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Featured Post | Industry-Research

Digital News Report 2022: Four key implications for publishers

The annual Digital News Report from the Reuters Institute for the Study of Journalism is a must-read for anyone in the news, media and digital publishing industries. Clocking in at 164 pages, the latest study, which came out today, covers a cornucopia of topics, informed by an online survey of more than 90,000 digital news consumers in 46 countries.

DCN members will want to read the complete report when they can, but ahead of that, we wanted to share some of the most relevant findings for digital content companies. To do this, I read the full report, identifying key trends and corresponding with the lead author, Nic Newman, to discuss these areas in more detail.

It is a decade since the first Digital News Report was published. Newman reflects that, since then, we have seen a relentless decline in consumption of traditional news sources such as TV, radio, and print and the growing importance of digital and social media.

“This has brought [a] greater variety of sources and perspectives than ever before, especially for educated and interested news consumers,” Newman says. “But at the same time,” he adds, “we see those that are less interested [in the news] often feeling overwhelmed and confused.”

It is against this backdrop that major themes emanating from the latest report — including growing news avoidance, as well as declining interest and lower levels of trust in the news —need to be considered. With that in mind, here are four developments publishers cannot afford to overlook, and recommendations to help tackle them.

1. Respond to the implications of news avoidance

Issue:

One of the biggest topics explored in the report is news avoidance. “Selective avoidance” is on the rise globally, with growing numbers deliberately steering clear of content that is often seen as difficult and depressing. Long-running and recurrent stories — such as those covering politics, the war in Ukraine, or the COVID pandemic — are also driving audiences to disconnect more frequently from the news.

Implications / Solutions:

To avoid audiences checking out, publishers need to recognize that some approaches in practice can be off putting. Therefore, they may need to offer a different content mix and tone. Addressing this is challenging, Newman says, because audiences also want — and expect — the media to cover difficult stories. Nevertheless, Newman identifies three areas where journalists and publishers can tackle several core reasons people often give for news avoidance: accessibility, negativity and bias.

First, he argues, we need to make news content more accessible and easier to understand. “This is one of the reasons why young people and less educated groups selectively avoid the news.” He also notes that content is typically produced for avid news consumers.

“Avoiding jargon and insider speak will help,” he says. More explanation, directly asking for — and addressing — audience questions, as well as producing fact-based content for video and podcast formats, could also be useful.

Secondly, telling stories differently might mean embracing approaches such as solutions and constructive journalism, as part of a mix of formats and content styles. Newman suggests outlets consider “finding more ways to cover difficult stories that provide hope or give audiences a sense of agency around stories like climate change.”

Lastly, we need to rebuild trust and credibility. Over a quarter (29%) of news avoiders believe the news is untrustworthy or biased. That rises to nearly four in ten (39%) in the United States.

“Some of that is about partisanship,” Newman says, “some is about sensationalist chasing eyeballs and clicks.” Potential remedies include “signalling opinion more clearly,” as well as “not labeling everything breaking news when it isn’t,” an approach CNN has recently broached.

2. Double-down on revenue diversification

Issue:

Increasing reader revenue is a key strategic goal for many publishers. However, much of the digital spoils generated by subscriptions are enjoyed solely by the biggest national brands. In the U.S, around half of paid subscriptions go to just three titles: New York Times, Washington Post, and Wall Street Journal. More widely, fewer than one in five digital news consumers (19%) in pays for content.

Implications / Solutions:

This “winner takes most” dynamic can make it difficult for smaller and local publishers to compete. Furthermore, the rising cost of living may also mean that some audiences will look to cut back their expenditure on paid-for content.

As a result, publishers can’t afford to be over-reliant on subscriptions. It has to be just one component of their revenue portfolio.

That’s a development Newman says news providers are alive to.

“More publishers are recognizing that subscription on its own will not be enough,” Newman says, “especially as further growth is likely to [be] constrained by rising prices and the squeeze on household budgets. Developing multiple revenue streams will provide resilience and help publishers weather the coming storm.”

This impending subscription storm is not unique to news publishers, but all media players. A chart on page 21 of the report outlines this tension. It shows that while 14% of digital news users in the U.S. think that they will have more media subscriptions in the next year, a further 14% of users believe they will have fewer subscriptions in the same period.

3. Ensure you have an effective first-party data strategy

Issue:

As the experienced product marketer Aphrodite Brinsmead noted last year, browser updates and privacy regulations impact the ability to use personal identifiers and capture customer data through third-party cookies. Subsequently, Brinsmead reflected, “the race is on for publishers and brands to leverage first-party data.”

However, news consumers appear to be wary about providing personal information, such as email addresses, to publishers. Just under a third (32%) of the report’s sample indicated they trust news websites to use their personal data responsibly. This drops to fewer than one in five in France (19%) and the USA (18%).

Implications / Solutions:

Most publishers understand that they need to develop their first-party data capabilities. But knowing you need to get to grips with this, and effectively doing so, is not the same thing.

“The low numbers (28% average) who have currently registered with a news site show that most news websites simply do not have a clear enough value proposition to get people [to] give up their data,” Newman argues.

This principle aligns with the subscription challenge publishers face too. It is hard to convince audiences to pay for content if the same material is available elsewhere for free. In these circumstances it seems not even inclined to hand over their email address to access it.

To remedy this, Newman suggests, “publishers will need to use a mix of competitions, events and special features to get those numbers up. They also need to persuade people that they will treat personal data responsibly.”              

