As Chief Technology Officer at Purch, John Potter brings a wealth of experience having spent more than a decade with CBS Interactive/CNET, where he held many roles. Most recently he served as Vice President, Software Engineering, managing a staff of 100+ developers in support of brands like CNET, CBS News, ZDNet and Download.com. John holds multiple patents for his system designs that improve Internet connectivity and document classification. At Purch, his role entails managing all aspects of technology, engineering and operations, and he has successfully participated in, and integrated 10 acquisitions.
Could you describe / define ad fraud?
John: Ad fraud is a persistent problem that, according to the IAB, costs the industry $8.2 billion a year in the U.S. While ad fraud is found in various forms, from a publisher’s vantage there are two main problems: One is fraudulent copies of sites that are created, and whose advertising inventory is then presented on programmatic platforms as coming from the original publisher sites. To add insult to injury, most of the traffic on these fraudulent sites is from bots. The other is non-human traffic on legitimate publisher sites from bots scraping the sites, attempting to insert comment links, or coming through content recommendation systems in an attempt to defraud them.
Each of these problems causes different issues and needs to be responded to differently.
How have issues such as bot traffic and audience verification impacted the digital advertising marketplace?
John: The prevalence of non-human traffic and fraudulent or non-viewable advertising inventory has led to an undermining of marketer trust in internet advertising. This directly harms all publishers. Just as importantly, it has led to the need for marketers to add software to their creatives to confirm viewability and detect non-human traffic. This increases the size of ad creative degrades the user experience on publisher sites. Then there are multiple, competing measurement systems in use. All this complicates the ability of publishers to deliver on marketing campaigns.
Are these issues particularly problematic given the rise of programmatic?
John: Yes, all of these issues have been compounded by the rise of programmatic. Marketer’s campaigns are running across a larger number of sites, most of which they have no direct contact with. This makes fraud a lot harder to detect than when you are signing a direct deal.
Why is it important to understand/have an accurate picture of the audience being reached?
John: In the end, all marketing is targeted at particular audiences. As publishers, it’s our ability to provide those audiences that makes us valuable to marketers. At a minimum, marketers should be able to expect that any ads they purchase will be viewed by real humans on a legitimate site that is brand-safe. Publishers and programmatic platforms need to do everything they can to make sure we meet that minimum expectation, and initiatives like TrustX can help with that.
How should the industry be addressing ad fraud?
John: First, publishers and the programmatic platforms need to cooperate to wipe out fraudulent advertising inventory. Ads.txt is a great start towards this, but it’s just a first step. I’m really enthused about the potential of blockchain solutions that will track advertising at every step of the process, and leave an auditable trail. Ideally, we get to the point where every advertising impression sold and served is auditable by all parties to the transaction.
Publishers also need to work hard to block fraudulent traffic on their sites. At Purch, we already do a lot to block bots from our sites, and to prevent advertising being served to any that get around our blocking attempts. We’ve now moved on to integrating real-time bot detection and ad blocking into our server-to-server header bidding platform. I know other publishers and programmatic platforms are taking this issue seriously as well, but it will need to be a continuing concern for a long time to come.
The illustration used in this article, Picco Robots, is reproduced, with modifications, under a creative common license.
As Facebook and Google continue to dominate the US digital advertising market — and capture nearly all its growth — digital publishers look to paid content for stable revenue and diversification. Consumer subscription models also provide publishers with a strong consumer touch point, allowing for deeper data and insights for content development and engagement. New Digital Content Next (DCN) proprietary media strategy research, DCN Paid Content Benchmark and Best Practices – Part 1 provides marketplace intelligence on paid content revenues and deal structures to support premium publishers with ongoing efforts to accelerate revenue diversification.
DCN members are actively developing paid content initiatives including direct-to-consumer subscription products and third-party revenue streams for licensed content. The study shows that monetization of distributed content for the first half of 2017 represent an estimated $22.4 million average revenue for the 20 participating DCN member companies. This report encompasses branded SVOD products (e.g. PBS Passport) managed by digital publishing operations, it does not include long-form digital video content through third-party virtual MVPDs (e.g. Hulu Live), SVOD services (e.g. Netflix) and download-to-own channels (e.g. Amazon). These businesses are for the most part run from corporate distribution operations.
Key findings
One quarter of digital revenue comes from digital content subscriptions, and 27% from paid content overall. It’s important to note that eight companies reported less than 5% of their revenue coming from paid content.
Eighty percent of paid content is comprised of consumer subscription products sold directly by publishers, while the balance is divided between licensing and syndication (11%) and third-party sales of consumer subscription products (9%).
Companies reported an average of 12.3 digital subscription products sold directly to consumers, however after adjusting for the large portfolios of print brands included in the study, the average is 2.9 digital subscription products per company.
