It does not come as a surprise that most digital publishers look to the New York Times for subscription strategy advice: On February 6th, The “failing” New York Times posted digital revenue of $709 million for 2018, based largely on its 3.4 million digital subscriptions. It also bucked expectations when it came to its ability to attract new subscribers. The NYT added 265,000 new digital subscriptions in the last quarter of 2018, which it calls “the biggest gain since the months immediately following the 2016 election.” As a result, the paper has set itself the new goal of having 10 million subscriptions by 2025.
This all suggests that while the “Trump bump” was a reality, there is more to the NYT’s success than simply being the target of The President’s ire. In an interview with Ken Doctor, the NYT’s Chief Executive Mark Thompson attributes much of its success to steady investment in the newsroom – which he calls a “very simple, old-fashioned model” – through having the highest number of journalists on staff in the paper’s history.
The vast majority of news publishers, however, do not have the coffers of a national title. Later in the interview, Thompson acknowledges that the NYT has unreplicable advantages when it comes to adding staff. However, the New York Times is employing a strategy that more publishers can and should emulate: It’s giving its news away for free – to 3 million students.
On its face, the idea sounds crazy. Back in July of last year, the NYT’s ‘The Truth Is Worth It’ advertising campaign made paying for high-quality news the responsibility of the public. Its press release stated that its research had “found that seventy-three percent of U.S. news consumers who pay and subscribe to a news source say that it has never been more important to support quality journalism.”
That rhetoric has also been employed by publications including The Times of London, the Guardian, New Statesman, and others as they market their own paid-for news products. Even local and hyperlocal publishers are increasingly pushing the idea that, while “news” is readily available for free online, quality news needs to be paid for.
In fact, the NYT is making a bet on free as a long term investment in demonstrating the value of quality journalism. As with the growth in its newsroom headcount, this is an investment the NYT is making in its future. And, while there might not be straightline attribution between these free subscriptions and total revenue for the foreseeable future, it is a smart bet that it can convert some readers who might never have paid into lifetime subscribers.
It’s a clever strategy for a number of reasons. However, it all builds upon the idea that free subscriptions for a particular demographic can convert a proportion of people –0 who otherwise might never pay for digital news – into regular subscribers.
While young people are more likely to pay for news than previous generations, there is a hard cap on how many news subscriptions they can afford. The latest Digital News Report from the Reuters Institute for the Study of Journalism found that just 14% of people globally currently pay for online news. And it’s vanishingly unlikely that the majority will pay for more than one subscription. Additionally, the price of an annual news subscription can take a back seat to entertainment services, though this is not a phenomenon unique to young people. Competition for those 14% of people, then, is going to be fierce.
(The NYT’s scheme is currently limited to students in the United States. However, the increasingly international NYT plans to open it up to international students as well, where the propensity to pay for news is typically lower than in the US).
So by offering the subscription for free, the NYT is effectively betting that it can create a relationship with enough students to make the scheme worthwhile. Having that preexisting relationship with a potentially lucrative audience is vital: With more players entering the subscription space, it’s unlikely that more than a handful of truly international publishers will be able to sustain themselves solely with the revenue from the 16% of people who are willing to pay for news in the US.
Those subscribers are a rare commodity, and getting young people on board early could mitigate some of that conflict with the NYT’s peers.
The Axios piece that trumpets the NYT’s 3 million student subscriptions contains a telling quote from Hannah Yang, head of subscription growth at the paper: “We already have high retention, but I think this could make it almost bulletproof.”
It’s a vote of confidence in the NYT’s ability to retain subscribers, but it’s also tacit acknowledgment that the cost of acquiring new subscribers far outstrips re-upping the contracts of existing ones. By some accounts, it costs up to five times as much to acquire a new subscriber than to retain an existing one.
Having an extra 3 million subscribers – particularly younger ones – on the books also has a beneficial impact on the NYT’s relationship with advertising. Brands are keen to reach as many people as possible, and younger demographics are highly desirable to some. So, while marketing subscriptions relies on having the depth of content that the NYT’s expanded newsroom offers, marketing products and commodities requires reach.
Additionally, having data on those self-selected subscribers is invaluable. Thompson makes this observation, both in the Nieman Lab article and in the press release, noting that “we are more attractive to the world’s leading brands than we would be if we didn’t have a digital subscription business. That’s why we’re growing our digital advertising business.”
Having those logged-in users also allows the NYT access to user data that allows it to refine its publishing strategy and the types of content it highlights to interested readers. Over the course of the last few years, The Times of London has been using exactly that sort of data to reduce consumer churn by appealing to their favourite aspects of the subscription. The greater the sample size, the better the refinements. Therefore, 3 million extra subscribers equals a huge amount of data points.
From a purely altruistic point of view, too, offering subscriptions to those who might not otherwise be able to afford one fulfils the journalistic remit to inform the public. That was explicitly the reason the FT announced it was extending its free access to FT.com to 16–19 year olds globally.
In a recent episode of the Media Voices podcast, we discussed the practical difficulties of other publishers trying to emulate The New York Times. It has, after all, a number of inherent strengths that most newspapers simply won’t be able to replicate.
In particular, it has a profitable business that allows it the luxury of both investing in its newsroom and the time to let those free subscriptions percolate and, eventually, have a chance to develop into full subscriptions. As a national title, it also has strong brand recognition, and can reach students from coast to coast.
Some other publishers, particularly local papers, simply don’t have the time to let those experiments play out. They also may not have enough students or other potential future subscribers in their patch to make it worth their while, and consequently we are already seeing many local publishers iterating on a hard paywall model rather than letting a particular demographic in for free.
Ultimately, it all comes down to whether free student subscriptions allow a newspaper to bypass that hard cap on propensity to pay for news. If reducing the friction of onboarding, deepening the relationship with the user during their free trial, and using their data to support other parts of the business adds even a few percentage points to the number of people who will re-up that subscription, the endeavour will have been worthwhile.
Publishers are getting a raw deal in the current online advertising ecosystem. The technology they depend on to display advertisements also ensures they lose the ability to control who gets their users’ data and who gets to monetize that data. With third-party cookies, users can be tracked from high-value publishers to sites they have never chosen to trust, where they are targeted based on their behavior from those publisher sites. This strips value from publishers and fuels rampant ad fraud.
In August, Mozilla announced a new anti-tracking strategy intended to get to the root of this problem. That strategy includes new restrictions on third-party cookies that will make it harder to track users across websites and that we plan to turn on by default for all users in a future release of Firefox. Our motive for this is simple: online tracking is unacceptable for our users and puts their privacy at risk. We know that a large portion of desktop users have installed ad blockers, showing that people are demanding more online control. But our approach also offers an opportunity to rebalance the ecosystem in a way that is in the long-term interest of publishers.
Publisher Pros and Cons
There needs to be a profitable revenue ecosystem on the web in order to create, foster and support innovation. Our third-party cookie restrictions will allow loading of advertising and other types of content (such as videos and sponsored articles), but will prevent the cookie-based tracking that users cannot meaningfully control. This strikes a better balance for publishers than ad blocking – user data is protected and publishers are still able to monetize page visits through advertisements and other content.
Our new approach will deliver both upsides and downsides for publishers, and we want to be clear about both. On the upside, by removing more sophisticated, profile-based targeting, we are also removing the technology that allows other parties to siphon off data from publishers. Ad fraud that depends on 3rd party cookies to track users from high-value publishers to low-value fraudster sites will no longer work. On the downside, our approach will make it harder to do targeted advertising that depends on cross-site browsing profiles, possibly resulting in an impact on the bottom line of companies that depend on behavioral advertising. Targeting that depends on the context (i.e. what the user is reading) and location will continue to be effective.
Curing Advertising Dysfunction
In short, behavioral targeting will become more difficult, but publishers should be able to recoup a larger portion of the value overall in the online advertising ecosystem. This means the long-term revenue impact will be on those third-parties in the advertising ecosystem that are extracting value from publishers, rather than bringing value to those publishers.
We know that our users are only one part of the equation here; we need to go after the real cause of our online advertising dysfunction by helping publishers earn more than they do from the status quo. That is why we need help from publishers to test the cookie restrictions feature and give us feedback about what they are seeing and what the potential impact will be. The technical documentation for these cookie restrictions can be found here. To test this feature in Firefox 65, visit “about:preferences#privacy” using the address bar. Under “Content Blocking” click “Custom”, click the checkbox next to “Cookies”, and ensure the dropdown menu is set to “Third-party trackers”.
