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Industry-Research | Perspectives

Mobile aggregators: The opportunity for referral traffic we’re not talking about

Referral traffic to content has risen in recent years due in part to a largely unknown channel — mobile-first aggregators. Here’s what we know about mobile aggregators, why they matter, and importantly, their growing influence over reader traffic.

What is the mobile aggregators story?

Mobile-first aggregators present a growth story — the referral traffic they send to publishers has doubled in the past two years. A significant portion of this growth is driven by Google Chrome Suggestions and Google News, which each grew more than 50% this year (and drives significantly larger shares of referral traffic than Twitter).

The field of global mobile aggregators is also growing. Tokyo-based SmartNews and China-based news aggregator TopBuzz have shown rapid expansion, driving an increasing amount of traffic to sites. More importantly, their growth has changed the traffic landscape. Smartnews and TopBuzz are both now sending as much traffic as Yahoo.

Why content creators should pay attention to mobile aggregators

Digital-first organizations are still in the early stages of understanding the primary drivers of subscriptions. However, effective strategies rely on identifying the behaviors content creators can (and want to) encourage that will ultimately lead to more reader revenue.

From our research thus far, publishers have had far  less success in converting readers from mobile-first aggregators compared to more traditional channels such as email. Connecting the dots is crucial.

Therefore, a deeper understanding of mobile-first aggregators can open up a whole new level of engagement, and by extension, a new reader revenue channel.

Next steps: Demystifying mobile aggregators

Based on what we currently know about mobile aggregators, here’s what content creators  should keep in mind:

Strategize around these new mobile referral sources

Overall, we see the mobile-first aggregators as more of a missed opportunity than an unsolvable problem. We believe content creators can take advantage of this mostly untapped source of traffic by understanding their unique impact and optimizing content accordingly.

Audience development tactics are needed

For too long, mobile-first aggregators have been categorized as a subset of the larger platforms (i.e., Google search) we know well. However, we believe they should be seen as their own channel, which would get publishers closer to segmenting (and therefore optimizing) key drivers of traffic.

It’s all about attribution

Segmentation of traffic leads to better attribution. The ability to uncover mobile aggregator-specific patterns and better track their impact. Moreover, it can clear the path towards leveraging the channel for higher engagement, loyalty, and conversions.

Our data shows that the growth of mobile-first aggregators has significantly upended the traffic source landscape. Publishers would be remiss to take this shift lightly, as they may be missing out on a major source of referral traffic in the long-term.

This also coincides with a trend we’ve long seen — the fact that mobile-first readers are demanding better experiences. Therefore, it’s unsurprising that aggregators have become this increasingly influential source of traffic.

Perspectives

DCN’s must reads: week of October 17, 2019

Here are some of the best media stories our team has read so far this week:

Marketing | Perspectives

How publishers are rethinking audience in a user-first world

On September 25, Vox Media acquired New York Media — the company behind my former employer, New York Magazine. Vice Media acquired Refinery29 on October 2. And five days after that, news broke that digital media company Group Nine had reached an agreement to acquire publisher PopSugar.

The long-expected digital consolidation is finally upon us. Media companies, it’s clear, are looking to survive by getting bigger in an effort to increase revenue and better compete by way of sheer scale. By expanding their audiences, they hope they’ll be able to build a more sustainable revenue model.

But is that necessarily true?

There’s nothing wrong with chasing scale or growing your business through intelligent mergers. (Piano recently took that route too, acquiring Cxense.) However, for media companies, growing overall audience doesn’t necessarily mean increased engagement or enhanced revenue. Not unless a critical percentage of that audience is made up of loyal users.

Identifying (and keeping) loyal users 

At Piano, we often define “core audience” as those users who view at least 10 pages a month. If 5% of your audience or higher visits that often, that’s solid performance. However, if that number falls below 2%, there’s work to be done to drive deeper engagement and grow that share.

Building your core audience — and their engagement — is key to reaching your overall audience and revenue goals. And that starts with putting users at the center of your site experience. The media companies that Piano works with — companies that have made reader revenue the centerpiece of their businesses — understand that better than most. After all, they’ve realized that they need to build relationships if they expect users to pay.

So, what lessons can digital media companies learn from leaders in subscriptions? And what other opportunity does a user-first digital landscape present?