Distributed content
Facebook and Google technologies and policies limited publishers’ ability to leverage new audiences sourced through distributed content. Such subscription business models require the control of paywalls, the ability to track and differentiate the experience of repeat visitors, and the capture of data to manage the relationship with subscribers. Facebook and Google’s recent announcements of plans to support publisher digital subscription models with subscription tools and new policies are promising but still at early stages of planning and activation.
Best practices
DCN identified five best practices publishers developed for successfully managing paid content.
Support commitments to paid content initiatives at the highest levels of top management.
Invest in premium content — including the creation of original content — for direct-to consumer subscription products that inform, educate, enrich, benefit, entertain and thrill consumers to drive subscriptions, high levels of engagement and renewal.
Support direct-to-consumer subscription products with opportunity for growth with investments in dedicated staffing, marketing, and technology and develop disciplined subscription marketing operations to optimize your marketing spend.
Where possible, push for a high level of accommodations from key third-parties – Amazon, Facebook and Google in particular — for subscription content and products. These platforms need to continue to develop policies and tools that provide for the data capture, paywall management and the direct customer relationships required to manage a subscription business.
TV/cable companies should also consider launching strongly branded Subscription Video on Demand (SVOD) services.
While there are many examples of digital subscription success, there are still those publishers who exhibit a cautious yet opportunistic approach. DCN Paid Content Benchmark and Best Practices (which is only available in full to members of DCN) serves as the starting point for additional member research on paid content planned for 2018. Next up is a series of case studies that will dive deeper into the strategies and best practices that are driving success for select DCN member companies.
Apple recently announced that iOS 11 will include Intelligent Tracking Prevention (ITP) in Safari. In a nutshell, ITP will go beyond merely blocking 3rd party cookies by segregating any cookie after 24 hours without interactivity on its parent domain’s website. The segregated cookie could still be used for log-ins, but not for tracking and/or retargeting purposes.
Despite a chorus of cries that this move will “sabotage” the current economic model of the internet, I actually think this is just Apple trying to keep up with consumer expectations. For years, Apple has attempted to block 3rd party cookies, although ad tech companies have worked to bypass Apple’s efforts. The thinking has been that consumers only want to be tracked by companies with which they have a relationship. ITP simply ensures that consumers can only be tracked by the companies with which they have a current relationship. There are some kinks, for sure, but overall it makes sense.
After reading some of the reactions to Apple’s move, I had to step outside just to make sure the sky wasn’t actually falling. The response from the ad tech industry has not been surprising. The ad tech lobby has a long track record of protecting legacy models, even when they are probably not the best path for long-term success. However, calling Apple’s move one that will “harm consumers by distorting the digital advertising ecosystem and undermining its operations” seems pretty far off base.
Given the industry’s fear of government regulation, I’m surprised the tech giants aren’t more supportive of private sector moves like Apple’s that seek to address underlying consumer concerns. As we see in the EU’s forthcoming General Data Protection Regulation (GDPR), governments can and will step in if the industry does not demonstrate that it can effectively self-regulate. When our trade bodies fail to step up and put into place strong guidelines that address customer concerns about important issues such as privacy, we put ourselves at risk of increased government scrutiny (many states already have privacy bills in the works.)
Instead, ad tech companies have dedicated massive amounts of capital and resources to developing new ways to track consumers, build larger and more sensitive profiles of consumers and deliver highly targeted ads. For the most part, the returns for investors have been terrific. For consumers – not so much. The well-documented reality is that digital tops the list of consumers’ least favorite forms of advertising. And tracking (aka “targeting”) is one of the aspects of digital advertising cited as particularly irksome.
Think about it: Right now, 67% of digital ads are direct response ads designed to get consumers to click. This is the equivalent of the junk mail cluttering your email inbox and those direct marketing ads that stuff your mailbox and end up in landfills. On top of that, digital ads are often overloaded with calls to unknown 3rd party servers, which dramatically slow the down the page. Worse, on mobile, it not only damages user experience, it soaks up more of a consumer’s data plan.
It’s no wonder consumers are downloading ad blocking software at higher rates each year. It’s no wonder that almost no one ever intentionally clicks on an ad. Suffice it to say that the claim that reducing the persistence of tracking cookies will harm the user experience is absurd. And frankly, a model that relies on these cookies to create an experience that’s driving ad blocker adoption is not one we need to defend.
Contrast that dynamic with Apple. Countless books have been written on how Apple is dialed into the wants and needs of consumers. The company boasts a loyal customer base and for good reason: Consumer experience is the priority. ITP is an extension of Apple’s consumer focus. Given the company’s track record as compared to the current state of digital advertising, ITP is likely to join the long line of successful consumer-friendly features developed by Apple. And if we want to have the same kind of success in the digital ecosystem, respecting the consumer and creating an experience they enjoy must be at the foundation of our advertising efforts.