We look forward to working with publishers to build a more sustainable model that puts them and our users first.
On January 29th, at the 2019 DCN Next: Summit, Rappler CEO Maria Ressa outlined the role social media and concerted, well-orchestrated disinformation campaigns played in perpetuating false information and media distrust in the Philippines, as well as attacks aimed at Rappler.
She then went on to have a wide-ranging discussion examining the various pressures on media credibility (and safety) worldwide with interviewer extraordinaire Kara Swisher, Co-founder of Recode.
Less than two weeks later, on Wednesday, February 13 at 5 p.m. local time in Manila, plainclothes officers from the National Bureau of Investigation, an agency within the Department of Justice, arrested Ressa on charges of cyber libel. As Ressa wrote in a statement: “We are not intimidated. No amount of legal cases, black propaganda, and lies can silence Filipino journalists who continue to hold the line. These legal acrobatics show how far the government will go to silence journalists, including the pettiness of forcing me to spend the night in jail.”
The Board of Directors of Digital Content Next (DCN), a trade association representing nearly 80 high-quality media companies, said, “The arrest of Maria Ressa is deeply troubling. Maria traveled to the U.S. to share her developing story with our members only two weeks ago. It is vital we value and protect the independence of media organizations and journalists around the world. Any effort to silence journalists or use intimidation to reduce their reporting is an affront to freedom. We encourage global leaders and the press community to make it clear this cannot be tolerated.”
In light of Ressa’s arrest, and to reinforce our support of a free press everywhere, DCN is pleased to share the video of Ressa and Swisher’s interview (full transcript below):
And, for those who would like to show support for Rappler and Ressa’s work, she has provided a link to their crowdfunding page.
Below, we’ve shared a full transcript of Ressa’s conversation with Swisher.
Alexandra Roman: [00:00:00]
I am truly honored to introduce this next conversation interviewer
extraordinaire Recode’s Kara Swisher. She’ll be speaking with a very special
person in our world these days. Named Time magazine’s Person of the year as one
of the guardians of journalism, please welcome the CEO of Rappler, Maria Ressa.
Kara Swisher: [00:00:33] So we’re going to start…first Maria is going to make a presentation then we’re gonna have a full fantastic discussion. Maria was on my podcast recently. It was, it was an amazing experience for me and I’m so glad she’s here and safe in the United States right now. We’ll be talking about that more. But first Maria go ahead.
Maria Ressa: [00:00:52] So
I like that Jason [Kint, CEO of DCN] talked about trust. And this is stuff I’ll
show to you from our perspective in the Philippines because it’s got the data
to prove the thesis and then I think you guys are not quite… I think you’re
not seeing the termites eating at the the credibility that you have as news
organizations and those termites are coming from geopolitical power plays. We
go back to information is power and with that that let me show you what’s
happened in the Philippines.
January last year, there were two surveys that came up exactly the same time but they’re almost complete opposite results. The top is real world Pew Global Attitudes Survey: How do Filipinos look at traditional media? And they came back they said 86 percent think traditional media is and the right quote is “fair and accurate.” But the Philippine trust index, which is part of the Edelman Trust survey, they came out with a survey that same month a year ago. And they asked people on social media and they came out with 83 percent “distrust traditional media.” Right. So how did that happen? We tried to figure out why is the world upside down? That’s really the question right. Why is the world upside down?
We have a database that we started gathering in July of 2016 when the when the drug war began in the Philippines because the attacks all came on social media. In our case it’s Facebook. But this is a timeline of attacks on traditional media. And in Rappler because we were the main focal point for a period of time, [which] started January 2015 and then moving to April 2017. January 2016 was when the campaigns began and the social media machine of then Mayor Duterte. He Was elected to office May 2016. You see that one? And you can see the fracture line Byaran means corrupt. Bias. So Bayaran is the one in the middle. The first long line and bias is the last one. If you look at that it’s a fracture line of society right.
There were mentions before but it was constantly pounded until it became a straight line after president Duterte was elected the weaponization of social media happened after he was elected because it was repeatedly pounded until it became fact. A lie told a million times its truth.
Right. So, then what happened? Here: This This is the database I was telling you about right? We call it The Shark Tank. The one on your left is the URLs that are spreading fake news in the Philippines. The middle column are the court the Facebook pages that are spreading that page. And I always look at the average reposting time which is the one all the way to your… my right, sorry it’s flipped.
I want to show you when the real attacks began against Rappler and it was after we came out with a three-part series on the weaponization of social media. It was October 2016. I went to Facebook with the data August 2016. So, October 2016 this is what it looked like. In October 2016, if it’s more than 10 times reposting, it turns red, You can see how it turned red. This Facebook page Sally Might Die accomplished its goals by April 2017. It’s been deleted from Facebook but you can see … This was something we created for our social media team so that you can see it’s a cut and paste account. And they post; look at how many times they post in one day! Each one of those squares is just one day. And this is where they post the groups. They posted to go viral in the campaign pages of Duterte it and Marcos, the son of former President Ferdinand Marcos.
oneI’m going to just show you the last thing which is how can we figure out who’s attacking us. Well you can gather the data and it looks like this but if you put it in a network map, It looks like this. This is the network that was attacking Vice President Leonie Robredo about a year ago and it is the same network that constantly attacks me, Rappler, and every traditional media. It is so systematic that the content creators of the network are broken down by demographic. For the Motherland, it is pseudo-intellectual and tries to target the one percent but pseudo-intellectual. The middle class is targeted by thinking Pinoy and the mass base is this Moka Olsen blog who is former singer dancer. They used to use to build her Facebook page by having it like she has a singing group called the Mocha Girls and they do pillow fights every Sunday. That was how they first built her Facebook page. Then she became the head of social media for the presidential palace and it became a whole other thing.
Anyway, you can see this is what attacks what attacks
journalists systematically. And it happens so many times. I just want to show
you one last thing which is something we did for Rappler. Natural Language
Processing to pull out. So, we looked at the entire Lexis Nexis right to try to
figure out … What do we need to learn? What Is the data telling us about the
articles that were written about us at the time when I was about to come home
for bail to file bail? Yeah, I had an arrest warrant then.
Right. So, the Philippines wrote 34 percent of the stories.
The United States wrote 27 percent. You guys are a potent a potent force for
us. But what was most interesting is that the Filipino stories are part of the
reason it’s in a line like this is because they essentially just regurgitated
the press release of the Department of Justice. It was the American news
organizations that talked about it as a Duterte rights crackdown. That wrote
about it in context. That was an amazing thing. I want to leave you with sorry
I don’t know what wrong thing, I think. I want to move forward. I want to leave
you with this information warfare. Yeah, I guess this is the right one.
So, with information warfare I’m going to bring it to to Russia. Dezinformatsiya. This was really interesting because. For Duterte to end the drug war. Sorry about that my slides were. OK so… I don’t know if you remember Yuri Andropov. He was the former KGB Chairman. This quote stuck with me because it fit the Philippines. Dezinformatsiya works like cocaine. If you sniff once or twice it may not change your life. If you use it everyday though it will make you into an addict. A different man. I think this is the impact on our democracies and we’ve seen it.
The first reports came out in November of 2017 saying that cheap armies on social media are rolling back democracies all around the world. And at that point it was something like 28 countries. By last year, it was 48 countries. It’s doubling. We started looking at Ukraine to try to understand how we can use the data the way Ukraine started fighting back. It is information warfare. It is political. It is about power and the money part of it … or the people who are actually or who are actually catering to the politicians. Russia backed Facebook post, this was November of 2017, this is the first time that I saw Americans really starting to look at it. But even when I saw this ok they reached 126 million Americans. I think what people missed is it happens all the time. It wasn’t just ads, it was it’s all the time …
I talk about termites. This bot is interesting to me because
it tweeted about U.S. elections. First, remember the Philippine election of
Duterte was one month before Brexit. After Brexit, there were U.S. elections
and then the Catalan elections. This little bot Ivan tweeted about all of
those. So, we found him from the Catalan elections. And when I’ve looked at his
account, it was specifically only tweeting about the Philippines. When we
posted this story, within 24 hours Twitter took his network down.
On Facebook, this is the last part I want to show you, the most recent thing that I found fascinating. In December, two groups came out with reports based on data that was given to the US Senate Intelligence Committee. This is the chart that is from new knowledge. And this thing at the bottom, I want to show you the connection between the Philippines and that chart. It’s this: So we tend to map the networks around us. Let me just. Try to get this so that you can see it. There. This is the attack network. Not connecting.