4. Do things differently if you want to reach Gen Z

Issue:

As we outlined recently, Gen Z is a demographic with its own outlook and media habits. The Digital News Report reinforces this, with Dr. Kirsten Eddy, a Postdoctoral Research Fellow at the Reuters Insitute, commenting on the growing gulf seen in the media behaviours and preferences found among many younger audiences compared to other demographics.           

Implications / Solutions:

This cohort is less interested in traditional news subjects like politics. It also has a weaker connection with news brands. “They are also more skeptical of traditional sources,” Newman advises. “They are also shaped by social aspect of news ‘who is telling the story’ and what others think about it.”

As a result, this is a demographic more likely to seek out diverse voices online. They are less concerned about impartiality and more comfortable with journalists expressing opinions on social media. A preference for more visual social networks has meant that across all markets the use of TikTok for news consumption has jumped among 18–24s from 3% in 2020 to 15% in 2022.

“But they are not simply all TikTokers,” Eddy cautions, recommending in a dedicated essay (found on pages 42-45 of the full report) that publishers connect with the topics young people care about, and develop content that is aligned to the style and tone of specific platforms. Publishers should do this, in preference to “expecting young people to eventually come around to what has always been done.”

The big four (and much more)

These four issues – reaching younger audiences, addressing issues of news avoidance, ensuring you have an effective first party data strategy and the need for revenue diversification – matter to publishers large and small. As a result, these were the topics that emerged as most critical upon first read of the Digital News Report 2022.

They are, of course, just a fraction of the actionable insights that can be gleaned from this weighty annual research study. Readers may also want to delve further into issues such as trust, polarization, as well as data related to the consumption of podcasts, online video, email news and attitudes towards coverage of climate change.

Learn more by reading the full report.

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Perspectives | Supporter Spotlight

The omnichannel approach to navigating media industry disruption

Media disruption has become a fact of life in the digital age. Media disruption is a fact of life in the digital age.ons become more diverse, new channels are emerging more rapidly than most media companies can respond.

This pace places an extreme burden on media companies. They don’t want to throw money at every novel channel in our here-today, gone-tomorrow culture because they can ill afford to waste time and resources. Nor can they afford to overlook the next big trend and risk irrelevancy. 

When an ad-supported model drove revenue, companies could risk complacency. With the depreciation of the cookie, there is a growing need to move fast to attract attention and leverage first-party data to drive engagement.

New channels, new strategies 

Media companies and publishers have re-adjusted their revenue strategies to focus on subscriptions as per-page revenue from advertising has dropped. In a recent interview, New Yorker editor David Remnick noted that advertising sales in their print magazine largely subsidized the content in the magazine for most of its life. Now, digital and print subscriptions pay for the newest Borowitz Report.

Can a successful subscription service be enough for a media company to thrive in the years ahead? For the New Yorker and loyal reader base, the answer is likely yes. For many others, survival means embracing a truly omnichannel strategy that distributes content everywhere that content can be consumed. 

The New York Times went through a tumultuous transition a decade ago as it dealt with substantial drops in print readership and revenue. Yes, they have done well with digital subscriptions. However, the Times has also developed a plethora of content products, built for the changing habits of their audience. 

The Daily, a long form audio content for the passive Times’ listener, is an excellent example. It demonstrates how companies like The New York Times provide a range of content formats that meet the broad expectations of today’s audiences. Products like these also access emerging digital engagement channels, which offer new revenue streams and drive subscriptions. 

New revenue: ecommerce and events

The definition of media is continually evolving. ESPN and Barstool Sports are content companies that also support new endemic opportunities such as sports-betting. Synergies like these not only create new revenue streams but drive ongoing multi-channel engagement. You don’t just read about or watch the game, you participate in the game along with your favorite content brand. 

Ecommerce is also becoming a way to leverage brand recognition and build stronger relationships with consumers by supplementing information with a physical product. It may not be a surprise that HGTV sells doormats. But did you know that Barstool Sports now sells One Bite frozen pizza?

Media company events are nothing new. However, they are becoming an ever more common way to drive revenue, engagement and brand loyalty. ComplexCon, the event put on by Complex Networks, is an excellent example of meeting their Millennial and Gen Z audience how and where they want to engage. The New Yorker Festival just saw its second biggest revenue earnings ever in its new hybrid format. 

True omnichannel lies ahead 

What are some of the promising omnichannel opportunities going forward? As The New York Times has demonstrated, audio is proving to be quite popular. (As well as a bit of what’s old is new again). Given that audio is a fairly passive content channel, it can exist in the background without demanding focused attention from the consumer. In our multitasking culture, having the freedom to absorb ambient media while also exercising or mowing the lawn is highly valuable. 

The once-taboo is now an opportunity for media companies looking to engage. As states begin to legalize online gambling and sports betting, there are opportunities to drive new branding and co-branding revenue streams, creating one of the most direct opportunities for the right media brands to surround and interact with the content. It is critical that companies keep their eye on changing trends and emerging opportunities that align with their brand and target audience.   

The long game

Indeed, whatever activity a media company chooses to tap into, they must do it authentically and on-brand. The excellent podcast series  on systemic racism Who We Are, created by Vox Media and Ben and Jerry’s, is an example of high-quality brand extension. 

What direct revenue will these and other emerging markets create? That’s the billion dollar question. But it also misses the point. Creating a content ecosystem that authentically connects great content to your audience supports behavior that drives subscriptions and ultimately sustainable revenue. The key is being open to experimentation. And experimenting does not mean developing a TikTok strategy in 2022 to gain younger viewers. 

