The shift to abundance is a very well-known trend in the media industry, and something that most publishers are struggling with. But the dynamics behind this trend are not unique. As soon as you get too much choice in a market, it starts to split in in two very different directions.
The Supermarket Effect
One direction is what I call the “supermarket effect,” where you focus on building scale with content that covers people’s general needs. This works great if you are big publisher, because then you can use your size to drive revenue, even though the value per article is extremely low.
But this is also where the problem is. Because, if your editorial strategy is to be a supermarket, being small just doesn’t work. There is no market for a smaller supermarket.
This is the problem we now see in the media. Most publishers have traditionally been centered around creating “packages of random content,” which, fundamentally, means the they are designed to be a supermarket of content. This worked great for a while. But in today’s world of abundance, it puts a lot of pressure on smaller publishers.
The Local Papers
We see this very clearly when we look at local newspapers (especially outside the larger US cities). Think of it like this: A local newspaper is like a small grocery store with a little bit of everything for the local community. And for many years, it was the go to place for everyone in its community. But imagine what happens when, one day, Amazon opens a Whole Foods store next door.
The answer is obvious, the smaller local store is outcompeted.
Being local is no longer viable, because you can’t compete with Amazon’s many advantages of being able to offer more items, at lower prices, with bigger marketing budgets, Amazon Prime, and a hugely scalable back-end logistic system.
We can see this in play when with companies like Meredith acquire Time Inc. Their strategy is to become a bigger supermarket by consolidating not just how many publications their own, but also how they work. And, as a strategy, this is a good approach if they can build up enough scale.
The Selective Approach
But this isn’t the only way to win the future. Another way is to become the opposite of a supermarket of content … which is to “get picked.”
People use supermarkets when they are just filling their daily needs without really thinking too much. So, the opposite of this is to get people to think and to choose to spend time with you. To do this we have to change the way we exist as publishers. Instead of focusing our editorial strategies around creating packages of content, we must start to build publishing products that people can (and will) pick.
Let me give you an example.
Most traditional magazines do reviews, but they are not designed for people who have a specific need. Instead, they are just published like any other article. This is not what people want when they are looking for a review. There is a very big difference between people who just sit down and flip through pages (or randomly come across links on Facebook), and people who are actually looking for answers. So, what we see now are companies like The WireCutter, which was created in 2011 by Brian Lam, to be a new type of review site that only focused on bringing you very high-end and very detailed reviews.
And look at what has happened. Because The Wirecutter designed itself around people when they need a review, they have become the destination for people to go to when they want to figure out what products to buy.
This is the difference between just having a “supermarket” editorial focus where the reviews are just another random story and having a “product” editorial focus where the content is designed to solve a specific need.
Product Makes Perfect
And this also applies to many other things. For instance, a traditional fitness magazine often has a wide-ranging selection of stories about health, nutrition, and exercise, but there is no real goal or structure to them.
Then look at the digital native publishers. They are not creating random articles. Instead, they are building fitness publishing products. They offer you actual training, they create meal plans for you, and they actively help you achieve your health goals.
Consider business publications: Are you just giving business people random news? Or are you helping them do their job better? Are you providing them with content, data, and insights that they can put to work?
On YouTube, for instance, YouTube itself is the “supermarket of random videos.” And, because of this, every single YouTuber knows that the only way to be successful on YouTube is to instead do something that people will specifically pick. So, every YouTube channel is defined around a very narrow focus, because you need that to create something for people to connect with.
YouTubers know that you can’t be a supermarket within a supermarket. Meaning, you can’t just give people a little bit of everything in a place where there is already a lot of everything.
This is now the reality of the media.
A few larger publishers will attempt to become the modern supermarkets of publishing and they may succeed. But next to this is another marketplace, where individual publishers create publishing “products” that are designed to be picked. The kind of specialty places that they turn to when they have a more defined moment and want something specific.
This is your challenge for the future. What will you do to get picked?
Thomas Baekdal is a media analyst and publisher of Baekdal Plus.
Artificial intelligence (AI) is being used more and more in ad tech to solve a variety of problems. Between the highprofileacquisitions and its rise as the industry’s latest favorite buzzword, it’s clear that AI is an extremely powerful tool. However, it’s definitely not a silver bullet. Let’s take a look into a few AI pros and cons.
Workflow Efficiencies: One of the largest benefits of AI is how much time it can save on the user side. Without AI, proper campaign optimization takes a lot of time and is absolutely more art than science. Just consider how much data is available on each individual. Even with a target persona in mind, sifting through vendors and guessing at which attributes will perform best is a costly and time consuming exercise at best. Once that’s done, the ad trafficker then needs to toggle pacing, pricing, and potentially dozens of other variables. AI can automate much of that. At which point, the user just needs to pick a goal the AI can optimize toward and let it run giving directional guidance where necessary.
More Data Processing than Humanly Possible: Big data and AI go hand in hand regardless of the industry. JP Morgan even published a massive white paper on how they think those two trends will affect investing. When it comes down to it, programmatic trading isn’t all that different from programmatic advertising. It’s all about automated buying and selling to maximize value. AI can “see” and consider as many features as it’s been trained to, considering hundreds or even thousands of variables over the course of a campaign to determine significance. That’s just not something humans can do in any cost-efficient manner.