OK. So, this attack network was from November. Sorry it’s frozen. There. Yay. OK. November 8, December 7th. This network. And you know what I used to map the network is this free tool called Flourish. It’s a startup. This is little Rappler. And what’s so interesting and this is where I will make the pitch that I don’t think we have any other choice but to actually collaborate together. Rappler is here. This, all of this, is a disinformation network that’s attacking us and you can kind of literally see it right.
But what’s so interesting is in the Philippines this
overshadows the information landscape. The traditional media groups are so set
aside they’re desperate. I’ve been trying for the last two years to get our top
television networks our newspapers to work together like retweet re share each
other so that we can rise up together in the algorithms. We refuse to do it
because people think it’s competitive. But you know what? You’re competing
against disinformation not against each other now.
I want to show you this because and I’ll end with this one… so this disinformation network is so interesting right. But this is the most fascinating one. When we saw this, I was surprised because this was created a year ago. It’s only one year old the daily sentry dot net. And yet the larger the circle, the larger the eigenvector centrality, the more powerful the account is. This is exponential pushes behind it. What’s interesting about it is that this is the first time we saw a direct connection to the Russian disinformation landscape because daily century dot net uses experts in quotes from this network. Sorry I can’t I can’t do the thing but on that chart there is an American man who who’s often interviewed by our de Sputnik by Iranian television … His name is Adam Gary. He is now an expert who’s popping into the Philippine ecosystem. He came in through the Daily Century and he’s from the Daily Century and he jumped into traditional newspapers from there. There’s a direct link to him because he writes for Global Research dot ca a group in Canada and connected to two other groups: one is Eurasian affairs dot net here. Another site both of whom come from a Russian IP address.
All that data in the chart came from the data that was given
to the Senate Intelligence Committee and published last December. This is
what’s happening in my country. I think you’re finding out what’s happening in
yours. But I think we’re only a small case study of what is happening globally
and that scares me.
Kara Swisher: [00:14:13] OK. All right. So, how was prison? [laughter] No really. How was prison?
Maria Ressa: [00:14:20] I, oh, I hope I won’t get there but you know…
Kara Swisher: [00:14:25] You were arrested. Explain what happened to you? We we did a podcast and I said you should not go back to the Philippines because you will be arrested. And what happened.
Maria Ressa: [00:14:32] Of
course I went back. Right. But I wasn’t arrested. OK. I thought I would be so
our lawyers told me … My flight arrived on Sunday night at 9:30 p.m. The
court, which is supposed to be an all night court, well it closes at 9:00 p.m.
So, if they had picked me up that night I couldn’t have filed bail until Monday
morning when courts opened. In the Philippines, if you have an arrest warrant
you’re not told you have an arrest warrant. They just come get you. I came I
went home and I was I wasn’t going to change anything and it went OK. I filed
bail. I I filed bail once I filed. I posted bail five times actually in that
Kara Swisher: [00:15:16] But
to be. And you weren’t actually arrested.
Maria Ressa: [00:15:18] No
I wasn’t arrested. I wasn’t arrested.
Kara Swisher: [00:15:20] Please
explain to everyone here who doesn’t know why they [are going to] arrest you.
What are the charges?
Maria Ressa: [00:15:26] Well
charges are ludicrous. Tax evasion. It’s really one event, the same event, that
I have four other cases of. They’re alleging, the government is alleging, that
I am working for, well, that Rappler is owned by Americans one and that I am
essentially working for them to take down the government. Very Putin-esque.
None of that is true. And then on top of that, the arrest warrant came from
taking that same charge: the investment instrument that we used, which was
constitutional. They then decided that… we didn’t pay the right taxes. And
the reason why they said we didn’t pay the right taxes was because they
reclassified Rappler into a stock brokerage agency.
Kara Swisher: [00:16:16] Rather
than a journalist.
Maria Ressa: [00:16:17] Rather
than a newsgroup.
Kara Swisher: [00:16:18] Right.
Maria Ressa: [00:16:19] And
that’s what I have to post bail for.
Kara Swisher: [00:16:21] The
reason I’m asking what this is I want people to understand how people can use
social media to create trumped up charges and then arrest you for them arrest
you for it.
Maria Ressa: [00:16:32] Well it is interesting that you said that because all of these charges. I laughed off because they first appeared on social media. And they were thrown at me. CIA you’re a foreigner. I am a dual citizen. But, all of that. Like termites you know they just came at it and then a year and a half later it comes out of President Duterte’s mouth during the State of the Nation address. He said that you are a journalist; I’m covering the State of the Nation address. And then President Dutertet says look at Rappler: They are American. So, then I just tweeted back. President, no we’re not owned by Americans.
Kara Swisher: [00:17:12] Right, right. So, let’s talk about the state. Well, last we talked you, you made a very passionate plea to Facebook to do something about what’s happening. What you’re showing here is essentially organized disinformation campaigns to pull you down because you’re doing critical coverage of the president in the Philippines. And so they’re employing a very slow moving but powerful network to do so and using in the Philippines as you said most people get their news at not just the Philippines but across the world from Facebook. This is the purveyor of news. And these malevolent forces have created pages and news organizations and fake organizations to try to battle that. Talk a little bit about that. About what where you are right now because at the time. You were sort of subject to the biggest news organization attacking you being used to attack you.
Maria Ressa: [00:18:06] OK.
So I think that there’s a whole information ecosystem that has been
manufactured and it is manufactured reality. And we went down to a point where
we were looking at you know how how powerful is it really. We manually counted
the impact of 26 fake accounts. 26 fake accounts can actually reach up to three
million other accounts in the Philippines and it wasn’t we were the first
targets because we expose them. I was so naive.
You know, I thought wow we can just do a hashtag no place
for hate campaign and people will come back because you think these are real
people. They Are not. And after we did that, we became the target. And as you
saw in the first slide it’s not just us it is traditional media because the
main goal is to kill any trust in any institution that can that can push back.
All we have done is challenge impunity. Impunity here in information warfare and impunity in the drug war. You don’t know how many people have been killed in the Philippines during this drug war because they keep changing the numbers. At most recent count the Philippine police will admit to killing 5,000 people. Even that number alone is huge compared to the fact that 3,200 were killed in nine years of Marcos rule. Right. But. There’s this other number they never rule out. It’s the homicide cases under investigation and there are 30,000 people who’ve been killed there. So, If you think about it since July 2016 you can have more than it is tens of thousands. Thirty five thousand. I know the way they parse the number and I’m even cautious in the way I tell you how many people have been killed.
Kara Swisher: [00:19:58] So
what they’re doing is trying to use social media to stop you from writing about
Maria Ressa: [00:20:03] Not just trying to use it they’ve used it effectively. iI think this is the first the first weapon it’s a new tool against journalists and against truth. And part of the reason we’re having a crisis of trust is because this is global.
Kara Swisher: [00:20:17] Right.
So, talk a little bit about your efforts with Facebook to do this initially. You
ran into Mark Zuckerberg and told him about this.
Maria Ressa: [00:20:28] F8 April 2017. There was a small group of us who had lunch together. It was founders groups of companies that were working with Facebook and I invited him to come to the Philippines because I said you know you have no idea how powerful Facebook is. Ninety-seven percent of Filipinos who are on the Internet are on Facebook. We’re 100 million people. And he was frowning and I was going so why are you frowning. And he just said, “Maria what are the other three percent doing?”[laughter]. We laughed: huh.
Kara Swisher: [00:21:05] Ah.
Ha. Ha. That’s how the board talks. But go ahead.
Maria Ressa: [00:21:09] But
that’s when you realize that that they didn’t understand their impact. What
they understood was their goal. And so I think now that’s changed.
Kara Swisher: [00:21:21] Right.
So they did that and then you brought this information to them. What happened
Maria Ressa: [00:21:27] Nothing.
You know by the time Mark Zuckerberg was in Congress for me everything that you
guys were finding out here is you know “been there done that.” We’ve
talked about this. I feel like Cassandra, you know. I’ve talked to maybe more
than 50 different officers and friends inside Facebook.
But we’re the Philippines and maybe people think you know
you’re out there. But, when He appeared in Congress and he said it would take
five years to fix this with AI. I was like you can’t do five years. Because In
the global South in my countries in Myanmar Sri Lanka and the Philippines every
day that it isn’t fixed means people die… I think they’re getting it. I think
partly your coverage you know the 2018 has spotlighted this but I don’t think
enough because it’s still being used.