Some (well, many) attempts will fail. However, those that succeed could become significant new revenue streams. The advent of 5G all but guarantees a turbocharged environment of innovative new channels for media companies to explore in the coming decade.

The future for media companies demands an omnichannel approach. While content is still king, customers now dictate how and where they will consume it. To win a battle fought on many fronts, media companies need to jump into the arena and embrace change. This means combining insight-driven experimentation with new emerging channels and technologies. That’s the kind of customer-centricity that will ensure content drives new revenue opportunities. 

Advertising | Industry-Research

Publishers accelerated diversification strategies in 2020!

As publishers reflect on 2020, most will agree that Covid-19 took center stage. The year was filled with business struggles, but it also offered some growth opportunities. What’s New in Publishing’s (WNIP) year-in-review, Media Moments 2020, identifies “diversification” as the paramount lesson from 2020. Importantly, the report makes it clear that publishers who are dependent on advertiser revenue need to rethink their strategies and include consumer revenue streams.

WNIP’s report covers the industry’s focus on “trend acceleration.” Certainly, while there has been marketplace disruption the past two decades, nothing has accelerated market shifts quite like Covid-19. Media Moments looks at 2020 to showcase these market changes and identify winning publisher strategies.

Notable 2020 highlights

Print final shift to digital

Any print publisher who survived 2020, will need to go fully digital in 2021. In fact, Poynter reports that nation­al newspaper circulation in the U.S. is down 30% since 2016 and 60 newsrooms closed recently due to the impact of Covid-19.

Launching a differentiated digital brand with fresh content is vital in this marketplace. Revenue diversification is key for sustainability. Offering virtual events, newsletters and podcasts are important touchpoints to broaden revenue opportunities as well as develop consumer loyalty.

Audio is an expending revenue source

Audio has proved to be a strong and viable business for publishers and they look to expand their audio businesses in 2021. Some have their business by producing dedicated podcast content while others grew through acquisitions. Many publishers are testing new formats for podcast integrations in content outside of news. Other examples include a new commentary format from AMC to complement their video business and Marvel’s experimenting with fictional content.

Spotify, iHeartRadio, and Apple are a few of the leading podcast platforms. While Spotify is among those building their content portfolio of content, others are building their podcasting infrastructure like iHeart.  This year alone, Spotify acquired content producers Gimlet and The Ringer. iHeart, on the other hand, acquired podcast analytics company, Voxnest. Even given the coronavirus’ negative impact on advertising spend this year, podcasting did not register large declines. PwC’s updated predictions approximate $814M for podcasting ad revenue, just 6% below PwC and IAB’s original forecast.

Publisher exercise first-party data

In January 2020, Google announced that Chrome would phase out support for third-party cookies in the browser within two years. This didn’t come as a big surprise, given that Mozilla FireFox and Apple’s Safari made similar announcements in 2019. Of course, this trend will mandate reducing digital advertising’s reliance on cookies. As a result, an already tough seller’s marketplace for publishers is getting tougher. Fortunately, many publishers acted early and started to develop first-party data strategies, benefitting from their trusted relationship with consumers.

Once again, publishers are touting the merits of contextual advertising.  And many publishers are building the tools to serve contextual advertising better than ever before. In fact, Vox Media launched Concert Ad Manager, a self-service tool for publishers to build and implement ad campaigns across the marketplace. Publishers using this tool include NBC Universal, Penske Media, Quartz, and others. This type of tool is extremely helpful to small and medium size publishers.

As the pandemic transformed our world, consumers searched for news and information to help them navigate the crisis. From dropping paywalls to record traffic, publishers responded, and they were reminded of the trust consumers place in them. By concentrating on consumer value, publishers can prioritize a consumer-first strategy and register growth in consumer revenue.

Advertising | Innovation | Marketing | Revenue

Key themes from the 2018 DCN Summit: trust, experimentation, diversification, and healthy paranoia

Strategies for differentiating their premium news and entertainment companies in an environment of disruption, trust issues, and monetization challenges were the focus of the annual closed-door members-only Digital Content Next (DCN) Summit held Feb. 8-9 in Miami, Florida.

DCN CEO Jason Kint updated attendees on consumer privacy, net neutrality, and press freedom policy initiatives. He said that pressure on platforms will increase this year and that advertisers will seek greater transparency. Kint cited findings from DCN’s new Distributed Content Revenue Benchmark Report, which found that publishers only garner 5% of their revenue from social platforms. However, he also touched upon the growth in paid content, on-demand video, and promising signs of sustainable advertising models.

Trust

For the digital media industry, Trust has reached a crisis level, Kint said. He and other speakers throughout the event pointed to the 2018 Edelman Trust Barometer, which reveals a low consumer perception of the media, platforms, and advertisers—particularly around digital.

An absence of trust has been a driving factor toward regulatory scrutiny in the U.S. and abroad. It has also profoundly affected digital advertising, one of the mainstays of the industry. Kint applauded DCN members for embracing DCN’s new tool for rebuilding trust: TrustX. The cooperative private programmatic marketplace serves as a collaboration platform for marketers and publishers to create innovative advertising solutions that drive measurable value and improve the consumer experience with confidence and safety at scale.

Kint was far from alone in extolling the importance of trust in the digital content marketplace, however. Fatemeh Khatibloo, principal analyst at Forrester Research cited the building blocks for trust, which include integrity, competence, transparency, privacy, and data security.