Understanding what your audience values

What do your most loyal users read or watch on your site? Which topics resonate with them most? Are their preferences different than those of mass, one-off users? 

A successful user-first strategy starts with knowing how your site’s core audience behaves and understanding what users are looking for when they get there. Both are key factors that contribute to subscription conversion, and audience data like this plays a large part in driving strategy. However, while data explains a lot, our customers find that talking to users is just as important. 

Asking users what they value about your content, website and brand, either through surveys or one-on-one interviews (ideally both) can give you an idea of unmet needs and what you could be doing that you aren’t yet. It helps develop an understanding on how they see you compared to a competitor and recognize the opportunity in those differences. And as you work to understand your users, you may begin to identify different segments of your core audience — along with the different content habits, demographics and benefits they gain from your brand. 

And that’s the kind of information that’s critical to the next step of building a user-first strategy: defining the customer journey.

Defining the customer journey

At Piano, we’ve developed a model for the customer journey that can be applied to both media and other types of business. It helps define the milestones of increasing user engagement and key conversions you want to drive along the way. This is what it looks like:

Of course, these generalized milestones are applied differently from brand to brand. Business Insider and The Daily Beast, for example, both use registration as a sampling tool. They ofer temporary access to premium articles in exchange for registration. In that case the Known stage of the customer journey becomes an important milestone, with a set of specific tactics employed to target active users who might not be ready to subscribe, encouraging them to register and experience paid features.

That highlights another essential element of this approach: considering the “next best action” you want your users to take to move them from one step of the customer journey to the next, then using small nudges, “micro-experiences,” to move them along that path.

In a user-first world, building deeper user engagement means considering the value exchange between the user and business. What action do you want the user to take? What’s the benefit to them? What are you asking in return? If you ask for permission to track them, for example, does that enable you to improve their reading experience by only showing articles they haven’t read yet? Are you making that benefit clear?

GDPR and the coming California privacy rules require sites to ask permission for tracking, but few sites are doing more than disclosing what’s being tracked. There’s a missed opportunity to use human language instead of legalese and take it as a moment to build a relationship.

Lastly, the specific tactics also define the metrics to focus on. In the case of the two sites I mentioned above, the exposure rate (the proportion of users who see a registration offer) and the conversion rate (of those exposed, how many register) are both key metrics to measure and understand.

In the Piano database, there’s a pretty wide range of exposure rates, but registration conversion rates are fairly stable — 2.2% for the bottom quartile and 3.4% for the top quartile. If you have enough audience, even a 1% conversion rate can bring in a lot of registered users. If subscriptions are a goal, then exposure rate, conversion rate, revenue per user, retention and customer lifetime value are all crucial metrics to consider.

Building user-first revenue

If you get the user journey and value exchange right, you open up a world of opportunities to drive revenue. For subscriptions, donations and memberships, certainly. But less obviously, direct, trusted reader relationships become more valuable for advertising too. 

That value hinges on publishers collecting first-party data and capturing user consent to track and display targeted advertising. Insider and Mediahuis in Belgium have each developed in-house solutions to create rich first-party profiles of users. Their approach primarily uses behavioral data on content consumption and extending their reach via lookalike modeling. They also allow advertisers to bring and match their first-party data to refine that targeting.

Diving a little deeper into the current ad landscape, increased privacy regulation and consumer awareness, plus changes in web browser cookie policies have made publisher-user relationships both valuable and essential. Valuable because publishers can build trust and encourage users to log in, allow tracking and even volunteer data in the right circumstances. Essential because without it, programmatic ad revenue drops, as browsers squeeze out third-party tracking.

Focusing on user relationships also opens up other product possibilities. Some other innovative examples we’ve seen: Austrian publisher Russmedia developed a gamified “Landlepunkte” points system to encourage user engagement, with points redeemed for swag, digital coupons and local event tickets. It dramatically increased user registrations, logged-in users and articles per user. Amedia in Norway turned 73 local newspapers and a national obsession with local professional soccer teams into a national live streaming sports network.

That’s the type of value a user-first strategy can bring. That and the loyalty obtained from users who intuitively know they live at the center of the experience you offer. No matter how big (or small) your company is.

