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Industry-Research

News publishers need to rethink their digital platform strategies

A new WAN-IFRA analysis finds that publishers receive minimal revenues from distributed content on Facebook. The report, Reality-Check — making money with Facebook, focuses on new business challenges for publishers, specifically the rise of digital platforms like Facebook. The analysis concentrates on Facebook since it’s one of the most popular social network in the world with 2 billion users. It also owns three leading networks — Messenger, WhatsApp, and Instagram. Facebook is now a source of news for half of all adults in major countries, and it is already the biggest source of referral traffic to news websites.

Disruption

Facebook’s technology matches users with other users, content providers and advertisers. The more people use it, the more useful and valuable it becomes for all constituents.

Grzegorz “Greg” Piechota, author of the report, identifies three distinct manners in which digital platforms disrupted the news media industry: 1) separating products and services, 2) sidestepping access to audiences, and 3) disengaging content consumption from the advertisements that fund the content. Facebook masterfully unbundled articles and headlines on publishers’ websites, offering pieces of content without seeing the publisher’s homepage or website.

The platform also blended professional and amateur journalists and treated them as equal, thereby competing for the same consumer attention. Facebook provided just enough publisher content that consumers can sidestep a publishers’ website.

Overall, news publishers cannot rely solely on distributed content monetization programs. Facebook and other digital platforms. WAN-IFRA members report that Facebook contributes on average 7% of their digital business revenue, consistent with learnings from DCN’s Distributed Content Revenue Report released earlier this year. Interestingly, Facebook appears to share proportionally less revenue with content creators than other platforms do.

Aligning strategies

News publishers should continue to build diversified revenue streams to include digital subscriptions, e-commerce and branded content. Importantly, they can no longer rely on the most common digital-publishing business model based on advertising revenue.

News publishers should address not only Facebook, but emerging digital disruptors. Forward thinking is critical to serve and engage new consumer news behavior.

Important considerations

Publishers need to assess Facebook’s new programs from both consumer and business vantage points. Facebook plans to let users subscribe to a publisher’s content directly from their mobile app. Users will be able to access contents behind paywalls. It’s initial testing is set to begin in October 2017.

However, there are still many questions to be answered before news publishers decide whether to participate:

  • Will consumers subscribe to the news publication or Facebook?
  • Who sets the price?
  • Will Facebook receive a revenue share?
  • How does the subscriber access the content – via Instant Articles or the publisher site?
  • What data will Facebook share with the publisher?

Digital platforms transformed business models and created new products to attract consumers, publishers, and advertisers. Notably, news publishers are taking steps to embrace new business-models, explore product innovation, diversify revenue sources. As publishers continue to explore the most effective ways to work with platforms, it is important to shift focus from audience development to customer acquisition and retention.

 

Perspectives

What the power to block means for freedom of speech

Our President relentlessly attacked the press for 30 minutes on Tuesday evening.

Make no mistake, Trump’s words and blatant disregard for the free media sends chilling signals and has a ripple effect with real consequences for reporters around the globe. He has that power. On the other hand, MSNBC exercised its right to effectively block Trump’s attempt to rewrite Charlottesville history by switching over to its studio for context and commentary about half an hour into his remarks.

It should be noted that you—the audience—have the right to turn off MSNBC if you don’t approve of its broadcast. This is how a free media works. Much the same, you can choose to read Trump’s tweets, ignore them, or block his tweets if you don’t want to see them at all. This is how open technology works. You have that power.

But in Silicon Valley, where technology companies pretend to stay “neutral” to avoid these messy issues, things are only getting more complicated. The platforms continue to assert that they are not media companies, or at least not “traditional” media . And this distinction is important because, as Josh Constine pointed out, pure technology platforms receive greater immunity regarding the content they serve, both legally and in the public eye. Media companies are considered more directly responsible for their content although ironically the platforms often get undue credit for delivering it.

Yet—in part because of moral outrage, and pressure from media watchdogs and international governments—tech platforms do step up willy-nilly to exert their control over content. Well-intentioned or not, the loose rules and vague promises of technology companies threaten to block the important role of the free media and the ability of the public to stay informed.

Closed for Good

While our President was struggling to adjust his messaging to speak out against neo-Nazis and white nationalists marching in Charlottesville, these abhorrent humans had their favorite website, Daily Stormer, effectively shut down.

“Literally, I woke up in a bad mood and decided someone shouldn’t be allowed on the Internet.
No one should have that power.”

