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Featured Post | Revenue

Subscriptions make sense. But how many will consumers pay for?

It’s no secret: In the coming year, readers will run up against more memberships, more pleas for donations, and more paywalls. In short, more opportunities for money to escape their wallets to bolster media outlets they have previously accessed free of charge.

Companies like Buzzfeed and Quartz have recently embraced direct-to-consumer business models, joining traditional subscription outlets in a rush away from digital advertising reliant models. Beset by multipronged threats like the internet giants Facebook and Google sucking up all traces of revenue growth, declining consumer trust, and an alarming trend of fraud cases, it’s not hard to see why digital media companies are looking for alternatives.

But this shift comes at a cost. While ad based revenue models optimized for reach, the new normal will be the tailoring of niche content to attract a reliable paying clientele. The Atlantic’s Derek Thompson recently predicted that the entire industry will return to the early days of journalism where a “party press” would stoke the partisan emotions of their readers.

“News media of the future could be as messy, diverse, and riotously disputatious as their audiences, because directly monetizing them is the new central challenge of the news business,” wrote Thompson.

That means that digital publishers will need to navigate the real risk of subscription fatigue. How much are consumers willing (and able) to pay for?

What it will take to survive in this new DTC world?

“As loose paywalls tighten and everyone seeks reader revenue, I imagine audiences will be forced to make choices, especially in what is looking like a dramatically slowing US economy,” said former GIzmodo Media Group CEO and Columbia University professor Raju Narisetti.

He expects that people will begin to add it all up and realize that  — given other recurring payments like internet service, mobile, and subscription-based everything from meal services to shaving supplies  — their content selection might need to be more discriminating.

Needless to say, publishers need to figure out how to compete for limited discretional dollars. One approach that many are trying is aggregate services like Flipboard, Texture, and Blendle.

Adding Texture

An obvious option could be an even more widespread integration into an app like Texture, purchased by Apple last year. Texture offers a service similar to Netflix wherein a group of publishers bands together to offer a wide range of branded content for a single rate. While currently available to use, there are persistent rumors of a spring relaunch of the service included in a future Apple News update, foreseeably offering an increased amount of content above and beyond the current free selection. It’s hoped that the move would have the same omph Apple brought to its Apple Music platform. At least that’s the pitch.

Publishers remain skeptical, though. “Some executives fear Texture could end up doing more harm than good. Their concern is that Apple could steal their current subscribers, who would save money by reading articles on Texture instead,” reported Bloomberg.

One thing that could change that calculus is the confidence boost of a New York Times-shaped news outlet taking the plunge, according to Narisetti. While he admits it’s natural for the larger players to be cautious, there’s a vector for profit in the service.

“That’s because they are currently giving away up to 20 stories entirely for free on Apple News. So, in my mind, they are actually likely to incrementally gain by monetizing that via Texture, than lose any significant, core loyal direct subscribers to lower-priced subs,” he said.

Once that’s overcome, “the US news floodgates will open up on Texture, much like how NYT paywall given the confidence to the American general news industry,” he added.

But there are always more than one way to approach the problem.

Infinite Scroll

Focusing on user experience, the creators of Scroll.com want to offer a direct to customer alternative which side-steps competing with a publishers revenue models by offering to remove the ads from a collection of publishers for a monthly fee. Sites load faster, users can opt out of advertising, and publishers get a new revenue stream.

“We avoid the problem of cannibalization and instead get to complement rather than compete with them. Most publishers see us as a middle of the funnel service, creating more engaged users who can then be converted into their own plans,” said Scroll founder Tony Haile.

But perhaps the industry needs to learn from the experience of the wider technology industry. Subscriptions are an increasingly popular way of packaging any digital-adjacent service (often dubbed Anything as a Service, or XaaS), whether it be a ride sharing plan, in-app purchases, or even the meals you make for dinner. But they’ve even suffered through the same issues as facing the digital publishing industry.

Value for Life

“As a media company looking at some of the struggles of consumer XaaS companies like Blue Apron last year, I would make sure to focus relentlessly on reducing my churn rate, and increasing the Customer Lifetime Value (CLV) of my paid subscriber base,” said Gabe Weisert managing editor at Zuora, a subscription management platform provider.

He explained that the way towards healthy CLV is to drive usage at every opportunity. Keeping people engaged keeps them paying customers. Strategies which achieve that include cross-selling and upselling. For example, the New York Times saw solid growth of new subscribers from their crossword and cooking app offerings.

To entice their audience, Buzzfeed is offering tote bags for new subscribers, but Amazon is taking those subscriber-enticements to a new level. The Seattle-based retail giant has started offering free sample of items of products based on users’ shopping habits data—with the only goal to getting us to buy more.

“CLV should be the gold standard metric of every media company. That’s all Netflix cares about. It’s all Amazon cares about. That’s why [subscription services] keep giving us “free” stuff — they know exactly how much those investments materially affect the value of their subscriber base,” he said.

Featured Post | Perspectives

Top 7 media trends in 2019

As the year comes to a close, we always get the reflexive compulsion to look back and take stock of what happened and consider what’s to come. And this year truly brought a sea change on a number of fronts in digital publishing. Facebook and other tech giants stumbled mightily from one PR disaster to the next, culminating in top executives literally telling Congress that they expect to be regulated. Who would have imagined that?

And the old, sad chase for eyeballs might finally be laid to rest, as digital pubs pivoted away from video, away from chasing mass audiences via social media, and toward reader revenues and putting the audience first. And while the digital ad duopoly of Facebook and Google face headwinds of regulation and a public backlash, Amazon is expected to make it a “triopoly” as their ad growth is skyrocketing.

Here are the media trends that made the biggest difference in 2018 and what to watch out for in 2019:

1. Facebook and Tech Giants Lose the Plot

It’s a lot easier to talk about what’s wrong at Facebook than what’s going right, and that goes doubly for its relationship with publishers. At the beginning of the year, Facebook changed its News Feed algorithm to downplay news pages and then saw its own usage flatten over the year. Things got worse when Facebook forced publishers to go through a verification process just to boost posts with political stories. Even at South by Southwest, a techie’s fevered dream, the “techlash” was in full effect with entire panels devoted to attacking Facebook.

Even worse for the technology behemoths was the continued pushback from regulators in the EU and U.S., including a rare bipartisan rebuke against executives. While Republicans and Trump have alleged anti-conservative bias at Facebook and Google, many others believe they need stronger regulation around privacy, especially after so many scandals related to politics (see Cambridge Analytica) and data leaks (see Facebook’s not-so-private photos). Expect more backlash and more regulation to come.

2. Amazon Joins the ‘Triopoly’

And if you’ve grown tired of the exploits of the digital ad duopoly, rest assured you have a new tech giant to worry about: Amazon. The Seattle behemoth has quietly slid into third place among digital ad purveyors and is set to grow a whopping 400%+ per year to grab 15% of U.S. market share by 2020, according to eMarketer. And the signs have been growing about Amazon’s dominance all year, from the time they beefed up agency and marketer support to the point where they had a scandal over sponsored wedding registry listings. Let’s celebrate another player to give Facebook and Google a run for their money – as long as they play fair.

3. Media Mergers Trump Trump

He tried so hard to penalize CNN. But in the end President Trump failed to block the AT&T purchase of Time Warner, or force a spin-off of CNN (which has been on a money-making tear). Instead, the mega-merger was approved by the courts, and we also saw Fox offload most of its assets, including the 21st Century Fox studio, to Disney, while Comcast skulked away in defeat.

