Login
close
Login is restricted to DCN Publisher Members. If you are a DCN Member and don't have an account, register here.
Search

Digital Content Next logo

Menu

InContext / An inside look at the business of digital content

Archive Archive

Archives

  •  
  •  
  •  
  •  
  •  
  •  
  •  
Perspectives

Hey Facebook and Google: The stakes are high. You in or out?

“I don’t trust Facebook.”

“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:

  1. 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.
  2. 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:

  1. 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.
  2. 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.

Perspectives Image
Perspectives

DCN’s must reads: week of January 17, 2018

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

Innovation | Revenue

The strategy behind Slate’s engaging new design

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.”

News Judgement

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.”

Innovation

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

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

Ted Mendelsohn, AP Vice President, Commercial and Digital Markets

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

In this Oct. 20, 2017 photo, Jamain Lee, center, looks at classmate Andre’veon Mosby at Milwaukee Math and Science Academy, a charter school in Milwaukee.
PAS: Data is hailed as the new black gold, and you have stockpiles of it. How do you view the opportunities in unlocking that data for clients?

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

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

PAS: So, data has become a new commodity?

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

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

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

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

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

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

Perspectives Image
Perspectives

DCN’s must reads: week of January 11, 2018

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

Perspectives | Revenue

The Good, the Bad and the Ugly: The 3 trends media execs need to watch in 2018

The past 12 months were pretty brutal for large swathes of the media and creative industries. We witnessed unpresidented (sic) attacks on the mainstream media from the Oval Office and White House surrogates; digital darlings like BuzzFeed and Mashable, missed targets, laid off staff or saw their businesses valued at a fraction of their previous levels. Meanwhile, the #MeToo campaign rightly garnered considerable attention, with its ramifications still being felt in early 2018.

So, what can we expect in the year ahead? Here are three key strategic areas that media execs must keep an eagle-eye on:

Show Me the Money: Making Media Pay

“Journalism needs new revenue models, particularly ones that align all our business incentives with our editorial ones,” Wired‘s editor-in-chief Nick Thompson wrote in a recent Facebook post.

His comments came at a time when both Wired and The Atlantic, publications which have predominantly eschewed these income models, have decided to pivot to paywalls. Previously these outlets have typically encouraged readers to “whitelist” their sites, bypassing audiences ad-blocking preferences.

The move by The Atlantic is particularly notable given that they’re one of the organizations enjoying a discernible “Trump bump” as younger readers “flock to old media.” It also comes, just a few months after introducing The Masthead, a new $100-a-year membership program which promises “founding” members exclusive content “at a moment rife with challenges for independent journalism.”

Meanwhile, The New York Times — fresh off the back of hitting record levels of subscribers — has decided to halve the number of articles it offers for free each month (from 10 to 5), as it seeks to further grow its subscriber base by putting more content behind the paywall. The move mirrors a similar approach in 2012, when the Times reduced the number of free articles non-subscribers could access from 20 to 10.

As of December 2017, the Gray Lady now has more than 3.5 million paid subscriptions and over 130 million monthly readers; more than double their audience from two years prior. Their efforts to become “a subscription-first business” were reiterated last year in their 2020 report, “Journalism That Stands Apart” which argued:

Efforts to generate more paying consumers, and to double-down on opportunities to create additional income from loyalists, are understandable.

But they beg two key questions:

Firstly, is there enough money to go around? Will 2018 be the year when we hit peak-paywall? Afterall, general audiences have historically been pretty reticent to pay for content.

Secondly, if there is a finite pot of subscription monies to go around (and I believe there is), then local news outlets are the ones most likely to suffer. They don’t have the scale that national and international outlets can potentially tap into. That’s an outcome which if far from desirable, given the pressures the sector is already under.

To counter this, local newspapers (the medium most at risk) will need to aggressively make the case (to readers and advertisers alike) that supporting their outlet isn’t just about your own consumption needs, it’s also about supporting the type of society you want to live in. And that’s one where we should guard against the expansion of media deserts, and stress the need for strong original reporting from across all parts of the information ecosystem.