David Sable, Global Chief Executive Officer, Y&R, noted that trusted brands employ honesty, environmental sustainability, and kindness. He also pointed out that millennials are keen to identify trusted news sources. Building trust starts early, according to Sean Cohen, president, International and Digital Media, A+E Networks, citing how brands such as the History Channel have become a trusted source for students.

Brian Stelter, Katy Tur, Arianna Davis, and Jorge Ramos

While Edelman’s barometer noted a five-point jump in trust of journalists, a social media-weaponized world has given way to readers and viewers expressing anger, often anonymously and without consequences, as vividly reported by a panel of journalists— Arianna Davis of Refinery29, Jorge Ramos of Noticiero Univision, CNN’s Brian Stelter, and Katy Tur of MSNBC Live.

Brand Quality and Context

People won’t pay for brands that don’t focus on quality, noted Andrew Essex, former CEO of Tribeca Enterprises and Droga5 [pictured, top]. Quartz President and Publisher Jay Lauf also emphasized value-based selling over commodified volume selling.

Context is critical, he said, adding that marketers “are terrified” about ads appearing on an exploitive YouTube video or inadvertently funding fake news on Facebook. And Hearts & Science research on negative reach confirms advertising appearing next to content a consumer finds offensive does more harm than good according to the agency’s president Zak Treuhaft.

Sean Cohan, President, International and Digital Media, A+E Networks & Jason Kint, CEO, Digital Content Next

And, in a world dominated by memes and disembodied news delivered via social platforms, “Context is king,” according to Sean Cohan, President, International and Digital Media, A+E Networks. For example, he pointed to the History brand’s increased emphasis on providing a larger historical context for today’s news, such as the history of sports figures’ involvement in political protests.

Disruption and Opportunity

Disruption has led to a competitive marketplace imbalance as DCN member companies try to transform their business models, as Kint noted. At the same time, disruptive technologies, such as voice assistants, can create significant opportunities.

Loren Mayor, COO, NPR, spoke of the station’s mission to connect with people through storytelling journalism and is using on-demand audio and podcasting to enhance audience growth and engagement.

Smarter use of data and respectful personalization were subjects that came up in a number of conversations and presentations. More-informed data will help drive value, according to Lou Paskalis, SVP, Enterprise Media Planning, Investment and Measurement Executive, Bank of America Merrill Lynch.

Marcus East, EVP & Chief Technology Officer, National Geographic

Marcus East, EVP, Product & Technology/CTO, National Geographic, said that successful brands create personalized experiences and help consumers save time and money, create emotional connections, offer life-changing elements, and promote positive social impact.

That said, in today’s uncertain digital environment, the hallmarks of reputable journalism have reemerged as critical for consumer trust and attention.  Michael Anastasi, VP News, USA Today Network, Tennessee pointed to importance of the Indianapolis Star’s investigative coverage of U.S. Olympic gymnastics doctor Dr. Larry Nassar, which stands out in a time of local news outlets’ survival uncertainties.

Anastasi said that USA Today leverages its local/national symbiosis on to inform some of its stories. He cited the brand’s coverage of the opioid crisis across all platforms—and with national, local, and individual ramifications. The comprehensive coverage was made possible through a sponsorship from BlueCross BlueShield of Tennessee.

In addressing financial sustainability in non-profit journalism, ProPublica President Richard Tofel noted significant growth in donation-based revenues since the 2016 U.S. presidential election. The non-profit model seems to be working for ProPublica as Tofel said that they launched with a staff of 25 nine and a half years ago and now number more than 100.

Diversification and Monetization

Ed Davis, EVP & CPO, Advertising Products, Fox Networks Group

Unsurprisingly, revenue was a key topic at the Summit. And while advertising remains a critical focus, diversification was a dominant theme. In all aspects of monetization, good consumer experience and engagement were essential. As Ed Davis, EVP & CPO Advertising Products, Fox Networks Group put it: “Attention is currency.”

Maggie McLean Suniewick, President, NBCUniversal Digital Enterprises & Tracy Corrigan, Chief Strategy Officer, Dow Jones

Maggie McLean Suniewick, President, NBCUniversal Digital Enterprises, showed off the many ways the company’s Olympic coverage is tapping into a wide range of platforms to engage target audiences wherever they might be. Bloomberg Media’s initiatives include global partnerships that help it transcend the competitive U.S. market according to Scott Havens, Global Head of Digital, Bloomberg Media. And The Washington Post has launched 15 products specifically designed to engage consumer interaction according to Jarrod Dicker, The Post’s VP of Innovation and Commercial.

The History Channel is leaning into new platforms and partners with The New York Times on stories and photo spreads. Sean Cohan, President, International and Digital Media, A+E Networks said that the company is seeing doubled social engagement, significant newsletter interest, and substantial boosts in YouTube video revenues.

Marty Moe, Vox Media President, said his company focuses on finding ways to grow quality, scale, and audience across its eight brands while retaining relevancy on each platform. However, diversification brings challenges such as tracking and measuring performance on multiple platforms, noted Christy Tanner, EVP & GM, CBS News Digital CBS interactive.

Dr. Jens Mueffelmann, CEO, Axel Springer Digital Ventures GmbH, President, Axel Springer USA, said his company’s success in global acquisitions is based on later-stage investment, development and partnership. While its successful classified ad profits have stunned critics, Mueffelmann urged companies to “stay paranoid” and continue to keep a close eye on emerging digital technologies and players.