And T-Mobile and Sprint passed their final hurdles to merge in 2019, leading to only three major mobile services in the U.S. They promise to cut prices for consumers, but less competition usually results in higher prices overall. How will all these huge mergers play out in 2019? For the media companies, it’s all about taking on the disruptive tech giants moving into entertainment and streaming. For the wireless carriers, it’s about moving toward speedier 5G to give us faster streaming (at higher prices). All those trends will come together as Disney unleashes its new streaming service next year.

4. The Digital Media Reckoning Continues

This year just reinforced growing trends in 2017, that will likely continue into 2019: Digital-only publishers cannot rely heavily on advertising or even sponsored content. Without diversified revenue streams, and especially reader revenues (subscriptions, memberships, etc.), most of these former darlings will end up hallowed out, like what happened to Mashable before and Mic recently. Even BuzzFeed had to move toward an NPR model, asking for $5-a-month memberships to support its news operation – complete with the cliché tote bag reward.

BuzzFeed CEO Jonah Peretti is calling for more consolidation. But most importantly, publishers need to put the audience first and take a user-centric view of sustainability. As Politico’s Tyler Fisher wrote in Nieman Lab:

“With a business model focused on reader revenue, the entire company can set its sights on making the best journalism product possible for the reader … The smartest of smart newsrooms will take one more step in their path to sustainability: They will become a trusted institution in their communities by respecting their users’ time, intelligence, and privacy.”

5. Snapchat, Flipboard, Pinterest Rise as Facebook Falls

As Facebook took a tumble this year, others stepped into the void and took advantage of the social giant’s missteps. The most ironic beneficiary was Snapchat, which had taken a beating from Facebook with copied features (ahem: Stories). The company stepped up its game by letting marketers target publishers in Discover and letting publishers use non-exclusive content in Discover. Even old stalwarts like Flipboard and Pinterest saw their stock rise as Facebook fell to earth. Why? As Facebook dealt with misinformation and algorithm angst, Flipboard focused on human curation and Pinterest on lifestyle. Of course, Facebook does own Instagram and WhatsApp, which continue to grow and thrive outside of the parent company’s shadow.

6. Linear TV Under More Pressure from Streaming

As noted above under the “Digital Media Reckoning,” the move toward reader revenues means more ad-free environments, and streaming giants like Netflix and HBO are leading the way. Even Facebook did some research on whether a subscriber-supported ad-free social network would pay off. Meanwhile, cable nets such as AMC Network saw their advertising revenues drop, while distribution revenues soared as they sold content to streaming networks and diversified.

Where does that leave our old friends, the purveyors of linear TV? They’ve had to up their game and innovate with “addressable TV ads” that target people better than mass market TV ads, which are on the wane. And AT&T’s purchase of Time Warner has given the telecom giant a chance to broaden its offerings with more content and data. Linear TV will continue to find ways to battle – and emulate – the streaming upstarts.

7. Podcasts Remain Strong After Some Contraction

Podcasts continue to mature and large publishers such as New York Times and Washington Post are pushing deeper into the audio-on-demand medium. There were some hiccups in 2018, with Panoply dropping its podcasts to focus on being a platform and infrastructure for podcasts. And BuzzFeed also closed its in-house podcast production outfit to focus on long-form video. But there were also signs of continued expansion, as Malcolm Gladwell and Slate’s Jacob Weisberg launched a new podcast company called Pushkin Industries, and iHeartRadio bought podcast producer Stuff Media (which makes “How Stuff Works” and more).

The reality is that as metrics improve, including the NPR-led open source RAD technology, more marketers will jump in and find that podcast listeners can be a very loyal bunch.

Conclusion

With the tech platforms hitting rough spots, this has been a year of retrenchment for publishers, who are taking stock of what’s really working and what’s leading them astray. The days of shiny new objects like VR and blockchain seem to be on the wane, and a laser focus on the user and serving the public are front and center. As VC funding becomes scarce, media startups need to be more practical and strategic. The chase for eyeballs is coming to a close, and now we can think about what’s real for our businesses – and for our communities.

Featured Post | Revenue

Why publishers see a future in a DTC/advertising hybrid model

After a brief hibernation, the era of direct to consumer revenue (DTC) is back and booming. Over the past six months, paywalls have sprung up around areas that used to be free and become smarter about who they let through. Paid newsletters are booming, even emerging around topics like cryptocurrency. Podcasts have gone members-only, membership models have undergone a Cambrian explosion and emerged vastly more disparate, and new funding methods for “slow journalism” outlets have come into being.

It’s a far cry from the distant days of 2016, when nearly every news publisher was rushing headlong into distributed publishing on social channels, relying primarily on the reach of the platforms and their ad networks to deliver significant revenue. Now, following some high-profile casualties of that publishing model and the “Trump bump” reviving interest in subscriptions, direct to consumer revenue is the name of the game for many publishers.

The value of a subscriber

The benefits of regular revenue straight from audiences are obvious and mutually reinforcing: Compared with other sources of digital revenue, the number of players is small, so less gets taken out of the value chain between consumer and publisher. At a time in which the digital advertising space is overcrowded (and dominated by two or three players), it’s no surprise that publishers would prefer to earn revenue directly from one consumer over sharing a tiny piece of the ad pie.

Consequently, one paying subscriber is worth many times that of a consumer monetized through advertisers. According to Jasper Jackson, digital editor of the New Statesman, which went behind a paywall in March of 2018: “One subscriber is worth many thousands of digital readers that you’re only monetizing through advertising. I’m pretty certain that subscription revenue is a better funding mechanism for good journalism, and particularly for the kind of journalism we do.”

Are subscriptions the right move?

That is also the contention of News UK around its subscription-based news products. Alan Hunter, head of digital for The Times and Sunday Times, said that while the industry has been in the grip of the chase for advertising revenue through scale, the pendulum is now swinging back the other way:

“When we first introduced subscriptions, people thought we were crazy. For a long time we’d go to conferences and people would pat you on the back and say ‘Oh I’m really sorry about this’, but if you look back on it it seemed very logical that journalism costs money and you have to pay for it one way or another.”

Subscription history

Similarly, many of the larger English-language newsbrands have a history of DTC revenue from their time as physical newspapers, when a significant proportion of their revenue came from subscriptions. Many of those organizations were in the early stages of figuring out how to convert digital readers to a similar system years ago, before they were seduced by the appeal of digital ad revenue through platforms.

Small wonder then that as the promise of digital advertising revenue failed to materialize for quality content producers, they have transitioned back to subscriptions and memberships to sustain them. It does mean trading a large proportion of the scale that comes from existing as a ‘“free” ad-supported publication. Jackson says that “pure reach is a wonderful drug.” However, for publications that have the requisite reputation and audience to make it work, the trade-off is worth making.

The New York Times, for example, reported 2017 subscription revenues of $1 billion early in the year. It also reported annual average growth of almost 50% for its digital subscriptions since the paywall was introduced in 2011. Based in the UK, The Financial Times is close to having 1 million subscribers, almost 80% of them digital.

The Guardian, too, has made direct-from-consumer revenue a core tenet of its plans for the next few years. And a strong showing from its membership scheme to date suggests that engaged audiences might be willing to pay for content that is nominally free from a brand that they feel an affinity with.

Subscriptions: not just newsworthy

Nor is the drive to direct monetization of users limited to newsbrands. Consumer-facing titles are introducing new membership tiers to generate more revenue from core audiences. And, while it’s now reportedly struggling to make it work effectively, even Google’s YouTube is feeling the pressure from OTT services like Netflix to introduce its own subscription-based premium video packages.