The good thing is there have been take downs take downs of
Russian networks, Iranian networks, they’ve been to take downs in the
Philippines. The most recent take down was about three weeks ago of a network
we identified and did a story on 13 months earlier. You know so it’s a little
too little too late but you know what. I will take everything because at least
it cleans it up. But the fundamental problem is that. our gatekeeping power …
So, we used to create [and] distribute the news and when we distributed the news we’re the gatekeepers. Now that power has gone to the social media platforms. Facebook is now the world’s largest distributor of news and yet it has refused to be the gatekeeper. And when it does that when you allow lies to actually get on the same playing field as facts, it taints the entire public sphere. And it’s like introducing toxic sludge in the mix. And this I think that’s the fundamental problem. They have to actually at some point say take down the lies instead of allowing it to spread.
Kara Swisher: [00:23:33] So
what do you face when you go there and say you need to take down these lies?
Tell me what happens or how are they now working with you.
Maria Ressa: [00:23:41] It’s
it’s significantly different now. And that’s part of the reason.
Kara Swisher: [00:23:46] Well
they’re very sorry now. But they’re very very sorry and also very very very
Maria Ressa: [00:23:53] I think they’re starting to understand what they’ve done. And I think they’ve started to hire the right people. In January of 2017, Nathaniel Glaser who was in charge of counterterrorism in the Obama White House. You know he was hired and shortly after that, well took a while, because this is a manual effort right? Tracking these networks down like counterterrorism requires somebody like a law enforcement official to go look for them. And so that’s part of the reason you see the takedown start starting to happen. I think it goes. The main thing that they have to do is to go to the content moderation system that they’ve put in place.
Kara Swisher: [00:24:39] Right.
Maria Ressa: [00:24:40] As journalists we have values and principles. We call it the standards and ethics manual. As tech people they tried to atomized it into a checklist and then this checklist goes to content moderators in — you know the two largest for a long period of time we’re in Warsaw and Manila.
Kara Swisher: [00:25:01] Right.
Maria Ressa: [00:25:02] And in Manila … I don’t know if you saw the movie, it was done by..
Kara Swisher: [00:25:06] The
Maria Ressa: [00:25:08] The
Cleaners, right. And in that one you can see that that these content moderators
who barely make you know minimum wage here in the States but they they have
seconds to decide whether to delete or whether to let content stay. And if they
just go by a prescriptive checklist they’ll just go up delete delete and let it
stay. And the guy who took down Napalm Girl was a Filipino and he took down
Napalm Girl because check list naked.
Kara Swisher: [00:25:35] So there’s no famous photograph of the girl running from napalm in Vietnam. Pulitzer Prize-winning photograph. It was news.
Maria Ressa: [00:25:44] So
these Filipinos who were in a call center in the Philippines are taking down
terrorist content potential are taking down supposed hate speech without any
cultural context without understanding the content.
Kara Swisher: [00:25:59] So
what do you what is your solution to them. I’m using Facebook as a broad thing
but they really are the game. Twitter is sort you have the same problems with
Twitter and other social networks?
Maria Ressa: [00:26:10] Twitter
is only 7 percent of penetration in the Philippines.
Kara Swisher: [00:26:13] So
it’s an unpopular service. So yeah.
Maria Ressa: [00:26:18] No, but it’s same right the same content moderation policy as YouTube. YouTube is huge. Also in the Philippines. And you know what this disinformation cuts across all of them. So I mean you saw it in our shark tank. We had the you or else I would love to give that to Google and have them down ran some of that. Right. Because.
Kara Swisher: [00:26:39] This
is just you doing their work for them. Correct?
Maria Ressa: [00:26:43] You
know I… I guess for me when you’re dealing with this stuff. and you’re
breathing it, it’s like toxic fumes every day. You just want a solution. And it
takes… Imagine if somebody from America comes to the Philippines and tries to
figure this out. It would take them a year. I already know it. Here take it. Do
something with it. I don’t look at it as their work. I think OK. This is where
I’ll be really generous. I know that they didn’t mean to do it. It is an
extremely powerful tool and the reason why I continue to work with Facebook is
because I think if they had the political will and the economic will to do
This is a game changer for the Philippines. Rappler couldn’t
exist without Facebook. We zoomed we grew 100 to 300 percent year on year
because of Facebook at the beginning in the good times. And I think they made a
crucial error in 2015 and that was instant articles when they brought all the
news groups in and then all of a sudden were at the same algorithms as the joke
that you heard or what you had for dinner. And when we became mob rule when
facts became determined by mob rule then it changed the ecosystem of democracy
in the world.
Kara Swisher: [00:28:03] And
what do you propose now that these… So, YouTube is a problem.
Maria Ressa: [00:28:09] YouTube
Kara Swisher: [00:28:09] A
huge problem. Are you getting the same responses from them: So sorry. They’re
really, really sorry. [laughter] No they really are. But they’re not in any way
Maria Ressa: [00:28:22] So
yeah. Tell me do you think they will act on it?
Kara Swisher: [00:28:27] You know I have an expression that was from one of my grandparents: You’re so poor all you have is money. I think they like their billions. I think they think they’re doing good for the world. And I think they’re careless. It’s sort of like from The Great Gatsby. They were careless people and they moved, they did damage and moved on.
Maria Ressa: [00:28:47] But they now know they’re not. And they’re killing people. They know that now.
Kara Swisher: [00:28:52] I
think they, what I’m getting now from a lot of people, is you’re so mean to us.
Maria Ressa: [00:28:59] Because
I do see them see this.
Kara Swisher: [00:29:01] When they say that I’m like fuck you. [laughter, applause.] You know what I mean. So it’s very hard for me to. But they are there’s a lot of victimy.
Maria Ressa: [00:29:11] I
mean until now. But you don’t know.
Kara Swisher: [00:29:14] No
I think they’re they literally get angry when people say hey hey now you know
hack democracy you really need to fix it. And they… I think one of the things
that I find interesting is when there is money to be made or whatever, they are
it’s their company. Yes.
And when there’s problems to be solved, it’s we all togethe have to solve it as a group. You know I mean and I’m like we didn’t get 64 billion dollars that I looked at. You know I have real old shoes. I don’t know. I mean we didn’t share in the upswing. And so I think again I joke. I’m so sorry but they feel badly but then I think are actually incapable in any way of taking care of it. I think they have they don’t have the mentality. They don’t have the talent. I think they’re incompetent to the task. That’s what I think.
Maria Ressa: [00:30:02] But
if that’s the case they will die. I mean it’s going to be a slow painful death.
But you know what I mean I guess for me I’m taking almost an opposite that it’s
there’s this phrase on enlightened self-interest that is…
Kara Swisher: [00:30:17] One
would think. One would think. No because this this will eventually… the
product will become terrible to use.
Maria Ressa: [00:30:24] Right.
Kara Swisher: [00:30:25] Or
it will become very addictive to use. And then what’s the difference? Like you
said with cocaine, I think. So, how do you … what are you wanting. What would
you like from them? You’d like them to become gatekeepers in other words.
Maria Ressa: [00:30:37] I don’t think they have a choice. I think they have to be. Otherwise we will leave. Right? Or again they’ll break be broken up by regulation or people will leave. In the Philippines so look at the immediate reaction. Alexa ranking of all the websites where do Filipinos go? From 2012 to 2016: number one Facebook. Undisputed. But then when the toxic sludge began mid-2016, by January 2017 on Alexa ranking Facebook dropped from number one to number eight. And then by January 2018, it went back to number five. In January 2019, right now, if you look at Alexa ranking in the Philippines, it’s number four.
So slowly they’re rising up but there’s no way. So, I mean
my thing is if they don’t fix it we will leave. We will leave. So that’s why I
think it is in their best interest they have no choice. But They are going to
have to suck it up and they’re going to have to have they are going to have to
hire real people. Machines can’t do this. But those real people will train the A.I.
and it will get better over time and they will have to lose money because they
will have to hire real people.
Kara Swisher: [00:31:52] So
talk to me a little bit about that business because you’re trying to create a
Maria Ressa: [00:31:57] Yeah.
2019 I’m trying to be a good CEO.
Kara Swisher: [00:32:00] Being
arrested attacked and essentially they’re trying to put you out of business.
Maria Ressa: [00:32:07] The
Kara Swisher: [00:32:07] Talk
about the actual business. Because it’s hard enough to do a digital effort. You
know that. I know that.