ROI: What happens when you put workflow efficiencies and maximum data activation together? Cost savings. Lots of it. Assuming your AI strategy is working (and your mileage may vary), adopters of AI stand to reap massive benefits. Since AI requires less human capital to operate, adopters stand to gain from not having to hire as many heads and the heads they do hire aren’t focused on tweaking knobs and levers manually. Additionally, since AI learns as it goes, performance constantly improves over time as it begins to distinguish between what’s important and what’s irrelevant.
Black Box Algorithms: Unless you’re building your own, it’s pretty difficult to know exactly how an AI algorithm works. Two primary reasons for this: 1) The features an algorithm considers are typically a company’s secret sauce, and asking a company to publicize everything that goes in is like asking KFC to share their 11 herbs and spices. 2) Even if there is a degree of visibility into what features are being considered for optimization, oftentimes the amount of data being processed is more than what a human can parsethrough (see Pro #2). Which begs the question…what’s the point of performance if you can’t explain it?
Not All AI is Made Equally: If AI is a brain made to learn for a specific purpose, who’s to say whether you’ve chosen the AI equivalent of Einstein or your bratty seven-year-old neighbor? Every partner’s going to represent themselves like they’re Watson, but realistically, that’s impossible. Some partners are better for specific industries, some are probably pure vaporware. Choosing the right partner isn’t easy, and if everyone’s offering an AI solution it’s difficult to say which is the best one for you without at least some degree of upfront investment and a decent amount of research.
ROI: Similar to how properly implemented AI can generate huge savings, it can also be a massive sunk cost. The initial barrier to entry – either investing in developing your own algorithms or paying a partner to use theirs – is going to be fairly substantial for most advertisers or publishers. There’s also no guarantee that it’ll work in every scenario. As much as partners would love for you to believe that their AI will make it rain gold bricks every Sunday, that’s just not true. When choosing a partner, don’t just think about their historic performance, but also whether they meet your needs in terms of transparency in both costs and reporting.
As far as AI pros and cons go, it’s hard to say whether AI is right for you. That said, AI is becoming an increasingly important part of a greater shift in the digital advertising ecosystem, and I’m personally interested in seeing how it adapts to other trends. Will AI specced for second price auctions succeed in first price environments? How about in a post-GDPR world? Will the new data restrictions affect performance and will new strategies arise as a result? Who knows, but I’m looking forward to finding out!
We were wasting time chasing display advertising dollars.
That’s the big lesson Spirited Media learned at the end of 2017, an awakening of sorts for us at the parent company of Billy Penn in Philly, The Incline in Pittsburgh and Denverite in Denver.
Now don’t get me wrong, we believe still that there are companies in and around our cities that are interested in partnering with us to reach our audiences — which are generally young, affluent and very civically engaged. And we’d had an encouraging start to the year by pursuing display ad sales. We needed that success to continue; that’s what we built our budgetary projections on.
And then that early ad success faded. It stands to reason why, of course: Going head to head with Facebook, Google and the largest newspaper websites was always going to be tough, And our staffs (no larger than six doing editorial work) can’t tell the same traffic story as sales folks repping newsrooms 15-20 times that size.
Instead, we looked at all the other ways we’ve been able to grow revenue, and prioritized those internally into three tiers. We stuck display advertising at the very bottom. In other words, we’re happy to get it, but we can’t burn staff time and effort to chase it. We’ve got bigger things in mind.
There are three things in Spirited Media’s most important revenue tier: the first is sponsorships and ticket sales for the events we’ve become so adept at organizing. The second is a membership program we’re rolling out in the coming weeks across all our sites. And the third is offering our custom platform for others to use. Let’s talk briefly about each of them.
Billy Penn launched in October 2014 – I was the site’s editor at the time – and we began hosting the first of our events a few months later. At the time, our staff numbered five people – myself, a community manager and two reporter/curators, and a brand new sales and events director. So, when we decided to start getting our audience together in person, putting together a lot of programming for those events wasn’t realistic. The same people building that event were the ones building our daily news report, after all. So the events (we tried many, but what worked best were happy hour gatherings) were very light on the programming. And when I say “light,” I mean we’d maybe grab a microphone for 20 minutes of a two-hour event.
These events proved incredibly popular with our audience and they had several things that recommended them over intrusive advertising on our site. One, the events lasted for a set amount of time; two, the events could only hold a certain number of people. In other words, we were able to create the scarcity that is nonexistent in a land of infinite Web pages. So events — the smart execution of them, ticket sales to attend them, and sponsors to underwrite them — are one of the pillars in our most crucial revenue tier. And, of course, events (and the potential early access to their tickets, or even their planning) will play in very heavily to the next item on our revenue punch list.
One of the things I consistently heard from Philadelphians as I walked the streets of the city was how much those who read Billy Penn loved it. Not just liked or respected, but connected with in a visceral way. So as we looked at how to build a business model that could withstand the seismic shift rocking the ad-supported media world, we of course considered whether we could turn that loyalty — hell, that love — into monetary support. But we can’t make this happen alone, so we’re working with the News Revenue Hub (Motto: “Fortifying the public’s access to quality journalism by helping news organizations build sustainability”), a spinoff of the stellar digital operation Voice of San Diego, a company that’s helped many newsrooms figure out how to turn their audiences into members. We’ll launch membership across our sites in the next few weeks, directly making a pitch to our readers that the work they’ve been consuming requires their direct support to continue. That’s because, plainly speaking, it does.