On the heels of the news that The New York Times added 157,000 digital subscriptions in the 2017 fourth quarter, pushing its subscription revenues – which comprise 60% of overall revenues – to more than $1 billion, COO Meredith Kopit Levien encouraged everyone to get into the subscription business. It’s important to understand what drives subscribers, she said. For The New York Times, it’s the resources to create better original content, including 250 daily stories, a popular crossword puzzle and a cooking app, she said, noting “our strength is as a brand.”

While challenges in trust, brand quality, disruption and diversification continue to throw roadblocks up in the news and entertainment industry, Kint emphasized that for DCN members, there is strength in numbers, citing The New York Times’ subscription victory as a victory for all DCN members because of what it symbolizes for the industry.

At the core, DCN members are focusing on what they do best and continue to innovate and experiment in order to best serve audiences.

“All of our members have a direct and trusted relationship with your audience and with your advertisers,” Kint told the packed conference room. “They come to your brands because they know what they’re going to get when they give you their valued attention or valued advertising dollars.”

Industry-Research

Publishers will diversify, platforms will tackle TV, and more media predictions for 2018

Nearly half of all editors, CEOs, and digital leaders (44%) are even more concerned with the powerful role of social media than they were a year ago, reports Reuters’ Journalism, Media & Technology: Trends & Predictions 2018. Publishers note their disappointment with social platforms, particularly with Facebook because of the platform’s role in the circulation of fake news, the lack of promised video revenue, and the decline in referral traffic to many news websites. As a result, publishers plan to be less dependent on social platforms. As one executive summarizes, “Expect more news organizations to pull out of deals with Facebook, Apple, and Snapchat that they consider are not delivering sufficient financial return, focusing instead on building more direct readership.”

Predictions for Publishers:

Restore consumer trust in journalism

Publishers are continuing to strengthen consumer trusts in news brands. Unfortunately, too often quality journalism is posted side-by side with low quality content and misleading information. Most social platforms fail to distinguish between the two. In 2018, publishers will continue to pressure social platform companies to set standards and do more to differentiate brand news content.

Less reliance on advertising

Publishes are working to diversify their revenues to ensure less dependence on advertising sales. In fact, 62% of publishers say that advertising will become less important over time. Publishers need to shift their strategies from reach and advertising engagement to subscription models and tenure.

Improve data capacity

Publishers believe that data is important to their business needs. Nearly two-thirds of publishers (62%) report that improving data capacity is their most important initiative this year. It’s also imperative for publishers to understand and comply with the European General Data Protection Regulation (GDPR) starting this May. The GDPR requires that publishers ask users for consent to use email addresses, to profile and to share their data with third parties working on their behalf.

Predictions for Social Platforms:

Expanding into TV programming

Social platforms are moving into the television business. While Facebook’s early attempts at Facebook Live failed and Facebook Watch has yet to become a must-view entertainment hub, the company is still forging ahead. Facebook is actively looking to secure broadcast programming rights and plans to develop new content to compete with Netflix and Amazon.

New social messaging offers

Growing messaging and access to news is important for social platforms. Reuters Institute data, shows messaging platforms like WhatsApp and Messenger are growing not just for messaging purposes but for accessing news as well. Facebook is launching a tween messaging app specifically targeting this demo. The idea is to draw the tweens in early and eventually expand their usage to age appropriate entertainment and education content.

Publishers and social platform alike are thinking about new business practices and monetization opportunities with their user base. Importantly, as they shift their strategies to meet 2018 goals, it’s key to keep a consumer focus, especially in the development of new content offerings, personal data information and GDPR compliance and new technology implementations.

Innovation

How AI and data are allowing the Associated Press to tap new revenue streams

In an age where exclusive content is pure gold and data is the new black gold, smart news organizations are looking for ways to unlock their frontline information and insights for maximum exposure across a multitude of platforms.

Ted Mendelsohn, AP Vice President, Commercial and Digital Markets

The Associated Press — a 170-year old news organization with teams in over 100 countries and one of the world’s most important archives of audio-visual archives of news, social history, sports, and entertainment — is going one better. It’s exploring new and rather unconventional opportunities, in areas ranging from data-mining to data journalism, to identify new markets and revenue opportunities for its wholesale and non-profit businesses.

Peggy Anne Salz, mobile analyst and Content Marketing Strategist at MobileGroove, speaks with Ted Mendelsohn, AP Vice President, Commercial and Digital Markets. They discuss the company’s mission to expand distribution of its archival content, extract value from its data, and enhance news-gathering capabilities.

PAS: On any given day, more than half the world’s population sees AP content. But that’s just one side of your business. Tell me more about your wholesale business and the opportunities you pursue.

TM: When I was brought into AP some 25 years ago, the commercial business focused on selling AP content into the federal government, corporate markets, and large clients, including Prodigy, LexisNexis, Dialog. Expanding this by identifying new markets and opportunities is very much what my job is about today.

Another part of the business is our retail business, where AP mobile comes into play. The focus is on making our own content available on AP-owned and operated sites and monetizing through advertising.

Finally, there are content services, where AP — because of its huge footprint worldwide and access to photographers and videographers — can work together with clients. It’s a service and a business opportunity that we see expanding. are exploring opportunities where brands might sponsor content like the AP Top 25 college basketball or college football rankings. There are also opportunities for companies to sponsor unique content. This might be along the lines of the top 5 things you need to know about ways you can improve health and fitness. We are open to doing more of that and that’s also where having our own platform opens a whole line of revenue and opportunities.