These are the words of the CEO of network security company CloudFare, who decided early last week to remove its protection and stop defending an indefensible website as a client. This followed after two other companies, GoDaddy and Google, refused to provide DNS services for Daily Stormer. These technology companies have the ability to silence this viewpoint. And they did.

However, the Electronic Frontier Foundation (EFF) called these moves “dangerous.” I agree. Take a look at EFF’s Free Speech weak links and you’ve got a jackpot situation of intermediary technology companies, and their CEOs, that possess the ability to shut down a site. No one should have that power.

Make no mistake, I’m as pleased as anyone that the website Daily Stormer was reduced to zero audience. I do not have an ounce of worry for their fate and I do hope the site sinks to the bottom of the garbage heap that is the dead web. But there is an underlying concern that has been exposed here.

“One of the problems with defending free speech,” the celebrated author Salman Rushdie said, “is you often have to defend people that you find to be outrageous and unpleasant and disgusting.”

Right. And thank you to Margaret Sullivan for putting this statement front and center as she weighed in on Charlottesville this week.

As the EFF wrote: “Protecting free speech is not something we do because we agree with all of the speech that gets protected. We do it because we believe that no one—not the government and not private commercial enterprises—should decide who gets to speak and who doesn’t.”

Simply put, no intermediary should be able to single-handedly shut down a website. Unfortunately, our beloved open web appears to be broken. And because of flaws in its own brilliant design, they can.

Neutral or Not

The FCC is in the final step of throwing out the Open Internet Order, which will effectively gut Net Neutrality. Make no mistake, this will allow a broadband provider to block content it doesn’t like. Broadband providers have promised they would never do this, and I trust that most, when left to their own judgment, will not. But we need only to look towards the Middle East and China for the reasons we must not sit idle and blindly trust such promises. No one should have that power.

Much the same, it is impossible to run a successful web media business without being discoverable on Google Search. Any publisher who turns down Google’s business rules for search is effectively off the grid – much the same as the Daily Stormer. No one should have that power.

Ultimately, we need a modern framework for when it’s acceptable for an intermediary to shut down a website or silence a voice. Search and social platforms are inexorably intertwined in our web experiences. So, they must—like the media companies with whom they so greatly rely upon—fully grasp and support freedom of speech and the open web.

Power and Social Responsibility

In fact, we need a new framework for public officials on Twitter. Right now, we have a situation where White House spokespeople, from the controversial advisor Sebastian Gorka to the President himself, block individual Twitter users. This is simply not the same as an individual blocking a troll. This is a case of public officials silencing an emerging channel for the public discourse that is a pillar of our system.

But beyond blocking individuals, politicians are also blocking reporters on Twitter. This shouldn’t be seen differently than a reporter blocked from a White House press briefing. Twitter is part of the modern media ecosystem and in fact has been declared official statements of the White House. And all media has a responsibility to share the statements of political officials with the public. Yet somehow, we find ourselves in a place where the single American who wields the most power is now able to block the public from reading and engaging through our modern media. No one should have that power.

Even if you accept the idea that public officials should have the right to block accounts on Twitter (which I don’t) then there at least needs to be public disclosure of the accounts they’ve blocked. It is significant that any blocked users are permanently unable to read the official statements for these officials. No one should have that power.

The Internet has created a global forum for communication, expression, and the dissemination of information. It has triggered the emergence of exciting—and dispiriting, even dangerous—technologies. It has transformed the very definition of media. Yet none of these developments has diminished the importance of the First Amendment. Technology evolves. The medium for media evolves. But our commitment to our fundamental American values must remain steadfast. This is far from the last time we will be called upon to consider these values in a new context. Let us do so in a way that supports progress along with public discourse and an open Internet. Therein lies the real power.

Innovation | Revenue

When shift happens at Telemundo, opportunity knocks

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

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

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

Authentic content and ongoing relationships

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

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

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

Much Ado about innovation and monetization

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

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

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

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

Advertising | Perspectives

Media alliances take on the Google-Facebook duopoly

The Google-Facebook digital advertising duopoly seems like a fait accompli at this point. So too is less-than-favorable revenue that publishers get from them, as a leaked DCN report earlier this year indicated. So it’s not surprising that publishers keep trying to team up to take on the online tech giants. The question is whether these efforts will amount to much more than throwing rocks at a Google bus.

Before we get into the latest efforts, let’s look at the numbers: eMarketer’s latest forecast finds that Google and Facebook continue to dominate in 2017. Online advertising in the U.S. is expected to grow 16% this year to reach $83 billion, and the two companies stand to earn the most from this growth. Google will account for 40.7% of U.S. digital ad revenues in 2017—more than double Facebook’s share. And Google will outperform on search and grow this year to seize 78% of all U.S. search ad revenues. Facebook, which rules U.S. online display ads, will grow to control 39.1% of the U.S. display market.

