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July 01 2013

17:45

New York Times launches new interactive ads for mobile

The New York Times is out with some interesting new ad formats specifically tailored for their iPad app. Developed by the Times’ Idea Lab, the new formats emphasize interactivity and a push to connect the app to other features on the iPad, including:

In-App Download: This capability allows for a user to purchase and download any selection of media that is available in iTunes, all within the ad unit. This includes music or video available in iTunes, but also proprietary apps that advertisers might wish to promote to users of The Times’s iPad app.

Direct Coupon Download: Users can download a special offer, ticket or coupon from an ad unit that saves directly to their iPad Photo Stream, resulting in it being saved to the consumer’s other devices, such as an iPhone.

Calendar: Allows users to download and save information directly into their iPad calendar to help them schedule appointments and reminders tied to special offers or events.

Panorama: Users can visually pan around a 360-degree environment using touch and swipe motions. For example, advertisers may use this feature to display a retail location.

A number of other Idea Lab custom units will also now be available in-app for the first time, including Pleats, which offers advertisers four distinct panels to showcase full-screen images in expanded format through an XXL unit; Unveil, which allows users to interact with a brand message by “wiping away” an initial image to reveal another one underneath it; and Product Zoom, a newsroom-inspired ad concept that can showcase a product’s finer details through magnification as a user moves the cursor over the image.

June 27 2013

17:46

Accuen’s CEO Jacobs: Digital Is Growing, Not Stealing, TV Ad Spend

CANNES – Some folk would have you believe in a straight, linear migration of dollars from television advertising to online video advertising. But that’s not how ad trading desk software vendor Accuen Media‘s CEO Josh Jacobs sees it.

“We’re starting to have much more interesting conversations with the television buyers saying, ‘How do we engage this consumer regardless of the screen they’re engaging on?’,” Jacobs told Beet.TV in this interview during a Rubicon Project discussion at Cannes Lions.

“Budgets are not shifting from television to digital, it’s expanding to incorporate the digital channels that consumers are playing in.”

Jacobs added: “We’re starting to see television buyers are recognizing the fact that consumers are really engaging with content across four screens.”

Accuen is a unit of Omnicom.

15:17

The newsonomics of Advance’s advancing strategy and its Achilles’ heel

Another city. Another melange of limited information, confused storytelling, and an unsuccessful attempt to put on a happy face to mask a huge change in newspapering and civic life.

Last week, Oregon’s dominant paper, The Oregonian, followed in the footsteps of other Advance papers and announced it would be delivering to homes only four days a week come fall. It will be greatly slimming down staff, including dozens in the newsrooms, formally going digital-first, reorganizing into two companies, and producing newsstand editions on the days it won’t home deliver. It’s Advance’s Slim-Fast, Phase 2, tweaked after its torturous New Orleans rollout last year (“The newsonomics of Advance’s New Orleans strategy”).

That’s the new Advance playbook, as the company — a top 10 newspaper company by revenue in the U.S. — proceeds with a revolutionary restructuring of the local news business. It’s a play that serves at this point as a contrarian example. Most publishers believe the Newhouse family, owners of the very private Advance, is downsizing its own business, and about to give away the local market dominance in readership and commerce monopoly regional dailies have long had in the United States.

Within Advance, you hear that its strategy isn’t just on plan — it’s ahead of it. How do we put together what’s really happening and figure out what to make of it?

It’s not easy. Working with sources up and down in Advance cities is one way, gathering lots of partial views. While top editors are willing to talk, Advance’s business leaders are mum. That’s just silly: Newspapers have a special responsibility to the public, one that although further tested by Advance’s new strategy, is universal. Newspapers are citizens of their community — leading ones, we’d hope — and clamming up about changes of this significance is contrary to the values of the trade.

Just as curiously, Advance isn’t sharing much with its peers in the industry. If Advance has really developed the new secret sauce, why not share it with other newspaper publishers nationally and globally? After all, they’re not the competition. Yet Advance’s omerta-light DNA is a sideshow here. What we care about is the Advance strategy and what it means to the readers, to the journalists, and to the business of news going forward.

So let’s look at the updated newsonomics of the Advance strategy, Phase 2, as it rolls out in Portland in October, two months after Cleveland’s Plain Dealer takes the same plunge. Let’s look the strategy — which has a fair amount of smarts built into it — and its challenges, pitfalls and, likely, its Achilles’ heel.

Planning for print decline

As a strategy, think shock therapy and you’d be close. For decades, the Advance papers had been the epitome of corporate paternalism. The no-layoff pledge, generous health benefits, and good salaries all said job-for-life. Advance’s separation of its local digital sites (OregonLive.com in Portland, for instance) from the newsroom — literally 10 blocks away and reporting to corporate, not the publisher or editor — greatly hampered a singular reader focus.

As other companies struggled mightily with the digital transition, the huge staffs of the Advance dailies found themselves too often sitting on the sidelines. Individual editors, with great variability, tried to innovate. Overall, though, Advance dailies were falling behind the peers in trying to meet the digital revolution.

After years of waiting, waiting, and waiting, the company is now in a mad rush to change. When it came time to acknowledge basic truths about newspapering, Advance management reached for the hand grenade rather than the scalpel.

Reading the same tea leaves of print decline as their brethren, they decided that blowing up the enterprise (reassembling it in two pieces) and downsizing their operations, their home delivery, and their community service was the answer.

Their analysis, curiously, parallels that of iconoclast John Paton, the mastermind behind Digital First Media, as Journal Register and now MediaNews properties experience their own more evolutionary revolution. The in-common belief: As print ad revenues show accelerated decline, companies must greatly reduce their legacy costs and concentrate on the digital future. In fact, Paton has somewhat endorsed Advance’s efforts.

While the experiments began in Michigan in 2009, it was the the New Orleans Times-Picayune downsizing that riveted public and industry attention. In fact, 60 Minutes, which had sought the one moment for years to finally talk about the decline of the U.S. press, used the Times-Picayune’s réduction des effectifs as Exhibit A.

Everyone acknowledges that Advance publicly handled the New Orleans changeover as poorly as it could. Marketing. Messaging. Engagement. All subpar.

The T-P seemed to be at odds with the community that went into the streets to demand its very pulp-based existence. The community’s clamor for a seven-day paper went unheeded — until Monday, when the street edition of The Times-Picayune hit pavement, in 60 glorious tab pages. The New Orleans paper had borrowed a page from its northern cousin, the Post-Standard, which cut back home delivery Feb. 1, publishing a print edition even on days that it no longer offered home delivery. The changeover, Phase 2.

Now The Plain Dealer, which just announced a set of layoffs last week, and The Oregonian are following the same five-point model:

  • Massively cut expenses: At The Oregonian, about a sixth of the 650 staffers will lose their jobs. At Syracuse, the number was closer to 30 percent of about 400. Overall, I’ve extrapolated that Advance is aiming for an about 25 percent expense reduction (mainly in staff, printing, and distribution); I’ve been told that is close to the mark.
  • Pixelate the remaining ink-stained wretches: As Oregonian editor Peter Bhatia made (solely, he says) the layoff decisions that eliminated the jobs of about four dozen journalist staffers — about a quarter of the newsroom — he’s been quite clear that digital skills played a part in his decision-making. “How well [people] will work in the new world order” is key, he told me this week. (For the depth of the tumult within The Oregonian, check out Willamette Week’s takeout here.)
  • Separate out the old business from the new: In all its restructured cities, two separate companies have emerged to replace the old print. In Portland, it’s the Oregonian Media Group (yes, the already much-satirized OMG) that will now employ the content and sales people. As I’ve argued over the years, it is content and sales, quite simply, that are the foundation of the new business. The Advance strategy recognizes that and takes it to an operational level. The other new company Advance Central Services Oregon houses “support” of OMG. So it’s mainly made up of the print-oriented parts of the business — production, printing and distribution — along with HR, finance, and technology.
  • Provide seven-day print, but not home delivery: In New Orleans, and at Advance’s two Alabama dailies, the end of seven-day print was cold-turkey. One day: seven days a week of print; after the changeover, only three days. Then, Advance learned something from the Syracuse model. Pushed to continue (at least for a while) the semblance of seven-day print, the Post-Standard found that a by-product of daily print — the durable, seemingly vestigial e-edition — achieved a market purpose. Today in Syracuse, with a daily circulation of about 75,000, about one in ten readers downloads that daily e-edition. E-editions have been around for 15 years; essentially, they’re replicas of the final edition of the printed paper, ones that can be updated during the next day, but often aren’t.

    Why would anyone want to read a static copy of yesterday’s news? Think older readers. They own computers, but are more comfortable with the format of the newspaper they’ve read for decades. This is an interim market, to be sure, but serving it is a subscriber retention must. To publish an e-edition, you need a print edition. If, like the Oregonian, you’re making substantial revenue printing other publishers’ papers, adding a short run of single-copy papers can be done very cheaply. Hence, single copy editions.

    In Portland, there will be four days of home delivery. The Wednesday, Friday, and Sunday editions are clearly full papers. The content emphasis of a Saturday paper — first called a “bonus” in its announcement — is still taking shape, says Bhatia. Consistent with Advance’s marketing and messaging faux pas, it has also named its daily e-edition, “My Digital O,” to the guffaws of many. Talk about service journalism.