PAS: AP is perhaps best known for frontline, breaking news content…

TM: Yes, it’s our bread and butter. We’ve noticed that our audience is heavily engaged with our content — stories, photos and video — and that the sessions are long. In fact, in August 2017, a survey from NewsWhip showed that AP drove higher total engagement on Facebook than any of the Top 10 individual publishers in June and July. This achievement is also linked to our ongoing efforts to update our content and add value. We provide alerts, but we also add to the news content from every angle, enhancing the story with text, photos, and video.

PAS: You’re using technology to expand and enhance distribution of your content. What is the role of technology in the production of content?

TM: AI is a technology that has an impact at several levels. We’re using it, but we’re also educating the media by showing the example of how we use AI within our newsroom. A lot of our efforts around understanding and using AI in the newsroom is focused on producing the routine news, like sports scores, and have them generated through AI technology.

But it’s not just about automation; AI can open opportunities for our reporters to cover more important stories and produce the exclusive in-depth content that wins us — and our clients — audiences on mobile and other platforms. And that is what drives the higher engagement. A good example is one of our most successful stories, what we’ve been calling the “Seafood from Slaves.” Here our reporters won the Pulitzer Prize for Public Service for their investigation that exposed slavery in the Southeast Asian fishing industry.

PAS: What are the other technologies top of your radar?

TM: At one level, AP is a retail store, for lack of a better word. We focus on approaches that will allow us to appeal to our readers directly. We ‘sell’ them on our content on the platforms, such as mobile, where they want to consume it. But it’s also about understanding how other companies and platforms are going to impact how we engage audiences. A prime example here is voice and deciding how we engage with companies that are creating voice-activated content.

It means talking to the Amazons, the Apples, and the Samsungs — companies now looking for content that is driven by voice-activation. For us, it’s becoming a new way of engaging with the customer, if you will, by creating content and adjusting our content for this market and working with companies who are attracted by the content we have and the platforms we can serve.

In other words, it’s not just the technology that we use internally. It’s working with the companies who are really technology-driven and finding ways to use our content to improve their technology and, at the same time, to make our content available in new and different ways.

The number one question for AP is: how do we move our content and make our content play across the platforms? My first boss at AP used to say he wants to ride every horse in the race. And, in some ways, that’s what we’re trying to do. We are on the horse that allows us to display and distribute our content. And we are riding the horses that allow us to get our content to the companies out there that need our content to engage their customers.

PAS: AP is exploring AI, launching a VR and 360 video channel in collaboration with AMD, examining the opportunities around voice and Internet of Things. How do make choices about the companies or platforms to explore and the ones to ignore?

TM: It’s not about betting on the newest technology or the ‘Next Big Thing.’ You also have to be flexible enough to adjust to what is coming out on the market. As an industry, we couldn’t have anticipated a technology like Amazon Echo and its impact. We also couldn’t have known the content these platforms require. But once it’s gaining traction on the market, like it is now, the best advice I can give content companies is to be flexible. You cannot shut them out; you have to engage.

What do I mean by engaging? It starts with the way I organize my group. Specifically, I’ve brought people together who have a focus on vertical segments. Some are in continuous discussions with industry leaders — they are in talks with Amazon, Apple, Yahoo!, and so on. It’s not a discussion like “Oh, we have this content for you, why don’t you sign a deal with us?” It’s a dialog where we want to understand where they’re going and they’re coming back to us with insights on the tech and opportunities that have real potential.

In this Oct. 20, 2017 photo, Jamain Lee, center, looks at classmate Andre’veon Mosby at Milwaukee Math and Science Academy, a charter school in Milwaukee.

PAS: Data is hailed as the new black gold, and you have stockpiles of it. How do you view the opportunities in unlocking that data for clients?

TM: On the data side — for example, election data — we are the primary source for our clients. We’re finding that election data, even older data, is highly valuable to hedge funds. We make that data available for them to study and make whatever algorithmic assessments they feel necessary based on the data.

Data is also at the core of our edge in investigative reporting, identifying trends and news ahead of the competition. For example, an AP analysis of charter school enrollment data allowed us to expose the growing level of racial segregation in schools. Recently we reported on crime in the cities, using the data to take a different perspective. Rather than look at crime growing in cities, we used the data to examine crime in particular neighborhoods. Data allows you to see this, and so we are finding ways to make this data available for our reporters and for other organization to use.

PAS: So, data has become a new commodity?

TM: Maybe commodity is not the right word. Let’s say it’s a valuable good that we can offer and sell because other companies — businesses, financial institutions, hedge funds — are evolving to use data in ways that we don’t.

There are two ways to look at the way marketplace for data is developing. One is the opportunity at the consumer level, where more and better data can improve marketing, advertising, and understanding your audience. The other is the opportunity at the commercial level. Companies need access to data — for example, election data — to identify and understand the trends, and make investment decisions based on the combination of data.

It’s early days, and frankly, no one is exactly sure where how data will play out. But we are seeing that a number of financial institutional are looking for data to enhance their own data. It’s why I have some people on the team who are working with financial institutions, trying to understand what they need so we can extract data to make these datasets available in the way our clients want them.

PAS: Content and data — the opportunity is in being flexible in your choice of platforms and models…

TM: Correct. And the third part is being flexible in how you do business. You can’t be limited in how you do business or the kind of business terms you negotiate. All of us in the media industry have models, pricing lists and stuff like that. I threw those models right out because I realized they don’t work. The next technology comes around, and whatever pricing model you have doesn’t work. Instead, you have to adapt to change. You have to adjust your content, and your business model has to be flexible as well.