About the author

Michael Silberman, SVP Strategy, leads Piano’s Strategic Services team, helping clients develop reader revenue strategies and drive success and revenue on the Piano platform. He joined Piano in 2018 after 10 years building the digital media business at New York magazine, and earlier, as one of the top editors launching and growing MSNBC.com in the early days of the consumer Internet.

Perspectives

Malware thrives in a blocking world

Security professionals continue to tell us that the threat landscape is constantly evolving and it’s not uncommon for The Media Trust’s Digital Security & Operations (DSO) team to discover a new threat firsthand. For example, the industry has been testing the effectiveness of malware blockers in lieu of scrutinizing code in the ecosystem. Unfortunately, the result is that publishers are experiencing larger, more penetrating attacks.

A current attack, named Ghostcat-3PC by our DSO, involves malware running behind the scenes. It slips through third-party feed-based malware blockers in order to hijack mobile browser sessions in the U.S. and Europe. Over the course of three months, the DSO discovered more than 130 different outbreaks related to this attack that affected hundreds of well-known publishers.

We detected the malicious ad while analyzing suspicious code from ad files hosted on two cloud platforms, one of which had the URL: qing.js. The malware hid in an ad served to publisher websites. When the malicious ad was delivered to the browser, it lifted browser fingerprints and used them to check whether the ad was running on one of 100+ publishers it was targeting. Each campaign centered on code containing its own list of 100+ publishers that was distinct from the lists of the other campaigns.

Exploiting defense security weakness

The malware achieved persistence by disguising malicious code – either by cloaking it with additional characters at both ends or splicing with additional characters. Most blockers work by detecting known malicious code found in an ad tag or on a publisher site. If the malicious code fails to match any code on the blocker’s keyword list, it will run as designed. Any change to the targeted code, no matter how minor, will prevent the blocker from recognizing it as a threat.

Knowing blockers’ fundamental weakness, attackers split the URL of the malicious domain, qing.js. In this scenario, blockers on the lookout for “qing.js” failed to recognize the disguised URL and therefore allowed it to run. For good measure, the attackers also used hexadecimal encoding to add a layer of obfuscation to the concatenated URL and the JavaScript file that delivered it.

These changes to the URL, combined with the large number of subdomains in use, made the attacks hard to detect and, even once discovered, hard to follow. Obfuscation blurred any connection between the subdomains and the ads, making these links impossible to find except by experts who find and track evolving threat patterns. 

Tracking the progress of this massive attack

The malicious attack was out of the ordinary — not only in sophistication but also in scale. The Media Trust identified and rebuffed more than 130 outbreaks linking back to 18 strikingly similar malicious campaigns over just three months. In that period, the malware script morphed into four different versions, each one concatenating URLs to hide from blockers. This method of foiling blockers enabled attackers to repeatedly infiltrate the supply chain—unimpeded—and infect hundreds of publisher websites and their millions of users.

We noted the malvertiser’s use of a host and file naming convention. The pattern emerged once the number of split URLs hosting the malicious script and the number of infected ad campaigns appeared to have reached a critical mass. The convention seemed to associate the script with and track each campaign.

To track the script’s progress, file names and hosts varied with each campaign, and included the JavaScript file name and the image width. Note the strict naming convention for JavaScript file names, which includes the use of Chinese words for:

  • Numbers (“ba” means 8 and “si” means 4)
  • Elements (“shui” means water)
  • Basic colors (“huang” means yellow, “zi” means purple, “qing” means green, “cheng” means orange)
  • Animals(“niu” means cow)
  • Vehicles (“che” means car, “sanling” means Mitsubishi)

The URL naming convention suggests the involvement of a group of hackers who continually morph their code and URLs to track their progress. Their tracking did not end here. They appeared to also track the presence of known signature-based security defenses, perhaps to find out how each would respond to the malware. In other words, they might be tracking whether these security tools have been updated to recognize the code and impede its progress.

Protecting the digital ecosystem from this threat

Today’s new and emerging threats are designed to fool signature-based security tools by combining a number of advanced techniques in obfuscation and morphing. In such a challenging environment, the best defense is one that involves collaboration with the entire digital supply chain on identifying and rooting out malicious actors.