    This single-copy story may get more interesting. Whereas Syracuse has stuck to a 16-page edition, with a single ad — to facilitate that e-edition — New Orleans’ TP Street debuted with 60 pages and a good run of ads, adding three to its print team to produce it. Both cities’ papers are delivered to hundreds of newsstands. An ironic question: What would Advance have to charge to restart seven-day home delivery, coming full-circle in its digital-first, cost-cutting exercise?

  • Keep digital access free — at least for now: Most puzzling in Advance’s strategy is its reliance on advertising, which continues to go south for the whole industry — including Advance. As more than 500 dailies in the U.S. move to charging for digital access, including all of Advance’s peer chains, Advance eschews paywalls. Why? Well, given the tight lips, we’re not sure.

    The lack of an All-Access model, I believe, looks like the Achilles heel of the Advance strategy, even if that strategy works in other ways. Why? Advance depends and will depend much more on ad revenue than its peers. Many of those peers believe that reader revenue may reach 50 percent of total revenue within two to five years. They believe that print advertising’s fade looks near-irreversible. Further, they’ve learned that the sharp growth curve upward in digital ad revenue has hit a wall. Some struggle for growth at all; most are in single-digits, well below the 15 percent growth of digital ad revenue overall. Sure, The Oregonian, The Post-Standard, or The Harrisburg Patriot-News could institute a paywall. It would likely, though, yield much less than it could have.

    Getting the order of things right on a paywall is important: Much better to improve the seven-day print product, add usable mobile apps, and then price up, even if you have a mind to cut home delivery. That way, you’ve established a new, higher price — and the monetary value of digital. Instead, Advance maintains what now seems like a nonsensical approach to paid print and free digital, and that bodes ill for holding on to current print subscribers, much less convincing many people to pay much for all-access down the road.

    If other publishers believes half of their 2016 revenue will come from digitally oriented readers, how will Advance newspapers deal with the lack of that revenue? It will have two major choices: find currently unknown large sources of revenue — or keep cutting expenses, including newsroom staff.

Stand back from this audacious strategy — with all its staff-cutting pain, its inducing of reader pain, and the promise of its digital-first, future-is-now thinking — and it’s hard to get past the point of its missing digital reader revenue strategy.

That said, Advance’s more immediate bet is that it can radically reduce its costs and maintain its dominating presence in local news and commerce.

It’s too early to assess the local advertising challenge. It’s a hyper-competitive marketplace, and Advance seems to succeeded in corralling seven-day advertisers into three days. (I’d projected it would hold on to 85 percent of its print advertising revenue in New Orleans; the number appears to be closer to 90 percent.) It still faces, though, a fast-declining (high single digits loss in metro markets) print market. Further, its ability innovate fast enough in the digital ad marketplace is unproven.

As one observer put it to me today, does the new Oregonian plan to make its future on display banner ads? I’m sure execs would answer that no. But its work in newer forms of digital advertising, from content marketing to marketing services to a major video presence, all seem relatively nascent. Is it ready for prime time as a digital-heavy company? Not yet, certainly, and the clock shows two more big Advance dailies going digital-first within 90 days or so. As it fights for digital ad revenue, it faces many competitors from Google and Facebook nationally to lots of local players.

New competition

In news impact, so far, there is mixed evidence.

Observers in both New Orleans and Syracuse tell me it is a crazy-quilt. Yes, with time-stamping on the website, more stories and posts are being pumped out of the newsroom.

The new operations break their share of news, and some second-day stories do a great job of summing up major news events. Sometimes, though — more than they used to — both papers drop the ball on breaking news. Other news players, from NewsChannel 9 WSYR in Syracuse to The Lens and the just-launched Baton Rouge Advocate’s greatly energized New Orleans play (“The New Orleans Advocate”), are competing more consistently. The Advance papers are still the biggest dog in town, but the dog park is now more diverse. Come fall, The Plain Dealer and The Oregonian will wake up to find their traditional alpha status more challenged day by day.

Times-Picayune editor Jim Amoss believes he is already seeing the dividends from the wrenching change the newsroom has seen. His staff is thinking news, not the next day’s paper.

“We’ve had eight months of having the news gatherers and editors separate, physically separate, from the print team and not having to think about the print product. The new rhythms have been inculcated in everybody,” says Amoss. “The total number of people in news went from 181 pre-change to 160 now. We’re still in the process of filling some of those positions. That total includes 91 reporters (including metro area news, sports, entertainment, Baton Rouge, and Washington correspondent). The number of reporters pre-change was roughly the same.”

Digital audience has grown, as we would expect given the print stoppage. Overall pageviews are up 15 percent, and “eyes on content” — meaning views of articles, videos, and photos across the site — are up 35 percent. A significant part of that is huge photo growth, up 150 percent year over year; photos represent 16 percent of the site’s traffic.

With the changeover, editors and ad directors have more direction of their own digital presentations and business. Advance Digital, to whom the separate sites used to report, still provides digital product development, sales strategy, news and information content product development, and centralized technology for the digital products.

Oregonian editor Peter Bhatia echoed Amoss’ newsgathering point to me this week: The Oregonian newsroom today has about 90 reporters and will have about the same in the fall. The newsroom cutting has fallen disproportionately in middle editor and copy editing ranks in all the Advance cities, a strategy well-employed by others over, including the Star Tribune, over the past several years in making cuts.

The big questions, of course, are who those reporters are, how much experience they have and what beats they cover. In any newsroom restructuring, newsroom managers can use the opportunity to make changes they long wanted to make, but found inconvenient. In this great shuffle, some areas, like environmental beat experience, have been wiped out at the Oregonian.

Further digital skills may have trumped journalistic skills in such Sophie’s Choice decision-making. Finally, The Oregonian — as keenly aware of its newsroom dollar budget as of its actual headcount — cut many high-salaried people, as well as some younger staffers, weighing, I’m sure, one more factor: exposure to age discrimination suits, as any employer in such a situation would do.

All of that change means The Oregonian, come fall, will find new areas in which to excel — and will leave its flanks more open to competition. In Portland, there’s a lot of it. Pulitzer Prize-winning Willamette Week provides city-smart, well-established news coverage. Oregon Public Broadcasting has been adding coverage area after coverage area. Add in a strong TV news presence and several niche print players, and The Oregonian may find what its sister papers in New Orleans and Syracuse have found: breaking news and analysis becomes more of a multi-horse race.

It’s not just news-gathering and writing that matters on the web, of course. A digital-first news operation should be the go-to news aggregator for the region; The Oregonian isn’t. It should have the best tablet and smartphone apps — news and entertainment — and its offerings so far are nothing special, open to competition. It could leverage community, user-generated content far better, borrowing a page from its Northwest neighbor, The Seattle Times, but hasn’t moved in that direction.

Broadly, let’s say the strategy — at least parts of it — may be right. Then the question becomes: Is the Oregonian ready to execute on it?

There’s little doubt that most of Advance’s employees — whose work will make or break the strategy — have little confidence in the “the plan.” It’s paternalism gone awry, and the sense of abandonment is clear. The lurch in strategy is offering little comfort, as Advance and its publisher largely keep the staff in the dark about how the new business is going to create successful products and long-term employment.

What Advance has done is buy some time. In radically cutting its cost base, it may have given itself a couple of extra years to get its new strategy right. It will need that time, at least, to work the prodigious to-do list it has handed itself.

Photo by Josh Bancroft used under a Creative Commons license.

June 26 2013

18:16

Nielsen Cross-Platform Campaign Ratings Go Public UK

Nielsen has begun the UK roll-out of its system for combining TV and online ad ratings, with several advertisers, agencies and publishers aboard.

Already live in the US, Cross-Platform Campaign Ratings (XCR) will, in the UK, take TV performance data from the audience measurement agency BARB, combining it with online ad viewing data to yield an analogue-style reach and gross rating point (GRP) metrics.

Speaking at Beet.TV’s Video Ad Strategy Summit in London in May, Nielsen media client consulting VP Andrew Bradford said: ”How do you de-dupe the people who saw the TV ad and the online ad? Fundamentally, that’s about people. It will allow clients to make much more informed investment decisions in an area that’s been a little bit of guesswork.”

For today’s UK public beta test, which follows a private test with BARB, Nielsen cites trials with advertisers including Unilever and Mondelez International (the former Kraft Foods); agencies including Omnicom, Aegis and Universal McCann, and publishers including Adap.tv.

Press release

17:26

Videology’s Jamboretz: Video Ad Tech Consolidation Looming

CANNES – With video advertising growing at such a pace currently, the number of technology suppliers in the chain could balloon and then shrink in a wave of M&A, one sector exec says.

“There is an absolute expectation that consolidation will have to happen at some point,” Ryan Jamboretz, the EMEA SVP of one vendor, Videology, told Beet.TV in this video interview during Cannes Lions. “There’s too many people racing at the opportunity. so there will be shake-out.”

Videology’s technology helps advertisers move money from TV to digital and understand the relative success of campaigns in each. The firm recently took on $60 million in new investment to fuel its own tilt at the opportunity.