Peggy Anne Salz is the Content Marketing Strategist and Chief Analyst of Mobile Groove, a top 50 influential technology site providing custom research to the global mobile industry and consulting to tech startups. She is a frequent contributor to Forbes on the topic of mobile marketing, engagement and apps. Her work also regularly appears in a range of publications from Venture Beat to Harvard Business Review. Peggy is a top 30 Mobile Marketing influencer and a nine-time author based in Europe. Follow her @peggyanne.

Advertising | Perspectives

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

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

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

———-

Scott Bailey, President, TEN Automotive Division
@TENenthusiast

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

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

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

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

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

Steven Smith, President of Digital Media, AccuWeather
@accuweather

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Advertising | Industry-Research

Publishers increase mobile investment

Mobile is an ever-increasingly important platform in digital publishing as consumers spend more time on their devices. In fact, three-quarter of publishers (75%) stated they will increase their mobile investment in the next 12 months, reported AOL’s 2016 Publisher Outlook Report, which surveyed 300 publishers in the U.S.

Further, nearly half of the publishers plan on increasing their mobile investment up to 25% more and 10% plan on increasing their investment from 50-100% more in the next 12 months. Publishers also anticipate video ad sales to be the top revenue performer of the year.

Ad blockers, quality creative and quality experiences are top challenges publishers face today, while better audience metrics, interactive and engaging ad units, mobile-first video and faster ad loads offer big opportunities.

Publishers rank their biggest mobile opportunities as:

  1. Better audience metrics – 43%
  2. Interactive, engaging ad units – 43%
  3. Mobile-first video (creative and formatting) – 42%
  4. Faster ad loads – 42%
  5. More mobile web-based content – 42%
  6. Cross-screen tracking and measurement – 40%
  7. Customized / personalized creative – 39%
  8. More app offerings – 38%
  9. Mobile commerce – 38%
  10. Gamification of content – 27%

And rank their primary challenges as:

  1. Ad blockers – 49%
  2. Quality of consumer experience – 44%
  3. Quality of content/creative – 42%
  4. App installations – 38%
  5. Measurement deficits – 31%
  6. Platform and service costs – 30%
  7. Off platform monetization – 30%
  8. Off network traffic / audience – 27%
  9. Lagging advertising spend – 27%
  10. Inadequate revenue/ROI – 24%

Distribution platforms for content have also emerged this year. Companies like Facebook, Apple, Twitter and Snapchat are all trying to attract readers to keep using their platforms while consuming publisher’s content. Over 90% of publishers believe distributed media has had a positive effect; 53% report it’s “extremely positive.” By and large, publishers also said that syndication is vital with approximately 25-50% of their traffic coming via syndication referrals.

More and more publishers are increasingly assessing new and alternative monetization strategies beyond advertising. For now, more than 75% of publishers pursue subscription and ad supported business models. Of those focused on subscriptions, over 75% expect to grow their subscription choices in the next 12 months.

While publishers are still very dependent on advertising revenue, the way of doing business has changed. Seven in 10 publishers (71%) sell inventory via programmatic with many using a private marketplace. Private marketplaces allow publishers to offer their own inventory to buyers in a more transparent and controlled environment. More than half of publishers (56%) depend on at least one private marketplace and 28% use multiple PMPs.

Publishers continue to evolve with the times, building new technologies, developing new revenue sources and even creating internal agencies to develop new creative. Publishers must continue to re-think how people are consuming content, how to deliver it, how it lives across platform and how to monetize it beyond advertising dollars.

Perspectives | Revenue

Playing poker: betting big on the brand

Brands. Conventional wisdom is that they matter less and less in a world gone digital — that consumer media brands no longer serve as the anchor to media experiences because the tidy packaging that came from a magazine, newspaper or a TV show has been blown up. And what’s been left in its place is an endless stream of content competing for the attention of millions of goldfish swimming in social media.

The reality is that, in a world with a multitude of options just a tap away, the brand is more important than ever. More and more the brand is a proxy for trust, which represents consumer (and advertiser) confidence in value. Do I find this report from the Associated Press credible? You bet. Will I be entertained by this show on HBO? Likely. Will this new car review on The Edmunds help me with my car purchase decision?  Will this video from The Onion make me laugh? Does the AccuWeather forecast help me plan for an outing? Yes, yes, yes!

Focusing on consumer needs offers the greatest opportunities in expanding a digital media business. What needs are being left unfilled and how can your brand uniquely deliver on those needs? Meeting these needs in a reliable, ethical manner builds a valued relationship between brand and consumer. This deep relationship takes time and trust. It isn’t measured in the sort of hockey stick adoption rates crowed about in the social sphere. Media brands aren’t a value-add, they are, by definition, valued. Why do you think that so many new social media platforms lead with these media brands? They are building their credibility and trust by leveraging the credibility and trust the media brands already have.

Consider the brand a big pile of poker chips. Each poker chip represents the trust of 1,000 of your most loyal consumers. As you consider new opportunities for your brand, you’re playing those poker chips. If you play them wisely, you’ll build a larger pile of chips and have even more opportunities. If you play them haphazardly, your pile will likely shrink. It’s ok to make some big bets, just make sure you’re aware of the risks.

I’ve been asked a lot about native advertising in the past year. It seems to come up more and more given the growth of adblocking. Native advertising is nothing new. Packaging experiences for advertisers to inform, entertain or engage their targets and customers is tried and true. Your brand equity is exactly why the advertiser wants you to deliver the content for them. The trust in your brand is exactly why the consumer is open to quality native advertising within the context of your content. You’re just playing another hand of poker.