Maria Ressa: [00:32:14] Yeah.
So, in the Philippines and in many other parts of the world good journalism is
really bad business and I wear both an executive editor hat and I’m the CEO so
it’s my job to make sure our business survives. In 2017, when the attacks started
happening we realized that and we had a big board battle. You know “you
journalists, you know you gotta tone it down” from the business men. And then,
from the journalists, because we had we were the largest group of shareholders
in Rappler. We had 3 percent more votes. So we pushed forward and 2018 was
mission and a lot of anger management issues. But 2019, I have to be a good CEO
and we need to build the business. So what we’ve decided. So when you’re under
attack by the government your advertisers get scared almost immediately they
don’t want to be associated with the brand. They always say you know Maria
we’re behind you but they’re very very far behind. [laughter].
Kara Swisher: [00:33:18] And
nice Time cover!
Maria Ressa: [00:33:23] So
I found out about it on Twitter. And I had to check whether it was real! But
the time cover is the first time I saw the ecosystem come up like real people
who were afraid. Fear is very real in the Philippines and I’m sorry. Before I
before I talk about the fear and I just want to finish on the part about the
business. So businessmen the businesses… they’re not the protectors of
democracy. And even if their values say that they want to do that they just
don’t because the money isn’t there. So, you can’t attack Facebook in the same
way or if you’re run by businesses your values — sorry — they follow
afterwards after the money. So, well, what we did is: We came up. We were
forced to be agile. And A lot of the things that you saw–the mapping, trying
to understand unstructured big data ,all of these things– we came up and
pivoted and became a consultant. Like I essentially carved out another team
that can do the same things we do for Rappler for other companies.
Kara Swisher: [00:34:37] So
your business… so, in that environment what do you do? Because good
journalism like you said is bad business.
Maria Ressa: [00:34:44] Rappler
continues doing good journalism. And I’ve we’ve taken the business and pushed
it away and we actually found a new business. The two things that we did. We’re
the first in the Philippines… The crowdfunding part, actually I didn’t think
it would work in the Philippines. But when our legal fees became like a quarter
of the entire monthly spend, we asked our community and they helped. And that
that helped pay for some of the legal fees. And then we, just December, we
began a membership program we called it Rappler Plus. I don’t think it would
have worked in the Philippines because unlike the United States or Europe
unlike the more developed countries, we don’t have a history of that but not
even subscriptions. People don’t want to pay for news especially in a country
where you struggle to put food on your table three times a day. So the Rappler
Plus took off much faster than I had expected and I think it is because of the
fear. People are afraid and by standing up … By being the kid telling the
emperor he has no clothes. By telling him he cannot do this with impunity.
This Is the most powerful man that we have had in since… I
think he’s more powerful than Marcos was. He controls the executive. He owns
the legislative and by the time he leaves office he will have appointed 11 of
13 Supreme Court justices. You guys in the states worry about one Supreme Court
justice he’ll have appointed 11 of 13. This is our next generation. And It’s
extremely worrisome, especially with this information warfare, with the young
men in our country who are sucking up these fumes. You know the levels of
misogyny according to our data women are attacked at least 10 times more than
Kara Swisher: [00:36:40] Alright,
we have questions from the audience and then we are going to end. Are there
questions from the audience? Yes, you over here. Right here. Put your hand up.
Question: [00:36:51] Hi. Krishan Bhatia from NBCUniversal.
Thank you for sharing this story and the insights and everything that you’re
doing to uncover this. My question for you is in the US market, as we sit here
today as premium publishers most of whom have some sort of news business and we
serve large cap marketers in the US: What should we be doing differently with
respect to Facebook in particular but platforms in general that we’re not
Maria Ressa: [00:37:20] I think we have [to address the issue]: Who is the gatekeeper right now? But I think that ideas are very simple to me. If information is power. And the gatekeeping determines what information is taken by everyone. And we all focus … the debate in the US focus is on all of these different demographics and the polarization. The polarization happens because we don’t have the same facts. So it goes down to that. Please push. I think Kara asked the solution for me is when you have something like Facebook or YouTube moving beyond prescriptive to where we used to be which is what are the values? What are the principles like standards and ethics for journalism right? It can’t be prescriptive because. Ironically what they keep saying they defend free speech but free speech in this case is being used to stifle free speech. So, you’ve got to take the toxic sludge out of the body politic because that is killing us and everything else is organ failure you know because you’re not getting the oxygen that you need.
So please push you have far more power than little Rappler
does in terms of pushing for action in my part of the world I guess you know
maybe I’m happy with little because it’s been so long. We have elections in May
and these take downs will do a lot. I’ve seen the reactions of the people
running those those Facebook pages. But please look also do the investigations
here in the United States. The data is coming out now. I think that our
credibility are and I mean are for traditional media and the new ones coming
up. I think we’re getting eaten up by termites without realizing that that the
floorboards are about to crack. That’s why I think there’s a crisis of trust.
Kara Swisher: [00:39:19] Yes,
I would agree with that. Finish on this question of fear because I think it’s a
really important thing of fear of not speaking up of rocking the boat of all
kinds of stuff or just people just are exhausted by it because you’re not doing
journalism you’re spending time dealing with lawyers you’re spending time
moving businesses around you’re not doing the actual job which of which you
were.. used to do.
Maria Ressa: [00:39:43] Yeah
that’s also true. I know it just means I’m not sleeping that much. But you know
I find that the journalism… So look, Rappler has been mission-driven and all
of the friction of a normal organization is gone because everyone who stayed
with us and everyone did stay with us on the journalism side we lost sales and
tax strangely. But the mission is so clear and the purpose is so clear and I
think the challenge for all of our news groups is to be able to maintain that.
In a society, what fear does, what this stuff does is normal
people will not… When you get attacked like this I didn’t show you any of the
attacks, but when you’re attacked so viscerally when you’re threatened with
rape with murder, you just shut up. And that’s exactly it’s meant to pound you
into silence. But our community realizes this. So in a strange way. I. We’re
not just journalists anymore also that’s weird.
Like when I’m at the airport sometimes a family a family
came in and hugged me and I hug them back. I didn’t know who they were but it
was because they are also they are afraid to speak. So when you speak for them
you fulfill a role that I think that’s the mission of journalism. I think I
have a natural tendency to be more positive I should hang out with you a little
bit more. [laughter]
But you know when you’re in my place, I put one foot in
front of the other. The mission is clear. We’re going to have to deal with
this. And I think this is what Facebook has to realize. They have to get
through this because it’s not just us. We’re just the canary in the coal mine.
It’s here it’s happening here. Your problems are because of stuff like this. I
think. I think it’s global.
Kara Swisher: [00:41:37] Are
Maria Ressa: [00:41:39] No
because there’s too much to do. Not right now. You know there are times when I
think it was far worse when no one was paying attention because when the
attacks were so personal the first two weeks…I got 90 hate messages per hour.
Not one nine. Nine zero hate messages per hour. And when I got that, it took me
two weeks to just figure out how do how am I going to deal with this and what’s
real and what’s not and then do I need security? You know all of that stuff. So
no I’m not afraid because now I know what it is. And the data helps me
understand it. So that’s the certainty. That’s why I know it’s important to
have the facts. You cannot fight back if you don’t have the facts.
Kara Swisher: [00:42:24] All
right. On that note Maria Ressa. [applause]
best things in life aren’t free, they’re loved.
In the table-setting remarks opening the 2019 DCN: Next
Summit, I shared a publisher challenge that I strongly believe our industry is
well on its way to overcoming: “Fighting the pervasive mentality that content must
Truth be told: We don’t know if direct revenues from the audience will suffice to sustain the industry in the broadest sense. However,
there are positive trends on all dimensions. We’re certainly seeing more
evidence across the DCN membership that people are willing to pay for premium
publisher services. It’s no longer simply the financial or national news
outlets that can garner subscription and membership revenues. Local news outlets, entertainment channels, and new bundles
are attracting consumer revenue. We’ve started to capture these learnings in DCN
research, as well as through our events on direct audience revenues.
We see three positive subscription trends happening:
If you want to differentiate a news or
entertainment service, you need to compare it to the rest of your category on
YouTube or the Facebook news feed. Your offering, your brand, needs to clearly stand out as compared to the next best user-generated
offering in the ways more and more users are discovering
Every new subscription to a publisher’s product drives
more intelligence and more investment back into the product so that the next
subscription is easier to convert. In a world of more stable and dependable
payments from your audience, it’s also easier to drive a percent of the revenue
back into constantly improving the product (see trend 1) whether it be hiring
more journalists or adapting the experience to the needs of the audience.