While these brands have a strong legacy to lean on, some digital pureplay brands are transitioning to hybrid advertising-membership models. Quartz, for example, has launched a membership model based around a partial paywall and the ability for its members to talk directly to editors and journalists, a perk that is also in effect to a greater or lesser degree at the Guardian, The Times and The Atlantic. Meanwhile, BuzzFeed, which was the poster child for scale, social distribution, and branded content revenue for years, has also launched a membership scheme … with mixed response.

DTC takes work

However, these shiny new opportunities for DTC revenue come with new considerations for publishers. Outlets like The Times are investing more in tech to reduce churn, since research from The Financial Times demonstrates that it costs four to fives times more to attract new subscribers than to retain existing ones.

The propensity to pay for online news is still relatively low outside the Nordic countries. according to the latest Reuters Institute Digital News Report, only 16% of people in the US currently pay for news online, and mainly to liberal leaning newspapers (though the proportion is increasing). That suggests that there is currently not enough digital subscription revenue going around to support all the outlets that are transitioning to direct reader revenue.

Risky business

Despite these new challenges, publishers have taken note of the fate of outlets like Mic and Mashable, whose strong valuations in earlier years belied an over-reliance on social distribution to achieve scale and indiscriminate digital advertising revenue. Subsequently, their respective collapses have galvanized other publishers to seek to transition to direct to consumer revenue.

Despite that, most digital publishers are not seeking to abandon other sources of revenue entirely. Many media businesses recognize that advertising can still provide a significant source of revenue. Jackson from the New Statesman explains: “Digital advertising, if you do it well, cleverly, can bring in significant revenue. There’s also an argument that pure reach is a very good marketing tool for print sales.”

In the future, then, it’s unlikely that direct-to-consumer revenue will entirely supplant advertising revenue as the primary means of monetisation for digital publishers. Instead, both will continue to play a role in publisher business models based around a wider variety of revenue streams.

Advertising | Featured Post | Perspectives

With ad dominance comes great responsibility for Amazon

Move over duopoly because the time has come to furrow your brow about the “triopoly.” Many marketers and publishers have grown tired of the dominance of Google and Facebook in the digital advertising space. Now they can add Amazon to the list of dominant tech rivals. eMarketer now predicts that Amazon will hit $4.6 billion in U.S. ad revenues for a 4.15% share of the digital ad pie this year. And its growth rate of 400%+ per year will get it to a 15% share by 2020.

You’ve probably notices that Amazon has sponsored search ads all over its e-commerce pages, enticing consumers to buy relevant products. However, it’s offering much more than that, from video ads to traditional TV ads to ads on its cardboard delivery boxes. The only problem is that it competes with its own advertisers by selling Amazon brand products alongside merchant listings. And more recently it went too far by promoting sponsored items in baby registries.

In short, if Amazon is going to be the third wheel on the triopoly tricycle, it can expect withering scrutiny from the media, marketers and eventually regulators if it doesn’t play fair.

So many ways to dominate

How did Amazon sneak up on us to become such a dominant ad player? By boring us to death. Those little sponsored links on product pages? How quaint. A sponsored related product, or a banner ad on a Kindle? Yawn. This is the same way that Amazon itself has dominated the world thanks to… cloud servers for your website or business. The engine for Amazon’s profits has long been Amazon Web Services, not its e-commerce business.

This sleight of hand works just as well in the ad business. While you were considering how they would deliver your packages via drones, Amazon was bulking up on advertising through its self-service system, placing sponsored items all over its pages. And then finally, in the sleepy days after Thanksgiving, while the country still was drowsy from tryptophan, the Wall Street Journal trumpeted that Amazon had arrived, “with little fanfare” as a new advertising behemoth.

Helpfully, the WSJ pointed out all the ways that Amazon was going to dominate in advertising. According to a Cowen & Co. survey of ad buyers, 29% buy sponsored product ads, 21% buy video ads on IMDB and Amazon.com, and 13% buy good old display ads. But there’s been more, with “The Minions” movie buying ads on delivery boxes, and a yogurt company paying to include instructions in Amazon Pantry boxes on how kids could build rockets and airplanes out of those boxes. Cute.

And the content play too

While those sponsored links followed the time-honored tradition of Google becoming a dominant ad player with its own AdWords offering way back when, Amazon is ready to spread its wings too. The video ads referenced above could explode if and when Amazon launches a rumored free ad-supproted Free Dive video service for users of its Fire TV devices.

While there is no advertising on its Prime Video service, Amazon has become a major player in content by spending $5 billion this year, according to a JPMorgan analyst. That’s less than the $8 billion that Netflix shelled out, but more than typical TV broadcast networks. And Amazon does serve TV-style ads into its streams of NFL Thursday Night Football games – as well as Premier League soccer games.

And that might grow as well if Amazon is successful in its bid for the 22 regional sports networks that Disney is selling as part of its buyout of 21st Century Fox properties. That type of marquee purchase (which includes the New York Yankees’ YES Network) might finally open the floodgates for tech giants to get into sports programming and break the final blockade for cord-cutters.

Missteps and conflicts

But what might stall Amazon in that pursuit is what might stall the company in its overall ad ambitions: creating too many conflicts of interest. Would Disney really want to sell the regional sports networks to Amazon, a company that is trying to eat its lunch in streaming content? And how many retailers will continue to feature their content on Amazon, and pay Amazon for sponsored slots, when they are being squeezed out by Amazon’s own retail brands?

You can hear the frustration in the story of Jason Boyce, CEO of Dazadi, a home recreation retailer that has to pay for placement on Amazon. “They get all the prime real estate [for their brands]. It’s unfair,” Boyce told the Journal, but “we have to be on Amazon.”

Even more unfair are the sponsored links Amazon runs in private baby registries, with a tiny gray “sponsored” tag. The sponsored items were not chosen by the parents-to-be and led some confused friends and family to buy those items, upsetting everyone involved. After a Wall Street Journal story about the practice, Amazon said it was phasing them out.

And that’s where the rubber meets the road for Amazon as it moves stronger into the digital ad business, with one of its HQ2 offices right outside Manhattan, the epicenter of advertising. If it wants the power of being a digital content and ad player, it will have to come clean on its ambitions and compete fairly or users will tune out. And let’s face it: If the U.S. Congress, FTC and other regulators won’t do their job to keep the tech giant in line, we can expect the EU to come down harder.

Featured Post | Innovation | Perspectives | Revenue

In 2019, these 4 shifts offer opportunities for trusted media brands

 

Successful media companies have always relied upon having a direct, trusted relationship with consumers and advertisers. Consumers want to know the brand and the experiences they’ll get from them. And advertisers that want to build this same level of customer relationship directly seek out these trusted media brands or tune advertising algorithms their way.  

The teams at trusted content brands wake up every day and create content people love, products that serve them well, and safe and valuable advertising environments—all while maintaining the high level of ethics and professional standards that benefit viewers, readers, listeners, and a healthy marketplace. And we’re here to support you.  

What makes our members unique is also what makes DCN unique. By focusing at the brand level across the entire media strategy, we’re able to advocate and work to advance the future of trusted news and entertainment and partner to develop all sources of revenues. We can also do it without needing to curry favor or meet the needs of a few large tech platforms with out-sized influence who are required partners for any modern publisher. 

As we turn toward 2019, it is a good time to reflect on the top-of-mind trends for media companies. Here are four important shifts happening in digital media right now—all of which play into the strengths of trusted media brands:  

1. Revenue, direct from audience.

With our quarterly and annual members-only benchmark report, DCN has unique access to market research specific to premium publishers. Importantly, our research isn’t skewed with numbers from Google and Facebook. (This is a very common issue in industry research. Always look “under the hood.”) Our research is based solely upon our members. One of the things our benchmarks tell us is that approximately 80% of members’ digital revenue comes from advertising. However, we’re finally seeing growth in direct revenue from audiences whether it comes in the form of membership, subscription, or donation.  