“We’re delighted,” Jamboretz told Beet.TV. “Raising $60 million is no small feat. I think it’s  of the biggest raises in the sector this year. It’s a big part of our international expansion plan.”

June 24 2013

00:11

GroupM’s Norman: Advertisers Must Embrace the “Stream” With Quick Content

CANNES — Advertising group GroupM’s chief digital officer thinks the top challenge for marketers is to insert themselves in new platforms like Twitter and Facebook that are all about chronologically-ordered, stream-based real-time media consumption.

“Every time the distribution channels change – and the stream is a new distribution channel -  typically the manufacturing problem changes as well,” Rob Norman told Beet.TV during this fascinating discussion at the Cannes Lions advertiser conflab

“If the … six-second commercial in Vine is going to be the short-form video … the manufacturing side of the business has to think very carefully about what does creativity look like in a light-touch way, as opposed to the heavier touch of the 60- or 30-second ad.

“There is this absolute tsunami of content about simple arresting quick-to-consume, quick-to-understand visual imagery that is running all over people’s Facebook page posts…

“If you set the bar of ‘What am I going to do that engages people in a second and persuade them to made them an engagement-related reaction to it?’, that’s a terrific creative challenge.”

We interviewed Norman on Friday at the Cannes Lions festival.

June 21 2013

10:24

“Angry Birds” is One of the Biggest Video Channels “On Planet”

CANNES — One of the world’s most popular games could also become one of its most pervasive video brands, after Rovio added its Angry Birds Toons cartoon channel to its mobile apps.

“Overnight, we updated 1.7 billion games back in March. We’re doing over 100 million views a month,” Rovio chief marketing officer Peter Vesterbacka told Beet.TV in this video interview during the Cannes Lions advertiser conflab. “It’s one of the biggest, if not the biggest, video distribution networks on the planet now.”

Initially, the video addition was to carry Rovio’s own weekly Angry Birds animated series. But the Finnish firm added a promo channel for Disney’s ‘Monsters University’ movie, and now Vesterbacka is promising this digital audience scale to advertisers in Cannes.

“Brands want to be on the first screen,” he said. “The first screen is mobile and tablet, it’s not TV anymore.”

09:47

VivaKi’s Kurt Unkel: Programmatic Is Here But Mobile Is In Testing

CANNES It’s now a hackneyed industry forecast: “This will be the year of mobile advertising.” But VivaKi products and services president Kurt Unkel thinks advertisers is still testing out the opportunity.

“There are a lot of things still being learned about mobile,” Unkel told Beet.TV in this video interview during Cannes Lions.

“How do we define an audience in a mobile space that’s a cookie-free environment? We’re finding other identifiers that we have to get savvy about. Nobody’s cracked it.”

But one thing Unkel is convinced has now fully materialised is “programmatic” ad-buying techniques, which he interprets as the holy grail of addressable advertising.

“The client appetite for it is very high. The technology has met the philosophical goal,” Unkel said.

Beet in Chicago on July 10

Unkel is hosting a Beet.TV event about programmatic buying at the VivaKi headquarters in Chicago presented by TubeMogul.

June 20 2013

14:02

The newsonomics of Spies vs. Spies

So who do you root for in this coming battle, as Google petitions the feds? Are you on the side of Big Brother or Little Brother — and remind me, which is which? It’s a 50-year-update on Mad Magazine’s iconic Spy vs. Spy.

The Surveillance State is — at least for this month — in front of the public. The Guardian’s rolling revelations of National Security Agency phone and web spying have again raised the bogeyman of Big Data — not the Big Data that all the airport billboards offer software to tame, but the Big Data that the unseen state can use against us. We’ve always had a love/hate relationship with big technology and disaster, consuming it madly as Hollywood churns out mad entertainments. We like our dystopia delivered hot and consumable within two hours. What we don’t like is the ooky feeling we are being watched, or that we have to make some kind unknowable choice between preventing the next act of terror and preserving basic Constitutional liberties.

Americans’ reactions to the stories is predictable. Undifferentiated outrage: “I knew they were watching us.” Outrageous indifference: “What do you expect given the state of the world?” That’s not surprising. Americans and Europeans have had the same problem thinking about the enveloping spider’s web of non-governmental digital knowledge. (See The Onion headline: “Area Man Outraged His Private Information Being Collected By Someone Other Than Advertisers.”)

While top global media, including The Guardian, The Washington Post, and The New York Times, dig into the widening government spying questions, let’s look at the ferment in the issues of commercial surveillance. There’s a lot of it, and it would take several advanced degrees and decoder rings to understand all of it. No, it’s not the same thing as the issues surrounding PRISM. But it will be conflated with national security, and indeed the overlapping social and political questions are profound. Let’s look at some recent developments and some of the diverse players in this unfolding drama and see where publishers do — and could — fit in.

The commercial surveillance culture is ubiquitous, perhaps even less hemmed in by government policy than the NSA, and growing greatly day by day. While Google asks the FISA court to allow it to release more detail about the nature of federal data demands, its growing knowledge of us seems to have no bounds. From our daily searches, to the pictures (street to sky) taken of our homes, to the whereabouts relayed by Google Maps, and on and on.

It’s not just Google, of course. Facebook, whose users spend an average of seven hours per month online disclosing everything, is challenging Google for king of the data hill. A typical news site might have 30 to 40 cookies — many of them from ad-oriented “third parties” — dropped from it. That explains why those “abandoned” shopping carts, would-be shoe purchases, and fantasy vacation ads now go with us seemingly everywhere we move on the web. It’s another love/hate relationship: We’re enamored of what Google and Facebook and others can do for us, but we’re disquieted by their long reach into our lives. It’s a different flavor of ooky.

We are targeted. We are retargeted. Who we are, what we shop for, and what we read is known by untold number of companies out there. Though we are subject to so much invisible, involuntary, and uncompensated crowdsourcing, the outrage is minimal. It’s not that it hasn’t been written about. Among others, The Wall Street Journal has done great work on it, including its multi-prize-winning three-year series on “What They Know.”

Jim Spanfeller, now CEO of Spanfeller Media Group and the builder of Forbes.com, related the PRISM NSA disclosures to commercial tracking in a well-noticed column (“At What Price Safety? At What Price Targeted Advertising?”) last week. His point: We’re all essentially ignorant of what’s being collected about us, and how it is being used. As we find out more, we’re not going to be happy.

His warning to those in the digital ad ecosystem: Government will ham-handedly regulate tracking of consumer clicks if the industry doesn’t become more “honest and transparent.”

Spanfeller outlined for me the current browser “Do Not Track” wars, which saw its latest foray yesterday. Mozilla, parent of Firefox, the third most-popular browser by most measures, said it will move forward with tech that automatically blocks third-party cookies in its browser. Presumably, users will be able to turn back on such cookies, but most will go with the defaults in the browsers they use.

The Mozilla move, much contested and long in the works, follows a similar decision by Microsoft with its release of the latest Internet Explorer. Microsoft is using a “pro-privacy” stance as a competitive weapon against Google, advancing both Bing search and IE. Spanfeller notes that Microsoft’s move hasn’t had much effect, at least yet, because “sites aren’t honoring it.”

These browser wars are one front, and much decried by forces like the Interactive Ad Bureau, the Digital Ad Alliance, and its “Ad Choices” program — which prefer consumer opt-out. Another front is an attempt at industry consensus through the World Wide Web Consortium, or W3C. Observers of that process believe it is winding its way to failure. Finally, also announced yesterday was the just-baked Cookie Clearinghouse, housed at the Stanford Center for Internet and Society. The driving notion, to be fleshed out: creating whitelists and blacklists of cookies allowed and blocked. (Good summaries by both Ad Age’s Kate Kaye and ZDNet’s Ed Bott.)

Never too far from the action, serial entrepreneur John Taysom was in Palo Alto this week as well. Taysom, a current senior fellow at Harvard’s Advanced Leadership Initiative, is an early digital hothouse pioneer, having led Reuters’ Greenhouse project way back in the mid-’90s. His list of web startups imagined and sold is impressive, and now he’s trying to put all that experience to use around privacy issues. As a student of history, old and modern, his belief is this: “When they invented the Internet, they didn’t add a privacy layer.”

“We need a Underwriters Laboratory for our time,” he told me Wednesday. UL served a great purpose at a time (1894) of another tech revolution: electricity. Electricity, like computer tech these days, seemed exciting, but the public was wary. It wasn’t afraid of behind-the-scenes chicanery — it literally was concerned about playing with fire. So UL, as a “global independent safety science company” — a kind of neutral, Switzerland-like enterprise — was set up to assure the public that electrical appliances were indeed tested and safe.

Could we do the same with the Internet?

He’s now working on a model, colloquially named “Three’s A Crowd,” to reinsert a “translucent” privacy layer in the tech stack. His model is based on a lot of current thinking on how to both better protect individual privacy and actually improve the targeting of messages by business and others. It draws on k-anonymity and Privacy by Design principles, among others.

In brief, Taysom’s Harvard project is around creating a modern UL. It would be a central trusted place, or really set of places, that institutions and businesses (and presumably governments) could draw from, but which protect individual identification. He calls it an I.D. DMZ, or demilitarized zone.