The population that has grown up with digital devices
shops for news and entertainment with the tap of their fingerprint on a mobile
device. Subscribing to Spotify, Netflix, Hulu, Apple Music, and more is a way
of life for them. They will not hesitate to invest in news and entertainment
that they trust and value. Each successful experience drives their behavior
going forward and is more likely to bring their friends into the market of
Importance of free to Google and Facebook
Whenever the sentiment is shared that people simply won’t
pay for content in the digital age of abundance, it’s likely that Facebook or
Google is lurking around a corner. They’re a crafty pair. Often, they prop up
this notion with a truly worrying concern: that a shift to paid content will only
serve to further divide the public based on ability to pay. However, their
intention is to protect their free fortresses. An industry-wide effort and
belief that audiences will pay for content is bad business for them. Hence the
veiled efforts over the years to spin the narrative and control the outcome.
DCN has long established that the free digital content
market has mainly benefited these two companies. The math is simple, and it’s
been cited far and wide. However, it’s important to recognize how critical the
free content ecosystem is to their unbalanced equation. And you don’t have to
take our word for it. On Monday night, the UK government released the
Review, which contains over 150 pages of analysis of the
digital news marketplace.
The Cairncross Review highlights two clear problems with the
disturbing dominance of the Google and Facebook business models:
1. The first problem (that forms the foundation of the duopoly’s dominance) is Google’s control over the buying, selling, transacting, and measuring of the digital ad marketplace. As Cairncross so eloquently puts it:
“Google has ad inventory in the form of Google Search and YouTube videos, and it owns ‘demand side technologies’ (used by advertisers to bid and buy inventory online), such as Display & Video 360 and Google Ads, and supply side intermediaries (that publishers will use to sell their ad space to advertisers), such as Ad Manager and AdSense. It also owns supplementary technologies such as Chrome browsers, Google Analytics (a ‘freemium’ web analytics service that tracks and reports website traffic as a basic free service, with more advanced features that can be paid for), and the Android mobile operating system.”
It’s clear what’s wrong with this: Antitrust much?
2. The second problem that bolsters the foundation of these platforms’ superiority is Google and Facebook’s unmatched ability to collect voluminous amounts
of personal data on peoples’ everyday interests and behaviors in both the digital and physical
worlds. Again, Cairncross astutely captures:
“Publishers gather user data from their own sites, including login data for their subscribers, but this pales in comparison to the power of online platforms, which have a rich set of user data giving them significant advantage over others in the market. Whether it is search data (Google), the social networks of users (Facebook) or generally the devices, locations, interests and behaviours of users online (both), these players have an unimaginable wealth of information – valuable to advertisers and publishers – about who is coming to which news sites, and who is seeing which adverts.”
Google and Facebook are fueled by the amount of personal
data available to their heavily-controlled advertising systems. Subscriptions
inevitably create more user friction and restrict the flow of data. This means
that movement towards subscriptions also forces these companies to step outside their carefully
constructed profit guardrails. For risk-taking Silicon Valley start-ups,
they’re terrible at stepping outside their shareholder comforts. Cairncross hits the nail on the head in calling for regulatory
mincing words) of these businesses — in how they deal with
publishers, their position in the advertising market, and how their algorithms
make decisions in promoting journalism.
So, who is the knight in shining armor?
To be clear, there are also positive moves by industry and government to encourage
these developments. Interestingly, the Cairncross Review takes a similar position to the Canadian
government by recommending a tax incentive for subscribers to
news, local news, or investigative content. Again, we agree with this
recommendation and expect it would help support publishers.
To their credit, Google and Facebook have made donations to innovation, journalism
institutes and, in the case of Facebook, run seminars to share best practices
on subscriptions. Again, their profit guardrails make it impossible for real moonshots. So, while these are good efforts, they are not enough.
And then there is Apple. A company with the leadership,
the payment systems, the brand architecture, and lack of dependence on
everything in between Facebook and Google’s profit guardrails (data collection,
advertising). And, as news starts to trickle out on Apple’s plans for a
subscription news service, there is a lot to like in it. However, as I
shared with Ad Age, the reported 50% revenue share is offensive especially
if it also comes with the risk of another intermediary controlling the customer
relationship. I’m frankly surprised they would roll out with anything close to
these terms and hopeful it’s merely a head fake.
I don’t have any proprietary information, but my
back-of-the-envelope numbers on Apple’s offering means that the 100 million
monthly users of Apple News translate to approximate 10-20 million daily users.
Even if 10 million of these users moved into a subscription tier, this
is a mere $120 million in revenue. And according to what’s being reported, a
paltry $60 million would get divided between all of the participating news companies. That math doesn’t add up. If Apple has higher
confidence in their model and ability to expand the market, then they’re going
to need to put some revenue share behind it.
It’s just business. Oh, and the future of
Artificial intelligence (AI) is part of today’s decision-making process. It’s used when companies identify the value and risk of issuing credit cards or forecasting unemployment benefits. It’s also used in employee recruitment and the college admissions process. Since AI is based on machine learning, each small decision impacts larger ones. Unfortunately, AI algorithms, especially among those conducted in black boxes, may include discriminatory practices. A biased outcome may not necessarily be the intent of the algorithm, but it can easily be a by-product.
Frederik Zuiderveen Borgesius, Professor of Law at the Institute for Computing and Information Sciences (iCIS), Radboud University Nijmegen, addresses issues of AI bias in his new report Discrimination, artificial intelligence, and algorithmic decision-making. Borgesius analyzes the AI process to better understand how unfair differentiation can be produced. He wrote this report specifically for the Anti-discrimination department of the Council of Europe. However, it is an important read for anyone involved in or thinking of using AI in decision-making.
The AI Decision-making Process
It’s important to first understand the basics of an AI
decision-making program. AI involves machine-learning to find correlations in
data sets. It uses algorithms to identify the relationships in a set of related
attributes or activities, also known as class labels. The class labels separate
all possibilities into mutually exclusive categories. When building a machine
learning tool, programmers use class labels to predict a derived outcome or
what is called the targeted variable.
To understand how this is works in a common application, think
of a spam filter. The spam filter is an AI program that sorts through email
messages and identifies those that are “spam” and “non-spam.”
The program uses archives of older emails labeled as spam or non-spam to help
identify the characteristics (a certain phrase, an email address or an IP
address) of each.
Professor Borgesius references the
work of Solon
Barocas and Andrew D. Selbst, two academic research experts, who
identify five ways in which the AI decision-making process can lead
unintentionally to discrimination.
How AI Leads to Discrimination
1. Defining the target variables and class labels
When defining target variables and class labels, it’s
important to think beyond how they are defined. For example, let’s say a
company wants to define an “engaged employee.” A variable assigned to an
engaged employee is someone who is never late for work. Unfortunately, this
could negatively impact employees who do not own a car and depend on public
transportation. Car ownership can also reflect higher income while reliance on
public transportation can connote lower income. Therefore, this class label of never being late creates a bias against
lower income employees. Mindfulness in the usage and creation of class labels
is important to prevent built-in biases.
2. The training data: labelling examples
AI decision-making also offers discriminatory results if the
system “learns” from discriminatory training data. All training data
should be scrutinized to ensure against biases. For example, a medical school decided
to use AI decision-making in its application process. The training data for the
programs included old admission files from 1980. Unfortunately, the acceptance
policy in the 1980s was heavily weighted against women and immigrants. While the
AI program was not introducing new biases, it included those inherent in the
admissions process of the older applications.
3. Training data: data collection
The sampling process of the data collection must be free of
biases. If the sampling process is biased, it will train the predictive models
and reproduce the biases. For example, the number of police officers sent to
patrol a neighborhood is often dependent on key variables such as neighborhood
size or density, etc. If a larger number of officers patrol a neighborhood and
report a high level of crime, we need to understand the factors involved. Otherwise,
the data amplifies a high crime rate in this neighborhood when it could be that
was a higher ratio of officers to see more crimes in progress.
4. Feature selection
A programmer selects the categories or features of data to
include in their AI system. By selecting certain features, a programmer may
introduce bias against certain groups. For example, many companies in the U.S. hire
employees who graduated from an ivy league university. An ivy league education
cost significantly more than a state university. If a company uses ivy league
universities as part of their data features, they are establishing a bias against
individuals of lower income. Data features must be fully accessed to ensure
characteristics do not introduce bias in the results.