We’re proud to be a company that puts our users first. Editorially, that means we pay attention to what we think people want to know. And we’ve also committed to respecting their time and their experience online. That means unlike other news providers’ sites, we don’t pop advertisements up in front of the story you’re trying to read, or force an auto-play video into your quiet office, or load up the top, middle and/or end of your story with some photo you just won’t believe about a 70s TV show star. We try to respect people’s time and their attention.
How’s that working out for us? Well, our research shows that more than half our audience is under age 35, and 75% of our readers are under age 44. That’s a startling figure for a media company, and it’s due in no small part to the way we’ve built our sites, using a custom WordPress theme that gives us what we think are clear advantages in the market:
One, it’s very easy for journalists to write and post their work onto our sites (and, automatically, Facebook Instant Articles, and Google AMP pages). We’ve also baked newsletter functionality into the back-end as well. Because we have very small staffs, there’s no separation between a reporter, an editor and our audience.
Two, our sites make a small amount of content look and feel like a lot. The home pages of Billy Penn and The Incline (and soon Denverite) spotlight the most important stories we’ve published, and then present a list of the most important events and other news stories happening in and around our cities, whether or not we’ve written them, in what we call “The Stream.” It’s basically a Facebook feed of what you need to know at any given moment.
Three, we’ve baked membership tools right into the platform. These pages, and the action funnel on which they’re built — driving occasional readers to become repeat readers, into newsletter subscribers, and into paying members — take advantage of a sea change in how the news industry is realigning itself in the midst of the great advertising breakdown.
And we’re finding that this suite of tools is attractive to other small publishers that are also seeking revenue that’s immune to the whims of Facebook and Google. In fact, we’ve closed one deal with a publisher to provide them the same tools we’re using, and following up on other requests about it that have come over the transom. We’ve seen enough interest, in fact, to prioritize platform sales as part of our most crucial revenue streams in 2018.
Another thing we’ve heard through the course of our existence is that people were interested in starting a “Billy Penn” newsroom in their city, but owned and operated by them. Until now, we have not pursued those arrangements; however, in the course of our reevaluation, we’re willing to explore arrangements like this.
My boss Jim Brady, the former editor-in-chief of Digital First Media, former editor of washingtonpost.com, and a former news executive at AOL, has also consulted at many of the world’s biggest and best media brands — ESPN, USC and The Guardian, among them. Our VP of Product, Brian Boyer, was most recently the Senior Editor for Visuals at NPR; he came there after building the News Apps team at the Chicago Tribune. Me? I’ve been the Executive Online Editor at the Philadelphia Inquirer, and the top digital editor in two of Hollywood’s oldest news institutions, Variety and The Hollywood Reporter.
Among us, we’ve worked in newsrooms covering local, national and international news; in verticals (sports, entertainment, politics), launched departments and won awards for videos, innovation, public service and more. And we’re finding interest in accessing that expertise among other media companies, which out of necessity have cut their digital workforces down in the face of the ad cataclysm.
So we’re putting out our consulting shingle, and negotiating with those seeking everything from advice in reaching the audience we have now or the audiences we’ve reached in our past. Why isn’t this a Tier One revenue stream? Simply put: bandwidth. While we can hire developers should interest in our platform take over, we can’t easily clone ourselves to grow a consulting arm. But the money we make in this fledgling endeavor can help extend our company’s runway as we push toward profitability.
We’ve already received grants to support our work —we hosted a Knight Foundation fellow for one year in Philadelphia, and are the proud recipients of a $106,000 grant for work on a Playbook for Mobile News. We’re also finalists for a Report for America grant, which would support a Spirited Media reporter working in Pennsylvania’s state capital of Harrisburg. These kinds of efforts can help underwrite important journalism in our cities while easing the burden on our budgets. In addition, a two-year partnership with Politifact funded a reporter position to help us fact-check Pennsylvania, thanks to a grant from the Democracy Fund. So we’re no stranger to grant-funded journalism, and are actively seeking out new ways to bring it into our newsrooms.
Finally, we’re not going to say no to companies that only want to buy space on our sites. But, as we said, it’s just not a great use of our time to sit through endless agency meetings on the off chance that we score the rapidly declining dollars to spare, once Facebook and Google gobble their share. We’re delighted with the roster of repeat advertisers we’ve had across all our sites, of course, and hope to continue working with clients as diverse as the Philadelphia Eagles, Comcast and Beneficial Bank — but, as often as possible, we’re hoping to convert those advertisers into sponsors supporting the events that are increasingly part of the future of our businesses.
We’re confident that future is bright. After all, local news is a lot closer to our users than the national and international sources. We’re down the street, just around the corner from our readers. It’s sobering but heartening to come to the realization, as a company, that those readers are even more directly responsible for our future than we’d first considered. But then again, that makes sense. We’re always telling them how important they are. We’re now giving them the opportunity to prove it.
A December 2017 survey by the Pew Research Center found that 46% of Americans use digital voice assistants, and the trend is going up. A recent study from Juniper Research forecasts that 55% of all households will have a smart speaker installed by 2022, and marketers’ spending on such assistants is expected to reach $19 billion by the same year.
It’s a huge opportunity for marketers and publishers looking to reach audiences on these devices. But buying an Amazon Echo, Google Home, or Apple HomePod isn’t just buying a product, but inviting an entire company into your home. So, publishers should tread with caution to make sure they have a fair shot in sharing upside, without upsetting people with invasive advertising and pitches. It’s a no-brainer that as Amazon, Google, and Apple rev up their products, they’re also going to look for ways to monetize their use and increase their company footprints. As the battle between platforms and publishers plays out, publishers must bear in mind that digital voice assistants are no exception.