Trusted publishers are uniquely positioned for this shift because they offer exactly what people want: high quality news and entertainment – that’s worth paying for. It remains to be seen how the market evolves in order for this revenue segment to grow as it must, but we’re thrilled to see our members playing a proactive role in shaping the opportunities.  

2. Distributed platforms, going over the top

The list of platforms is endless and evolving: YouTube, Facebook, Snap, Twitter, Apple News, Flipboard. While publisher revenues on these distributed platforms have been promising at times (YouTube), they’ve often been disappointing (Apple News, Facebook Watch). But right now, quality content creators are seeing the fastest movement in the video space, particularly long-form and over the top (OTT).

Our best practice research on OTT earlier this year showed how our members are taking aim at these opportunities. However, new gatekeepers are surfacing in the OTT space like Amazon and Roku. And while Google and Facebook don’t like being called “walled gardens,” every new platform will no doubt be planting their own seeds to maximize their profits off your content. Experimentation is essential. But protecting your IP and deal terms early on is critical.  

3. Ad targeting, rebirth of context 

In the EU, the impact of GDPR has just started. There are new claims calling into question the entire way Google has collected consent for its ad supply, how real-time bidding operates, not to mention endless class-action suits mostly focused on Google and Facebook. DCN has distributed research on Google’s unique and unavoidable ability to mine behavioral and location data significantly beyond user expectations as you browse the web and walk the streets . We’ve argued towards raising the bar on companies who collect data across most of the web while recognizing the inherent trust in choosing to visit your environments, brands and context.  

Global leaders are asking more questions than ever. Looming large over the discussion is a new law in California which will impact the very companies that are now (albeit, ironically) advocating for federal laws to save them through preemption. It’s been a wild year when Google, Facebook and its trade group, IAB, are now finally pushing for a federal privacy law thereby admitting their existing frameworks may be failing consumers. Quality publishers have a unique role in shaping any solutions as consumers seek more controls and alignment with their expectations. Consumers don’t know the hundreds of ad tech companies mucking up their web experiences, but they do know you and your brands. And, of course, this value then transfers to ads in this environment.  

4. Advertising, direct to consumer

Research from the IAB, as well as industry discussions, has driven a DTC (“direct to consumer”) movement as the next big thing. Here is the great news about this conversation: It’s no longer focused on the plumbing, data, ad tech, and vendors. It’s focused on how brands have value and can connect directly with audiences and consumers, bypassing gatekeepers and intermediaries. This is the sweet spot for quality content companies. In fact, I’d say if anyone wants to better understand how to go direct to consumers, they should start with the members of DCN.

But here’s the rub: Many players in the market won’t ever really be able to go “direct to consumer” without relying on the brand equity of trusted media. In order to find scale, they’ll first need to build demand, be willing to bundle, and find quality brands to associate with and carry their flag. They’ll want to be near those with purpose and value recognized by the public.  

I’m sure each of these movements will surprise us in ways we can’t predict. They may develop more slowly than anticipated or accelerate at light speed like the privacy regulation has with GDPR and Facebook’s mishaps hitting in the same quarter. But either way, premium publishers should be ready as, with the right proactive strategy, there are opportunities in all. 

Featured Post | Perspectives

Recklessness, a reckoning, and the road forward

Two cars travel down a two lane road approaching one another from opposite directions. A solid white line sits painted in-between them as they approach each other. One car swerves, crossing the line, then cuts back. 65 MPH and climbing, and the only thing preventing the car from crossing into the other’s lane again is a theoretical barrier painted on pavement. These guiding lines are not a guarantee. They’re more of a social contract, a legal rule that we abide by because it is for the betterment of ourselves, others, and the rest of society. However, this driver chose not to follow the rule and crossed into the wrong lane. What happened? Recklessness.

The media and information industry is in an age of recklessness. Fueled by misinformation, lines are being crossed. And this reckless behavior is taking a serious toll on the trust in and value of the media.

We want to believe in societal norms that govern the free flow of trustworthy information. There are standards that should apply across platforms, publishers, and consumer domains. There is an assumed integrity that applies not only to the words we write, but the videos we produce, and how they are spread throughout the web. But this recklessness has led to a reckoning; and now we must forge a new path forward.

Post-Truth, True Story

Unfortunately, this is clearly no longer the case (‘That’s not altered. That’s sped up. They do it all the time in sports.’). There are now separate narratives, cultures, and communities built around the rhetorics of truth, information and more dangerously, misinformation. Reputation is no longer a default to “trusted” media brands at the domain level. It needs to be re-focused, re-earned, and re-defined.

The role of media institutions today is more important than ever. In the age of recklessness, we need to continue to provide our communities and readers with the knowledge they need to inform their lives, societies, and governments. And it’s the responsibility of the rest of society to process this information and re-paint those lines that define to bring awareness to what is real and what is not. Today it’s more important than ever to understand the information that is being put in front of you. And that understanding runs deeper than images and text, to the source, the context, the delivery channel, and much more.

The revolution will not be qualified; it will be quantified. The media business is positioned better than ever to expose the value of their work and drive their business forward. Putting an emphasis on trust, the value of a media brand is in its operation and its reputation.

Media business leaders need to keep their eye on the road. How can they secure and deliver information that is validated, honest and objective? And through that, expose that their organizations differentiate from other less reputable players in the space.

To emphasize this value, media must prove its worth. That seems frustrating, especially because many of these institutions have been in business for decades, even centuries. However, when you ask someone to pay for something, you must give them a reason why. In order to be successful, the media business must be subscribed to, not just supported. That means creating a product market fit that is both helpful and necessary. To do this, we must expose our practices, and how we seek provenance, validation, truth and every other value that’s standard to the media industry.

Proof of Effort

Building value means exposing the underlying components for all to see. To severely oversimplify: The greatest value of the media industry is in its effort. The practices behind media, and the process by which information is researched, created, edited, and published is what drives its purpose and differentiation from imitators.

However currently, the only way to quantify media’s value is in generalities. How many page views, referrals, visits, and shares does a piece of information garner? This is the opposite of what drives reputation and an institutions’ value, which has everything to do with the actions before a piece of information is published. Because of this, and how information is distributed (social platforms, search, applications), information has become commoditized. The value of a viral video is measured the same as an investigative expose, even though the investment in each is severely different. And gaming that system is how we continue to not just commoditize our worth, but blur the value between information and misinformation.

Media’s recklessness is fueled by misinformation. And because of this, not all media can be valued equally. But how did we get here? The value attributed to media-at-large is dictated by the returns of where it is being distributed. Facebook, Google, and other major platforms have rewarded content based on output mechanics. This has little to do with how the information is created, edited, and published prior to distribution. Because of this, everything appears to be created equal; even though the efforts behind different types of media work and the investments tied to them are all different. We need to refactor the economics of the web and better reward and expose the value in the efforts of creating the good, while in parallel demoting the bad. This starts with quantifying elements of effort as it relates to truth.

A Valuable Proposition

Quantifying the next era of media can be  associated in a few sets: attribution, provenance and the effort behind the work. What’s clear is that we know that there is value in a creator’s work. And we, as an industry,  recognize what it is but do a terrible job conveying it to our audience and consumers. Building a way to expose the efforts in media and put the value on that input instead of the output will get us there. This is the key differentiation between what can and cannot be trusted; is the way that we got to this information accurate? If so, show it.