New Alliances

Condé Nast recently teamed up with Vox and NBCUniversal to join their year-old effort, Concert. The premium advertising marketplace was meant to help advertisers get better combined audience. It promises to reach over 200 million online consumers — including 99% of all millennials, according to the comScore data that the companies cite. As part of their new team effort with Condé Nast on board, Concert will develop new ad products catered around mobile video and branded content. Vox and NBCUniversal also now benefit from the addition of Condé Nast’s behavioral data-tracking platform Spire — evidence that these companies are thinking about a win-win situation for everyone, not just themselves.

Meanwhile, just as YouTube and Facebook have made moves into video and TV — or what some people are suggesting is “the new TV” — Fox Network Group, Turner and Viacom have created a new consortium called OpenAP. The grouping is meant to align offerings but also help navigate the tricky territory of audience measurement. The group says that a neutral third-party auditor will run OpenAP and attacks what it calls “proprietary walled garden, self-governed reporting” — a likely nudge at Facebook and its measurement flubs.

The team effort is also necessary for the TV industry to maintain a semblance of control in an environment where digital is taking hold. As OpenAP’s letter states:

“OpenAP will be a single platform that agencies and advertisers can integrate with their own planning systems to activate advanced audience targeting and independent measurement within premium content. That premium content reaches 93% of all television audiences today, and we hope it will expand if additional publishers join OpenAP in the future. This consortium is a necessity to move our industry forward.”

And there have also been newspaper alliances. The holding companies of The Daily Mail, The Guardian, The Telegraph, Mirror, The Sun, Express, Metro and The Daily Star in the U.K. are involved in a collaborative effort called “Project Juno” to take on the tech behemoths. Meanwhile, another U.K. body representing national and local publishers, the News Media Association (NMA), has called for an investigation into Google and Facebook’s online dominance because of their roles in helping to distribute fake news. This serves as a reminder of the perils of a news supply chain running on just a couple of distributors.

Coopetition Revisited

This isn’t the first effort at alliances to take on Facebook and Google. As I noted in a 2015 DCN column, coopetition — when companies put competition aside and cooperate for the greater good — has long been known in Silicon Valley. But for all the attention it attracted then, the Pangaea programmatic alliance of different newspaper publishers — including The Guardian, Financial Times, CNN International, Reuters and The Economist — has been fairly silent.

So too has the Truffle Pig advertising model that Snapchat, The Daily Mail and WPP became involved with in 2015. Like the real-life truffle hog it was named for, that advertising agency was meant to use its heightened sense of smell to sniff out and market content in a way only it could. As Digiday’s Jessica Davies pointed out last summer, “Such alliances have historically run into problems around infighting, lethargy and incompatible data and systems.”

And while some publishers are teaming up against Facebook and Google, others are imagining a different kind of coopetition altogether: working with them instead of against them. Some may refer to this as a “frog in boiling water” mentality (in which the publisher eventually dies). However former editor-in-chief of The Guardian Alan Rusbridger, is among those to suggest otherwise. His take is that it’s obvious the two companies will maintain an authority no matter how hard publishers resist. “I can’t think of an editor that can afford to not be on Facebook; that would be suicidal because a third to half of your audience is there,” Rusbridger has said. And some local news partnership groups are following suit.

In the end, the alliances are good for publishers who can share knowledge and audiences and get more attention from marketers. But the idea that they will somehow supplant or topple tech dominance is wrong-headed. In the end, it will take cooperation between publishers, as well as between publishers and tech companies, to succeed in a disruptive era.

Industry-Research

How publishers’ engagement on social platforms has evolved

These days, most digital publishers participate in some form of distributed content. Social strategy provides publishers with an opportunity to grow referrals, reach new audiences and engage readers. In the new report, “What we’ve learnt from three years of social data,” NewsWhip used its social analytics to identify what works best on social platforms by specifically looking at the best way toward long-term development.

Facebook

There are a variety of publishers that have high levels of monthly engagement on Facebook. These leaders of engagement are no longer restricted to organizations like Buzzfeed or the Huffington Post. In fact, Facebook engagement rates among publishers are now more evenly matched month to month. In 2014, the two of the Top 10 engagement sites, Buzzfeed and Huffington Post comprised 80% of all engagements compared to this year when the top two two sites, IndiaTimes.com and NBC comprise only 20% of all engagements.