The Voice Battle Rages
It’s become something of an iPhone or Android question: Google or Alexa? Both are great products and offer great services, and their comparison is the focus of many consumer-focused assessments of where people should invest their money — and eventual data. Indeed, knowing the aim behind these companies is a good indicator for what to expect down the line. Wired’s Scott Rosenberg put it this way: “Amazon is primarily a store, so its likely long-term plan is to use Alexa to sell you more stuff. Google is primarily an advertising company, so somewhere down the line you can bet it will find ways for its Assistant to present you with ‘sponsored’ suggestions.”
Not to be outdone but admittedly late to the game is Apples’s new HomePod device and Sonos’ new voice-activated speaker, Sonos One, which presents itself as a platform-agnostic device. But you’d have to do the legwork yourself to transfer your personal data, should you switch from one platform to another.
And that means that the platform buy-in is real. Amazon has a two-year leg up over Google and is obviously at the top of the hierarchy at the moment; it also has the potential to upend the entire advertising industry. What was once a company that tiptoed around marketing has now been toying more with placing sponsored products higher up in search results — which means advertisers are now buying in more. To date, Amazon says it won’t sell advertising on Echo, but advertisers and the public assume the company will change course when it figures out the best way to serve them.
Google Coming On
Google, meanwhile, is pushing its Assistant onto more products, and made a huge splash at the recent Consumer Electronics Show in Las Vegas. It recently came out with “Smart Displays” (akin to Amazon’s Echo Show), which, among other things, can visualize recipes, maps, and — to toot on its own horn — YouTube videos.
It’s no wonder that marketers are trying to benefit. The natural question for brands now is how to bring voice into their experiences, which is in sync with how companies are also trying to differentiate their products. You can see how that plays out with Apple’s “give me the news” feature on for Siri, or the number of brands building skills for Alexa, which Amazon also touts as device features.
The BBC has been relying on voice assistants installed on smart devices to feature BBC content, and will likely transition into creating content specifically for Echo and Home devices, and monitoring what and how people are listening to create better experiences for those voice-activated formats. The Washington Post and CNN, among others, are also experimenting with ways to leverage audio programming in a way that’s useful for their audiences.
Ensuring a Win-Win Situation
With more devices entering the market and voice positioned to be the next frontier in experience and marketing, the risk for publishers is that building for one company specifically — or even multiple companies — places their eggs in the basket of a third-party tech giant. That means that as bullish as publishers ought to be in featuring content where their audiences are, they also need to insist on sharing the wealth these tech companies are gathering — revenues, customer data, advertising insights and more — to beat any potential exploitation.
And that can also be an opportunity for publishers. The current trend is still on the we-must-get-on-the-voice-AI-bandwagon-before-it’s-too-late hurried strategy, without thinking about the data and revenue deals that need to happen in tandem. With all the opportunities publishers can leverage with voice — news flash briefings, news quizzes, podcast streaming, recipes and the like — they should also emphasize their own loyalty programs, subscriptions and original content back on their own sites.
Just as publishers have battled with social platforms over the power dynamic, data and promotion, they will have to make sure voice devices don’t end up using their content without giving them a good chunk of the spoils when they take off.
Since Facebook made the announcement about the changes coming to News Feed, teams have quickly-organized strategy meetings and experienced a range of emotions from resignation to pure panic.
The trend of Facebook’s declining referral traffic back to publishing sites isn’t new, we saw it happen throughout all of 2017. But with the explicit announcement from Facebook, including a follow-up that they would be asking users to rank publishers’ trustworthiness, the industry as a whole has decided it needs to brace for what’s coming next.
Traffic from Facebook
As of January 20, our network shows 23% of external referral traffic coming from Facebook, which has stayed roughly consistent over the past month.
According to Mark Zuckerberg’s post, “After this change, we expect news to make up roughly 4% of News Feed — down from roughly 5% today.” Since readers must see publishers’ stories and posts in order to click and become referred traffic, going from 5% to 4% for two billion people could result in additional declining traffic.
Facebook’s shifting the tides of the media landscape. And we want to help the industry. We’re offering assistance through data to help clarify your risk relative to other publishers, regardless if you’re a Parse.ly customer or not. See our top three tips below and find out more about getting our free Facebook Risk Exposure Assessment.
How Concerned Should You Be?
The decline of Facebook as a referral source in our network captures the aggregate data, but it’s not the full picture.
If you’re taking stock of your risk and strategy in light of these announcements, here’s what else you need to consider.
1. Know how your historical referral trends track against the aggregate
Yes, Facebook volume has been decreasing. But it hasn’t been decreasing at the same rate for all publishers. For some, it has actually been increasing during that same time period.
Facebook confirmed that some publications could see an increase in their distribution:
“We’ll be working on these efforts for the rest of the year. For the first change in the US next week, publications deemed trustworthy by people using Facebook may see an increase in their distribution. Publications that do not score highly as trusted by the community may see a decrease.”
– Adam Mosseri, Head of News Feed
And while we encourage teams to prepare for changes, so far we haven’t seen any indications of a Facebook “cliff,” rather an ongoing overall decline that had been happening almost all of 2017. Know how your organization relates to that trend.