On their 20th birthday last September, the digital magazine Slate reported 17,000 paying subscribers for their membership program, Slate Plus. Today, that number is at 35,000.
The surge in subscribers owes in part to the Trump bump—Slate Plus membership jumped by 46% after the election. But the underlying catalyst is that Slate has gone all-in on loyalty to lower their dependence on platforms like Facebook and monetize their incredibly loyal audience. By launching new podcasts (and using them as platforms to promote Slate Plus), revamping their newsletter, and doubling down on comment moderation, Slate has committed to creating engaging content that keep readers coming back.
That commitment necessitated a shift in how Slate thought about measurement, moving away from a focus on unique visitors to a metric that matched their primary goal. Establishing engaged time as a “North Star metric” enabled teams across the organization to put loyalty at the forefront of their initiatives.
Connecting the dots between audience loyalty and engaged time
Digiday’s Lucia Moses regarded Slate’s loyalty initiative with a healthy amount of skepticism: “Introducing a new measurement approach isn’t easy, though. Publishers may like to talk about engagement, but there’s no industry standard for it. … And measuring loyalty, as Slate is trying to do, is murky anyway.”
In short, fostering a loyal audience sounds great… but how do you measure it in a way that makes sense for the whole company? That’s a question Slate’s Director of Research Anna Gilbert has spent a lot of time thinking about.
Gilbert and her team considered the number of unique visits and returning visitors to represent loyalty, among other metrics. Ultimately, they chose total engaged time—how long visitors actively read, watch, or listen to a piece of content—because it helped them measure the sincerity of their visitors. “When we have first time visitors that come to Slate and read two or three articles and spend a minute and a half or two minutes, we want that to be reported and credited in this loyalty initiative. And we think that those everyday visitors, or those twice-a-week visitors, are also captured really well,” said Gilbert. “They’re worth far more than drive-by visitors who quickly leave the site.”
Wherever a reader is in the funnel, whether they’re a first time or everyday visitor, Slate is now able to answer the question: “Are they staying on Slate longer?”
Implementing a new metric and acting on insights
Gilbert acknowledged that rolling out new metrics can be hard because it requires figuring out how you move the needle. “If you write more stories, that leads to higher unique visitors. It’s a pretty clear relationship. If you’re at the end of the month and you’re not close to your goal, you know tangibly what you can do. Whereas with engaged time, the levers are not as clear. You need to figure out how to reframe your thinking around it.”
Slate’s partnership with Parse.ly has helped every team to align behind engaged time as their core metric. “Seeing engaged time in the Parse.ly dashboard helped us make a much smoother transition from unique visitors and the Big Bang Facebook days to a more real relationship with our most loyal readers,” said Gilbert.
The editorial team uses the Parse.ly dashboard to track which stories are getting the most engagement, while the sales team employs it for storytelling to prospects. The product team uses Parse.ly’s API to power Slate’s infinite scroll reading experience, which recommends relevant content once a reader has finished an article. As for identifying levers, Gilbert’s team is analyzing raw engagement data made available through Parse.ly’s Data Pipeline to identify factors—like referral traffic or publication time—that correlate with a high amount of engaged time.
What about staff working on Slate Plus? “They’re one of the most data driven teams at Slate. They’re constantly using Parse.ly to monitor engaged time in combination with subscription and marketing data from other sources to figure out what’s working or where new opportunities might lie,” said Gilbert.
The future of monetizing loyal audiences
As more and more publishers turn their sights to subscriptions as a viable source of revenue, Slate’s journey to fully focusing on loyalty offers a roadmap to success.
And Gilbert has hopes that the industry at large will come to see the value of standardizing engaged time. “When our sales team goes out and does pitches, they definitely talk about Slate’s loyal visitors and how much time they spend with our content. But they still show the UV number. I think establishing a clearer relationship between engaged time and revenue generation—so that we’re talking about revenue per minute instead of revenue per pageview—will help frame why engaged time matters for more than just editorial tracking.”
The UK TV industry has always punched above its weight class. Smaller than Oregon, with a population equivalent to that of California and Texas (66 million), the British TV sector is a vibrant £14 billion a year ($18.58bn/yr) business, which has created formats, content, and executives, who have made their mark around the world.
So, what the can media organizations everywhere learn from their smaller cousins across the pond? Here are seven ideas and considerations (not, by all means, unique to the UK) worth exploring:
1. Consider moving millennial orientated services online only
We know that millennials consume content differently. They’re more likely to watch video content on devices like smartphones and laptops than older demographics. They’re less likely to watch TV-like services on an actual TV.