Sometimes measures to make a relevant and well-informed
decision may lend themselves to a biasness. Zip codes are often used as a
neutral criterion to provide socio-economic information for decisions on loans,
credit cards, insurance, etc. However, if a zip code is used as proxy to
identify people of a specific race or gender, it will impact business results.
Importantly, transparency of AI systems and the decision-making
process is necessary. Borgesius, as well as other academic scholars, advocate
for the development of transparency enhancing technologies (TETs) to drive
meaningful transparency of the algorithmic processes. AI decision-making can
result in negative consequences for people, especially protected member classes.
Caution must be used in algorithmic decision-making to ensure AI does not pave
the way for discrimination.
Of the millions pieces of content that are
published online every day, only 10% are ever seen.
If that shockingly low statistic makes your heart sink, you’re certainly not alone. Publishers across the globe are fighting the increasingly difficult battle to get their articles in front of the right people – or even just real people. From fake ad impressions to the death of organic traffic, the digital maze that your content needs to navigate its way through before appearing on the newsfeeds of your target audience is becoming more and more complex.
This crowded, often disingenuous advertising landscape
has brought the industry to something of a crossroads. Quality engagement is
both publishers’ most valuable and scarcest commodity. It’s also more expensive to achieve than ever
before. So how do publishers give advertisers more of what they want without
spending themselves into the red to deliver it?
Perhaps the greatest obstacle to winning the fight for engagement is the CPM, or cost per thousand impressions, model. Only by tossing this outdated method of ad performance measurement out the window can the industry move forward. But what’s so bad about CPM, and what should be called upon to replace it?
Out With the Old…
The CPM model was created during a time when banner
ads and impressions reigned supreme. Getting an impression on a banner ad only required
a reader to open the webpage and view the ad for a second, which is fine when
you’re raising awareness of a shoe sale or a flight deal. But it simply doesn’t work for content. Whether
that content is an article, a video, or a social post, its power comes from
engaging readers or viewers with a story for an extended period of time, during
which they become aware of your values and develop a connection with a brand’s
voice. Scrolling past a sponsored headline on your homepage just doesn’t
deliver the same result.
The mass publisher shift towards branded
content and content marketing arose out of a desire to forge more meaningful
relationships with customers — and when was the last time you made a
connection with someone in a second? For this reason, selling on impressions
and praying you succeed doesn’t work. This model also doesn’t put value on the
thing publishers are best at: crafting an engaging, powerful story. Content
needs a new measurement (and pricing) strategy that better reflects its
strengths and rewards publishers for their efforts.
… And in With the New
If you’re seeking guaranteed, meaningful interactions with your stories, one possible solution could be the Cost Per Read (CPR) model. Where CPM measures split-second impressions better suited to display ads, CPR bundles the content with a number of high-quality reads, so advertisers know exactly what to expect.
rapidly growing and evolving digital advertising landscape also demands a greater
degree of flexibility and control over content. To cover the reach limitations
of models like CPM, publishers often tack on things like banners, social posts,
and e-newsletter mentions in order to drive engagement. These tactics (and
their associated costs) can earn pushback from advertisers who want to see as
many of their hard-earned dollars go towards content as possible. To better
reflect this modern mindset, the CPR model focuses solely on drawing in quality
views to a piece of content, making investing in branded content less risky and
removing ambiguity around campaign deliverables.
How the Death of Organic Traffic Killed the CPM
CPR also puts publishers back in the driver’s seat in terms of amplification. Organic traffic has been rapidly declining since 2014. And when Facebook swung its metaphorical axe down upon the News Feed in 2018, it seemed as though the industry would never recover. Publishers had spent years honing their Facebook promotion skills and building a larger, more dedicated audience through the platform, only to have that effort made to feel pointless. Reaching the same readers they used to reach suddenly cost significantly more, making content amplification a loss-leader for many sites.
But it doesn’t have to be. Business models
like CPR allow publishers to charge a premium on amplification. That’s because
advertisers want to leverage a publisher’s brand and audience to reach as many
people as possible. From a profitability
standpoint, it also creates an opportunity to generate more revenue on
additional earned reads. As long as you’re confident in your story and your
amplification skills, you can earn incremental revenue for every new person
CPR allows you to grow site traffic on someone else’s dime, because the cost of
the social amplification used to drive traffic to branded content is factored
into the pre-set cost per read. This wider readership closely aligns with your
own target audience, meaning you can connect with new readers who may someday
become a loyal part of your audience.
Digital advertising is an innovative, fleet-footed industry
that demands a great deal of adaptability from publishers, brands and agencies
alike. In the tug-of-war over audience engagement, you’ll want the business
model that favors quality attention over cursory impressions on your side.
One of the main
drivers behind programmatic’s meteoric growth (at least on the demand side) has
been the ability to leverage data to find and buy specific users, out of
seemingly infinite opportunities, wherever they might be online.
After all, this enabling of “audience-based buying” brought marketers closer to their long-held notion of advertising utopia: reaching the right person, with the right message, at the right time, in the right context.
It also, theoretically, went a long way to minimizing wasted ad spend and enabled significant performance gains. The ad dollars flowed. But this shift took its toll on the sell-side.
To secure programmatic
budgets (which were growing steadily and taking dollars away from their direct
IO business), publishers had to relinquish control over their hard-won audiences
by allowing cookie access to DSP partners in real time via cookie syncing. In
doing so, they allowed the buy-side to build up and store those valuable
audiences in their own platforms, reducing the need to work with publishers
directly to gain access to or insights about their users.
The rapid proliferation of user-based targeting has understandably been followed by recent increased focus on consumer privacy. The GDPR went into effect across EU member states in May of last year, limiting unfettered access to user information and the ability to share that information with multiple parties across the ecosystem.
With passage of the California Consumer Privacy Act (which really means all of the US, given California’s outsized influence) and the likely imminent passage of the ePrivacy Regulation in the EU in the second half of 2019, the push for greater consumer privacy legislation seems unstoppable. France’s recent lawsuit against Google also indicates that common industry solutions and frameworks for satisfying new consumer data collection, usage, and privacy regulations aren’t always holding up to legal scrutiny, making the prospect of sharing data widely across partners and vendors increasingly difficult in the future.
While the enactment of
these measures on such a global scale erodes the value (and calls into question
the long-term viability) of cookie-based buying, it may also open a door for
publishers to regain over their data and audiences and re-assert their position
in the advertising value chain.
Here are three tips for publishers looking to capitalize on the moment:
Limit access to your
A quick Ghostery check
across a number of premium sites shows just how easy it is for 3rd-parties to
build pools of data on a given publisher’s audiences. Publishers should be
constantly evaluating who has access to their users, and what they’re doing
with the data they’re collecting. Partners who add value, either by enhancing
audience segments with additional data, or providing analytics and attribution
services, should be prioritized. Others, who may be packaging up and reselling
data, should be de-prioritized or even culled. An added benefit to this pruning
process: faster page loading for users.
Use your data to
enhance deals with buyers
audience scarcity (enabled through the culling process mentioned above) opens a
door for publishers to work more closely with advertisers looking to gain
access to their users (and maximize the yield they see from those users).
Striking guaranteed and non-guaranteed deals directly with advertisers based on
1st-party audience segments gives publishers the ability to more closely link
the cost of media to the value of audiences, and thereby extract greater
revenue from their inventory, while also benefiting parties up and down the
supply chain. Advertisers enjoy the confidence of targeting audiences using the
most recent and accurate data pools. And DSPs and SSPs executing the deals
incur less waste (and listening costs), because the inventory is pre-filtered
to match only the audience the buyer wants.
Let advertisers bring
their own data
More than just
building and monetizing their own audiences, publishers should start allowing
advertisers to bring their first-party data to the table. One of the main
benefits to this strategy is that buyers are able to trust the veracity of the
audiences they’re buying. From a publisher’s perspective, it opens up new
options for inventory segmentation that may not have existed within their
proprietary audience pools. Overlaying additional data will always limit scale,
by matching cookies at the source of origin rather than through DSP and SSP
intermediaries. And publishers and advertisers can at least maximize match
rates, minimize data loss, and decrease the risk of inefficient decisioning
down the line – thereby offsetting scale issues to the greatest extent possible
(while also commanding very premium CPMs).