2. Understand your exposure to the duopoly
The amount of search and social referrals that each publisher receives varies widely under that rolled up aggregate number.
Within a sample of our publisher network, you can see how the exposure to Facebook as the main source of referral traffic ranges. The publishers further to the right of this graph are those most at risk.
3. Evaluate your trustworthiness
Now that readers will be telling Facebook how trustworthy they think you are, how can you assess how they feel already? Beyond search and social traffic, understanding your most loyal readership offers an indication as to how strongly people feel about your site.
Evaluating sources that drive internal referrals and direct traffic through apps or newsletters can pinpoint areas that could be worth investing more in if Facebook traffic continues to decline.
A lot of reporters have been coming to us to help them understand how the platforms’ algorithmic changes affect publishers. This has prompted us to make some resources available to publishers to help them better assess access their risk. As an aid to publishers while these changes are rolling out, I’m happy to announce that Parse.ly will:
We’re confident that this information can assist publishers who may be seeing a decline from Facebook, but also the industry at large as we decrease the dependency on the News Feed and increase the engagement that audiences have with your content directly.
Sachin Kamdar co-founded Parse.ly in 2009 with former NYU roommate Andrew Montalenti. Sachin speaks around the world on how companies can incorporate data and analytics into their content and audience strategies. When not running Parse.ly, he is a mentor for Entreprenuers Roundtable Accelerator, he sits on an advisory board for the University of Florida‘s Audience Analytics program, and he tutors students. Sachin has bachelor’s degree in Economics from NYU and a master’s in Education from Pace University. He enjoys listening to live jazz, exploring Brooklyn with his wife and their dog, Jamba, and never having a steady sleep schedule.
Spend on data-driven advertising is surging as brands continue to realize the benefits of more granular and personalized campaigns. However, the way the advertising industry uses, captures, and analyzes consumer data will change dramatically in 2018. And that will impact just about everything.
Here are two big changes on the horizon that are posed to significantly impact digital advertising:
GDPR is coming – and that’s OK.
In May, GDPR will go into effect. And with it comes new rules surrounding digital data collection. Now, EU audiences will have more control over how their personal information is indexed and used.
In the ad industry, reception to this new regulation has generally been negative. Brands and agencies rely on consumer data to develop personal – and ultimately successful – advertising experiences. GDPR, however, will treat anonymous and personal data identically, which could have a major impact on ad experiences for consumers in the EU. What’s more, there are significant compliance costs that come with GDPR. Those who don’t obey will face fines, which could amount to as much as 4% of global revenue.
Now, while these new guidelines could cause some early problems for advertisers, GDPR will also bring with it key long-term advertising benefits. For example, GDPR raises the bar for opt-in data collection. While this will reduce the scale of data collected, it will dramatically raise the quality. This means better ad experiences for consumers and stronger ROI. More marketers will realize this as we get closer to the launch date.
Second-party data is king in 2018 ad transparency.
Second-party data was all the rage in 2017 and that will continue this year as well. Essentially, second-party data is someone else’s first-party data that you access directly from them. There is no data aggregator or other “middleman” in the exchange of second-party data. Through a direct relationship with the owner of the first-party data, you can define exactly what data is being bought or sold, the price of the data, and any other commercial terms.
The possibilities with second-party data are endless. Advertisers can choose the data sources they feel are most relevant to their campaign optimization, filtering out all the unnecessary stuff. This is where you can take data-driven marketing to a place that is not only unique, but extremely efficient. And what second-party data may lack in “scale,” it makes up for with precision.
In 2018, second-party data will explode in demand, driven by advertiser calls for transparency and clarity in the data they use. By cutting out the middle-man, marketers can go directly to companies that they know will have the most important or high-quality data. The data is unique and a direct relationship is in place, so quality is never an issue.
With GDPR looming and transparency still an evolving battle, 2018 promises to be an interesting year for advertising data. The industry is changing – and while some aspects of data collection and activation will become harder, as a result, at large, GDPR and the shift towards second-party data are likely to enable a new depth of data quality. That’s a good thing.
As Lotame’s Chief Revenue Officer, Eric Marterella is responsible for overseeing all revenue-focused and client retention initiatives worldwide. Since procuring his degree from Virginia Polytechnic, Eric Marterella has garnered sales leadership experience in various industries for over eighteen years at companies including Digex, AT&T and Cisco. Most recently, Eric served as a Global Vice President at Sprinklr, where he was instrumental in the company’s growth from $20M to a $1.8B valuation. Eric is a co-chairman of a monthly executive leadership forum called The Leadership Breakfast.
“At this point, I start from a position of distrust in dealing with Facebook as a company.”
Regrettably, I found myself sharing these thoughts last Friday with reporters who were working around the clock to process the latest Facebook news. And I’m not alone. Even the most trusting publishers have gone from giving Facebook the benefit of the doubt when they rolled out Instant Articles a few years ago, to a “prove it” mentality today.
This is unfortunate considering the power and influence that Facebook has on our lives. Like it or not, Facebook is effectively the largest public square where nearly two billion people around the world gather to exchange information. And there is certainly merit to the argument that the world benefits from the success of Facebook’s experiment to create an open and connected world.
So, what changed?
Business as Usual
Ben Thompson wonderfully captured the heart of the question several years ago, “Even if Zuckerberg is right, is there anyone who believes that a private company run by an unaccountable all-powerful person that tracks your every move for the purpose of selling advertising is the best possible form said global governance should take?”