There appear to be two publisher models that increasingly earn high levels of engagement on Facebook and other social platforms:

  • The first model showcases digital publishers who create volume with high monthly article counts. They have different sites customized for different audiences, be it by geographic areas or by interest groups. These publishers reach large digital audiences both nationally and internationally. They also have their own social media teams responsible for reaching and engaging audiences.
  • The second model showcases publishers with smaller article outputs but that receive higher average engagement rates. These sites often rely on writers or the specialty of their coverage to engage readers. Examples of this model are the New York Times and CNN.

Social media offers publishers, big and small, a way to directly touch hard to reach audiences.

Instagram

Instagram is a visual medium and a great attention grabber. Interestingly, eight in 10 of its users are from outside the U.S. A growing focus on Instagram is the video marketplace. Last March, the company increased its video length from 15 seconds to 60 seconds. Compelling practices for videos postings include:

  1. Keeping videos short and to the point,
  2. Using on-screen captions for better storytelling,
  3. Utilizing the regular post caption capabilities to offer details about the story, and
  4. Using square format option instead of landscapes to appeal to mobile users.

Linkedin

Linkedin is a particularly good distribution channel for business sites. Recommendations that achieve more shares on Linkedin include those with descriptive headlines, relatable to others’ work life and posting to groups (which can also help grow followers).

Pinterest

Pinterest is a great vehicle for specialty publishers such as beauty and fashion, lifestyle, art, etc. The popular publishers here are often those that provide a blog and offer stories behind their pins. Interestingly, Pinterest is very appealing to publishers and brands because its users are noted having a higher intent-to-purchase, something that is attractive to publishers and brands alike.

Social media platforms offer publishers an opportunity to be seen by users outside the footprint of their site. It’s an opportunity for publishers to identify and supply readers with quality and trusted content. It’s critical for publishers and brands to think about the audience and produce content that is of interest to the platform’s users.

Perspectives | Video

Facebook shifts focus from live-streaming video to long-form

Although Facebook paid millions to the likes of the New York Times and BuzzFeed to live stream a certain number of videos — a $50 million investment altogether — publishers now say Facebook is talking to them less about live video and more about premium quality content, according to Recode’s Kurt Wagner.

“Our goal is to kick-start an ecosystem of partner content for the tab, so we’re exploring funding some seed video content, including original and licensed scripted, unscripted and sports content, that takes advantage of mobile and the social interaction unique to Facebook,” Facebook’s Ricky Van Veen said recently in a statement regarding original content.

While the one-year contracts haven’t yet ended, and there’s no official word from Facebook about them, it appears that they may have been a short term strategy for the platform. It also turns out many publishers aren’t interested in renewing these one-year Facebook Live contracts either. Some told Recode that Facebook’s compensation wasn’t enough to justify the time and resources needed to produce the live streams. So what’s the future of live-streaming on Facebook, and how can publishers get on board the new push for long-form video?

Live-Streaming Is Here to Stay
While some may interpret the news as Facebook admitting that live-streaming was never a profitable prospect, all arrows point to live-streaming’s staying power. Live viewership among Internet users decreased slightly in the second half of 2016. YouTube and Snapchat experienced small declines in market share of live-streaming, but Facebook’s market share actually rose from 14% to 17% between June and November of last year, according to eMarketer, suggesting that Facebook is emerging as a leader in a market that’s still in its infancy.

Meanwhile, Facebook has announced a slew of new tools and features for Live: a video tab on the Facebook app that makes spotting live videos easier (which helps fight against the algorithms that might keep viewership at bay); the ability to broadcast onto Facebook straight from a web browser (which is sure to keep Facebook competitive against the video bloggers doing this on YouTube); a “Live Contributor” role Page admins can assign people to broadcast live from the page; and enhanced live video metrics for people with at least 5,000 followers. Facebook is also planning to introduce mid-roll advertising, which will finally offer some payoffs for publishers who haven’t yet profited from these video streams.

Mediocre Content from Publishers Can’t Match Viral Hits
So it’s not necessarily that Facebook doesn’t believe publishers will now stay clear from Live altogether. In a breaking news moment, Live is the best way to reach as many as 1.7 billion viewers at once. Think of last year’s coup attempt in Turkey, or when House Democrats staged a sit-in to push for gun control.

Let’s also not overlookthe shooting of Philando Castile by police, and his girlfriend Diamond Reynolds’ Facebook Live stream in the immediate aftermath. Or even Chewbacca Mom, laughing in the glory of her own happiness, and the subsequent viral sensation she became.