Primary Colors: When Politics and Policy Collide

If 2017 was the year of “fake news” and “alternative facts” then 2018 promises to be a year where the media landscape risks becoming even more partisan and polarised.

In the coming months, we won’t just see missteps and mistakes in the mainstream media being weaponized, we can also expect to see regulation, competition rules, as well as M&A activity, being increasingly viewed through a political lens.

As a case in point, consider the AT&T – Time Warner case, Sinclair’s proposed Local TV expansion, or that the FCC’s decision to overturn net neutrality was split down party lines. Against this backdrop, it will be interesting to see how the huge Disney-Fox plans play out.

Whatever your political persuasion, it’s hard not to detach the different approaches being deployed here from the current political climate. That may always have been the case, but in 2018, this promises to be more overt than ever.

The implications of these developments, of course, will resonate far beyond Washington and the boardrooms of Fortune 500 companies.

Changes in net neutrality rules may make it more difficult for local players and start-ups to afford new access fees; it will certainly be much harder for them to access the super-fast highway than content creators with deeper pockets.

Moreover, consumers may find themselves facing higher internet and phone bills, more politicized local news coverage, and the need to subscribe to yet another OTT service, as Disney launches its own on-demand products and removes its content from Netflix and other rivals; as it seeks to grow its own audience (and direct revenues) in this space. Despite the financial implications, it’s a move that becomes more appealing to mouseketeers the world over if/when Fox’s vast library is also folded into the mix.

I, Robot: Emerging Tech

Writing on these pages at the end of last year, Mark Glaser, Founder and Publisher of MediaShift, highlighted how we are already witnessing considerable interest – from publishers and platforms alike – in Audio and Voice as potential delivery platforms.

Even though it’s early days for products like Amazon Echo and Google Home, research from the Reuters Institute for Digital Journalism indicates some of the potential. CNN, the BBC,Wall Street Journal, and many others all experimenting with these technologies. Voice assistants have the potential to transform local search and content, with local newspapers joining NPR, the Washington Post, and a plethora of other publishers, who are exploring whether these platforms can deliver new audiences and fresh opportunities for monetization.

To these digital horizons, of course, we also need to add Augmented Reality (AR) and Artificial Intelligence (AI).

Speaking at the Global Editors Network conference (GEN Summit 2017) in Vienna, Austria, last summer, Amy Webb, founder of the Future Today Institute,felt that newsrooms and media companies – by focussing on virtual reality – had been “following the wrong fish.”

Reflecting on the energies being poured into these areas by some of Silicon Valley’s biggest companies, she argued that “the future of news involves object recognition and Augmented Reality. “But,” she said, ”there isn’t a single news organization that I know of on the planet that’s working on a visual object recognition strategy for revenue advertising or for content.”

Perhaps that will change in 2018, not least because I expect Facebook and Snapchat to get much more behind these tools/platforms, especially AR. Facebook has already made some noises about this; and just as they incentivised publishers and celebrities to help kick-start their live video offering, it’s not unreasonable to expect they may take a similar approach to another format that they’re particularly keen to grow.

Finally, with AI tools already being used for live reporting, work being done by agencies, and the automation of some content – such as the local news experiment, supported by Google Digital News initiative – this fast-moving technology remains one to watch.

The Dollars Trilogy: What this Means for You

How you categorize, these digital-led developments (the good, the bad and the ugly), will vary – depending on your particular standpoint. But, these new realities cannot be ignored. Each of these trends has the potential to impact your bottom-line. For good or ill.

As we enter the end of the current decade, the media landscape probably feels more like the wild west than it has for some time. The impact of the three topics outlined here, coupled with ongoing strategic considerations — such as ad-blocking, the consequences of changes to Facebook’s algorithm, and the continued reliance on many third party platforms and services — means that many media companies continue to face an uncertain, unpredictable, future.

Yet, at the same time, this uncharted territory also offers tantalizing prospects for content innovation and potential opportunities for new revenue streams.

The world is full of digital cowboys, but with 2018 promising more paywalls, evolving policy and the growth of emerging tech platforms, media companies may need a few more gunslingers. Change is in the offing, and as a result, execs will need to carefully marshal their resources, and once again saddle up for another year where change and opportunity will go together hand-in-hand.