Our industry is at an important crossroads. In many ways, the Facebook announcement to reorder News Feed priorities isn’t very different from Google’s early shifts and changes (remember Panda?). Many times search engines have been more impactful to the finances of publishers than anything a publisher could control directly. But really, despite some early utopian proclamations, these platforms are just doing business as usual. They lean in heavily to innovation that aligns with their own business interests and has a positive product outcome while slow-walking anything that creates risk to their own financial interests. Why wouldn’t they?
Yesterday, I sent an email to the members of DCN that was quite critical of Facebook. Implicit in my concern is the parallel that can be drawn to Google (something I highlighted in a Washington Post op-ed last October). These two companies are the front door to information for billions of people. So, when they make a tweak or announce a significant shift, the entire information industry needs to pay close attention.
We are paying attention.
Moonshots, Money and Responsibility
Unlike business as usual, “moonshots” are intended to drive real break-throughs that go beyond the horizon of the more cautious bets constrained to basic organizational needs or that don’t inject risk into the cash cows. Last November, we asked Google and Facebook for moonshot-level thinking and initiative to address the fake news and other garbage flowing through their platforms. Yes, the fake news was starting to erode the solid foundation our members’ business is built upon. But the problems go well beyond business. The issues in play resonate deeply through our society.
To put it bluntly, both companies have failed to step up to the task. As a result, there are increasing levels of tension in the press, in Washington, and in Brussels as this distrust spreads. And this isn’t good for anyone.
There are two platform pressures that work against trusted publishers and, importantly, public interest:
Platforms are biased towards solving problems for the lowest-common denominator “publisher” so the solutions can be applied to the wider web. This often creates collateral damage for publishers playing the long game – cultivating brand and engaging customers – and not just focused on immediate financial gain. We’re seeing the impact now as Google attempts to solve for ad blocking or how the industry has dealt with measurement issues.
Platforms also have incredible growth expectations, as they really have one goal to surpass Apple as the most valuable company on the planet. These revenue and profit obligations create an inherent bias toward their own products. In fact, the European Commission already found Google guilty of this. Facebook will always drive consumer intent and publisher interests to the most profitable outcomes. This is why video was Facebook’s #1 priority last year. And now it’s not.
There are also two big issues that affect the entire ecosystem and, importantly, public interest:
Americans don’t trust “the media.” In fact, they trust it less and less each day. The research says they do appropriately trust many of our members and the journalists and creatives they employ. However, what Americans think of as “the media” continues to change and now includes platforms, distributors, advertising technologies, artists, advertisers, and publisher brands. And the public doesn’t separate or even understand where the buck stops with each. Every ounce of research I’ve seen shows that more and more consumers are going to places like Google, YouTube, and Facebook to get their news and information despite trusting these platforms significantly less than other outlets. This distrust in platforms and ad technologies extends into the media at large.
Facebook and Google are the two most significant sources of traffic to publishers. Facebook drives about 17% of the inbound visits to DCN members; Both companies share less than 1% of their revenue with DCN members. They are very important for the discovery of news and entertainment. Yet they feel it is very unimportant to pay for the creation of it.
These gaps aren’t going to be closed through hearings in Washington. They’re also not going to be closed by walking away from dialogue. Ultimately, we need major platforms to decide that moonshots matter and be both humble enough and comfortable enough with their own vulnerabilities to work with publishers and academics on solutions. I don’t see that happening yet but I believe that we’ll get there in time. It’s just that important.
Today, Slate unveiled a sweeping redesign that includes its logo, website, mobile, and events branding. But this redesign runs much deeper than a new aesthetic approach. Slate’s new look reflects the organizations’ emphasis on audience engagement over scale.
“Our last major redesign, in 2013, was at the height of the Facebook boom. Social was the driver.” That design was very successful, according to Slate’s editor in chief Julia Turner. However, like most websites, it prioritized social sharing over increasing user interaction and time on site.
The landscape has changed a lot since 2013. In fact, the only constant has been change—with traffic, audiences, and distribution largely reliant on the algorithmic whims of search and social platforms. This is evident in Facebooks recent decision to de-emphasize news articles and anything published by brands in user’s News Feeds. While many publishers are concerned over how the latest change will affect traffic, few are surprised.
Engagement versus Scale
However, the pursuit of likes and shares was just one symptom of a larger trend that dominated the thinking of digital publishers: the quest for scale. As Dan Check, the president and vice chairman of The Slate Group, describes it “social isn’t about increasing time spent on site; it is about touching more people. Scale is fundamentally the pursuit of uniques.”
According to Turner, “We began to see fairly early on—in late 2104, early 2015—that the pursuit of scale for scale’s sake, didn’t make sense for a brand like Slate.” In fact, last September the company moved to engaged time as its primary measure of success, which enabled teams across the organization to put loyalty at the forefront of their initiatives. “The Landscape has become inhospitable to cheap scale. But even more, it doesn’t suit our audience and values.”
The new design builds upon Slate’s commitment to understanding and serving its audience, which Turner describes as “a highly-informed omnivorous media consumer.” Given that they are looking for “sophisticated next-level analysis,” she said it was important that this new design help guide them to information that will offer a deeper contextual understanding of topics in Slate’s five verticals: News & Politics, Culture, Business, Technology, and Human Interests.