Against this backdrop, in 2016 the BBC made their youth targeted TV network, BBC Three, online-only. In part, the move reflected the fact that younger audiences are increasingly consuming less linear TV. But, it also yielded major savings (estimated at c.£30 million / $39.6 million p.a.) as the online-only service requires less original programing, and isn’t burdened with the same transmission and distribution costs.
The BBC’s move didn’t just make financial sense, it was also an effort to more explicitly take content to the spaces that their younger audiences inhabit.
2. Explore opportunities for ad free options
British viewers have grown up in an environment where TV advertising is much less pervasive. The BBC, for example, has no adverts at all, just trailers for other BBC programs and services.
“Seven in ten (67%) say they like to watch TV programs and films on demand to avoid adverts, or because there are no adverts,” UK communications regulator, Ofcom, recently noted.
This preference – coupled with the use of ad blockers on web based TV services – should be a cause for concern, given the continued importance of traditional advertising. One potential solution, explored by the UK’s oldest commercial broadcaster ITV, is to offer a premium IP delivered service that mirrors the ad-free experience provided by HBO and Netflix.
In 2013 the network launched an iOS app that allowed Apple users to watch the last thirty days of their content (from five different TV services) without advertising, as well as live simulcast of ITV3 and ITV4, for £3.99 ($5.27) per month.
The service, called ITV Hub+, has now been rolled out to other platforms including Smart TV’s. (It also costs £3.99 a month.) Will consumers pay more for this convenience? Evidence suggest they will, and this is therefore a model that other broadcasters may want to emulate.
3. Be everywhere
Given the range of ways in which audiences consume – and access content – it’s increasingly incumbent on broadcasters and other content providers to be as accessible as possible.
The BBC iPlayer, an internet streaming, catchup, television and radio service from the BBC, which celebrates its 10th anniversary this year, has always been available across wide range of devices, including mobile phones and tablets, PCs, gaming devices and Smart TV’s.
BBC Three, their youth orientated service, doesn’t just live on the BBC’s own app and web services, it also has its own YouTube channel with full episodes – and entire series – available to watch.
Other UK broadcasters have followed suit. The ITV Hub, for example, is now available on 30 different platforms, including Google Chromecast, and Xbox. At the end of 2016, the broadcaster noted that consumption (the measure of the number of hours watched) is up by 43% in the past year; and, interestingly, that Live TV accounted for c.30% of all requests.
4. Embrace bingeing, archive access, and offline viewing
On-demand services like Amazon, Hulu and Netflix have changed viewing behaviors. As a result, traditional broadcasters need ask whether they too should go “all in” and do things differently.
That might mean releasing new series in their entirety, offering new content for download and offline viewing (which the BBC and others offer) as well as providing “digital boxsets” so that audiences can binge on older shows.
These moves are not just designed to protect revenues and audience share, they also reflect evolving consumers behaviors. Failure to respond to these expectations means that traditional broadcasters risk being left behind.
5. Serve better ads, because audiences still watch a lot of TV
It’s not just online ads that are often terrible, many TV commercials aren’t great either. And yet, we continue to watch a lot of TV, creating prime conditions to deliver strong, effective, advertising to captive audiences.
“The average time spent watching broadcast TV across our 15 comparator countries,” the UK communications regulator noted, “was 3 hours 41 minutes per person per day in 2015.”
That’s a lot of screen time (most of it live viewing) which, when coupled by the mass audiences TV can still reach, continues to remain attractive to many advertisers.
6. Innovate and experiment with new forms of ad delivery
TV’s mass reach makes it an appealing medium for advertisers. Yet, at the same time, we also know that audience’s attention is increasingly fragmented. For many younger audiences, TV is already the second screen, and has been for some time.
As far back as 2012, the Pew Research Center found that 58% of smartphone owners used their phone to keep themselves “occupied during commercials or breaks”. But, Pew found, respondents were often engaged in second screen activity related to what they were watching. This resulted in advertisers trying to find new ways to engage audiences on their second screen. (See some great examples below targeting Game of Thrones fans).
How some advertisers have tried to engage Game of Thrones fans on Twitter.
Personalization, time-shifted ads and the use of products (like Sky AdSmart in the UK) to serve different ads to different households (or different people in the same household) against the same content, may still be relatively small markets, but they’re expected to grow quickly. As such, they’re a technology that broadcasters need to be doing more than keeping an eye on.
7. Recognize online revenues can be a major growth area
In 2016, TV revenues in the UK were worth £13.8bn, a figure which is remarkably resilient considering that TV revenues in 2011 stood at £13.3bn.
