to know about digital video advertising in 7 charts

Okay, let’s start off with an obvious—but critical—fact: Just about everybody’s watching digital video. According to comScore, almost every demographic watches some form of digital video each month.

comscoreaudience

12-1hThat said, it is clear from the comScore chart that there are segments that are consuming more than others. And, According to Defy Media, consumers aged 13-24 watch 12.1 hours of video per week on YouTube, social media and other free online sources, and another 8.8 hours weekly on Netflix and other subscription-video services. (That’s more than two and a half times the 8.2 hours weekly they spend watching television.)

While few of these younger viewers adore advertising, they are much more amenable to a brief sponsorship announcement or product integration is than the traditional preroll.

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In its 2016 Digital Ad Spend Study, the International Advertising Bureau (IAB) reported that Digital Video and Original Digital Video budget allocations resulting from the NewFronts event have steadily increased over the last 3 years. Their research finds that ad spending on original digital video programming has increased 114% since 2014 and, on average, marketers and advertisers are spending more than $10 million annually on Digital Video, representing an 85% increase from 2 years ago.

averagevideoadspenddoubling

According to Statista, there’s still plenty of room for growth, though. Statista analysts expect the digital ad market to grow at an average rate of 10.9% over the next five years, with social media and video advertising outpacing the overall market’s growth. And while search marketing is forecast to remain the largest share of digital advertising, it is predicted to rise about 57% whereas video is expected to experience an 80% increase.

digital_ad_market_growthstatista

While marketers find video to be among the most effective content type used in content marketing initiatives, they also rank creating it as among the most difficult, according to a report from Ascend2 and its Research Partners. Customer testimonials, explainer/tutorial videos and demonstration videos are ranked as the most effective types of video content marketing, per Ascend2’s research.

ascend2-most-effective-difficult-video-content-types-july2015

Time of viewing affects ad effectiveness. Online video advertising seems be most effective between the hours of 3 a.m. and 12 p.m., according to a study from cross-platform video advertising firm YuMe. They saw this trend across all age groups including millennials, Generation X, and baby boomers.

timedv

Mobile will be the biggest driver of digital-video ad spend over the next few years according to BI Intelligence. They found that US digital-video advertising revenue from PC- and mobile-based video ads will top nearly $5 billion this year, and grow at a five-year compound annual growth rate (CAGR) of 21.9%.

bimobiledrivegrowth

Advertising | Innovation | Perspectives | Revenue

Three key takeaways from the media leaders at Folio’s C-Summit

As part of its annual show October 31-November 2, Folio hosted a one day C-Summit. The invitation-only event focused on top strategic imperatives for magazine media organizations. Led by Hanley Wood CEO Peter Goldstone, the day provided an intimate conversation between panelists and attendees.

Here are three key takeaways from the discussion:

1. People matter (a lot): Many of the day’s speakers expressed that competitive recruiting and managing millennials to their fullest potential are significant challenges. Across the board, it was apparent that these leaders feel that having the right people to drive the organization from both strategic and tactical levels is a top priority.

“We need to teach all employees to think about the end game and how they can contribute Give them a voice, an opportunity to express ideas and concerns… We need to give them pride of ownership in solutions.”

—Bonnie Kintzer, CEO TMBI

“It used to be that the people in charge knew everything…Well, we’re in a learn-together mode now, particularly as we try to build new lines of business. Of the 46 people we have hired at AIM since January, 32 have job descriptions that didn’t exist before they were hired.”

—Andrew W. Clurman, President & CEO, Active Interest Media (AIM)

“The scariest thing is to have an opportunity but not have the capacity to deliver. For example, we find that companies want to connect with customers by feeding them, but staffing the event side has been a challenge… Creating the right culture is absolutely critical.”

—Catherine Neville, Publisher & Founder, Feast Magazine

“Running a media related company over the past 10 years has been a tough job. There are a lot of dead men walking. Employees are key to transforming business. You need to attract, retain, and develop people who will change your business or you will be one of those dead men walking.”

—Tom Kemp, Chairman CEO of Northstar Travel Group

2. Advertising is data and context driven: Digital advertising is increasingly driven by data—particularly in the B2B space, which is focused on lead-generation. However, context matters as does bigger-picture understanding of what the advertiser’s objectives are and how to creatively accomplish those goals.

“Advertisers are asking: What is the value you are going to give us, how are you going to bundle stuff? That said, they don’t always really know what they are asking. They want, and need you to know more about their biz than they do.”

—Jim Elliot, President James C. Elliot Co. Inc.

“We have to be sure we are producing products our customers want to buy, not just what we want to sell, so that we continue to have the relationship with them that supports the business. And yes, we need to be able to provide as much audience data as possible. We’re thinking less about selling advertising than selling all the assets we have.”

—Tom Kemp, Chairman CEO of Northstar Travel Group

“Programmatic is inevitable because it is a far more efficient for sellers and buyers. At Hanley Wood, we love programmatic because we have the data. What we’re seeing is a bifurcation in the value proposition between what publishers brought to the table—the value of our insight around the data and the audience—versus the value of the content and placing ads in context.”

—Peter Goldstone, CEO, Hanley Wood

“Thinking about some of the new players…yes, they are taking dollars away and disrupting things because they play by their own rules. But we must continue to behave in a way that is extremely responsible because of our brands’ reputations. We’ve been successful with our ad-sales guarantee. We’ve partnered with Nelsen to measure return on ad spend. We spend a lot of time on measurement and in our strategic partnerships. It is an area of emphasis and focus to demonstrate efficacy.”

—Mark Rothschild, SVP, Meredith Digital.

3. You’ve got to put your money where your progress is. Despite a seemingly endless desire to innovate, the reality is that resources are finite and making smart decisions about what to fuel and what to fold is critical.

“We have to focus on how to grow the business despite managing a mature print portfolio. There’s always a lot to do, but what do you choose not to do is just as important. As you think about your portfolio, resource allocation decisions are imperative.”

 —Peter Goldstone, CEO, Hanley Wood

“We looked at a lot of areas with underperforming assets, many outside the US, which we are in the process of selling. We are focused on being a strong US and Canadian content producer. The hardest parts are the print versus the digital pieces of the game.”

—Bonnie Kintzer, CEO TMBI

“There are lots of new shiny ideas that pop up in this industry. Yes, some are good…but others aren’t, and you have to be able to tell the difference, or figure it out fast.”

 —Jim Elliot, President James C. Elliot Co. Inc.

“As an industry, there’s a drag of products that need to close, that have served their purpose, but closing them creates an opportunity to start something new. And there’s always a new opportunity.”

—David Carey, President, Hearst Magazines

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