When publishers slog through Facebook Live like it’s a chore, it shows. Hosts wear their ambivalence on their faces, and the quality is mediocre at best. With the abundance of competing content, users have no incentive to watch a live-stream. When individuals take to Facebook Live, however, it’s different. There’s no ambivalence. There’s the necessity that comes from immediacy. And the result is connection.

Brands Are Already Succeeding with Long-Form Video
Connection is the reason why some brands would prefer long-form video anyway. It often seems like Facebook is calling the shots these days when it comes to influencing media. But on-demand video services and live streaming are already pushing marketers to think beyond short 30-second ads, and toward advertising that is, essentially, stand-alone entertainment that connects with the viewer.

Case in point: Luxury brands like Burberry and BMW. Short commercials, which helps boost brand recognition, aren’t as important to them as it is to lesser known companies. They have loyal customers who are more concerned with the identity of the product — and identity comes from the perspectives, narratives and dramas you can present in what are basically short films. It’s a shift within marketing — “being” becomes more important than “having.”

Meanwhile, remember that ad blockers are some of the most popular mobile app and web extensions, with one out of every five smartphone users blocking advertising on web browsers, according to PageFair. Again, it goes back to the cable industry analogy. Just as viewers make time for premium long-form programming, getting them to turn off ad blockers requires making quality advertising! Because web advertising has become so targeted, there’s also more potential to experiment with advertising lengths.

So even though live-streaming on Facebook has been hit-and-miss so far, these could just be growing pains: Publishers will likely continue efforts with live-streaming and creating their own long-form video for editorial—and let’s not forget their focus on monetizing, regardless of format or platform.

 

Advertising | Industry-Research

Today’s challenges offer an opportunity to rebuild trust in digital media

With trust in mass media at a record low, publishers look to 2017 as an opportunity to distinguish quality journalism from the fake news landscape and bot traffic of big tech platforms.

CEOs, editors and digital leaders today recognize both the opportunities and the challenges in 2017. Reuters Institute surveyed 143 senior publishing executives in 24 countries to recognize current business sentiment, uncover trends and identify new developments in the digital marketplace. Interestingly, Reuters found that more than two-thirds (70%) of executives believe fake news offers them a chance to strengthened their brands. More than half (56%) say that Facebook Messenger will be an “important/very important” part of their offsite initiatives this year (53% for WhatsApp and 49% for Snapchat). And at the same time, just under half (46%) of these same respondents are more worried today than a year ago, about the role of offsite platforms.

In Reuters Institute’s annual predictions report, the key trends identified for 2017 include:

1. Addressing fake news

  • Fact-checking news outlets becomes the new norm.
  • Platform and algorithm changes allowing for easier reporting of false news (and feeding these signals back into the core algorithms so these sources get devalued).
  • Regulation threats to remove fake news from sites.
  • Algorithms are expected to challenge our bias.
  • Fighting for quality news brands.

2. Redefining publishers’ relationship with platforms

  • Publishers fight back by creating platforms of their own (e.g. Schibsted, started its own platforms for content and advertising to create the scale and data competence to compete with Facebook).
  • Platforms pay hard cash for content.
  • Mergers and acquisitions happen more often as scale will mean operating across multiple platforms.

3. Digital advertising and sustainable business models

  • Subscription payments will focus more about membership and less about paywalls. News publishers, especially, will need to attract new customers, offer new pay services and earn more money from their current subscribers.
  • Data, loyalty and personalization will help with converting unidentified web users into loyal customers by creating more relevant and personal experiences.
  • Mobile alerts and the battle for locked screens signifies the shift to mobile notifications to attract consumers back to apps and websites.
  • Acceptable ads and ad-blocking apply pressure on the marketplace to ensure a more positive user experience with non-intrusive advertising.
  • Sponsored content replaces the displayad model.
  • Pop-up newspapers and magazines will offer in-depth coverage on certain topics but for only a limited period of time.

4. Messaging applications and news bots

  • Voice news bots with voice-activated platforms gain strong penetration (e.g. Alexa and Google Home).
  • Fact-checking bots are activated (e.g. Full Fact, a UK based company, is already looking to developing a service that fact checks live press conferences).
  • Conversational commerce emerges (e.g. Crosby, a travel bot service, that reads your email or group messaging conversations and send you recommendations for where to eat, what to do and when to leave for the airport).