Industry-Research | Video

More video content, more confusion. We need to help consumers find what to watch

Consumers are swamped with video content options. New services continue to emerge in a fragmented marketplace of distribution platforms. It’s overwhelming for consumers and, as a result, much video content is left undiscovered and unwatched. Today’s video publishers need to do more than create (or acquire) must-see content. The need to attract and engage consumers and provide a return on investment to marketers.

PwC’s Consumer Intelligence Series, Can you find that show I didn’t know I wanted to watch? How tech will transform content discovery focuses on the key questions of digital content discovery, its influencers and improvements needed in personalized recommendations.

The Appetite is There

Consumers have an appetite for new content. Half of consumers (55%) report they are looking for a new TV show or movie to watch at least once per week; 83%, a few times per month. Close to three-quarters (72%) of consumers are watching more video content than a year ago and just less than half (46%) are paying for more content.

Yet, consumers are frustrated with the content discovery process. Nearly two-thirds (62%) of consumers agree that they often struggle to find something to watch, despite there being many choices available to them. Further, the findings show that half of consumers (50%) are frustrated when they search for content to watch compared to finding content to read (37%) or music to listen (32%).

Interestingly, pay-per-view customers (38%) enjoy searching for new video content to watch more than cord-cutters (31%) and cord-nevers (23%). Even cord-cutters are bothered by the process of finding content to watch. In fact, 74% agree that despite there being a lot of choices available to me, I often struggle to find something to watch and 61% also agree that searching for something to watch is frustrating. 

The Influencers

There are several key influencers informing consumers viewing decisions. Streaming content plays an important role in content discovery. Eight in ten of all consumers (79%) and 90% of consumers under the age of 30 years old agree that streaming services play a large role in their discovery of new video content. Social media also helps consumers find what to watch (50%), especially for those under the age of 30. Interestingly while there are frequent discussions on social media about video content to watch, consumers don’t necessary based their viewing choices on these discussions.

Further, less than half (48%) of respondents said they are influenced by what their friends and family watch. Meanwhile, FOMO (fear of missing out) reportedly also drives 25% of consumer viewing habits.

Discovery

Pay-TV subscribers and non-pay TV streamers differ in the top influences on new content discovery. Personalized recommendations appear to be missing its mark ranking number six for pay-tv subscribers and ranking number four non-pay TV steamers.

Browsing is still a popular way for consumers to find video content to watch. Almost half of consumers (47%) report that they came across a new show they recently watched while browsing for something to watch. The other top responses included commercials/advertisements looked good (44%), read a great review (32%), recommended to me based on another show I previously watched (27%) and people I know wouldn’t stop talking about it (23%). Consumers are also unpredictable. Eighty percent state that what they choose to watch is largely driven by their mood on that given day.

Get Personal

While 79% of consumers report they’ve watched a TV show or movie based on a recommendation from a content service and 90% state like what is recommended to them, personalized recommendations are still not the go-to source for consumers. Four key contributing factors as to why personalized recommendations are not working for consumers include:

  • Friends and family know better
  • Personalized recommendations are the shows the services are promoting
  • Not sure if the recommendation will be liked
  • Don’t want to waste time on starting a new show that may not be liked

Consumers want more clarity as to what is behind the personalized recommends. Consumers report they are more likely to watch personalized recommendations if additional context is included:

  • Provide criteria for high rating; provide details such as fast-paced, exciting, good characters (83%)
  • Allow to access reviews directly from platform (75%)
  • Quantify likelihood of enjoyment based on previous viewing habits or others with similar profiles (72%)
  • Offer specific reasons for poor ratings, for example, boring (72%)
  • Ability to link to reputable critics’ reviews directly from platform (68%)

Get Smart

Artificial Intelligence (AI) can help consumers find more content to fit their taste. AI can assist in content curation organizing content by themes. It can also use consumer insights to classify and target consumer segments to test recommendations. AI can look beyond genre categories and include a director, favorite actor, sub-sub-sub-genre, decade, special effects, costumes, etc. Personalization needs to be even more adaptive and include a temperature reading of mood. Content platforms should ask consumers how they feel. After all, 80% report their video content selection is often based on their daily mood.