He makes the point that the whole purpose of data mining is to get to large enough groups of people with similar characteristics — not to find the perfect solution or offer for each individual. “Go up one level above the person,” to a small, but meaningfully sized, crowd. The idea: increase anonymity, giving people the comfort of knowing they are not being individually targeted.

Further, the levels of anonymity could differ depending on the kind of information associated with anyone. ”I don’t really mind that much about people knowing my taste in shirts. If it’s about the location of my kids, I want six sigmas” of anonymity, he says. Taysom, who filed a 2007 U.K. patent, now approved, on the idea, is now putting together both his boards of advisors and trustees.

Then there are emerging marketplace solutions to privacy. What havoc the digital marketplace hath wrought may be solved by…the digital marketplace. D.C.-based Personal.com is one of the leading players in that emerging group. Yes, this may be the coming personal data economy. Offering personal data lockers starting at $29.99 a year, Personal.com is worth a quick tour. What if you could store all your info in a digital vault, it asks? Among the kinds of “vaults”: passwords, memberships and rewards programs, credit and debit card info, health insurance, and lots more.

It’s a consumer play that’s also a business play. The company is now targeting insurance, finance, and education companies and institutions, who would then offer consumers the opportunity to ingest their customer information and keep it in vault and auto-fill features then let consumers re-use such information once it is banked. Think Mint.com, but broader.

Importantly, while Personal.com deals potentially with lots of kinds of digital data, its business doesn’t touch on the behavioral clickstream data that is at the heart of the Do Not Track fracas.

Do consumer want such a service? Personal.com won’t release any numbers on customers or business partners. Getting early traction may be tough.

Embedded in the strategy: a pro-consumer tilt. Personal.com offers an “owner data agreement,” basically certifying that it is the consumer, not Personal.com, that owns the data. It is a tantalizing idea: What if we individually could control our own digital data, setting parameters on who could use what and how? What if we as consumers could monetize our own data?

Neither Personal.com nor John Taysom’s project nor the various Do Not Track initiatives envision that kind of individually driven marketplace, and I’ve been told there are a whole bunch of technical reasons why it would be difficult to achieve. Yet, wouldn’t that be the ultimate capitalist, Adam Smith solution to this problem of runaway digital connectedness — a huge exchange that would facilitate the buying and selling of our own data?

For publishers, all this stuff is headache-producing. News publishers from Manhattan to Munich complain about all the third-party cookies feeding low-price exchanges, part of the reason their digital ad businesses are struggling. But there is a wide range of divergent opinion about how content-creating publishers will fare in Do Not Track world. They may benefit from diminished competition, but would they be able to adequately target for advertisers? Will Google and Facebook do even better in that world?

So, for publishers, these privacy times demand three things:

  • Upscale their own data mining businesses. “There’s a big difference between collecting and using data,” says Jonathan Mendez, CEO of Yieldbot, that works with publishers to provide selling alternatives to Google search. That’s a huge point. Many publishers don’t yet do enough with their first-party data to adequately serve advertiser needs.
  • Take a privacy-by-design approach to emerging business. How you treat consumers in product design and presentation is key here, with some tips from Inc. magazine.
  • Adopt a pro-privacy position. Who better than traditionally civic-minded newspaper companies than to help lead in asserting a sense of ownership of individual data? If news companies are to re-assert themselves as central to the next generation of their communities and of businesses, what better position than pro-privacy — and then helping individuals manage that privacy better?

It’s a position that fits with publishers’ own interests, and first-party data gathering (publisher/reader) makes more intuitive sense to citzen readers. For subscribers — those now being romanced into all-access member/subscribers — the relationship may make even more sense. Such an advocacy position could also help re-establish a local publisher as a commercial hub.

News and magazine publishers won’t have to create the technology here — certainly not their strong suits — but they can be early partners as consortia and companies emerge in the marketplace.

Photo by Fire Monkey Fire used under a Creative Commons license.

13:19

New CEO Wants Shazam To Be Destination, Not Utility

CANNES – After branching out from identifying music to enabling TV ad interaction, now mobile app Shazam wants to start aggregating its wealth of user data to encourage greater user engagement.

“Expect to see us do more and more around content and engagement, and becoming a more of a destination app around music instead of an identification utility solely,” Yahoo alum and recently-appointed Shazam CEO Rich Riley told Beet.TV in this interview during Cannes Lions.

“Sixty-five million people used Shazam in May. We want to make sure they’re not just using us when they hear a song they don’t know – we’d like them to come to us any time. We’ll be surfacing music, showing them what other people are Shazaming, we’ll have the social aspect, more content, more video.”

These upgrades will likely include lists of popular and current tracks and will continue in around a month, Riley said, adding that Shazam plans similar features for its TV efforts.

June 19 2013

11:30

Twitter Is Now The #5 Digital Ad Platform

CANNES – Now that it has turned advertisers on to its marketing tools, Twitter is snapping at the heels of the biggest online ad gorillas, according to industry data.

“When you’re talking about the digital landscape, there are four dominant players that everyone knows – Google, Yahoo, Facebook and Microsoft,” ZenithOptimedia global CEO Steve King told Beet.TV in this interview during Cannes Lions.

“Those four companies represent about $49 billion out of the $77 billion of ad spend that’s generated. In fifth place would be Twitter, but still some way behind those companies.”

Twitter has spent the last couple of years implementing its ad propositions including Promoted Tweets. Now, with recent big tie-ups announced with WPP and ZenithOptimedia owner Publicis, Cannes Lions 2013 – and ZenithOptimedia’s data – show Twitter emerging as a major vendor in the space.

“It’s rate of growth is much higher than the other companies - they’re a much more nascent player,” King added.

ZenithOptimedia’s latest advertising forecast again credits growth in social media and online video ad spend as the driver of a 20 percent jump in internet display  expenditure. Those two categories are forecast to pull 30 percent more money this year. Press release and executive summary here.

May 30 2013

11:36

The newsonomics of climbing the ad food chain

The numbers are sobering.

While digital advertising has been growing at a 15 percent pace annually in the United States, the digital ad sales of news companies have largely plateaued, struggling to find any growth year over year. The New York Times Company reported digital ad sales down 4 percent for the 1st quarter, while McClatchy managed a 1.5 percent increase in the first quarter. Most news-based companies are significantly underperforming that 15 percent average — in the low single digits, either positive or negative. Meanwhile, the top five digital ad companies, led by Google, increase their share of ad revenue year after year and soon will hold two-thirds of it.

Why are publishers lagging?

Publishers describe their digital ad woe with these terms: “price compression,” “bargain-basement ad networks,” and “death of the banner ad.” Each describes a world of hyper-competition in digital advertising — a world of almost infinite ad possibility and unyielding downward pricing pressure.

Not long ago, news companies believed that their premium-pricing models would withstand the competitive onslaught. Now they’re retooling, trying to speed their adaptation to the new nature of the digital ad beast.

It’s a matter of survival. For some, all-access circulation revenues are a good positive (pushing overall circ revenue up 5 percent in the U.S. last year). All, though, find themselves running as fast as they can to make up both for the freefall of print ad loss and that overall digital ad pricing downturn. “The ground is falling away under you” is how FT.com managing director Rob Grimshaw describes it.

Let’s look at what some of the leading digital ad innovators among publishers are doing to regroup. Let’s look at the newsonomics of climbing the ad food chain, checking in with two global publishers, The New York Times and the Financial Times, and two regional ones, the Minneapolis Star Tribune and Digital First Media. They provide a snapshot of a world in ever-spinning change.

Their strategies are all fairly similar: employ a range of new techniques that will justify premium prices. Let Facebook, which controls as much as a quarter of all web ad inventory, sell at 80-cent CPM and make money on scale. Publishers know they will never win that game. They want rates *20 to 50* times that, offering increasingly better targeting of their affluent readers.

Climbing the ad food chain is mainly about three things: technology, creativity, and sales relationships. It is also, overall, about differentiation, the roar of a lion in a crowded landscape.

Grimshaw, a former ad guy, says simply: “You’ve got to be doing something unique.”

Let’s look at each of the areas:

Technology

Digital advertising is all about technology in 2013, and you’ll see lots of talk of the ad-tech stack, and who owns it. Google, of course, owns much of it, through its successive AdWords/Doubleclick/AdMob and more creations, acquisitions and integrations. Its stack is so efficient that many publishers feel compelled to use it, though they are wary of getting their businesses tied ever more directly to Google — or the Google “Death Star,” as some critics call it.

For most publishers, Google is the classic frenemy. They work with it when they think the advantages outweigh the hazards, even as top publishers build their own programs. In fact, expect to soon see U.S. news publishers transition their Newspaper Consortium partnership with Yahoo into something intended to be broader, something that allows publishers to opt into and out of the ad programs of multiple portals — not just Yahoo — harnessing the ad tech of the day.

Six-month-old Smart Match is one of the FT’s latest innovations to stay “premium.” In brief, the content of an advertisement is matched, dynamically, to that of an article. The technology: semantic targeting of both article content and the FT’s current “ad library” for the best matches on the fly, as compared to standard keyword targeting.