This information exposure is the first step towards a path away from misdirection and recklessness. In today’s society, the lines in the road are meant to be abided by because there an understanding how they got there and why they exist. As long as that narrative continues, they will continue to do their job governing the way we as a society move around. The same goes for media. We must remind the world why these practices and principals exist, and how they came to be in the first place. They are the lines that govern information and most importantly, democracy. This must be exposed for the betterment of our world.

All of this adds up to a world in which quality media, information exposure, and great creative translate into good business. It’s the key component to wresting control over news from misinformers, manipulators, “clickbaiters,” and social media hubs and placing it back into the hands of media organizations that want to produce quality information about issues that really matter. We must put value on our effort to build a transparent and healthy newfound ecosystem.

Media is undervalued. It’s undervalued financially but especially undervalued in its role in maintaining a free and open society. Acknowledging and emphasizing its purpose through ubiquitous effort points solves for both. It will enable us to build new platforms, value systems and economies based on our true value and starve misinformers in its wake.

We know why the work that we do is so important. Now it’s time for us to let the world know exactly what goes into it.

Featured Post | Perspectives | Policy

The Midterms are over: Sizing up what it means for big tech

For the last two years, Congress has increasingly focused on big tech platforms. Lawmakers have summoned executives, consumer advocates, and academics for hearings on consumer privacy, market dominance, data breach scandals and perceived political bias. However, with the exception of a bill to amend Section 230 of the Communications Decency Act to clarify  companies’ liability for facilitating  sex trafficking on their sites, Congress has not yet moved significant legislation to regulate the tech industry.

Some are wondering whether a new Democratic majority in the House means Congress will start legislating, particularly with the President saying that he is interested in discussing with Democrats whether or how to regulate the technology industry. Let’s take a look at how the 2018 midterm election results might impact a few high-profile tech issues.

Market Dominance of Big Platforms

Even before the elections, Democrats and Republicans raised concerns about the outsized influence of Google, Facebook, and Amazon – albeit for different reasons. Many Democrats are concerned about the data surveillance business models of big tech companies. Republicans, on the other hand, distrust social media algorithms, which they believe favor liberal points of view over conservative voices.

I expect both parties’ concerns will only grow, especially as we get closer to the 2020 Presidential election. And those concerns might fuel action on other issues. Congress is not likely to do anything to directly address the dominance of the big technology platforms. The expectation is that the Department of Justice and the Federal Trade Commission will work with Congress to provide guidance on what, if anything, lawmakers should do. Thus far, discussions have focused on how various digital business models function and what remedies or regulations would be needed to enhance consumer experiences.

Net Neutrality

Over the past decade, Congress and the Federal Communications Commission (FCC) have been bickering about net neutrality without final resolution. Most recently, the Republican-controlled FCC rolled back net neutrality regulations promulgated by President Obama’s FCC.

With Democrats set to take the reins in the House, they are more likely to move a bill to reinstate those Obama-era net neutrality rules. But the Republican-controlled Senate is likely to completely ignore any bill sent over by the House. That dynamic could change if the courts rule on the pending challenges to the FCC’s rollback. Until the incessant shouting stops, this is likely an insular technology discussion and fodder for future campaigns.

Consumer Privacy

Congress has held dozens of hearings on consumer privacy over the years. This year was no different. However, the tone of the conversation has changed dramatically just in the past few months. As mentioned before, many Democrats have long advocated for a consumer privacy bill of rights, saying that Congress needs to step in to protect consumers. Now, a few key Republicans agree. Many in the industry are calling for the same as the California Consumer Privacy Act and the EU’s General Data Protection Regulation go into effect.

Just last month, Senate Commerce Committee Chairman John Thune (R-SD) stated, “It is increasingly clear that industry self regulation in this area is not sufficient.” Clearly momentum was building on this issue before the midterm elections and there is reason to believe it will continue. Senator Thune is likely to move into a leadership position in the Senate, thus relinquishing his position as Chairman of the Senate Commerce Committee.

However, the next likely chairman is Senator Roger Wicker (R-MS), who signed a bipartisan letter with three other key senators in September saying they want to work with the Administration to “provide consumers with more transparency and control over the collection and use of (consumers’) personal data while preserving the innovation at the heart of the internet.” The House Energy and Commerce Committee is likely to be chaired by Representative Frank Pallone (D-NJ), who included consumer privacy legislation on his agenda for 2019. On top of that, a host of other policymakers, including Senators Wyden (D-OR), Blumenthal (D-CT), and Markey (D-MA), have recently introduced their own legislative proposals. Comprehensive consumer privacy legislation appears to have early bipartisan and bicameral support.

All that said, our nations’ founders intentionally made it difficult to pass legislation. And, 2019 will be no different. For any meaningful legislation to advance through both chambers of Congress, Democrats and Republicans will have to put aside partisan differences long enough to find middle ground. That will be hard for elected officials to do in the current highly polarized political environment. Odds-makers would say the chances are slim that Congress can enact comprehensive consumer privacy legislation, but it’s got a better chance than most.

Featured Post | Perspectives

Why the time is right to shine a light on ‘dark social’

One of the least understood portions of the web is becoming one of the most important: dark social. And as the calendar turns from Halloween to the Day of the Dead, it’s time to shine a light into the darkest corner of the web to understand how people are sharing content via messaging services, email, texting, and other platforms that don’t show up easily on analytics programs.

For a long time, referrals that showed up on Google Analytics as “direct” were a mystery. Could that many people really be typing in long URLs into their browsers? No. Instead, they were cutting and pasting URLs into an email to friends, or WhatsApp or Facebook Messenger. Those referrals became known as “dark social” because of our ignorance about their true source. And with public sharing on Facebook and other platforms down, dark social is only growing more important, with an estimated 84% of all sharing, according to RadiumOne.

But there are ways to better gauge where those dark social referrals are coming from. There are also ways to reach people on messaging apps, through chatbots and targeted promotions. Even more important, reaching people on dark social requires a new way of thinking of them in their “tribes” or personal space where gauging sentiment might be more important than marketing a product directly.

The Rise of Dark Social

They are like two ships passing in the night: the rise of messaging apps and the decline of public social sharing. Just looking at Facebook user statistics gives us a stark picture:

  • From November 2014 to September 2017, Facebook Messenger users went from 500 million to 1.3 billion.
  • From December 2013 to December 2017, WhatsApp users went from 400 million to 1.5 billion.
  • From Q1 2017 to Q2 2018, Facebook interactions went from 29.1 billion to 12.8 billion.

Yes, 12.8 billion is still a lot of interactions, but you the trend is clear. People are losing trust in social networks and flocking to private messenging services.

As Arik Hanson at Business2Community noted, even Facebook’s Instagram is thinking beyond the public feed. “Let’s look at the direction they’re going: Investing heavily in Stories and direct messaging (both “private” for the most part, when it comes to engagement). Many of the new features added recently revolve around these two areas: poll sticker, slider stickers, polling via DM. These are the areas Instagram is focused on – not the public-facing feed as much.”

How to Get a Handle on Dark Social

There are ways to bring dark social into the light. While vanilla Google Analytics shows dark social traffic, there are ways to segment pages to see which ones are getting the most action from dark social. (99Signals has a good primer on that here.)

And there are always advanced tools like GetSocial and AddThis that can help identify which pages are getting hit the most from dark social. They also show where some of those sources are.

However, tracking down dark social the same as regular social referrals might not be the point. As Alpha Group’s David Cohn points out on MediaPost, “part of dark social’s appeal is its ‘off the grid’ nature, [so] we wouldn’t want to throw the baby out with the bathwater by looking for too much data and meaning among the noise.”