Key UK TV Industry metrics. Source: Ofcom/broadcasters/Ampere Analysis/Advertising Association/Warc/BARB
The sector’s revenue mix has also proved to be surprisingly durable. In 2016, 30% of UK TV revenue was generated by advertising, compared to 29% in 2011, subscriptions accounted for 46% of revenues in 2016 and 44% in 2011, and broadcasters enjoyed 30% of total UK display advertising in 2016, down just 1% from five years ago.
However, this relative stability doesn’t mean that sector can rest on their laurels. Finding new revenue sources, remains important. And in this space, online revenues are growing fast.
In 2011, online revenues were worth £0.3bn for UK TV companies. Jump forward to 2016, and this figure was £1.7bn, a substantial increase. Given this rapid growth, and stagnation in other areas, expect more efforts to be focused on this space.
Final thoughts
“Despite fundamental changes in the advertising market over the last ten years,” writes regulator Ofcom in their latest UK Communications Market Report, “the television advertising market has remained very resilient due to its primacy in providing mass audiences.”
That’s not going to change any time soon, but as viewing habits on both sides of the Atlantic continue to evolve, so broadcasters and advertisers need to refine their strategies accordingly. This means finding new ways to capture attention, serve relevant – and increasingly targeted – ads, and experiment with new revenue models.
Three areas that I believe merit more attention are: more flexible pricing models – recognizing that many audiences love to watch certain shows, series or events, but that they don’t necessarily want (or can afford) a year-round subscription – simulcasting shows (nationally and internationally) to prevent piracy, and identifying opportunities to both reduce churn, and discourage the illegal sharing of logons and subscriptions.
What we see in the UK, as well as here in the US, is that although TV’s business model is changing, there are opportunities to diversify both content distribution and income strategies. How broadcasters continue to respond to the challenges – and opportunities – presented by digital disruption, is a subject many of us will continue to watch with interest.
Damian Radcliffe is the Carolyn S. Chambers Professor in Journalism at the University of Oregon, a Fellow at the Tow Center for Digital Journalism at Columbia University and an Honorary Research Fellow at the School of Journalism, Media & Cultural Studies at Cardiff University. (And, by way of disclosure, Damian is originally from the U.K.)
The first dot-com boom was about tech startups collecting millions of eyeballs. About five years ago, there was a resurgence of that kind of thinking in digital media. BuzzFeed, Upworthy, Gawker, and many others made an art of clickbait headlines and viral listicles and quizzes. But the focus on “vanity metrics,” like sugar-spun cotton candy, wasn’t really good for them, or the bottom line.
As traffic declines and clickbait fatigue ensued, many of these publishers tried to reach audiences through their social channels and bore the brunt of algorithmic changes. This left them wondering if the chase for views, shares, and clicks would really pay off. Those measurements are imperfect at best, and often misleading at their core. However, doubling down on what really matters can move businesses forward so that they can surmount this problem. Beyond the obvious shift toward subscriptions, engagement, and impact, publishers know that the real difference-maker for their business is serving their most loyal customers.
Highs and lows in the chase for numbers
The underpinnings of how we got into this mess can be traced to two overarching reasons.
The first is the psychological boost of the numbers game. Just as a Facebook user beams when she sees the number of likes and shares skyrocket on an individual post, so too do advertisers and news publishers when they see rising numbers for corresponding clicks, views, social shares, impressions, and the like. In a competitive industry where measuring popularity can and often is boiled down to who has the biggest following, a quick glance at the numbers can settle — or aggravate — any existing tension.
Of course, the real point to metrics should be creating a long funnel that gets to something bigger. Metrics should assess genuine leads, conversions and end goals. But it’s easy for marketers’ performance measurement ABCs — acquisition, behavior, conversion — to be shoved aside when views and impressions — sometimes paid for in promoted posts or campaigns — already captivate so much of the budget. Still, paying for a click might not amount to anything at all.
Zane McIntyre, co-founder and CEO at Commission Factory, boils down this unhealthy relationship in AdExchanger with a strong case in point:
“When advertisers conduct tests to determine the best thumbnail for video views, for example, advertising ‘reach’ is determined by the number of people who see it — if only for a moment. But then viewers quickly leave, often after the premise they were promised is under-delivered. It’s a vanity metric and can be easily manipulated with clickbait and paid content promotion, both of which can get content in front of a targeted audience quickly and cheaply.”
Trust issues
This brings us to the second big trend fueling the vanity metric craze: trust in (sometimes unreliable) parties whose skewed metrics leaves little room for proper assessment. The often-tense relationship between publishers and platforms is just as much of an issue here as it is anywhere else. When Facebook and Twitter allow you to pay for promoted posts or tweets, the idea is that you sacrifice some amount of control to the gatekeeper in hopes of gaining more control (in the form of a following) with audiences.