Advertisers commit specific budgets for specific time periods, and the FT does the matching. The FT says it gets a major lift in ad engagement with the technology, an average of 9x over its average clickthrough. Ten clients are now live in Smart Match’s soft launch period.

Ad effectiveness isn’t a one-time process; breakthroughs like Smart Match require ongoing engagement with marketers, as publishers work with them to figure out what works and what doesn’t — and to tweak constantly. “Ads can’t be a fire-and-forget enterprise” any longer, says Grimshaw.

The FT is setting floors on pricing and better controlling inventory, testing small “private exchanges” with select ad buyers and agencies, working with Google in the U.S. and Rubicon in Europe. Exchanges have caused publishers lots of headaches, as too much of their inventory — mixed and matched with lots of “lower quality” inventory — helped drive down pricing and deflated the meaning of “premium.” So many have pulled back from exchanges in general; a few are starting to harness the exchange concept, but in a members-only approach.

“We are constantly evolving our approach to the programmatic marketplace, and private exchange activity is one part,” says Todd Haskell, the New York Times Co. group vice president for advertising. “We’ve been using private exchanges for a series of single-client buys executed using private exchange technology, and are now exploring several single buyer/multiple brand programs.”

One big notion here: minimize channel conflict, so that a publisher isn’t competing with itself, making its inventory available at variable prices here and there. Private exchanges are proceeding cautiously. Buyers get more flexibility, but within the control of publishers.

Such private exchange testing follows the adoption of RTB (real-time-bidding), which publishers are honing to get better rates for the ad inventory they can’t sell locally. “We moved away from a remnant inventory model a few years ago with the adoption of RTB and actively manage all of the programmatic demand that we see through the ad exchanges,” says Jeff Griffing, the Star Tribune’s chief revenue officer. “As a single-entity, local site publisher, our strategy is to make sure as many bidders/buyers as possible can transact on their audience impressions that we fulfill on our site.”

Similarly, Digital First Media is moving to add new data — including third-party data from traditonal sources like Experian — into its own systems. “As we move more into the programatic world, with our own Trading Desk and all our own inventory in our private exchange, we keep adding data to all that traffic and match it in a way that enhances the ROI for the small and medium advertisers,” says Digital First Ventures managing director Arturo Duran.

Ad tech is also allowing publishers to do things they couldn’t previously do. The Times is using new brand new ad formats to help marketers gain interactivity. One new program will allow for coupon delivery within an app.

The idea of delivering more experiences within experiences — rather than alongside — can be seen in another recent announcement. Twitter Amplify allows advertisers to deliver videos in-stream — part of a slew of ad-friendly moves, well described by Ingrid Lunden at TechCrunch. Among the early partners to sign on: BBC America, Fox, Fuse, and The Weather Channel. The goals here: make ads both more experiential and more lead-generating.

Yield optimization is a term now part of everyone’s vocabulary. Optimization — the better use of data through adjustment of the digital pulleys and levers that adjust what’s offered, at which price points when — has always been a part of the advertising game. Cycle time, and sophistication, though, have markedly moved up. Where the Times used to adjust in 24-month cycles, says Haskell, it now makes significant moves in three-month periods.

There are lots of moving pieces to optimization. The Star Tribune’s chief revenue officer Jeff Griffing describes how his company does it: “The push to premium help us drive our effective yield on pageviews; we’ve established baselines that our different pageviews should meet or exceed and factor in our directly sold campaigns with those indirectly or programmatically filled. We have an optimal formula for how will fill inventory and have set up systems that make sure we’re delivering maximum revenue across all ad units.”

Of course, publishers have long adjusted based on supply and demand. Today, though, the complex external development — various sales partners, through networks, private exchanges and more — requires fine tuning to get the highest possible price for fleeting inventory.

If this all seems like four-dimensional chess, mobile adds a fifth dimension. Haskell recalls the boom in second-screen tablet usage found on election night last November. That development provides a new place for the text-, numbers-, and analysis-driven Times to play in what is usually an immediate TV story. Consequently, it opens up new ways for the Times to exploit the tablet as a second-screen, timely ad vehicle.

The tablet (and mobile, generally) is quickly moving from niche to main play for the Times and others. Of its 43.6 million U.S. unique users in March, 18.3 million arrived via mobile devices, the Times says.

There’s targeting — and then there’s super-targeting. So the Times is selling what Todd Haskell calls “super premium.” It is able to target, through its growing audience database, readers with certain job titles, reading certain sections of content. That kind of targeting drives higher rates, and it’s part of the Times’ plan to move up on the food chain, just as the middle and bottom of that chain widens infinitely.

Creativity

Over the past year, publishers have reawakened to the notion of commercial storytelling. They now see it — a cousin to editorial storytelling — as a core competence, and one that many marketers envy.

“Agencies and many advertisers don’t know how to do it,” says Grimshaw. “There’s a constant need for fresh [marketing] content.”

Enter content marketing, which I recent covered in depth in “The newsonomics of recylcling journalism.” The Star Tribune’s Griffing points to his company’s first big foray into the field, a Kids Health site. Sold to a single sponsor for one year, Children’s Hospital, the new content was produced by Star Tribune staff and is a prototype for products to come. Griffing says the company’s innovations, overall, have pushed year-over-year digital ad growth into the teens.

2013 is the year of content marketing, from New York to D.C. to Minneapolis to Dallas to San Francisco. The creative spark comes from a combination of old-fashioned journalism skills, both editorial and marketing. Sums up Rob Grimshaw: “Publishers have tremendous assets that have never been exploited.”

Now, often, the creation and placement of “native advertising” are inextricably tied. As with the Times’ IdeaLab, the Washington Post’s Brand Connect, and Atlantic Media Strategies, global publishers have asserted their high-end editorial skills, applied to other people’s storytelling, and are packaging that skill with an ad buy. Haskell points out that the creative costs can be built into the ad buy itself, if the buy is big enough. “We’re not looking to make money on the creative,” he says.

That combination of the creative and the buy shows the newness of it all, and the early flux in the content marketing craft. Over time, we’ll likely see a greater cross-title placement of above-average creative, saving on creation costs. How then will the various content marketing works of a Times, an FT, a BuzzFeed, or an Atlantic Media compare? Which will become go-to creative companies, and which will return to the old comfort area of selling placement?

Video creation has also unearthed new creativity among the formerly ink-based wretches. In fact, most companies tell me that video ad demand, at anywhere from $25 to $75 cost per thousand rates (many multiples beyond display ads), is still outstripping supply.

The Star Tribune’s Griffing puts it this way: “This one is simple. We are selling as much video inventory as we have; 1.2 million plays per month, which is significantly more than the next closest competitor, a local TV station. That said, until we’re doing 10M plays a month, revenue for video will be relatively small.”

In a nutshell, that describes the dilemma. The New York Times recently hired Rebecca Howard, late of AOL/HuffPo, to expand its sold-out video inventory.

For Digital First Media, a pioneer in local news video through the Journal Register Company, new video formats offer premium possibilities. It’s going short, and long. “For short format we just closed a deal with Tout.com, and we are deploying their player in all our sites.” DFM journalists will take videos, through Tout (“The newsonomics of leapfrog news video”) and place them quickly on the sites, says Digital First’s Arturo Duran. “Some of those ‘Touts’ are embedded inside the articles. This is following what the consumers are doing, and the tests by WSJ and BBC. They have created snippets of 15 seconds of information that feed their sites with real time information on events. For end users, it’s a faster, easier way to watch it. There is a big play in the mobile arena, specially smartphones, as end users are watching more video in this [short] format than any other.”

Longer-format video is still in the planning stages for DFM, says Duran, pointing to the potential of live events, interviews with personalities, direct chats with readers, and more. It’s noteworthy that despite the success of video advertising, text-based sites still haven’t mastered greater quality production of greater scale and aren’t well-using third-party, “higher quality” video to satisfy ad needs.

Sales relationships

In an age of self-service, spawned by Google’s paid search products, the sales channel is still multi-tiered. Self-service works profoundly for some products, but telesales and in-person, feet-on-the-ground sales forces are finding new life.

Blame complexity. The choices advertisers now have are endless. Top-tier advertisers are served by such specialized teams as the FT’s “strategic sales” unit. The group works matches the complexity of FT’s analytics-fueled approaches to marketing with advertiser needs.

At the other end of the spectrum, the burgeoning marketing services business (“The newsonomics of selling Main Street”) is bringing these new approaches to smaller, local businesses. The Star Tribune’s Jeff Grilling, a major proponent of the marketing services business, has already learned some lessons from his company’s Radius marketing services foray.

“I’m finding more similarities than less, to our traditional sales approach. I’m finding that we are only as good as our sales people and the relationship they create, and that many small business customers have been approached by some sort of digital solutions vendor in the last few years. Make no mistake, there is no easy money in the SMB digital solutions business — it is very competitive and customers have are typically skeptical because of weak solutions they’ve experienced by other vendors in previous years. So if it’s a quick and easy revenue stream that a media company is looking for, I would look at options other than SMB digital solutions. I do still believe, however, that if your intention is to genuinely help local businesses grow, and you have the stomach for investment, strategy, execution, and patience, SMB digital solutions can be a viable product line.”