5. Voice as an operating system and the rebirth of audio

  • Podcasts and audio books get a big boost in the car.
  • Improvements to data and advertising around podcasts lead to significant investments by publishers. A new measurement system form Nielsen’s and a Swedish start-up platform Acast offer metrics for podcasts to support advertising models.
  • Businesses start to deploy Amazon Echo and Google Home speakers (e.g. hotels use voice-controlled devices to enable guests to order room service, check the weather and find TV channels).

6. Online video and the future of TV

  • Disillusion with Facebook Live shifts a live focus towards sport and exclusive music, both strong vehicles to attract audiences and advertisers.
  • Oversupply of short form video leads to falling advertising premiums.
  • New opportunities with feature-based videos for brands integrate messages into videos.
  • Video-selfies to experiment with new fantastical filters (e.g. Splash is a new app that allows you to create and annotate 360-degree experiences).

7. The blurring of television and online video

  • Top content will increasingly be watched on big screens.
  • Competition for talent and rights heats up to drive new subscription and retain existing users.
  • News bulletins lose audiences triggers new ways to appeal to young (e.g. CNN acquired video-sharing app start-up Beme, co-founded by YouTube creator Casey Neistat, is building a new brand around distinctive reporting and commentary for millennials).
  • New cross-platform metrics for TV.

8. Virtual Reality (VR), Augmented Reality (AR) and Mixed Reality (MR)

  • New reality tech offers huge potential to shape experiences for entertainment, education and commerce. Forecasters suggest around 30m devices will be sold by 2020 generating revenue of around $21 billion.

9. AI and algorithms under fire (e.g. An example gone sour was Microsoft’s friendly AI driven chatbot Tay. Within its first 24 hours on Twitter with Millennials, it was spouting offensive and racist messages such as “Hitler was right”).

10. Automation and a jobless future means robo journalism on the way

  • More automated stories.
  • Intelligent content production systems.
  • Computer and networked assisted investigations.
  • Filters and alerts are being developed to help manage the information overload (e.g. SamDesk and Dataminr are deployed in newsrooms to pinpoint and manage breaking news in social networks).

11. Cyber-Wars, and Personal Security

  • Encryption and surveillance are on the rise.

12. New technology

  • Sharper screens, fold out phones, better batteries.
  • Faster and more reliable networks (e.g. 5G).
  • Clothes as a platform with wearable technology.
  • Biometrics, the end of passwords and checkout-free shopping. A new shopping experience, Amazon Go, that automatically detects when products are taken from or returned to the shelves using computer vision and sensor fusion.

13. Start-ups to watch

  • Cheddar is a new business news video network for millennial. Founder Jon Steinberg of Buzzfeed is charging $6.99 for premium services on its own website and is looking to drive carriage fees from services like Facebook Live, Twitter and Netflix.
  • Zipline is a small robot airplane designed to carry vaccines, medicine and blood in developing countries.
  • Houseparty is a new group video chat, up to 8 people can chat at a time, from the creators of Meerkat.
  • Accompany aims to provide an automated briefing of all the information you need before you walk into any meeting including relevant files, email conversations with attendees, details about their lives sucked from the web plus up-to-date information on company performance.

2017 provides many opportunities for publishers to rebuild consumer trust in digital media. The Reuters Institute predictions suggest that publishers must help scrub the digital environment from bot traffic, annoying ads and fake or misleading news. They must hold themselves and others responsible and keep a watchful eye on the algorithmic accountability tied to the digital experience. Importantly, publishers must continue to build their digital brand and diversify their revenue streams beyond digital display advertising.

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.

Perspectives

Stamping out fake news will take collaboration by platforms and publishers

Since Donald J. Trump became president-elect of the United States, attention on “fake news,” its role during the U.S. election, its contribution to social media echo chambers (and subsequently, our understanding of reality) has taken America by storm. By one professor’s estimate, at least 120 fake news sites exist. Apparently, fake news entrepreneurs can earn anywhere from $10,000 a month, to $3,000 a day—even as much as $10,000 a day from Google AdSense.

Facebook’s role as the garden where these fake news “insects” roam wild is under even more scrutiny, as is the payment mechanisms from Google. Just what these companies ought to do, though, and how publishers can assist with their efforts, has been a trial-and-error process that leaves few, if any, industry analysts satisfied in the current hyper-partisan, “post-truth” world. But some common themes have emerged in the search for solutions.

First, Admit There’s a Problem
One is that the leaders of these tech companies must acknowledge with resolute conviction that they do contribute to the spread of misinformation. Facebook CEO Mark Zuckerberg immediately denied the claim that Facebook played a major role in the elections and declared that “more than 99 percent of what people see is authentic.” Six days later, after more intense coverage on the issue—including word that a renegade group of workers within Facebook had formed a task force to deal with the problem—Zuckerberg wrote a more thoughtful post on Facebook, outlining some of the projects in motion to mete out fake news.