Expanding the search function beyond individual platforms is also important to consumers. They not only want to know what to watch but where to watch. Helping consumers navigate the video content marketplace will assist the content selection process so that video gets found – and watched.

Advertising | Perspectives

How to make it easy for brands to buy your advertising (like Google & Facebook)

We all know the story only too well by now: depending on whose estimates are cited, Google and Facebook — the oft-referred to “duopoly” — together account for 60%-80% or more of all digital advertising revenues. eMarketer succinctly captures the repercussions by stating “With the duopoly taking in about two-thirds of US digital ad revenues, that leaves around a third of the market for every other firm to compete for.”

These “other firms” include deep-pocketed companies like Microsoft, Amazon, and Verizon — all of which pose a threat to both eat into the duopoly’s market share as well as capture the lion’s share of the remaining $30 billion or so in US digital ad revenues. But this is by no means a foregone conclusion.

Microsoft has been stumbling around this category for years without finding its groove; Amazon doesn’t understand the ad business; and Verizon doesn’t know how to compete in unregulated categories (yet). Among the duopoly itself, Facebook will have the Department of Justice on its back for at least a couple of years due to its complicity in the election mess, and Google is just waiting for the other shoe in the saga to be dropped on its doorstep. Meanwhile, the braintrust at Googleplex in Mountain View is focused on figuring out how to diversity revenues into non-advertising channels, with mixed results so far.

For companies seeking to successfully capture or grow their share of the roughly $100 billion US digital advertising marketplace, the following tactics will help ingratiate you among digital marketers and media buyers.

Make It Easy To Buy From You

The path of least resistance here is joining the exchanges and allowing media buyers to access your inventory via programmatic platforms like AppNexus, MediaMath and OpenX. And this should certainly be part of a multifaceted strategy.

But there’s also old-fashioned tactics like providing media buyers with case studies that resonate, transparent pricing, low minimum buys, creative support, accepting credit cards, and trafficking campaigns quickly.

Without question, most advertising is done by the largest 100 or so brands, so from one vantage point, it makes the most sense to allocate inordinate resources to this area of the marketplace. But this is also a crowded and fiercely competitive part of the market. The upside of the emergence of Google and Facebook is that small and medium sized businesses now understand the power of targeted advertising as never before, and are more receptive to advertising pitches as a result.

Emphasize Your Strengths

Brands still matter — arguably now more than ever. And seminal publishing brands have brand power in spades. Longevity, relationship with readers, and unique value propositions can help, over time, combat against the duopoly dominance.

By contrast, problems associated with digital advertising have entered the public consciousness via Russia election meddling, with Facebook serving as the poster child. While challenges associated with ad fraud aren’t easily avoided by any organization with robust digital properties, they are certainly more manageable relative to Facebook trying to monitor billions of users or Google’s ad network, which supposedly reaches 90% of the internet. Buyers need to understand these risks, and the pros and cons of going in one direction versus another.

To be sure, it’s easy to buy ads from Facebook and Google today. But these avenues can be expensive, and are rife with potential problems — fraud and transparency among them, but dozens of others as well related to campaign configuration and tuning. The media buying community writ large still requires a good deal of education on these issues, and traditional publishers have an opportunity to carefully deliver these messages. (In my experience, there is a subtle and mostly silent shift underway in the marketplace, as experienced media buyers aren’t happy about being overly reliant on two outlets for more than half of their media buys.)

Help Marketers Help Themselves

Perhaps Google’s greatest genius —not including search marketing (which was a happy accident, like Pfizer’s *discovery* of Viagra) — has been in helping marketers reorient their fundamental value proposition in the organization. By emphasizing business-based metrics such as “conversions” and “dollar value per conversion” in their ad buying (AdWords) and measurement (Google Analytics) tools, which can be easily linked to revenues and profits, they’ve helped marketers do their jobs more easily and effectively. At the same time, Google’s tools provide marketers with myriad ways to shape performance data in order demonstrate a campaign’s effectiveness.  