That tells you how long a haul this digital transition remains, and how many twists and turns even the innovators must endure.

Photo by NJR ZA used under a Creative Commons license.

May 29 2013

13:27

In the End Was the Word and the Word Was the Sponsor’s

and-now-a-word-from-our-sponsor1
We used to know what ads were. They had borders around them — black lines in print, a rare millisecond of dead air on TV, the moment when the radio host’s voice became even friendlier, letting us know he was now being paid to peddle.

Today, under many ruses and many namessponsored content, native advertising, brand voice, thought leadership, content marketing, even brand journalism — advertisers are conspiring with desperate publishers to erase the black lines identifying ads.

When I started Entertainment Weekly, a sage editor sat me down and summarized in one sentence the magazine industry’s voluminous rules about labeling what we then called “advertorials”: “The reader must never be confused about the source of content.”

Confusing the audience is clearly the goal of native-sponsored-brand-content-voice-advertising. And the result has to be a dilution of the value of news brands.

Some say those brands are diminishing anyway. So sponsored content is just another way to milk the old cows as they die. Lately I’ve been shocked to hear some executives at news organizations, as well as some journalism students and even teachers, shrug at the risk. If I’m the guy who argues that news must find new paths to profitability, then what’s my problem?

Well, I fear that in the end we all become the Times of India, where paid advertising and news content are allegedly mixed so smoothly in some areas that readers can’t tell one from the other. Worse, at some news organizations, editorial staff do the work of writing this sponsored content. They become copywriters.

Mad Men Don Draper Peggy Olsen

At the same time, many of these news organizations are using their brands as candy to attract legions of new contributors, which can drastically lower the cost of content. Mind you, I’ve applauded that spirit of openness and collaboration as well as that newfound efficiency.

But here’s the issue: Some media properties have taught me to pause before following a link to them. Sometimes, I’ll find good information from a staffer or one of many contributors who brings real reporting or expertise. Sometimes, I’ll find a weak contributor — or staff — piece that adds no reporting or insight; it merely regurgitates what others have written when a link would be better. (Beware headlines that start with “how” or “why” or include the words “future of” or “death of” or end with a question mark; chances are, they add nothing.) And then sometimes I’ll find one of those sponsor-brand-native pieces only vaguely labeled to let me know its source.

My problems with these trends in news media:

Inconsistency. I no longer know what to expect from news organizations that do this. Yes, I’ve heard editors claim that they work with both contributors and sponsors to improve the quality of their submissions — but apparently, not enough.

Brands used to be selective both because the scarcity of paper or time forced them to be and because that became key to their value. Now they want more and more content. Making content to chase unique users and their page views rewards volume over value.

Conflict of interest. First, let me say that I think we in news became haughty and fetishistic about our church/state walls. The reason I teach entrepreneurial journalism is so that students learn about the business of journalism so they can become more responsible stewards of it. I argue that editors, too, must understand the business value and thus sustainability of what they produce.

That said, I worry about journalists who spend one day writing to serve the public and the next writing to serve sponsors. News organizations should never do that with staff, but I’m sorry to say that today, a few do. Freelance journalists are also turning to making sponsored content to pay the bills.

Thus, I hear of some journalism educators who wonder whether they should be teaching their students to write for brands. Please, no. My journalism school doesn’t do that. Others schools already include courses in PR and advertising, so I suppose the leap isn’t so far. In any case, brands will hire our students because of the media skills we teach them and we need to prepare them for the ethical challenge that brings.

Brand value. Some news companies are exchanging their brand equity for free or cheap content of questionable quality and advertising dollars of questionable intent. As someone who champions disruption in the news industry, you’d think I wouldn’t care about dying legacy media brands. But I do. I see how legacy news companies can bring value to the growing news ecosystem around them through sharing content and audience and someday soon, I hope, revenue. If the legacy institutions lose their value — their trust, their audience, their advertisers — then they have less to give, and if they die, there’s more to replace.

Now here’s the funny part: Brands are chasing the wrong goal. Marketers shouldn’t want to make content. Don’t they know that content is a lousy business? As adman Rishad Tobaccowala said to me in an email, content is not scalable for advertisers, either. He says the future of marketing isn’t advertising but utilities and services. I say the same for news: It is a service.

I’ve been arguing to news organizations that they should stop thinking of themselves as content businesses and start understanding that they are in a relationship business.

News organizations should not treat people as a mass now that they — like Google, Amazon, and Facebook — can learn to serve them as individuals. Can’t the same be said of the brands that are now rushing to make content? They’re listening to too many tweeted media aphorisms: that content is king, that brands are media. Bull.

A brand is a relationship. It signifies trust and value. Advertising and public relations disintermediated the relationship that commercial enterprises used to have with customers over the cracker barrel. Mass media helped them bring scale to marketing. But now the net enables brands to return to having direct relationships with customers. That’s what we see happening on Twitter. Smart companies are using it not to make content but to talk one-on-one with customers.

Here’s where I fear this lands: As news brands continue to believe in their content imperative, they dilute their equity by using cheap-content tricks to build volume and by handing their brand value to advertisers to replace lost ad revenue. Marketers help publishers milk those brands. And the public? We’re smarter than they think we are. We’ll understand when news organizations become paid shills. We understand that marketers would still rather force-feed us their messages than simply serve us.

What to do? The reflex in my industries — journalism and education — is to convene august groups to compose rules. But rules are made to be pushed, stretched, and broken. That is why that wise Time Inc. editor over me at Entertainment Weekly (as opposed to the oily ones who tried to force me to force my critics to write nicer reviews) summed up those rules as a statement of ethics. Again: “The reader must never be confused about the source of content.”

Well, if we’re not in the content business, then what is the ethic by which we should operate now? I think it’s even simpler: “We serve the public.”

If we’re doing what we do to fool the public, to sell them crappy content or a shill’s swill, to prioritize paying customers’ interests over readers’, then we will cannibalize whatever credibility, trust, and value our brands have until they dry up.

So am I merely drawing a black rule around advertising again? Don’t we hear contributors to a hundred news sites rewrite the same story every day — that advertising is dead? Well, yes, advertising as one-way messaging is as outmoded as one-way media. Oh, we in media will milk advertising as long as advertisers are willing to pay for it. But we know where this is headed.

Then do media companies have any commercial connection with brands? Can we still get money from them to support news? I think it’s possible for media companies to help brands understand how to use the net to build honest, open relationships with people as individuals. But we can teach them that only if we first learn how to do it ourselves.

Some will accuse me of chronic Google fanboyism for suggesting this, but we can learn that lesson from Google. It makes 98% of its fortune from advertising but it does so by serving us, each of us, first. It addresses its obvious conflict with the admonition, “Don’t be evil.” (When Google has failed to live up to that ethic — and it has — its fall came not from taking advertisers’ dollars but instead from seeking growth with the help of malevolent telcos or tyrannical governments.) Note well that Google sees the danger of sponsored content, which is why it has banned such content from Google News.

Whether you like Google or you don’t, know well that it provides service over content, enabling it to build relationships with each of us as individuals while also serving advertisers without creating confusion. Google is taking over huge swaths of the ad market by providing service to users and sharing risk with advertisers, not by selling its soul in exchange for this quarter’s revenue, as some news organizations are doing.

My advice to news organizations: Move out of the content — and sponsored content — business and get into the service business, where content is just one of your tools to serve the public.

downton1

(Crossposted from Medium.)

May 23 2013

16:33

The newsonomics of value exchange and Google Surveys

whittier-daily-news-google-survey-paywall

What happens when a reader hits the paywall?

Only a small percentage slap their foreheads, say “Why didn’t I subscribe earlier?” and pay up. Most go away; some will come back next month when the meter resets. A few will then subscribe; others just go elsewhere.

So what if there were a way to capture some value from those non-subscribing paywall hitters — people who plainly have some affinity for a certain news site but aren’t willing to pay?

Welcome to the emerging world of value exchange. It’s not a new idea; value exchange has been used in the gaming world for a long time. As the Zyngas have figured out, only a small percentage of people will pay to play games. So they’ve long used interactive ads, quizzes, surveys, and more as ways to wring some revenue out of those non-payers.

It’s a variation on the an old saw that says much of life boils down to two things: money and time. It also brings to mind the classic Jack Benny radio routine, “Your Money or Your Life.” If people won’t pay for media with currency, many are willing to trade their time.

Now the idea is arriving at publishers’ doorsteps. It is being tested mainly, but not exclusively, as a paywall alternative. Yet, as we’ll see it, there may be many other innovative uses of time-based payment.

In part, this is part of the digital generational shift we might call “beyond the banner.” Static, smaller-display advertising is increasingly out of favor, with both prices and clickthrough rates moving deeper into the bargain basement. But marketers want to market, readers want to read, and viewers want to watch, so new methods that combine the marketing of brands and offers and the go-button on media consumption are au courant.

That’s where value exchange fits. Publishers are seeing double-digit, $10-$19 CPM rates from value exchange, and that’s more than many average for their online advertising. Annual revenues in the significant six figures are now flowing in to the companies that have gotten in early on the business.