Clearly, as publishers embrace blockers’ set-and-forget convenience, malicious actors are taking note.  A single security solution will be no match against the thieves and fraudsters who continue to sharpen their saws. Nor will it fulfill the data security requirements of a rising number of data privacy laws like the upcoming California Consumer Privacy Act. More importantly, consumers are willing and able to vote with their feet—and file lawsuits. And they won’t entrust their business to companies that can’t be trusted with their data.

About the author

Chris Olson co-founded The Media Trust with a goal to transform the internet experience by creating better digital ecosystems to govern assets, connect partners and enable Digital Risk Management. Chris has more than 15 years of experience leading high tech and ad technology start-ups and managing international software development, product and sales teams. Prior to The Media Trust, Chris created an Internet-based transaction system to research, buy and sell media for TV, radio, cable, and online channels. He started his career managing equity and fixed income electronic trading desks for Salomon Brothers, Citibank and Commerzbank AG.

Perspectives

DCN’s must reads: week of October 10, 2019

Here are some of the best media stories our team has read so far this week:

Innovation | Perspectives

Why you should consider bypassing app stores to reach new audiences

Frustrated by fierce competition in a marketplace that counts over 6K new Android apps added daily to the Google Play app store alone and infuriated by reports that suggest Apple routinely favors its own apps in App Store searches, app companies and developers are adopting bold approaches to get their apps in front of potential audiences. The outcome is a flurry of activity and experimentation that could make 2019—destined to be the biggest year in mobile and apps yet—the best year for mobile app distribution models that pay real dividends.

A company writing the playbook is Epic Games, the company behind Fortnite. The shooter game on PC, consoles, and now mobile and apps has become a cultural phenomenon; as of March 2019, it had amassed an audience of almost 250 million worldwide. Addictive gameplay is certainly a big factor that has contributed to the blockbuster success of Fortnite since its launch in 2017.

However, if we dig deeper, a critical driver is a brilliant direct distribution strategy shaped by the company’s determination to bypass the app store. “Avoiding the 30% ‘store tax’ is a part of Epic’s motivation,” the company’s CEO Tim Sweeny told Forbes. “It’s a high cost in a world where game developers’ 70% must cover all the cost of developing, operating, and supporting their games.”

It’s also high time to ask some basic questions about the app store distribution model that hasn’t changed since the app stores opened for business in 2008. Leave it to the edgy El Reg to call out the elephant in the room. “More pertinently, after a decade, is the question why Apple and Google still take a 30% cut. In a competitive marketplace, wouldn’t that rate have been whittled down over the years?”

In a world where prices are falling everywhere, the article concludes, “that 30% over a decade is starting to look plain embarrassing.”

Clever moves to cut out app stores

The Apple-Google app store duopoly is increasingly the focus of broad government antitrust investigations. That’s because these two companies serve as gatekeeper for a massive marketplace where consumers are expected to spend an incredible $120 billion this year, according to app market intelligence provider App Annie. Think of it: That’s 5 times the growth rate of the global economy. So, its little wonder companies are lining up for their share of the action (and revenues).

A pioneer in the alternative app-marketplace was Facebook’s Instant Games. The platform where consumers can launch games from within Facebook’s chat apps has gained significant traction this year. The content library—6,000 Instant Games compared to over a million Android games and over 800,000 games on iOS—may seem tiny, but the goal here isn’t size. Facebook leverages its social connections to power an app-like ecosystem that doesn’t require an app store.

In China, the mobile messaging app WeChat has done one better. It has evolved into a one-stop-shop platform for a wide array of content and services. Consumers rely on it every step if their daily journey. With the help of “mini-programs” they download directly into WeChat, users can access content, order meals, make payments, and call a cab—and that’s just the start.

The alternative app marketplace

The ranks of companies building the capabilities to take aim at Apple and Google’s dominance of the app economy are growing. Realistically, though, it’s a strategy only a handful of companies can afford to pursue. So, what are the options for the masses of companies and developers that want to reach new audiences with their apps but lack the resources to construct and command their own alternative app marketplace?

One approach gaining traction is the Direct 2 Device (D2D) model. I learned about this one  through my own informal survey at Mobile Growth Summit. D2D is the choice for an increasing number of app companies—particularly media and entertainment apps eager to engage more users across more regions. In this scenario, app companies work with Digital Turbine, a mobile delivery platform that leverages more than 40 partnerships with handset makers and mobile operators worldwide to pre-load apps on devices. Apps are delivered directly to the device because Digital Turbine’s technology sits at the operating system level of new Android phones, enabling companies to reach consumers as they set up new devices.