Consumer privacy legislation is pushing us to the point where the party closest to the consumer – typically the publisher – will increasingly enjoy exclusive access to those audiences as well. When we add the unique ability to know who that user is and what their interests are, the value soars. Couple this with the decline in quality and scale in the open exchange and what you have is publisher data that hasn’t been this valuable since programmatic began to take off.
Following these three steps will help publishers maximize that value. It will also deliver greater efficiencies and performance to advertising partners as well as privacy consideration to valued users.
About the Author
Mike Pugh is a Senior Solution Consultant at IPONWEB where he acts as the intermediary between clients and IPONWEB’s design, delivery, and engineering teams to create custom ad tech projects. He is responsible for bringing client-specific solutions to market and ensuring a successful execution of the solution, strategy, and opportunity. Mike is currently the team lead on the TrustX SSP as well as other strategic business accounts. Prior to joining IPONWEB, he led a team of 14 programmatic traders at Accuen, Omnicom’s trading desk. Mike has experience managing programmatic buying campaigns across the Autos, Retail, CPG, Financial, and Pharma verticals on most major DSPs. Mike graduated from the University of Iowa with a Bachelor’s Degree in Economics and DePaul University with a Master’s Degree in Economics & Policy Analysis.
to keep up with the latest plays in the streaming game? You practically need a
scorecard and the guidance of a fast-talking play-by-play announcer to keep up.
For proof, consider just some of the latest streaming service bombshells to hit
the news in the past few weeks:
All of these moves speak, of course, to a larger and evolving trend: Anybody and everybody in the media business seems to be getting in on the OTT act. The idea is to take their product direct to the consumer via an AVOD or SVOD (subscription-supported video on demand) model. And that’s creating an increasingly crowded field of competitors.
It will be fascinating to see who else
enters the fray and who will survive and thrive in a crowded OTT world where consumers
only have so much viewing time. To help make better sense of all the market
chaos—and understand what streaming services will need to do to stand out from
the crowd—I spoke with several industry experts.
Why more media players
want in on streaming
It’s no big surprise why news and
entertainment companies are jumping in and jostling for position in an already
congested OTT pool: Consumers crave streaming content.
“They don’t want the same bundle of
channels they receive today. And they don’t want the same, scheduled experience
they’ve had for decades,” according to Peter Naylor, senior
vice president/head of advertising sales for Santa Monica-based Hulu, which now
has 25 million subscribers. “Consumers want choice and control in their TV
experience. In order to continue to reach consumers, TV must move from a
business ruled by cable and satellite gatekeepers and by a traditional schedule
to a model where the consumer truly gets to choose.”
Billy Nayden, research analyst
for Parks Associates in Dallas, agrees. “Younger consumers are watching
traditional television at decreasing rates. In order to reach them with video
content, internet video is a necessity. A dedicated streaming service helps
facilitate delivery of that video and gives consumers a centralized place to
access content,” Nayden says.
Offering a direct-to-consumer streaming
service also provides some unique benefits.
“Broadcasters and content companies are
able to collect data on consumption and their audience, which is often not
available through over-the-air broadcasts or pay-TV providers. Direct offerings
also provide a hedge in pay-TV licensing negotiations, allowing networks to
reach consumers even when blackouts occur on pay TV,” adds Nayden.
However, experts caution that fragmentation
of content sources, changing viewer habits, multiple direct competitors, and
rising content costs make competition in streaming extremely difficult.
“The number of streaming services
available globally has exploded in the past few years, and they are now
competing not just with other streaming services but also pay TV,
user-generated content like YouTube, and digital entertainment options like
video games for consumer time and eyeballs. Standing out and innovating in a
crowded ecosystem is a major challenge,” says Nayden.
Laura Martin, senior media analyst for New York City-headquartered Needham and Company, says discovery and clutter are huge problems. “Roku has nearly 4,000 video apps of free TV and about 1,000 apps of SVOD that the 28 million connected TVs in their network can choose from,” she says. “That’s many more choices than the 200 channels you typically have in a linear pay TV bundle.”
Additionally, to succeed long-term in the streaming space you need deep pockets, says Dan Rayburn, principal analyst at Frost & Sullivan in New York City. “Think about who’s behind the big services today—Sling TV is owned by Dish, Direct Now is owned by AT&T, and Hulu is co-owned by Disney and Comcast” (as well as Fox and AT&T), Rayburn points out. “A lot of these services can’t stand on their own as a profitable platform because the costs to license and create all their content is too high.”
You also need a deep library of content to
compete effectively, per Alan
Breznick, cable/video practice leader for Light Reading in Toronto. “Although,
if you’re a niche player going after a specialized market, like wrestling fans
or hobbyists, and no one else has such a channel yet, then you don’t
necessarily need a huge library of old content,” says Breznick.
Another huge hurdle? Retention. “You’ve got to worry about churn rates and how
to keep your customers as well as keeping the cost of acquiring customers
down,” Breznick adds.
Plus, “it’s going to get harder for the
smaller companies because so many of the big competitors entering this space—like
Sinclair, NBC and Disney—have free marketing opportunities. They have other
media outlets with unsold ad inventory they can use to promote their streaming
services,” says Martin.
A myriad of models
In the OTT space, there is no such thing as one size fits all. A variety of service models and pricing tiers exist that often make it difficult for analysts and consumers alike to compare apples to apples (see Sidebar for an overview of the major services). Some brands strictly follow a direct-to-consumer formula while others also partner with a pay-TV service (by, for example, offering authenticated streaming apps). And some services run ads while others don’t.
“Ads have always been in the mix for many of these subscription channels because the cost to make and license the content is still too high—you can’t make enough money on subscription alone,” says Rayburn. He notes that ad-free Netflix—despite its 139 million paying subscribers—still expects a negative cash flow of $3 billion in 2019. This is likely a big reason why it recently raised (and will continue to raise) its subscription fee.
“It’s tricky. We’ve had this mentality as
consumers that content should be free for a long time, thanks to YouTube and
others. Now, we’ve got several channels charging up to $15 or more per month
and live services like YouTube TV charging $40 and up monthly,” Rayburn says.
“The question is, how much higher can streaming services push their prices
before consumers say no?”
Ian Wishingrad, creative director/founder of BigEyedWish in New York City, says the formula for sustainability and profitability in the streaming market is simple. “Have award-winning content. ‘The Handmaid’s Tale’ legitimized Hulu and ‘House of Cards’ legitimized Netflix. You also need the right price. If you’re good and your price is right, you’ll get hits,” says Wishingrad.
Nayden seconds that sentiment. “To
maintain subscribers, services must offer a variety of compelling content
exclusive to their particular service,” says Nayden.
That’s why, according to Naylor, “over the
last year, we’ve focused a lot on adding more content to the service, including
full series runs of shows like ‘ER’ and ‘Lost,’ and new originals like ‘Castle
Content may be king, but so are customers,
insists Breznick.“You really have to know your customers and the market you’re
Offering your patrons more choices—in
programming as well as pricing—can go a long way, too. “Convenience to the
consumer is the new service. Giving options makes you flexible and cool, versus
‘this is the rule, take it or leave it,’ Wishingrad adds.
Ask Martin and she’ll tell you that the
best way forward for OTT services is to “have at least two revenue streams,
such as subscription-supported, ad-supported, eCommerce, micro-payments,
And, as mentioned, partnering with pay-TV
providers could bring increased visibility and exposure to your service, “especially
among consumers who otherwise would not have known about the service,” suggests
Nayden. “Until recently, the operator set-top box has remained one of the few
in-home connected devices that OTT video services were unable to penetrate. The
pay-TV set-top box is often used daily. Being available on that box is a big
boost to user convenience.”
A booming market
Virtually all of the media giants have launched or announced an impending standalone streaming service by now. But there are others poised to make a splash, and legacy video brands are far from the only players looking at the streaming opportunity.
Nayden foresees major print media brands entering the fray eventually, too. “While print media has found it financially difficult to transition to the new digital marketplace, I think the space for news-based OTT services represents a significant opportunity for content creators,” Nayden explains. “Cheddar and Newsy give us an example of what is possible. If a traditional newspaper like The New York Times or Wall Street Journal could partner with a video content creator and build a service that combined access to premium print and video content, I think it would attract a significant amount of paying news junkies.”
Breznick also envisions a day coming soon when college sporting programs—like Notre Dame football—roll out their own streaming service. “And at some point, every single broadcast channel out there is going to have to think about it,” adds Rayburn.