But Facebook’s repeated metric discrepancies have included miscounting Facebook Live reactions, misreporting the average duration of video viewed, and over-reporting on the amount of time spent on Instant Articles. That’s highlighted the necessity for accountability, transparency and third-party verification in performance analytics. It’s an onus on the social giant, already reeling from issues of trustworthiness, to circumvent these problems. But it also lights a fire under publishers and marketers to take metrics back into their own hands — and not relinquish control purely for the sake of ego boosting and more reach.
Metrics that matter
In response to criticism over its misconstrued metrics, Facebook has established partnerships with verification partners. Automated analytics too, should be “machine recommended, but human approved,” as strategist Nasr ul Hadi emphasized at this year’s Online News Association conference. At ONA, the broader issue of getting distracted by the wrong numbers became a talking point.
The close cousin of measuring and increasing impact is increasing engagement, with the hopes that deepening a relationship can lead to a sincere boost in vested interest and more subscriptions. Take the efforts of GateHouse Media, with its chain of local newspapers. The large publisher launched a campaign last summer called “Newsroom Hero,” which profiled GateHouse Media journalists as more than just journalists. The campaign kept the focus on the positive influence and impact reporters bring to communities — whether in their reporting, civic engagement as volunteers, or in their own families. It’s the first such campaign for the publisher to focus on impact, and their hope is to translate that into more meaningful metrics — beyond the raw numbers of 35 million monthly digital visitors and nearly 23 million weekly readers.
Increasing engagement shouldn’t be mistaken for solving the metric conundrum. It’s hard to point to impact as a cost-cutting national chain of local newspapers. But as MediaShifts’s Jason Alcorn points out, it’s a milestone for a local news chain to talk in the language of non-profits, who aim for impact to satisfy funders and subscribers.
It’s a tall order indeed to turn numbers, whether high or low, into actionable insights that deliver real leads and results. But the fact that this inner conscience is being spoken aloud more and more shows that vanity metrics are no longer in vogue — and the quest for meaningful measurement might just lead to better business results for everyone.
The continuous stream of false information and mounting consumer mistrust challenges today’s media environment. When fake news becomes a daily battle cry for consumers and politicians alike, it’s time to rethink current reporting practices. The PEN American Center’s new report, Making News: Fraudulent News and the Fight for Truth, reviews journalism and media interactions to identify how best to rebuild consumer trust in news outlets today.
Figuring out fakes
What exactly is fake news? It includes clickbait and misleading headlines as well as fraudulent news for profit or political reasons. On the other hand, “good-faith mistakes” or editorial points of view don’t fall under the fake news umbrella. PEN America defines fraudulent news as “demonstrably false information that is being presented as a factual news report with the intention to deceive the public.”
Importantly, while there is no quick-fix to stop fraudulent news, restricting or governing speech is not the solution. That said, digital media’s content and search algorithms are no excuse. Popular information channels like Facebook and Google need to behave responsibly, given their powerful roles. When Google shares content to supply a search result and Facebook curates content for its newsfeeds, they take on the responsibility to ensure the information they share is truthful. Social media and technology platforms need to step up their game to curtail the spread of fraudulent news.
The game plan
The report calls upon users, news outlets, policymakers, educators, social media and technology platforms and others in six key areas to support consumers in their efforts to combat fraudulent news and rebuild trust in media outlets. The six steps approach includes:
1. Educate to create informed consumers of news across all platforms.
Policymakers and educators:
Identify effective forms of news literacy education.
Engage and prepare teachers to educate the public on news literacy.
Use all media platforms to inform citizens about the foundation of news literacy.
2. Equip the public to differentiate between fact and fiction.
Technology, social media platforms and other news intermediaries:
Identify those producing fraudulent news to ensure they do not profit from advertising revenues and marketing dollars.
Develop or invest in technologies and practices to quickly identify fraudulent efforts (e.g. bots) that increase traffic and suggest credibility of information.
Detect fraudulent traffic so it’s visible to users.
Fortify partnerships with independent fact-checking organizations. Ensure their work is easily available and understandable to users.
Encourage news literacy plans and support through funding and partnerships.
Introduce users to content outside their personal views. Ensure users can control what they see and receive.
Appoint independent spokesperson(s) to reply to the public questions on these policies.
Collaborate with academic researchers and civil liberties advocates to understand effectiveness of educational programs and policies.
Ensure employees can speak candidly about preventing the spread of fake news.
Guarantee there is an appeal process for those identified as publishers of fake news.
3. Exemplify the values of collecting and distributing credible news.
News outlets:
Highlight transparency practices including the editing practices and the management of errors.
Carefully label content to identify information reports versus an opinion or analysis.