Delivering a frictionless user experience

In practice, the approach gets apps directly in the hands of consumers. It also puts consumers in control of their apps, giving them the option to keep what they like and delete the apps they don’t. The result is a frictionless experience that streamlines app discovery, which saves users the hassle of sifting through digital shelves packed with millions of apps.

This is a big deal in a global app economy where app store search, though not broken, is clearly not optimal. Many apps show up high in search results because the companies that made them have mastered app store optimization or bid on the right keywords, not because the apps are the best fit with what consumers are looking for in the first place.

Digital Turbine’s EVP of global revenues and growth Matt Tubergen tells me his company has preloaded over 2 billion apps via its software platform, which is installed on more than 270 million devices. Shopping and gaming—hypercompetitive verticals where too many apps are chasing too few users—were the first to embrace Digital Turbine to capture and convert new audiences. More recently, media and entertainment apps have joined the party.

From CNN to the BBC, and from Smart News to News Republic, companies are making D2D the cornerstone of their customer activation strategy. News portals and social platforms, including Yahoo!, Opera News, and Reddit, are also harnessing the platform to fuel growth.

Significantly, Digital Turbine’s Tubergen says many media companies don’t just see D2D as a play to bypass the app stores. “It’s about augmenting their channels—increasing reach in a way that allows them to take back control of the download experience and determine their distribution in addition to the app stores.”

You have options

Whether companies have the wherewithal to build their own app store marketplaces (without a store), or join the ranks of companies making their apps available to consumers directly on the smartphone at the time of device activation, it pays to explore other ways to distribute your app and grow your audience.

Media consumption on mobile is headed for the stratosphere this year. In fact, roughly 10 minutes out of every hour spent consuming media will be on a mobile. So, it’s no surprise that the dominant distribution channels are noisy and crowded. Harnessing alternative distribution channels allows media companies to drive customer connection—without the friction. It also lets them focus on an even bigger challenge: ensuring that consumers engage frequently and deeply with their apps.

Perspectives | Revenue

With the cookie crumbling, the new recipe for data-driven success features consumer trust

The digital advertising industry is changing. Third party cookies are being rendered obsolete by recent browser updates including Safari’s ITP 2.2/2.3 and Firefox’s v69. Users are also becoming wary of how vulnerable their personal information is to misuse and mishandling following the Cambridge Analytica Scandal and Equifax Data Breach – among others.

In the face of this shift, the industry needs to behave responsibility and be cautious, so that “data” is not called out as the underlying issue that needs to be solved. Data is not inherently good or bad. And when data is used responsibility, it empowers digital media and advertising. Data can a user to discover a compelling article or product that they may have never found on their own. It also gives tools to advertisers to be strategic about who, when, and where their messages reach valued consumers. And data allows the world’s leading publishers to focus on producing quality content that consumers depend on.

As an industry, we are scrambling to find tactical solutions to each new browser update or legal regulation that comes out. Despite the need to address these emerging issues, we must keep our eye on the big issues. And the proper use of data is one we must focus on.

Consumer privacy comes first

Consumers have a right to privacy. They also have a right to know how their data is used and shared and they have a right to determine if they are comfortable with their data being used for advertising. The industry needs to come together to align on governing principles that, at the core, have fundamental protections in place for user’s data across the entire ecosystem.

There needs to be a sincere consideration for the user’s right to privacy and fundamental protections in place for their data across the entire ecosystem. Consumers need to feel safe and protected online. And their information is not being misused or mistreated. Additionally, we need to be mindful with the perception of “creepy ads” in order to build the level of trust like that of users sharing fingerprints and face recognition with phone manufacturers.

Education is key

The industry needs to better inform users about how their data is being used and provide the option to opt-out. At the same time, it is critical to teach users about the importance of advertising and how it fuels the free content that they consume on a daily basis.

Moreover, we need to educate users on why allowing sharing data with responsible parties can help them have a much better experience and receive more personalized ads. With more and more direct-to-consumer brands, consumers mostly learn about them and their products through advertising. These companies are taking on giant competitors and need to be very efficient with their advertising. To do so, they focus on providing a unique and added value to consumers, particularly early adopters. The most effective way to reach those people is by using data and customer profiles.