Taking Action to Reach Users

So how does a marketer or publisher get a return on investment by reaching folks on messaging apps, texting or emails? Cohn says the key is to figure out basic demographics on the platforms and the groups who congregate there. He uses the example of a foodie group in New York that could start to send more traffic to food publications and restaurants. “A marketer or publisher wouldn’t know exactly whom to target, but they would have a place,” he wrote. “And they would recognize this community as a gathering place for worthy targets.”

One example from India shows how ROI can grow when targeting dark social. When streaming service iflix wanted to increase its users, it found that its most loyal customers had one important thing in common: They liked sharing viral content and celebrity gossip on messaging apps. According to Business Today’s Sonal Khetarpal, iflx targeted messaging apps users. They converted 1 million more paid subscribers in six months. And the cost of acquisition dropped from $25 to $3 per person.

While it’s true marketers are tiring of social media planning that moves from one platform to the next each season, they’re going to have to get serious about messaging apps and dark social. More folks will have to take chatbots seriously, or just better targeting to users of messaging apps. Otherwise, they will miss a massive, growing opportunity as more people become disaffected with public social media spaces.

Featured Post | Revenue

Moving readers from free to fee: An inside look at successful premium publishing strategies

In a world where consumers are accustomed to getting many digital goods for free—from apps to podcasts to instant facts online—convincing them to fork over funds for content remains a tough sell. And hanging on to those hard won customers is a challenge unto itself. For proof, consider the subscriber churn rate among publishers, estimated at 30% last year.

Yet many publishers today are tackling this problem with a variety of successful tactics designed to convert more freeloaders into subscribers. And recent data suggest that publishers are learning from past mistakes and become better attuned to what attracts and retains paying patrons.

By the numbers

Per The Lenfest Institute for Journalism, fewer newspapers are giving away the store than they used to. They have found that 78% of American newspapers charge for digital access. Eighty percent of these use a metered model while 4% employ a hard paywall.

“Publishers are becoming more successful at moving folks from free to paid than just a few years ago,” says Matt Skibinski, reader revenue specialist at the Philadelphia-based Lenfest Institute. “In the past several years, we’ve seen publishers achieving better results by engaging in more sophisticated marketing tactics and centering their newsroom around producing content that their readers are willing to pay for. As a result, the number of current users who are turning into paid subscribers every month as a percentage of total audience has gone up, while the number of free articles allowed under a metered model has gone down.”

The American Press Institute recently found that around 73% of news organizations polled provided free trial subscription offers for digital content, with less than one quarter of free trial readers converting to full-price subscriptions. Discounted trial subscription offers fared better, with nearly 72% of polled organizations reporting a greater than 76% conversion to full-price subscriptions via this method.

A separate API study of 4,100 newspaper subscribers revealed that several factors motivate people to pay for content: access to local news (chosen by 30% of respondents); convenience of print/home delivery (15%); a discount or promotion/discount (12%); a topical focus (12%); and trust/quality (9%). Additionally, 45% eventually subscribed because of a free trial or promotion, and a paywall meter triggered around 50% of digital subscribers to subscribe.

Metered might

The metered model has been especially valuable because it allows publishers to monetize engagement, rather than page views. The most important metric for publishers that want to grow digital subscriptions is engagement Skibinski says.

“Engagement means encouraging the user to build a relationship with a publication and develop a habit of reading it every day,” says Skibinski. “Engagement is best measured in terms of people—the folks who are actually likely to subscribe. Publishers can measure the number of users or visitors, for example, who view one piece of content in a given month versus those who view five or more articles.”

The key here is “segmenting your audience into groups of people based on their behavior,” Skibinski adds. “Page views may drive advertising revenue, but engagement helps you better measure digital subscription success so that you can make the right decisions about what kind of content to invest in and what kind of promotions and marketing to pursue.”

Data collected by the Lenfest Institute show that most successful metered publishers stop 5 to 10% of their digital audience with a payment gateway.

“In order to get your readers to pay for your digital content, you have to actually ask them to pay. In the past, many publishers were too conservative with their meter rules, and as a result, they would only ever ‘stop’ a small percentage of readers with a subscription ask. We’re now seeing publishers become more confident in saying to readers, ‘we have content that is high quality, valuable, and worth paying for,’” says Skibinski.

A metered paywall isn’t for everyone, of course. The Financial Times gravitated from the latter to a four-week trial for $1 model in recent years and hasn’t looked back (its annual premium content subscription is $559).

“Years ago, our challenge was to make people understand why valuable content and great journalism is worth paying for. Today, our challenge is more around ensuring that we remain their go-to content provider and reminding them of the value they’re getting,” says Fiona Spooner, global marketing director, B2C, for The Financial Times, based in London. “The four-week trial gives us an opportunity to engage them and communicate this value without the threat of any metered limitations.”

Spooner’s motto? “If you want people to buy something from your shop, you have to welcome them in but not let them walk out with your merchandise without paying for it,” she says.

Membership has its privileges

One of the first brands to launch a subscription paywall—back in 1997—was Consumer Reports. It shifted from a subscriptions to a membership model earlier this year, offering four tiers: from free to all-access content (at $55 annually). Since then, the average order value is up 20%, the take rate for its all-access tier is twice what was anticipated, and new membership benefits and features have garnered half a million interactions.

“Our research shows that consumers want relationships with brands they can trust. And people are more open to the idea of paying for convenience and unique value that extends to content that’s curated and personalized,” says Kim Stehle, vice president/CMO for Consumer Reports, headquartered in Yonkers, New York.

“I like to think of the mix of free and paid content we offer as akin to relationships. You start with a chat and then maybe move to a first date. You’re still testing the waters. That’s where free content comes in,” says Stehle. “As in any relationship, you get more comfortable with each other over time. The commitment deepens, and eventually you get married. That’s where paid content comes in.”

A tiered membership model doesn’t necessarily have to focus on value or prestigious journalism as a main driver. Spirited Media, which manages Denverite in Denver, Billy Penn in Philadelphia, and Pittsburgh’s The Incline, asks its readers for monetary support at any level, although three higher levels of membership (starting with a “supporter” membership, at $35-99) are encouraged and come with extra perks.

“We’re not forcing people to pay for content. We are asking people to pay because they love us. To succeed at membership, our readers have to believe, in their hearts, that we’re an essential part of their community. And to get there, to believe in our ‘essentialness,’ they must identify with our point of view, which is, ‘We love this city and the people who live here, so we want it to be better,’” says Brian Boyer, vice president of product and people at Great Falls, Virginia-based Spirited Media.

Boyer believes that quality journalism, while important, “isn’t sufficient to convert readers into members. You can’t count on the work to speak for itself. You have to know your point of view and express it.”

Best practices from the pros

If you want to improve your paid conversion rates, be prepared to do your homework and try a little tinkering. Your first task: Look closely at your data and segment it by user behavior.

“Their behavioral data tells you how much value they’re getting out of your product. For instance, a user who views five articles per month is far more likely to become a subscriber than if they are reading only one a month. And that reader is up to 15 times more likely to pay for content if he or she is also subscribing to your e-newsletter,” says Skibinski.

Next, make smart decisions based on that data you parse.

“When you’re sitting in a product meeting or talking to your staff about how to measure success with content, review how many engaged readers looked at a given article as opposed to total page views,” Skibinski notes.

Experiment to create the optimum mix of free and paid content, too.

“Don’t be afraid to change or tighten up the number of free articles you offer. Ask people to pay after you’ve made them aware of the value your brand offers,” says Skibinski.

Consumer Reports’ Stehle recommends trying more personalized content. “We now offer a premium paid service called ‘Ask CR,’ where paying members can receive personalized buying advice from our specialists,” says Stehle.