With the new design, regardless of whether the visitor is a regular or lands on a page via search or social, Check said “We wanted to give people stronger signposts and a better understanding of what they can expect from us.” The redesigned Slate (which doesn’t use a third-party recirculation partner) will “show people more relevant content and tell the story about who we are. For years, our message was ‘like us on FB, follow us on Twitter.’ Now, it is more about contextualizing what you’re seeing.”
Listening to Opportunity’s Knock
This, in turn, is intended to deepen visitors’ time-spent on the site and affinity for the brand, both of which translate into revenue opportunities. While Slate CRO Charlie Kammerer says that the company has been able to “baseline monetize purely with our programmatic dollars,” the new design will offer more premium membership prompts for SlatePlus as well as newsletter sign ups.
It will also better surface and integrate Slate’s popular roster of podcasts on the homepage and throughout the site. Check points out that for many years, podcasting was a medium awaiting a business model. However, in the decade between the company’s first podcast (in July of 2005) and the explosion of podcasting a revenue driver, Slate remained committed to the format—in large part because its audience was. “Podcasting was something that garnered a lot of audience interest for about a decade. There’s rabid listenership. So, though it wasn’t a business for a number of years, it always made sense from an audience perspective.”
Today, Slate claims 2% of the podcast market share. Kammerer said “We’re glad we stuck with it because when the model matured, we were already in a good position in terms of expertise and audience.” And, with this redesign, Slate will also be investing more in audio, further increasing its roster from a current 24 podcasts and putting out more original shows like its hit Slow Burn, about the untold stories of Watergate, which hit #1 on iTunes on its first day out.
However, Slate’s emphasis on audio and the written word is not an indication that it has “abandoned video” said Turner. “Our video focus is what we can do well.” And, as Kammerer pointed out, the “the case for the pivot to video was a case for scale. The CPMs were higher so a lot of outlets chased those CPMs forgetting that video is expensive to produce well, and that the margins aren’t that great.” In his experience, the CPMs for audio are as good or better than video. “It’s about focus for us and we continue to focus on maintaining a super-premium audience. The written word and podcasting delivers that audience in a very meaningful way.”
And, while engaging its existing audience is a critical piece of Slate’s strategy, they plan to continue to build a quality audience without embarking on an unbridled quest for scale. As Turner put it, “It isn’t that social isn’t a good way to drive traffic. But what you want is a real relationship with your audience that isn’t dependent on social media.” She reports substantial growth in Slate’s Google and Apple News-driven traffic.
Referring to Facebook’s decision to downgrade publishers’ content in News Feed, Kammerer said “If they really want to drive more meaningful interaction, I like our chances. But who knows what changes they’ll announce two months from now?”
As Check put it, “You saw big publishers reach huge audiences through Facebook; a lot of people discovered content they wouldn’t have otherwise. Unfortunately, it has also given rise to a lot of things that aren’t great like fake news and low-quality content.” He sees a genuine market opportunity for existing or emerging aggregation partners who “want to be more responsible.”
Ultimately, Turner sees a real upside for Slate in Facebook’s move to back away from media distribution. “My instinct is that being an arbiter around the news space requires a whole set of real responsibilities and rigor that they’ve been fairly freaked out about. Now maybe we’ll see the return of news judgement to the institutions that have been cultivating that judgment for years.”
In an age where exclusive content is pure gold and data is the new black gold, smart news organizations are looking for ways to unlock their frontline information and insights for maximum exposure across a multitude of platforms.
The Associated Press — a 170-year old news organization with teams in over 100 countries and one of the world’s most important archives of audio-visual archives of news, social history, sports, and entertainment — is going one better. It’s exploring new and rather unconventional opportunities, in areas ranging from data-mining to data journalism, to identify new markets and revenue opportunities for its wholesale and non-profit businesses.
Peggy Anne Salz, mobile analyst and Content Marketing Strategist at MobileGroove, speaks with Ted Mendelsohn, AP Vice President, Commercial and Digital Markets. They discuss the company’s mission to expand distribution of its archival content, extract value from its data, and enhance news-gathering capabilities.
PAS: On any given day, more than half the world’s population sees AP content. But that’s just one side of your business. Tell me more about your wholesale business and the opportunities you pursue.
TM: When I was brought into AP some 25 years ago, the commercial business focused on selling AP content into the federal government, corporate markets, and large clients, including Prodigy, LexisNexis, Dialog. Expanding this by identifying new markets and opportunities is very much what my job is about today.
Another part of the business is our retail business, where AP mobile comes into play. The focus is on making our own content available on AP-owned and operated sites and monetizing through advertising.
Finally, there are content services, where AP — because of its huge footprint worldwide and access to photographers and videographers — can work together with clients. It’s a service and a business opportunity that we see expanding. are exploring opportunities where brands might sponsor content like the AP Top 25 college basketball or college football rankings. There are also opportunities for companies to sponsor unique content. This might be along the lines of the top 5 things you need to know about ways you can improve health and fitness. We are open to doing more of that and that’s also where having our own platform opens a whole line of revenue and opportunities.
PAS: AP is perhaps best known for frontline, breaking news content…
TM: Yes, it’s our bread and butter. We’ve noticed that our audience is heavily engaged with our content — stories, photos and video — and that the sessions are long. In fact, in August 2017, a survey from NewsWhip showed that AP drove higher total engagement on Facebook than any of the Top 10 individual publishers in June and July. This achievement is also linked to our ongoing efforts to update our content and add value. We provide alerts, but we also add to the news content from every angle, enhancing the story with text, photos, and video.