We also need to be open about how data driven advertising supports journalism while making a true and honest best effort to provide value to marketers, publishers, and users.

Let’s build a healthy economy

In order to move forward, we need to commit to building a healthy digital economy and evolve compliance in order to restore trust among consumers. We need to look at ways to ease concerns among users, providing more transparency across the web and making it easier for users to exercise their right to privacy. We need to educate users on the value of their data and the ways that it is being used to provide a healthy digital economy that they can benefit from.  The bottom line is a cookie-less world means one big thing for advertisers: We need to gain back the user’s trust in order to succeed as an industry.

Featured Post | Perspectives | Policy

Google continues its offensive, but we’re all smarter now

There is a certain musical rhythm to our digital media industry calendar. If there was a crescendo, I expect it would be in the Fall, as leaders migrate from execution to strategic planning. And with this shift, conference season begins. There are many forces at work shaping these agendas, not the least of which are businesses wanting to get their messages to market.  

As is so often the case, Google sits at the top of the influence food chain and its extensive industry relations efforts impact nearly everyone else’s agenda. Whether Google’s wishes and goals are delivered directly (as they are for a privileged few of their so-called “premium partners”) or through the company’s trade lobbies, press efforts, investments and research, Google’s impact is as predictable as the autumn leaves.  

But this year is different. 

As we wind down 2019, Google is a bit less focused on driving its own profits and a lot more focused on strengthening its fortress against scrutiny. Right now, it seems that Google’s first and only priority is to dispel or confuse any analysis being done on anticompetitive behaviors. This marks a more sensitive and controlled conversation for Google.  

For us, it is important to bear in mind that one of Google’s best defenses can be getting the industry to support its efforts. This is where all of us come into play. We need to be sure we clearly see (and accurately portray) how self-serving Google’s “industry relations” efforts are. The good news is that we are all smarter now. And we – the media industry, the press, and politicians everywhere – are in a position to take informed, proactive action to confront wrongdoing in the form of untenable industry dominance.  

The market today 

Here is what we know about the scrutiny of Google:  

  1. Everyone has upped their game. Everyone. The people involved in the many antitrust investigations have done a lot of homework. This isn’t 10 years ago; it’s not even three years ago. Global scrutiny by international regulators, the press, and the industry has made everyone smarter on the topics. These days, critics are unlikely to get lost in the complexity of Google’s digital business. (As an example, this time around regulators are asking questions about nuanced industry topics like auction mechanics and data rules.) 
  2. Everyone understands Google’s core business. Everyone. Google operates free services in order to devour as much data as possible in order to micro-target advertising to audiences. Investigations appear to be focused on Google’s vertical control over experiences and the entire advertising stack funding them. This is where Google continues to make more than 85% of its revenue. And dozens of Google products work together to enable it.  
  3. Everyone is significant. Everyone. Investigations happening globally from Australia to the U.K. In the U.S., it includes 48 State Attorneys General, Congress, and the Department of Justice. Put another way, a lot of serious antitrust experts across nations, and political aisles, are aligning to explore areas of concern.  

Growing concerns  

These investigations primarily focus on the intersection of Google’s data practices and its market dominance. Both are protected by Google’s command of search and mobile operating systems – two areas where the company has already been found by EU regulators to have violated antitrust law.  

Aggregating other’s content for searching the web was the original and easiest version of Google’s strategy to understand (and attempt to address). However, the company has extended into new services that exponentially increase its ability to collect data. And, as we now know, a majority of Google’s data collection occurs when users aren’t even choosing to interact with Google.  

So, the roll-out of privacy laws in Europe (and now the U.S.) present escalating risk to Google’s business. As Google attempts to comply with these new data protection laws while maintaining its profits, it needs to avoid tripping more antitrust wires as it did last year in Europe.  

Make no mistake, the cards are still stacked in Google’s favor. Its annual budget for academic research, think tanks, lobbying, publisher support, trade press PR, and event sponsorships likely matches the top lines of revenue for nearly every organization in the industry. No one wants to upset Google and therein lies one of the key symptoms of the problem.  

What can the industry do? 