The big player in publisher-oriented value exchange is Google Consumer Surveys (GCS), a year-old brainchild born out of the Google’s 20-percent-free-time-for-employees program (and first written about here at Nieman Lab). GCS now claims more than 200 publisher partners, including the L.A. Times, Bloomberg, and McClatchy properties. It says it has so far exposed some 500 million survey “prompts” to readers.

GCS will soon have more company in the value exchange game. Companies like Berlin-based SponsorPay, which offers interactive ad experiences in exchange for access mainly to games, is beginning to pursue publisher possibilities, both in Europe and the U.S, where half of its current clients are based. SponsorPay emphasizes mobile and social in its business.

L.A.-based SocialVibe, newly headed by hard-charging CEO Joe Marchese, is an ad tech company. It’s mainly oriented to non-newspaper media, especially TV companies.

How does this value exchange exactly work? Typical is the implementation at one smaller paper, the Whittier Daily News in the L.A. area., one of some 35 Digital First Media papers (both MediaNews and Journal Register brands) that have deployed GCS almost since its inception. Upon reading their 10th, and last, free metered article of the month, readers get a choice: buy a sub for 99 cents for the first month — or take a survey. “Do you own a cat?” for instance.

Publishers get a nickel for each completed response. Response rates tend to fall between 10 and 20 percent. “Completion rates” improve by targeting specific questions to specific audiences. The nickels add up.

For publishers, then, we have a new acronym: PAM, Paywall Alternative Monetization.

Consider the innovation a by-product of the paywall revolution. If you haven’t created a barrier to free access, you have less leverage to force wannabe readers to choose the lesser of two choices to proceed with their reading. Now, publishers can say, pay me for access with money — or with time. The time is short — measured in seconds or maybe minutes, depending on a video’s length or a survey’s questions.

What does the consumer get for answering a question? It varies. Respondents can get as little as a single “free” article, or an hour, or a day of access.

These programs can offer side-by-side offers. For instance, someone like a Press+ (which now powers some 380 newspaper sites) may power a subscription offer in one box, and Google Surveys or a SocialVibe can offer up an alternative in a neighboring one.

Digital First Media, long a public skeptic of paywalls, is using value exchange as an adjunct to its paywalls, many of which were deployed before DFM took over management of the MediaNews papers. While it is using it successfully as a paywall alternative, says Digital First Ventures managing director Arturo Duran, it’s also finding a couple of other ways to wring money out of surveys.

At many of its digital properties, including The Denver Post, its photo- and video-heavy Media Center hub offers Google surveys as speed bumps for continued access. Readers perceive value; enough of them are willing to pay with a few seconds of time to keep getting access to visuals. Similarly, Boston.com’s The Big Picture “news stories in photographs” uses GCS.

This approach, putting up a speed bump — in the form of a survey — instead of paywall explores the nuances of differing consumer valuation of differing parts of news sites. The Texas Tribune has offered a similar approach, having used Google surveys on its extensive data section. How often a survey is deployed can be adjusted by the publisher, working with Google, to maximize both revenue and reduce traffic lost. The search here is for the magic sweet spots.

The Christian Science Monitor is also an earlier surveys adopter. “We don’t have a paywall,” says online director David Clark Scott. “So we tried an experimental speed bump.” Those bumps were installed first on a single section, and now have grown, popping up on much of the site. One CSM twist: If you come to the site directly, you won’t see the surveys. If you come via some search, social, or other referrals, you will.

Digital First is also testing survey deployment for a group notoriously hard for the news industry to monetize: international readers. “We can’t sell [ads] in Kenya, Japan, and India,” says Duran. Instead of fetching bottom-of-the-ad-network prices, as low as 25 cents, surveys can return money in the whole dollars. One lesson so far: “It’s a much better experience than an ad,” for many readers, says Duran.

Publishers are also finding other ways to get readers to “pay.” At the Newton (Iowa) Daily News, the paywall also provides these two alternatives: answer a survey question or a share an article (via Twitter, Facebook, or Google+) in exchange for continued passage.

“It wasn’t about market research at all — it was about trading time for content,” says Paul McDonald, head of Google Consumer Surveys. McDonald, who developed the product along with engineer Brett Slatkin, says they tested out what people would most likely be willing to do, in exchange for some good. They tested a million impressions at The Huffington Post and found that question-answering was the most likable activity. Hence, Google Consumer Surveys.

“Most research is stuck in old ways — paper, email, and phone. It’s a stagnant industry, ” McDonald says. The industry, of course, has responded, offering its own critique of GCS’ rapid-fire — surveys can be commissioned and deployed within a day, with complete results, broken down by customized demographics (at an extra cost to survey buyers) within 48 hours — disruption of the market survey space. Still, industry reaction is more than mixed, with the positives of Google’s new technique winning adherents among bigger brands and smaller businesses. It’s a self-service buying technique, borrowing from Google’s flagship AdWords model.

Interestingly, Google itself is using Surveys to obtain consumer insight. Yes, the company that derives more data from our clicks than anyone still finds asking a human being a question can yield unexpected learning — which, of course, can be combined with clickstream analytics. YouTube is among the many GCS deployers.

It’s a new frontier, and one that I think offers a number of curious potentials.

  • At scale, if there is scale to the business, it’s about significant new sources of revenue.
  • As a paywall alternative, it may be a detour that leads back to the road to subscription. If a reader is engaged enough with a news brand over time — kept engaged in part through value exchange — maybe he or she will eventually subscribe. Does a value exchange-using customer have a higher likelihood of subscribing in the future? It’s too early to know, but we may have soon have sufficient data to see.
  • Value exchange could expand the ability to gain customer data. Each time someone trades some time for reading, she or he could be asked for an additional piece of profiling information. Essentially “registered,” that new customer becomes more targetable for subscription offers or advertising.
  • We can start to widen the idea of trading time for access. Remember the idea of the “reverse paywall,” espoused by then-Washington Post managing editor Raju Narisetti and Jeff Jarvis? Spend enough time with a news product, and get rewarded, they proposed. Value exchange begins to structure that kind of relationship, providing value both to readers and publishers. Rough equalization of value would be a painful process, but it may be doable through much experimentation.
  • Let’s combine two things: the rise of mobile traffic and value exchange. Mobile may not be ad-friendly, but customers might be far more willing to watch a video or touch through a quick questionnaire on a cell phone — and that can ring a different key on the digital cash register. “Mobile is already more diversified,” says SponsorPay CEO Andreas Bodczek, explaining that it is moving beyond gaming companies for value exchange and will soon include publishers.
  • GCS is an easily deployable tool for small- and medium-sized businesses. As such, it could be an interesting add-on for publishers’ emerging marketing services businesses (“The newsonomics of selling Main Street”). That’s a line Google could allow newspaper companies to resell, just as many resell Google paid search.

May 22 2013

14:00

Jaron Lanier wants to build a new middle class on micropayments

jaron-lanier-cc

jaron-lanier-who-owns-the-future“We’re used to treating information as ‘free,’” writes Jaron Lanier in his latest book Who Owns the Future?, “but the price we pay for the illusion of ‘free’ is only workable so long as most of the overall economy isn’t about information.”

Lanier argues that a free-culture mindset is dismantling the middle-class economy. In his estimation, the idea “that mankind’s information should be free is idealistic, and understandably popular, but information wouldn’t need to be free it no one were impoverished.”

Who Owns the Future?, like his 2010 book You Are Not a Gadget, is another manifesto attempting to rebuff what he sees as the contemporary ethos of the web. But the followup also refreshingly attempts to pose solutions, one where all participants in this information-based world are paid for what they do and distribute on the web. Throughout, it places particular emphasis on the ways digital technology has unsettled the so-called “creative class” — journalists, musicians, photographers, and the like. As he sees it, the tribulations of those working in such fields may be a premonition for the middle class as a whole. It’s “urgent,” he writes, “to determine if the felling of creative-class careers was an anomaly or an early warning of what is to happen to immeasurably more middle-class jobs later in this century.”

I recently spoke with Lanier and we discussed the ways he sees digital networking disrupting the media, why he thinks advertising can no longer sustain paid journalism, and why he misses the future. Lightly edited and condensed, here’s a transcript of our conversation.