Mighty messaging maneuvers

Using the right messaging language that moves users from free to fee is equally crucial.

“A lot of publishers have had to test different messages, but they typically employ the voice of the brand and target those most engaged,” Skibinski says. “The Seattle Times did a successful campaign that spoke about its quality, integrity journalism. Others have great success offering something like a Snow Day sale—‘get 50% off for the first three months if you subscribe today.’ A paper like the Dallas Morning News may do better with a message crafted around football, which is a huge sport in that city.”

The secret to successful messaging is acknowledging the relationship you already have with the consumer and the moment they are in.

“Even if their current relationship is ‘free,’ you can convey how much more they could be getting from your brand if they were willing to pay. We’ve found that using language around ‘upgrade’ or ‘gaining access’ works, because they intuitively connote additional value,” Stehle says.

About the Author

Erik J. Martin is a Chicago area-based freelance writer and public relations expert whose articles have been featured in AARP The Magazine, Reader’s Digest, The Costco Connection, EContent Magazine, The Chicago Tribune, and other publications. He often writes on topics related to digital media, technology, real estate, and business. Read his blog at martinspiration.blogspot.com.

Advertising | Featured Post | Perspectives

5 big takeaways from the NewFronts West

The Upfronts in New York were always about making big advertising deals before the TV season kicked off. Then came the NewFronts, which focused on digital offerings and innovative formats. Now comes the NewFronts West, an extension of the NewFronts that took place in Los Angeles this month, and which have evolved even further from the original Upfronts. Gone was the talk of making big ad deals. In its place was discussion of new platforms, new formats, and new ways to reach younger audiences with influencers, podcasts and, of course, online video.

In short, the personality and networking surrounding this event fits in perfectly with the ethos of Silicon Valley and Hollywood, the major West Coast hubs that have insinuated themselves into the ad market like never before.

Here are five big takeaways from the inaugural edition of the NewFronts West:

1. Big Ad Deals Take a Back Seat to Relationships and Emerging Models

Closing major ad sales was hardly the focus at this event. One reason is was that  it took place outside of the traditional media buying season. Also, because there was a mix of digital-only and legacy media publishers, it offered a chance for all parties to stand out with new types of offerings.

In fact, it was the kind of space  where people new to the game could come in and introduce themselves. And it was a chance to think less about traditional models of advertising and more about emerging prototypes that are just beginning to gain traction, like branded content, custom sponsorships and opportunities for publishers within Instagram’s IGTV. These avenues are especially interesting to advertising execs as ad-free platforms take hold and audiences become more and more fragmented.

Even the New York Times, one of the more well-known heavy hitters at the event, saw the NewFronts West less as a space to close deals and more as a brand marketing opportunity to talk to people about how the Times works with advertisers. In this way, the event was much more future-focused. The hope, it seemed, was that building relationships now would reap benefits down the line.

2. Podcasts Are Not Slowing Down

Podcasts have exploded over the past few years, with nearly every publisher producing some or at least considering them. But after BuzzFeed and Slate’s Panoply cut back on offerings, it was easy to think that perhaps the hype had gone too far. Judging by the NewFronts West, those cutbacks might only be a hiccup.

The Los Angeles Times, Gallery Media Group and Ellen Digital all announced new podcasts. The L.A Times announced new podcasts about a drag racer, “Big Willie,” and a reporter’s search for a hospital patient called “Room 20,” following in the footsteps of its popular “Dirty John” podcast co-produced with Wondery.

Podcasts have always been favored for the intimacy that voice offers, but a compelling host is also arguably the best brand influencer for an audience. With 92% of consumers leaning toward product recommendations, according to a FameBit presentation, podcasts are a more personal way for hosts to promote products.

3. Vice Media’s Brand Safety Splash

While there have been a lot of efforts around promoting brand safety for advertisers, Vice Media made a big splash at the NewFronts West by countering widespread use of keyword blocking by pushing a more contextual approach from Oracle Data Cloud.

Vice executives released the findings of an 18-month long study abut keyword blacklists, which are meant to flag potentially objectionable content for advertisers. Turns out they place LGBTQIA-related keywords high on the list, including “gay,” “transgender” and “bisexual.” The study also found that the keywords “Asian,” “Muslim,” and “interracial” also appear at the top of these blacklists.

For a media brand that prides itself on diverse and inclusive programming (as its executives said), Vice’s announcement made a big statement. Vice then said it would be testing Oracle Data Cloud’s contextual brand safety solution, which offers deeper analysis and scores content based on its storytelling context. They also called for other publishers to follow suit. Now we’ll have to see if Oracle Data Cloud stands up to its reputation.

4. Advertisers Will Have to Work Harder to Reach Audiences

Part of why the West Coast’s approach to the NewFronts is so attractive is that advertisers have realized they have to work much harder to secure the attention of their audiences. Thus, they’re more willing to try new platforms and experiment with techniques that are still nascent like Alexa skills, brand-sponsored podcasts or e-commerce enabled videos. Platforms like Netflix and HBO have made commercial-free viewing experiences de rigeur, and readers on the internet can also easily block ads they don’t want to see.

What to do? Create advertising that consumers can’t not pay attention to is the answer. Advertising executives are anticipating that the traditional model of advertising will evaporate sooner rather than later. So, they’re trying to stay ahead of the curve for their own survival and efficiency. That’s a no-brainer. Having influencers on IGTV or other social platforms pitching products for them has become one way to do that.

5. Snapchat Pushes More Scripted Shows

As Facebook has struggled with battles against misinformation (and lost data), Snapchat continues to move forward with its own programming. At NewFronts West, the L.A.-based social app announced a host of new serialized, scripted shows for the launch of what it’s calling Snapchat Originals. It feels a little bit like Netflix’s foray into originals, except the projects will be shot in a vertical format and feature six-second unstoppable ads. It’s definitely a big endeavor, and one to watch – even if it means that other tech giants may want to, ahem, copy this strategy as well (looking at you, IGTV).

The bottom line coming out of this year’s NewFronts West is that it’s much more important to be strategic about new advertising models and partnerships than it is to partner with name-brand entities and existing prototypes. While tried-and-true advertising formats may sound good in theory and work for the time being, they may not be viable in the future. This event gave publishers a chance to zero in on those emerging ideas. If an event like the NewFronts West can continue to present itself as the more future-forward alternative to the East Coast’s spring NewFronts — and reiterate the fact that not all agencies and ad shops are in New York — it has the chance to develop an even larger following for future shows.

Featured Post | Innovation

Why The Financial Times is going all-in on tech coverage

The Financial Times has announced plans to expand its tech coverage, acknowledging the growing influence of technology across all sectors. The move is part of a broader trend in recent years in which media outlets including The Wall Street Journal, CNBC, and CNN have dedicated increasing resources to this area.

Perhaps it’s because of the famous maxim that every company is a software company now. Whether it’s manufacturing, automotive, insurance or pharmaceuticals, it’s become impossible to separate the tech innovation from a specific sector. Publications are increasingly addressing that fact by offering increased tech coverage.

What’s more, the traditional tech sector itself has changed dramatically over the last decade. Instead of a handful of dominant companies like Microsoft, Oracle, SAP and IBM, we have a new generation of tech powerhouses including companies like Netflix, Salesforce, and Amazon – not to mention a whole universe of startups trying their best to out-innovate the bigger players.

Adding A Tech Desk

In response to this, the FT, which had been organized into four broad coverage desks (Companies, Markets, World News, UK/National News), decided to build a dedicated desk specifically for tech. Prior to adding this specialized group, tech tended to fall under Companies in the FT organizational structure. This resulted in coverage of the larger players in the sector. Smaller tech startups tended to fall by the wayside and readers were hungry for more comprehensive information, Malcolm Moore, the new Technology News Editor told DCN.