But in the interest of transparency and support for a fair assessment of Google’s business practices, what can the rest of the industry do to be supportive? 

1. Press scrutiny. I would emphasize that the trade and policy press must continue your great work to cover the company fairly and with the healthy bit of cynicism it deserves. This has shifted significantly over the past few years in a positive way as newsrooms have ramped up their coverage of big tech. We’re seeing fewer instances of the industry press simply rehashing Google’s announcements or sharing its carefully crafted blog posts. Instead, they’re reporting on them with proper context and careful analysis.  

It is important to add that as an industry that seeks to inform, instead of simply propagating the spin of a corporate blog post, we have a responsibility to share the best coverage of issues, even when it’s written by the competition. With the advent of social, proliferating quality information must be one of our highest objectives.  

2. Independent academic research. We saw something remarkable play out this past quarter. Academics at Carnegie-Mellon and Minnesota released independent, empirical research that showed how little publishers actually benefit from third party cookies (around 4%). The research spanned three years and offers critically important analysis as publishers consider changes to data policy. For this reason, it also very much threatens Google’s interests.  

Recently, Google released its own “internal research” consisting of a single data point, which suggested that more than 50% of advertising revenue would be lost without third party cookies. It’s a ridiculous argument. After reporters and academics scorched Google for the claim, they eventually posted a thin three-page summary which they subsequently buried and backed off from (suggesting, perhaps, that they weren’t anxious for another careful analysis of the quality of this “research”). No doubt there are many more examples. 

As an industry, we must continue to question self-serving or corporate-baked research. The onus is upon us to seek out the best independent research and share it widely.  

3. Persistence. When Google’s Head of News put out a blog post defending its practices and unwillingness to pay publishers for use of their content despite competitors’ willingness to pay and new copyright laws rolling out in Europe, that’s not the last word. When Google sends a note to publishers in France extorting them to give Google permission to use their content for free or lose traffic to their website, there is only one answer: “No.” This all happened in the past week. Really, Google is not going to turn off Google News across Europe and they’re also not likely to want to be in an inferior position as other news platforms roll out.  

As an industry, and bound by ethics and the law, we need to continue to hold the line for the proper value of trusted news and entertainment and the trust of the users and advertisers we serve.  

The PR machine rumbles, but its workings are exposed 

Just this week, we witnessed the incredible power of the Google disinformation machine. A senior executive at Facebook and several industry influencers are sharing a piece that uses an arcane analysis of file sizes (yes, as in bytes) instead of referral traffic to confuse the issue of the company’s search dominance and disparage the knowledge of a vocal antitrust proponent. It is disheartening to see this get any air. At the same time, we clearly see that politicians have increased their knowledge of how Google’s business (and PR machine) works. Rather than being buried by obfuscation, we see clear-eyed and immediate push back coming from lawmakers on both sides of the aisle including Senators Josh Hawley and Elizabeth Warren. 

I considered titling this piece, “Winter is Coming” but that’s overused. I’ll just conclude with a note that there are significantly important investigations happening by competent authorities which will impact the future of our industry. And California offers new guidance for how data can be collected and used. Both issues play directly into publishers’ business interests.  

Fortunately, there are positive signs. We see well-informed, reasoned calls for a close examination of technology’s impact and its business practices. Journalists and industry watchdogs have begun to see biased research and self-serving statements for what they are. And that is progress.  

Perspectives

DCN’s must reads: week of October 3, 2019

Here are some of the best media stories our team has read so far this week:

Perspectives | Revenue

Yes, publishers can compete with Google (here’s how)

As antitrust investigations envelope tech giants like Google and Facebook, some publishers may be lulled into thinking that their competition with Big Tech is fading. It’s certainly encouraging to see that Google may be held to account for their monopolistic practices. However, it’s unlikely to change the fundamental battle between publisher and platform. Google will continue to profit from news delivery and aggregation, and marketers will still funnel large portions of their budgets to stay at the top of search results. But to say that Big Tech is here to stay is not to admit defeat. This David and Goliath battle will surely rage on, and there are plenty of ways publishers can win along the way.  

If Google escapes all 50 state attorneys general investigations unscathed, will the pressure from publishers and legislators be enough to force change? The likelihood of any specific outcome aside, this recent news has led to a fascinating game of “what-ifs.” Well beyond mere speculation, this exercise is helpful for legislators, publishers and tech giants alike.  