“We do not want to be arbiters of truth ourselves, but instead rely on our community and trusted third parties,” he wrote before specifying efforts like third party verification from fact-checkers and improvements on the quality of “related articles.” “Disrupting fake news economics” is also a goal, and Facebook updated its Audience Network policy as well to align with that. Now, it states “it will not display ads in websites or mobile apps that hold fake news,” as Adweek’s Marty Swant and Christopher Heine reported.

Google too revealed it was working on policy changes to keep fake news sites from using its AdSense advertising network. The new mandate pressures publishers to prove their legitimacy. “Moving forward, we will restrict ad serving on pages that misrepresent, misstate, or conceal information about the publisher, the publisher’s content, or the primary purpose of the web property,” Google said.

Second, Take Concrete, Transparent Steps
The moves are not quite enough, though, according to DCN CEO Jason Kint. In a letter to Facebook CEO Mark Zuckerberg and Google CEO Sundar Pichai, Kint argues that the two companies owe both users and democracy far more, especially with their resources. “Wouldn’t it make sense for you to pursue cleaning up the garbage littering the digital media ecosystem with the same excitement, investment and vigilance with which you pursue these huge, visionary projects?” Klint wrote. “We don’t see that in your public statements or actions.”

He also underscored the necessity of transparency. Zuckerberg’s post, for example, had left some industry analysts wondering—who are the independent fact-checkers Facebook will be working with? When news broke that the company was secretly developing censorship tools to enter China, many in the tech industry bristled at why it couldn’t devote that kind of stewardship to curbing fake news.

Zeynep Tufekci, an associate professor at the University of North Carolina School of Information and Library Science, stressed that Facebook needs to open up its walled garden of data on fake news and its influence. “Unfortunately, Facebook exercises complete control over access to this data by independent researchers,” she wrote in an Op-Ed for the New York Times. “It’s as if tobacco companies controlled access to all medical and hospital records.”

Roles for Publishers, Ad Tech
If Facebook is akin to a tobacco company, that means that publishers and news outlets must work harder to depend less on Facebook and more on alternative means of distribution, to reduce the monopoly it has over publishers. Publishers also need to look internally at themselves. Fraudulent ads have been known to appear on the New York Times, for example, because human oversight of programmatic advertising is often lacking. Even if the Times has one of the “cleanest ad experiences in the publishing business,” as public editor Liz Spayd wrote, the Times should do more to ensure this stepsister of fake news doesn’t appear.

Ad tech firms, who tend to take a “who am I to decide?” approach to fake news, as Digiday’s Lucia Moses wrote, might also want to focus less on the dollars earned and have an empathy check. Perhaps they could take a tip from AppNexus Inc., which operates one of the biggest digital advertising services. The company did a “human audit” of the so-called alt-right website Breitbart News, found it violated hate speech rules, and so barred Breitbart from using its ad tech service. Even if AppNexus wasn’t looking at fake news, per se, its hard scrutiny shows how firms can be serious about the range of issues it has presented.

The publishing and platform businesses ultimately serve their users. For publishers to truly emphasize facts in the click-bait, competitive nature of the web, they need to prime their audiences with less of an emotional reaction toward consuming information, and write headlines and news alerts appropriately instead of amplifying false claims. That also requires much-needed media literacy for all of us, especially in light of news that students cannot identify fake news.

Indeed, no one technology company or publisher can save us now. This is a group effort.

Perspectives

The case for working with Facebook instead of railing against it

Facebook has become “public enemy number one” for journalists, not to mention a “giant that may eat us.” And that’s just the Facebook business model of accumulating a massive global audience and then serving targeted ads to them in the news feed and videos—while controlling who sees what and deciding which content should be censored.

There’s also Facebook’s well documented missteps with Trending Topics, hiring low-level editors in poor working conditions and then letting them go when the algorithm was “trained” to pick top stories. Then there’s its many run-ins over data collection. And the most recent black eye for Facebook came when it admitted flubbing video metrics on its platform. Facebook acknowledged in its advertiser support page last month that when it came to the “average duration of video viewed,” it had only been counting views that lasted three seconds or longer. This discrepancy between its stated definition of the average duration of the video viewed with its calculation in practice means that Facebook exaggerated its video views for close to two years.

Oops.

And yet, I remain optimistic that Facebook is far from public enemy number one for publishers, journalism or democracy. And it makes absolutely no sense to call out the platform for its errors without also trying to help make it better.