The FT decided to form a dedicated group of reporters exploring every aspect of tech from startups all the way up to the largest vendors. They wanted to cover the bigger picture as well, including policy, regulation, and innovation. Internally, the idea of building a desk dedicated to technology began to take shape.

“We thought wouldn’t it be a good idea to have a dedicated tech desk on top of the existing ones, a fifth desk, to give us a more holistic approach to it all. This would let us cover early companies a bit more, we can cover innovation a bit more, and we can cover this [broader] intersection of business with the with the tech industry,” Moore explained.

Giving Readers What They Want

Moore said a big part of the FT’s value for readers is providing them with insight they won’t get anywhere else. And, as technology has grown increasingly critical to investors, the audience indicated that they wanted more information to help them understand this pivotal industry better. “We collect a lot of data from our readers. We also survey them a lot. What came back to us time and time again is that they wanted more technology coverage,” he said.

FT editor Lionel Barber pointed out that publication has had broad tech coverage for 20 years with teams in Silicon Valley, Washington, Brussels, and across Asia. However, this is the first time the company put all that coverage together under a single banner. It’s in recognition of the growing importance of this coverage area for readers. “Technology permeates all areas of our lives and impacts global economies, markets and societies. The creation of this new team reflects the importance of this topic to our readers,” Barber said in a statement.

Putting It All Together

The new group began to come together over the last six months, although Moore says his bosses have been thinking about this even longer. Moore, who had covered tech in Asia for the last eight years, was tasked with leading the effort. Though the new section went live on October 1st, he says the tech desk is still a work in progress.

With a new area, they also have to figure out how where the coverage falls. That requires communication between reporters and editors, and they are still learning how to bring different kinds of expertise together. “We have tech reporters and amazing sector specialists. As tech spills over into the different sectors, we can link specialists outside of tech with our tech reporters,” he explained.

It will take time to learn where to define the coverage and nail down exactly how many people will be needed to staff the FT’s tech desk. Moore wants to build a team made up of experienced journalists, combined with young and hungry reporters working on the ground, as well people with deep technical understanding of the underlying technologies. “It’s an ongoing process,” he says, but like other media outlets, the FT recognizes tech matters to readers and like any smart business, they are making sure they give them what they want.

Featured Post | Perspectives

In search of a Goldilocks solution to online privacy

For years, large tech companies have spent millions on lobbying in Washington to make sure that they escape tough regulation. And until recently, they have been successful.

But today is a new day—one where tech companies are actually asking for regulation. How did we get here? Trust in tech giants is at an all-time low. And practices that include collecting untold amounts of data, even when consumers think they have privacy (see: Google Data Collection research); selling data to nefarious players (see: Facebook and Cambridge Analytica); and losing their data to hackers (see: Facebook’s newest data breach of data from 50 million users) has focused the attention of lawmakers in the EU and United States.

While past Senate hearings have at times felt like introductory classes to social media, with tech representatives slowly explaining how their platforms work, last week’s hearings on consumer privacy took on a different tone. “The question is no longer do we need a law for consumer privacy; the question is what shape these laws will take,” Committee Chairman Senator John Thune (R-SD) said in his opening remarks.

Now, the tech industry has come to realize it can’t escape regulation, and Facebook’s data breach has only heightened the stakes. But the question is how you make everyone happy with new regulation, with tech companies chafing at California’s strict new privacy laws and the European Union’s GDPR. How do we get to the “Goldilocks” policy? One that’s not too loose for consumers and not too strict for advertising and commerce. And how much will publishers need to change their ways to comply?

The Limits of Self-Regulation

In the past, as critics have expressed more and more concern over privacy — and investigations have revealed the ways in which nefarious players have mined user data for insidious targeting — tech giants have slowly policed themselves. Facebook, for example, announced in August that it would remove 5,000 options on its site that ask for “sensitive personal attributes” that enabled advertisers to hyper-target and limit their audiences.

Facebook says the move was more pro-active on its part and not in response to anything in particular, though the timing is suspicious after a lawsuit leveled by fair housing groups charging that advertising on Facebook could prevent minority communities from seeing housing ads. The routine is now becoming familiar: Scandal on a tech platform related to data. Platform tries to solve problem with new rules and its own regulation. Remember Cambridge Analytica? If not, look no further than what Facebook is currently facing with its latest data scandal.

But last week’s hearings revealed that representatives from major tech companies like Amazon, AT&T, Google and Twitter— along with the IAB, which had previously favored self-regulation — are warming up to the idea of some kind of federal legislation that, in theory, would mandate actions that might prevent future scandals. They said they’re in “widespread agreement” about that, which Google also acknowledged in a proposal for privacy regulation it published just a few days before the hearing.

Meanwhile, publishers have had to take action to comply with GDPR from Europe. And while they realize it’s a hassle, and privacy-policy pop-ups are annoying for users, there can be upsides. At a recent panel discussion at Marfeel in Spain, publishers noted that they now could take responsibility for first-party data they collect, and make sure it’s secure so that users are comfortable handing it over.

“So, I think if there’s any silver lining, it’s that publishers in general and the media companies in general are now actually taking responsibility to collect that first-party data instead of simply hoping that Google and Facebook would play nice and share some of that,” said Rithesh Menon, vice president of monetization and account management at Good Media Group.

Operating in the Shadow of Europe and California

While this may seem like a drastic change of stance among tech companies, remember they’ve already had to pivot to new privacy laws in Europe and California. In fact, the reasoning behind their embrace of federal privacy laws is that they’re trying to avoid legislation that’s as strict as Europe’s GDPR or California’s Consumer Privacy Act. That was obvious during the Senate hearing, where tech representatives called out both laws in urging Congress to “strike the right balance,” as Leonard Cali, AT&T’s senior vice president of global public policy, put it.

Representatives from Google, Apple, and Twitter, for instance, discouraged Congress from following in the footsteps of the GDPR by noting that small and medium-sized businesses might not have the financial backing to take on the compliance costs that would come with GDPR-like legislation. Amazon’s representative pointedly critiqued California’s privacy bill, arguing it doesn’t promote the best privacy practices.

Theoretically, if federal law is not as strict as state law, tech companies could bypass California’s strict regulations that might very well serve as a model for other states, because federal law would trump state regulations. But Congress also noted that strategy is not what it has in mind.

“Your holy grail is ‘preemption.’” Senator Brian Schatz (D-HI) said. “And we’re not going to replace a strong California law with a weaker federal one.”

Having a Seat at the Table

Having a seat at the table when it comes to drafting federal regulation is in the best interest of tech companies at this point. But the reality is that their huffs and puffs about how strict other legislative models are might not do them any good. With yet another Facebook data breach, consumers and lawmakers alike are fed up.

California’s new law requires that people can see what data companies have on them — which makes perfect sense from a consumer perspective. And the EU is still pushing social media platforms to adjust to a new way of operating under GDPR. European Commissioner Vera Jourova warned Facebook to change some of its terms and conditions by December, so the company can finally tell users how it utilizes their data for commercial purposes. It’s a wake-up call for tech companies that the EU is not going to budge — and that gives American lawmakers the chance to pile on with more conviction.

Now that the tech giants have asked for regulation (though of course of the weaker variety), it is up to Congress to take action. But first, they also have to listen to consumer groups — because a table of decision-makers that only includes one side would not look good. Senator John Thune said Congress is not in any rush toward a decision. But let’s hope one emerges before another data breach occurs.

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