So, what changes if Google loses? 

Whether Google faces fines or recent scrutiny leads to legislative changes, most agree that Google will have to make fundamental changes in the coming years. Since News Media Alliance reported that Google made $4.7 Billion in 2018 from aggregated news content, calls for Big Tech to begin sharing a piece of that revenue pie have grown louder and more insistent. 

Proposed policies like the Journalism Competition & Preservation Act would enable publishers to collectively negotiate directly with Big Tech platforms to “improve the access to and the quality of news online”. Senators John Kennedy (R-LA) and Amy Klobuchar (D-MN) introduced this legislation in June, a key tenant of which is the establishment of a 48-month “safe harbor” (a.k.a. regulation-free period for Google) for publishers to “band together to negotiate with dominant online platforms.”  

One must wonder what is preventing publishers from doing this now, and what would be achieved. You’ve armed David with a slingshot, but where is the stone? For some, it is hard to believe four more regulation-free years for Google would lead them to start paying publishers for their content. 

Either way, publishers must emphasize how they compete 

If the changes on the table are unlikely to move the needle for publishers in a significant way, can publishers compete with Big Tech? Yes! And they should. The challenge for ad sales teams is to learn how they stand out against Big Tech digital advertising and be prepared to clearly articulate this to advertisers.  

Too many local publishers are unprepared to compete with Google and Facebook, and believe their only option is to partner directly with their biggest competition. What they fail to realize is that if they could only communicate to advertisers why they should add local advertising into their marketing mix, they could tap into an important revenue source.  

In the eyes of marketers, how do publishers differ from Big Tech?   

Here are four difference that publishers can capitalize on: 

1. Trustworthiness 

DCN has long emphasized the importance of quality, trustworthy content. And this is not just for the sake of readers and the future of journalism, but also because these factors are critical for advertisers. Due to the “black box” nature of Big Tech algorithms, campaigns from trusted brands may end up in distasteful corners of the internet. This is not only embarrassing for reputable brands. It can have a detrimental impact on their bottom line. 

In contrast, publishers are not only focused on the quality of their content, but they vet their advertisers as well. Marketers need not fear their ad campaign showing up next to pornography or propaganda. The trust that readers place in a quality publication is extended to the brands that advertise there. And this value is nearly impossible to replicate on Facebook or Google.  

Ad sales teams must be prepared with the facts about ad fraud and why trustworthiness is critical for campaign success.  

2. Audience data 

Advertisers don’t want to purchase impressions or ad space – they expect access to specific audiences.  Google makes this easy. Do you? Publishers have an opportunity to show advertisers that they can leverage their first-party data for a better user experience and higher-quality, audience-driven campaigns.  

If your publication is behind a paywall (in full or in part), you already know the value of your first-party subscriber data. Be the opposite of Google’s algorithmic black box. The more transparent you can be, the more value marketers will see in your audience.  

3. Omnichannel campaigns 

Advertisers want easy to understand campaign options, a clear understanding of campaign ROI, and they want doing business with a publisher to be easy. With the right tools, publishers can deliver on all these things – but they must go one step further.  

We’ve shown that publishers can compete head-to-head on trustworthiness and quality data. But what can publishers offer that Big Tech cannot? Omnichannel campaigns that cross mediums and deliver clear results. Who else can combine digital and print with OOH and events?  

As publishers diversify their revenue streams, they must be careful to train sales staff to understand the uplift these additional channels can provide for advertisers.  

4. Marketing expertise 

More and more publishers are adding marketing services to their offerings, and it’s no wonder. Research from Borrell Associates indicates that agencies and advertisers alike look to media companies for marketing expertise. This means your sales teams need to be prepared to be that expertise. The consultative selling approach has been proven effective. However, it requires a dedication to understanding the latest trends and recognizing how your products and services can help advertisers capitalize on them.  

Time will tell if Google and Facebook will be held to account for their monopolistic practices. Regardless of how policies change, publishers must recognize that they’re already able to compete with Big Tech. It is critical that ad sales teams understand what differentiates them from the Googles and Facebooks of this world. If they can, they’ll become an invaluable resource to reputable brands and local advertisers.  

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