Publishers can steal a page from this playbook by providing prospects with similar support (recognizing that some manual labor will be required in this effort) to monitor performance and ROI after the campaign has been completed (or even mid-flight). Like the Google and Facebook systems do, it’s not so much the absolute data that matters most, but their organization, meaning, and presentation. And most marketers need help separating the wheat from chaff. This kind of pre- and post-sale support will go a long way towards generating industry goodwill (unless you’re a top 100 buyer, Google and Facebook support is awful) and, of course, repeat buyers and loyal customers.

While both the advertising and publishing sectors have experienced seismic changes over the past decade, we could be on the precipice of another shift, albeit a far more subtle one. The volatile political environment has created an uptick in demand for quality journalism, and venerable properties such as The New York Times are growing subscriber bases and figuring out how to make the transition to digital work. Fallout from politics has also ensured that one of the biggest players in digital advertising will have a neon bullseye on its back for the foreseeable future, at least limiting any unusually aggressive behavior. For storied media organizations looking to make a move and carve out their territory in the digital advertising ecosystem, conditions may not get better than this.

Tim Bourgeois (@ChiefDigOfficer) is a management consultant at East Coast Catalyst, a Boston-based advisory firm specializing in digital strategy assessments and media audit projects.

Perspectives | Video

Vertical video, brand safety, consolidation, and Meredith: Four predictions for 2018

In 2017, the advertising industry — both buyers and sellers — experienced many changes that will shape the space moving forward. Some were related to the constantly advancing technology that has become so important in the category. Others dealt with an increased demand for greater transparency from partners.

So, with the New Year now underway, there are several areas that I believe are especially critical for the industry to pay attention to in the coming months. Here’s a closer look at four of them.

1. Sharp increase in vertical video.  

While Snapchat’s stock price is declining, at MediaRadar, we observe that the number of brands buying on their platform is rising sharply. One of the unexpected byproducts of Snapchat’s impact on the market is that those advertisers are now more actively running vertical video – everywhere. Simultaneously, we see more internet use of mobile phones than ever. As a result, we predict a continued, steady increase of vertical video as the vertical format becomes more common.

2. Brand safety becomes much more important.

In the beginning of 2017, it seemed like brand safety was a minor issue. However, ater repeated lapses at YouTube (and elsewhere), advertiser confidence is shaken. The scale of the problem is significant. YouTube CEO Susan Wojcicki is taking no chances. She announced she had hired 10,000 people to manually watch videos. And the WSJ’s overview on the people doing the clean-up paints a bleak portrait of what they’re up against. We predict brand safety becomes an important part of 2018 campaigns.

3. Ad tech consolidation.

We believe there will be fewer ad tech companies at the end of 2018. Here are the headwinds the industry faces. First, MediaRadar observes more MSAs between agencies and ad tech players than ever before. Ad spend is being increasingly consolidated and concentrated. Second, high-profile brand safety failures from 2017 are decreasing the amount of buying on programmatic. Third, follow-on investments by venture capital has declined sharply into ad tech firms. And, finally, companies that sell direct are becoming more sophisticated selling against programmatic, as well as co-opting programmatic for their own benefit.

4. Meredith rises.

Industry pundits are quick to fret about the negative impact of disintermediation on traditional media businesses. But disintermediation doesn’t actually favor the new vs. the old. Des Moines-based Meredith Corporation is a wonderful example of this. In the past 10 years, they have been careful buyers, scooping up assets from Gruner + Jahr, Disney, Martha Stewart, Selectable Media, AllRecipes.com, and now Time Inc. They’ve also had big success launching new brands, such as their mega-hit, Magnolia Journal, in 2017. The result is a company that will have approaching $5B in annual revenue. The stock has gone up 6X in the past 10 years. Meredith is clearly a recognized leader in the new media hegemony.

As we look ahead, expect vertical video, brand safety and consolidation – as well as the growth of Meredith Corporation – to be top-of-mind among advertisers in 2018. Closely following any developments in these areas will be crucial to their success next year, and beyond.

Perspectives Image
Perspectives

DCN’s must reads: week of January 4, 2018

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

©2024 Digital Content Next. All Rights Reserved.