Ensure independent spokesperson(s) focuses on transparency and accountability.
Assist in the public education regarding the harms of fake news.
Proactively engage in civic and education initiatives to improve media literacy.
4. Engage users of different groups to better understand the passion or trigger points that influence their trust in the news media.
News outlets, social media platforms, educators, research institutes, and civil society:
Identify and understand the drivers of media distrust.
Offer opposing sides of topics to fight fraudulent news.
Include voices from across the political spectrum.
Ensure objectivity in operations and including the reasoning behind conclusions.
5. Expose those who purposely spread fake news.
News organizations and civil society:
Report the ways in which fake news is created and distributed.
6. Empower people to help disarm fake news practices.
Policymakers, news outlets, social media platforms, and civil society:
Refute those who deny validity of news.
Protect sources especially with concerns of national security.
Support the news of those in the minority.
Publicly reject all efforts to denigrate the news media or undercut the legitimacy of their work and reaffirm commitment to the freedom of the press.
Counter government efforts to close or limit media outlets.
Defend freedom of the press.
Consumers, news outlets, social media and technology platforms all have a role in combating fraudulent news. Importantly, empowering consumers is the ultimate solution to reviving trust in media. Today’s users have the right to exchange information but now they need the necessary tools to conscientiously access its credibility.
Over the past year, advertisers have devoted more dollars to programmatic native than ever before. And it’s easy to see why. Programmatic native gives native scale, while bringing more efficiency and data-targeting into the equation. Nativo, TripleLift, Sharethrough, Unruly, and Bidtellect are some of the most well-known players/programmatic native exchanges in this space.
To get a clearer picture of today’s programmatic native ad market, my company, MediaRadar, pulled together some of the most pressing trends on the year so far.
It’sa growing market
The number of advertisers placing native in Q1 2017 was nearly identical to Q1 2016 (2,318 vs. 2,326 brands). However, there was a sharp increase in Q2 2017, where the number of advertisers grew 42%, from 2,100 to 2,981 native programmatic advertisers. Why the surge? Good performance. As I have shared previously, programmatic native is generally evaluated on the same KPIs as display. In a contest against most standard IAB ad display units, programmatic native scores well with high click-rates and engagement. And it can scale.
Penetration is low
Despite the fast rise in programmatic native, 122,241 brands were buying advertising online in the first half of the year. This means that as a% of total, only 2.5% of those brands buy native programmatic. We are only scratching the surface here. Even though large national brands make up the early adopters, there is still significant room for programmatic native to grow. This is welcome news for native exchanges that sell this kind of advertising. They know the opportunity is poised to grow substantially.
Renewal rates are mixed
While total numbers are strong, quarterly renewal rates on programmatic native remain challenged, with only 20% renewing. Specifically, the brands buying in the first half of 2017 share just 20% of the same brands from the first half of 2016. So, for programmatic native to continue its expansion, brands will have to recognize its benefits and make a long-term commitment to the format.
Campaign duration varies
Campaign duration remains short, with most native campaigns lasting a median of one month. In Q1 and Q2 2017, 14% and 20% of advertisers ran multi-month campaigns, respectively. During this time period, renewal rates on longer campaigns were much higher than shorter-term campaigns. This is why renewal rates and campaign duration are often tied together tangentially. Longer campaigns mean more of an opportunity to tweak and amend programs, which feeds into higher renewals.
Programmatic native is on the rise. And while there are some challenges – namely measuring performance of programmatic native and no definitive, standard set of metrics, as well as some market confusion about what programmatic native can offer – the benefits outweigh them. Yes, the market is still in its infancy – relative to its potential – but it’s becoming increasingly popular. And it has a lot of room to grow.
Over the past 20 years, the “digital transformation” of the publishing industry has been—for the most part—a slow, incremental process. For too long, the publishing industry was mostly concerned with digital replicas, ebooks, and other superficial “transformation” efforts which, in fact, didn’t so much transform the business as copy legacy models in electronic form.
Suffice it to say that legacy media models are oriented around the process of producing a book, magazine, or newspaper and not necessarily based on the experience and circumstances of the digital consumer. As digital transformation enters a new, more advanced phase, many publishers are recognizing they have an opportunity to provide products that raise the value proposition to customers.
What does it all mean?
The term digital transformation can be defined as a multitude of activities and attitudes that a business could potentially pursue. But what digital transformation really requires is that business owners adopt the customer’s viewpoint and change their business philosophy accordingly – from a process orientation to one that is customer-centric.