The Google Example
It wasn’t so long ago, about 2010, when we had another primary public enemy for the media and its name was Google. European media companies were up in arms over Google indexing their web pages, and Rupert Murdoch called Google a “parasite” and “content kleptomaniac” then. Mark Cuban called Google and content aggregators “vampires, they just suck on your blood.”

News Corp. took the extraordinary step of removing its content from the Google search engine. But two years later, the company reversed course because of fears that its newspapers were losing influence by not being in Google search. This is instructive because if news publishers believe they can just remove themselves from Facebook, where so many people get their news, then they are going to find themselves on an island.

Positive Steps
Facebook is the current “enemy,” but there’s also Twitter, YouTube, Snapchat, LinkedIn and many, many others—all of which tend to come and go. The reality is that smart publishers realize that they need to distribute their content natively wherever their audience wants to consume it.  Rather than bemoan a loss of gatekeeping power, they need to suck it up and start doing the hard work of collaborating with the platforms to find better ways to work together.

Early on, Google didn’t really understand its power with the media, but eventually it became more open, and has boosted its efforts with news media through Google News Lab and a series of training opportunities for newsrooms. The same thing will happen at Facebook. Why? Because Facebook will lose its place in the media hierarchy if it doesn’t get its act together. People will leave the platform if the experience doesn’t feel right or trustworthy.

At the recent ONA conference in Denver, Facebook dominated the proceedings as the top sponsor, including a large presence in the Midway, with its logo literally up in the rafters. I mentioned that to a top Facebook media person in their booth and he said, “People complained about us being too opaque so here we are!”

He also pointed out that Facebook was hiring for its media partnerships team, with various job openings already posted for New York, including a person who will work specifically with local publishers. This is not the behavior of a platform dedicated to killing journalism and ruining democracy. And let’s face it: There’s a lot in it for Facebook to have good relationships with companies that produce the content people so readily consume on their platform.

The bottom line is that railing against Facebook’s power and clumsy use of it does little to improve the situation.  What makes a lot more sense is turning down the rhetoric, rolling up our sleeves and figuring out how to educate Facebook on its issues, and find ways to open the lines of communication and do better moving forward.

I’ve already begun this work with a private roundtable last May at Bloomberg with top platforms and publishers, which led to a Special Series on MediaShift and a series of online trainings. And I plan to continue producing private gatherings to get publishers of all shapes and sizes and the platforms on the same page. While it’s good to forcefully point out the failings of Facebook and platforms, what will work better in the long run is finding common ground so that both sides can win in the long run.

Industry-Research

Media companies’ Facebook relationship status: It’s complicated

The relationship between Facebook and the news media industry is increasingly complex, requires context, and has room for improvement, according to a new report released today by the International News Media Association (INMA).  The 79-page report, “The Facebook-Media Relationship Status: It’s Complicated,” offers an executive-level overview of how the social media giant intersects with news publishers as of late 2016.

The report cites Mark Zuckerberg’s widely-reported remark that Facebook is not a media company, but rather a sort of Uber for the content industry. In other words, Zuckerberg believes that because his company doesn’t create content, it isn’t in the content business. However, as the report points out, from content aggregation to distribution and myriad “editorial” decisions (be they algorithmic or human), the distinction is blurry at best.

The report attempts to help better define Facebook’s role in the ecosystem as well as examine the market position of all of its platforms (Messenger, Instagram, and WhatsApp.) It provides an overview of major social media usage trends and patterns worldwide. And finally, the report takes a hard look at Facebook’s complicated relationship with the news industry (including a deep dive into the way in which its News Feed algorithms work), and analyzes different strategies that media companies use with regards to Facebook in an effort to help others do so strategically.

Among the takeaway’s from INMA’s report:

  • Software really is eating the world.
  • New technologies make traditional market-entry barriers disappear.
  • Value propositions are no longer defined by the industry but rather by customers and their changing needs. Thus, user experience becomes a competitive advantage.
  • New business realities blur distinctions between partners and rivals.
  • News media consumers no longer form a mass market but rather networks of individuals.
  • Users are flooded with content. News has become a commodity.
  • Data is becoming the new oil.

As Emily Bell pointed out in a recent Columbia Journalism Review article, “Facebook is being taken somewhere it never wanted to go.” Yet, while it may not have sought to be a pivotal media cog, the report points out that “clearly, Facebook needs to be a thoughtful partner to the news media industry — and vice versa. That is a partnership that should be based on transparency and mutual support.”

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