PAS:You’re using technology to expand and enhance distribution of your content. What is the role of technology in the production of content?
TM: AI is a technology that has an impact at several levels. We’re using it, but we’re also educating the media by showing the example of how we use AI within our newsroom. A lot of our efforts around understanding and using AI in the newsroom is focused on producing the routine news, like sports scores, and have them generated through AI technology.
But it’s not just about automation; AI can open opportunities for our reporters to cover more important stories and produce the exclusive in-depth content that wins us — and our clients — audiences on mobile and other platforms. And that is what drives the higher engagement. A good example is one of our most successful stories, what we’ve been calling the “Seafood from Slaves.” Here our reporters won the Pulitzer Prize for Public Service for their investigation that exposed slavery in the Southeast Asian fishing industry.
PAS: What are the other technologies top of your radar?
TM: At one level, AP is a retail store, for lack of a better word. We focus on approaches that will allow us to appeal to our readers directly. We ‘sell’ them on our content on the platforms, such as mobile, where they want to consume it. But it’s also about understanding how other companies and platforms are going to impact how we engage audiences. A prime example here is voice and deciding how we engage with companies that are creating voice-activated content.
It means talking to the Amazons, the Apples, and the Samsungs — companies now looking for content that is driven by voice-activation. For us, it’s becoming a new way of engaging with the customer, if you will, by creating content and adjusting our content for this market and working with companies who are attracted by the content we have and the platforms we can serve.
In other words, it’s not just the technology that we use internally. It’s working with the companies who are really technology-driven and finding ways to use our content to improve their technology and, at the same time, to make our content available in new and different ways.
The number one question for AP is: how do we move our content and make our content play across the platforms? My first boss at AP used to say he wants to ride every horse in the race. And, in some ways, that’s what we’re trying to do. We are on the horse that allows us to display and distribute our content. And we are riding the horses that allow us to get our content to the companies out there that need our content to engage their customers.
PAS: AP is exploring AI, launching a VR and 360 video channel in collaboration with AMD, examining the opportunities around voice and Internet of Things. How do make choices about the companies or platforms to explore and the ones to ignore?
TM: It’s not about betting on the newest technology or the ‘Next Big Thing.’ You also have to be flexible enough to adjust to what is coming out on the market. As an industry, we couldn’t have anticipated a technology like Amazon Echo and its impact. We also couldn’t have known the content these platforms require. But once it’s gaining traction on the market, like it is now, the best advice I can give content companies is to be flexible. You cannot shut them out; you have to engage.
What do I mean by engaging? It starts with the way I organize my group. Specifically, I’ve brought people together who have a focus on vertical segments. Some are in continuous discussions with industry leaders — they are in talks with Amazon, Apple, Yahoo!, and so on. It’s not a discussion like “Oh, we have this content for you, why don’t you sign a deal with us?” It’s a dialog where we want to understand where they’re going and they’re coming back to us with insights on the tech and opportunities that have real potential.
PAS: Data is hailed as the new black gold, and you have stockpiles of it. How do you view the opportunities in unlocking that data for clients?
TM: On the data side — for example, election data — we are the primary source for our clients. We’re finding that election data, even older data, is highly valuable to hedge funds. We make that data available for them to study and make whatever algorithmic assessments they feel necessary based on the data.
Data is also at the core of our edge in investigative reporting, identifying trends and news ahead of the competition. For example, an AP analysis of charter school enrollment data allowed us to expose the growing level of racial segregation in schools. Recently we reported on crime in the cities, using the data to take a different perspective. Rather than look at crime growing in cities, we used the data to examine crime in particular neighborhoods. Data allows you to see this, and so we are finding ways to make this data available for our reporters and for other organization to use.
PAS: So, data has become a new commodity?
TM: Maybe commodity is not the right word. Let’s say it’s a valuable good that we can offer and sell because other companies — businesses, financial institutions, hedge funds — are evolving to use data in ways that we don’t.
There are two ways to look at the way marketplace for data is developing. One is the opportunity at the consumer level, where more and better data can improve marketing, advertising, and understanding your audience. The other is the opportunity at the commercial level. Companies need access to data — for example, election data — to identify and understand the trends, and make investment decisions based on the combination of data.
It’s early days, and frankly, no one is exactly sure where how data will play out. But we are seeing that a number of financial institutional are looking for data to enhance their own data. It’s why I have some people on the team who are working with financial institutions, trying to understand what they need so we can extract data to make these datasets available in the way our clients want them.
PAS:Content and data — the opportunity is in being flexible in your choice of platforms and models…
TM: Correct. And the third part is being flexible in how you do business. You can’t be limited in how you do business or the kind of business terms you negotiate. All of us in the media industry have models, pricing lists and stuff like that. I threw those models right out because I realized they don’t work. The next technology comes around, and whatever pricing model you have doesn’t work. Instead, you have to adapt to change. You have to adjust your content, and your business model has to be flexible as well.
Peggy Anne Salz is the Content Marketing Strategist and Chief Analyst of Mobile Groove, a top 50 influential technology site providing custom research to the global mobile industry and consulting to tech startups. She is a frequent contributor to Forbes on the topic of mobile marketing, engagement and apps. Her work also regularly appears in a range of publications from Venture Beat to Harvard Business Review. Peggy is a top 30 Mobile Marketing influencer and a nine-time author based in Europe. Follow her @peggyanne.