And, as the power of brands allows for native ad plays, strong media brands are able to find revenue opportunities that provide growth outside of traditional advertising streams. Sure, subscription models are terrific, but they aren’t right for every media brand, no matter how loyal the audience.

On December 1st, we’re launching an event for our DCN members called Power of Brands — I encourage anyone responsible for marketing, product innovation, digital strategy or revenue generation to attend. We’ll spend the day hearing from brands who have expanded into new revenue lines. Whether it be experiential marketing, subscription products, licensing into products or digital formats, e-learning or face-to-face events, these opportunities for growth start with a strong relationship between the consumer and the brand. And digital isn’t a simple question of disintermediation. Digital offers endless opportunities for new points of genuine connection.

Innovation | Revenue

What Drove Hearst to Invest in Ride-sharing Service Via?

Darcy Frisch, vice president of Hearst Ventures, discusses the unique model, business structure and future of Hearst Ventures’ newest investment, ride-sharing service Via.

Hearst Ventures is always on the lookout for the next big thing in the technology space that can help impact consumers’ lives. The group’s newest investment, ride-sharing company Via, shows big promise in the on-demand transportation sector and has a unique business model that provides an attractive price point and sophisticated technology that differentiates the company from the ever-expanding market competition.

Can you give us a brief background on Via?

Frisch: Via is a ride-sharing service that allows you to reserve a seat in a car using an app on your smartphone. Using Via’s app, customers drop a pin in the location where they’d like to be picked up and where they’d like to be dropped off. Via’s technology matches the request with a nearby vehicle that can fulfill the ride, and dynamically coordinates the route to include other users going in the same direction.

We think there is pent-up demand for transportation alternatives in Manhattan and other major metro areas. Via offers a solution to riders who want to share the cost of their ride, but are looking for, and willing to pay for, more convenience and comfort than what is currently offered by mass transit.

What Hearst Ventures finds particularly compelling about Via is its software platform: an automated dynamic routing system optimized for many variables ranging from traffic conditions to predicted demand along routes traveled. The software—not the vehicle driver—chooses the route and ensures that the customer will always be picked up and dropped off within two blocks of their pin drops. It automatically communicates critical information about the location of the vehicle as it approaches and clearly instructs the customer, through the app, on where to meet their driver and vehicle.

Can you talk a bit about Via’s plans for expansion?

Frisch: Via has been expanding its service in Manhattan gradually over the past year or so and demand for the service has been extraordinary. At the time Hearst invested, service was operating limited hours and in a zone from 32nd Street to 110th Street. Very recently, Via announced that it was extending its hours of operation to be 6:30 a.m.-9 p.m. and expanding its service zone to cover from 14th Street to 110th Street, river to river. Via also has plans to expand into other metro areas in the U.S., and eventually internationally. The first two targets will likely be Chicago and Washington, D.C.

Tell us a little about Via’s pricing model and how the company keeps costs so low.

Frisch: There is a pre-pay option on the app where customers can use money they have already loaded, at the five dollar per-ride price. If customers pay for each individual ride, the cost is seven dollars per ride. If there is more than one person being picked up, each additional rider is charged at 50 percent of your per-ride price. The company keeps the cost low by matching vehicle supply and customer demand. The drivers are independent contractors, licensed by the New York Taxi and Limousine Commission, and are called to work based on what Via expects demand to be on a given day, at a given time. Fully utilized, a vehicle can make three to three and a half loaded trips per hour. Ideally, Via’s vehicles will run at full capacity, but there will always be times of less-than-full utilization. The supply of drivers and vehicles is being managed to grow with demand for the service. The two will expand together.

Tell us more about the founders and the team behind Via.

Frisch: The founders, Daniel Ramot and Oren Shoval, are impressive entrepreneurs. In their home country of Israel, they grew up with Sheruts—shared taxis and vans—that are a popular and effective means of transportation. Ramot and Shoval are both graduates of the elite Talpiot program of the Israel Defense Forces, and clearly have the engineering skills, training and experience that made them able to build the Via technology and successfully roll out the service in New York. Their team is divided between New York and Tel Aviv. The engineering team resides in Tel Aviv, under Shoval, and the operations and marketing teams are based here in New York with Ramot.

What separates Via from some of its competitors?

Frisch: We think there is a lot of room for new transportation solutions in Manhattan. Via is offering a new type of service that combines the low price and sharing aspects of mass transit with the personalization and convenience of a for hire taxi or limo ride. Also, the software and technology platform that I described before is a defensible advantage that Via has over its competitors.

What about Via ultimately made it an attractive investment for Hearst?

Frisch: Hearst Ventures has been interested in on-demand service models and we have spent a good deal of time thinking about these businesses. On-demand transportation is particularly interesting because it is a very large market opportunity that is in its early days of disruption by smartphone hailing services like Uber and Lyft. We spent a long time thinking about the market, and Hearst President and CEO Steve Swartz challenged us to find a company for investment that offered a real competitive advantage to the market counterparts. When I came across Via, I honed-in on its technology platform as something that would differentiate the service. The automated routing system that enables the shared service and the low price point is truly groundbreaking.

Via’s management team is rock solid and their business model is new and different. The timing feels right, since well-funded companies already in the space have educated both the drivers and riders that it is very easy and convenient to transact using smartphones. With this new round of funding, Via can expand and grow more quickly. We are very excited about working with them as they do.

VIA

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