Publishers in education, reference and professional segments are beginning to execute operational change which supports this evolving viewpoint. And of course, there are “born digital” media organizations that aren’t wedded to legacy models. However, some of the best examples come from sectors outside media. Amazon.com is frequently cited as a proponent of the customer-centric view and their willingness to continue to rethink their operations from the customer perspective results in initiatives such as ‘one-click’ ordering to their recently announced wireless checkout process. Payment is made automatically via the Amazon app as the customer leaves the store. And we’ve seen what Amazon-owner Jeff Bezos has done in terms of transforming processes at The Washington Post since he acquired it.
Creating an environment where change can occur is no easy thing. Detailed and comprehensive change management activities need to be adopted to help guide an organization through this process. By definition, a legacy business model carries with it deeply entrenched legacy processes that need to be changed, adapted, or discarded in order to forge a new environment for success. Engaging in a formal digital transformation initiative endorsed and supported by the highest level of management is a requirement, and nothing less will suffice if the business is going to succeed.
Where to start
Before this can happen, though, it’s important to understand your starting position. A complete review of the current state of the business is critical to defining your future objectives and targets. Digital transformation is a process that takes place over time, along a spectrum of capability, where the endpoint is a business (or a product line) that has been digitally transformed. Points along that spectrum should be predetermined, well-defined objectives, which also serve as opportunities to reevaluate and reassess whether the business is going in the right direction.
Recently, I was asked to conduct a workshop with an educational publisher that recognized the business imperative of digitally transforming their business. This is not an unsophisticated publisher; they realize they are still too far removed from the consumer experience and must establish new business processes, product development strategies, and distribution/access models to remain competitive over the next 20 years. That’s a tall order for any organization, which is why the digital transformation process needs to be embedded into the organization in a consistent and repeatable manner. So, I took a team of senior executives through a day session to explore how this transformation process could be executed within their organization. An important takeaway from our meeting was the recognition by the group that taking on too much to quickly will doom a transformation project before it has started.
On a project I worked on several years ago, we avoided this trap in three ways. We:
recognized that our content and editorial workflow needed to become digital-first;
identified three to four workflow products to implement early in the transition; and
implemented a number of quick wins such as metadata improvement, copyright clearance integration and the implementation of process improvements with our distribution partners.
Doing the first brought uniformity and control to the creation and management of content, while the second enabled the team to learn by experience. The third built confidence in our ability to execute. During the first and second year of this project, as progress was made on these initial initiatives, the team gained the time necessary to test their market and product assumptions directly with customers.
As a result, toward the end of the third year, the publisher had established and expanded range of integrated products combining traditional textbook and reference content with assessment, collaboration, and other tools that improved their effectiveness and established a sound foundation for further digital growth. Across a variety of products, they had begun to adopt a customer-centric publishing model with revenue models to match.
Leading long-term change
Generally, the critical components driving the success of the transformation effort will be collaboration, resources, leadership, a clear understanding of business value, creativity, and a deep understanding of customer wants/needs. No one person can affect all these factors. Therefore, a strong statement of intent from senior management, ownership of the process by the senior leadership team for the business unit, measurable performance factors, quick wins and identifiable success stories are critical to creating an environment for transformation success across the business.
Securing executive buy-in to support this transformation effort (led by the CEO reporting to the board) must be a given. The imposition of technology on businesses today is so vital to medium- to long-term business viability that this effort demands the active support of senior management. An effective tool in this process is the establishment of targets and key performance measures tied to the desired improvement in the customer experience. To drive change, these objectives should represent significant “step change” performance improvement. Setting these out clearly helps prevent back-sliding and guards against good-enough results masquerading as real change.
Taking an organization’s senior management through a workshop like this one is the first step in a good first step in driving a true digital transition process. But because digital transformation will ultimately touch every part of the organization in some way, all staff must be included in the process. All employees must understand the importance of the effort to the success of the business, how the process will unfold, its impact on their work and what their contribution will be.
And remember that a digital transformation effort is never over. In a truly customer-centric organization, the business will always be anticipating changing behavior, rapidly adapting, expanding capabilities, and building new and better customer solutions. Increasingly, legacy processes do not allow for that type of flexibility and that’s the imperative for digital transformation.
Michael Cairns has served as CEO and President of several technology and content-centric business supporting global media publishers, retailers, and service providers. He blogs at personanondata.com and can be reached here.
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John: Ad fraud is a persistent problem that, according to the IAB, costs the industry $8.2 billion a year in the U.S. While ad fraud is found in various forms, from a publisher’s vantage there are two main problems: One is fraudulent copies of sites that are created, and whose advertising inventory is then presented on programmatic platforms as coming from the original publisher sites. To add insult to injury, most of the traffic on these fraudulent sites is from bots. The other is non-human traffic on legitimate publisher sites from bots scraping the sites, attempting to insert comment links, or coming through content recommendation systems in an attempt to defraud them.