Eric Allen Been: You were one of the early advocates of the notion that “information wants to be free.” An idea most media companies initially embraced when it came to the web, and one that now some seem to regret. Could you talk a little bit about why you changed your mind on this line of thinking?
Jaron Lanier: Sure. It was based on empirical results. The idea sounded wonderful 30 years ago. It sounded wonderful in the way that perfect libertarianism or perfect socialism can. It sounds right, but with all these attempts to make a perfect system, it doesn’t work out so well. Empirically, what I’ve seen is the hollowing out of middle-class opportunities and that there is an absurdity to the way it’s going. I think we’re not getting the benefits that I initially anticipated.
Been: When it came to journalism, what were some of those benefits that you originally expected? I imagine you then thought it would be a largely positive thing.
Lanier: Yeah. To use the terminology of the time, we — that is, me and others who were behind a lot of the ideas behind the Web 2.0 ethos or whatever — wanted to “supplant” or “make obsolete” the existing channels of journalism and the existing types of jobs in journalism. But what would come instead would be better — more open and all of that — and less intermediated. What happened instead was a little bit of what we anticipated. In a sense, the vision came true. Yes, anybody can blog and all that — and I still like that stuff — but the bigger problem is that an incredible inequity developed where the people with big computers who were routing what journalists did were getting all the formal benefits. Mainly the money, the power. And the people who were doing the work were so often just getting informal benefits, like reputation and the ability to promote themselves. That isn’t enough. The thing that we missed was how much power would accrue to the people with the biggest computers. That was the thing we didn’t really think through.
Been: Historically, technological advances have caused disruptions to industries, but they’ve also tended to provide new jobs to replace the wiped-out ones. There seems to be some optimism in a lot of quarters that journalism can get eventually get on the right track, economically speaking, within the digital world. But you don’t think so.
Lanier: The system is slowly destroying itself. I’ll give you an example of how this might work out. Let’s suppose you say in the future, journalists will figure out how to attach themselves to advertising more directly so they’re not left out of the loop. Right now, a lot of journalism is aggregated in various services that create aggregate feeds of one kind or another and those things sell advertising for the final-stop aggregator. And the people doing the real work only get a pittance. A few journalists do well but it’s very few — it’s a winner-take-all world where only a minority does well. Yes, there are a few people, for instance, who have blogs with their own ads and that can bring in some money. You can say, “Well, isn’t that a good model and shouldn’t that be emulated”? The problem is that they’re dependent on the health of the ad servers that place ads. Very few people can handle that directly. And the problem with that is the whole business of using advertising to fund communication on the Internet is inherently self-destructive, because the only stuff that can be advertised on Google or Facebook is stuff that Google hasn’t already forced to be free.

As an example, you might have a company that makes toys and you advertise the toys on Google, and that might show up in journalism about toy safety or something. So journalists can eek some money from people who sell toys. That’s kind of like the traditional model of advertising-supported journalism.

But every type of business that might advertise on Google is gradually being automated and turning into more of an information business. In the case of toys, there’s a 3-D printer where people print out toys. At some point, that will become better and better and more common, and whenever that happens, what happened to music with Napster will happen to toys. It’ll be all about the files and the machines that actually print out the toys. If the files that print out the toys can be made free, the only big business will be the routing of those files, which might be Google or Facebook handling that, and there will be nobody left to advertise on Google.

That’ll happen with everything else — pharmaceuticals, transportation, natural resources — every single area will be subject to more and more automation, which doesn’t have to put people out of work. The only reason automation leads to unemployment is the idea of information being free. It’s a totally artificial problem, but if journalists are counting the Google model to live on, it won’t work. Google is undermining itself, and there will be no one left to buy advertisements.

Been: Speaking of advertising, I’m interested in hearing what you think about a lot of people currently lauding BuzzFeed and its use of native advertising. There’s a lot of talk about it solving “the problems of both journalism and advertising at once”, or it being some sort of guiding light for a “future of paid journalism.”
Lanier: Advertising, in whatever form, just can’t be the only possible business plan for information. It forces everybody to ultimately compete for the same small pool of advertisers. How much of the economy can advertising really be? It can’t be the whole market. Why on earth are Google and Facebook competing for the same customers when they actually do totally different things? It’s a peculiar problem. You’re saying that there’s only one business plan, one customer set, and everybody has to dive after that. It becomes a very narrow game — there’s not enough there for everybody. It could work out locally a little bit, but it’s not an overall solution.
Been: And your solution is what you call a “humanistic information economy.” Could you talk a little bit about how such a system would work?
Lanier: There are some theoretical reasons that lead me to believe that if you monetized a deeply connected open network, the distribution of benefits to people would look like a middle class. In other words, there would be a lot of wealth in a lot of people’s hands that could outspend any elite, which is critical for democracy and a market economy to survive. So one benefit is you could get a consistent middle class even when the economy gets really automated. It becomes a real information economy.

A humanistic economy would create a middle class in a new way, instead of through unions and other ad hoc mechanisms. It would create a middle class by compensating people for their value in terms of references to the network. It would create an expanding economy instead of a static one, which is also important. It’s built around the people instead of the machines. It would be a change in paradigm.

Been: In the book, you write: “If we demand that everyone turn into a freelancer, then we will all eventually pay an untenable price in heartbreak.” But a lot of what you’re proposing strikes me, in some senses, as a freelance economy.
Lanier: That’s right. What I’m proposing is actually a freelance economy, but it’s a freelance economy where freelancing earns you not just income but also wealth. That’s an important distinction to make. What I think should happen is as you start providing information to the network, it then will become a part of other services that grow over time.

So, for instance, let’s suppose you translate between languages, and some of your translations provide example phrase translations that are used in automatic translators. You would keep getting dribbles of royalties from having done that, and you start accumulating a lot of little ways that you’re getting royalties — not in the sense of contractual royalties, just little payments from people that are doing things that benefited from information you provided. If you look at people’s interest in social networking, you see a middle-class distribution of interest. A lot of people would get a lot of little dribs and drabs, and it would accumulate over a lifetime so you’d start to have more and more established information that had been referenced by you that people are using. What should happen is you should start accumulating wealth, some money that shows up because of your past as well as your present moment.

Been: So if I simply shared a link to a New York Times article on Twitter, for instance, would there be a payment exchange? If so, who would it go to?
Lanier: It would be person-to-person payments. Right now, we’re used to a system where you earn money in blocks, like a salary check, and you’re spending on little things like coffee of something. And in this system, you’d be earning lots of little micropayments all the time. But you would be spending less often. That terrifies people, but it’s a macroeconomic thing. I believe the economy would actually grow if information was monetized, and overall your chances will get a lot better than they are now.
Been: You say in the book that this person-to-person payment system is partly inspired by the early work of the sociologist and information technology pioneer, Ted Nelson. Particular, his thoughts about two-way linking over a network. Could you talk a little bit about why you think this is a better way to exchange information?
Lanier: The original concept of digital networking that predated the actual existence of digital networking is Ted Nelson’s work from the 1960s. It was different from the networks we know today in a few key ways. All the links were two-way, for one. You would always know who was linking at your website — there would always be backlinks. If you have universal backlinks, you have a basis for micropayments from somebody’s information that’s useful to somebody else. If the government camera on a corner catches you walking by, and it matches against you, you’d be owed some money because you contributed information. Every backlink would be monetized. Monetizing actually decentralizes power rather than centralizing it. Demonetizing a network actually concentrates power around anyone who has the biggest computer analyzing it.
Been: Let’s talk about that last point. This is an example of what you call in the book a “Siren Server.” That is, computers on a network that gather data without conceding that money is owed to those individuals mined for the information.
Lanier: That’s right. It’s my name for one of the biggest, best, most effective, connected computers on the network. A Siren Server is a big server farm — a remote unmarked building somewhere in the countryside near a river so it can get cooled. It has tons of computers that run as one. It gathers data from the world for free and does more processing of that data that normal computers can do. What it does with the processing is it calculates several moves that the owners can make that put them in an advantage based on a global perspective.

If you’re Amazon, it means you keep track of everybody else’s prices in the world, including little local independent stores, so you can never be outsold. If a store wants to give a book away, Amazon will also do that, so nobody gets a local advantage. If you’re Google, it gives advertisers a way to use a behavioral model of the world to predict which options in front of you are most likely to steer you. If you’re a finance company, it’s a way of bundling derivatives in such a way that somebody else is holding the risk. It’s almost a cryptographic effort. If you’re an insurance company, it’s a way of calculating how to divide populations so you insure the people who least need to be insured. In all these cases, a giant computer calculates an advantage for yourself and you get a global perspective that overwhelms the local advantage that participants in the market might have had before.

Been: In the book, you call Craigslist a Siren Server, one that “created a service that has greatly increased convenience for ordinary people, while causing a crisis in local journalism that once relied on paid classified adds.” You write that it “has a tragic quality, since it is as modest and ethical as it can be, eschewing available spying opportunities, and yet it still functions as a Siren Server despite that.” So a Siren Server, in your mind, isn’t necessarily always a malevolent construction.
Lanier: That’s true. I don’t think there’s much in the way of evil or competitive intent. It’s the power of having one of the biggest computers. When you suddenly get power by surprise, it’s a seduction. You don’t realize that other people are being hurt. But if it wasn’t Craigslist, it would have been something else. Some computer gets a global perspective on everything and the local advantage goes away. Craigslist calculated away the local advantage that newspapers used to have.
Been: So far, the reviews of Who Owns the Future? have been largely positive. But in The Washington Post, Evgeny Morozov criticized it by saying “Lanier’s proposal raises two questions that he never fully confronts.” One being whether a nanopayment system would actually help the middle class once automation hits its tipping point. He cites cab drivers being replaced by self-driving cars and says: “Unless cabdrivers have directly contributed to the making of maps used by self-driving cars, it’s hard to see how a royalty-like system can be justified.”
Lanier: This has to do with the value of information. In the book I ask this very question — in the future, in the case of self-driving cars, it’s certainly true that once you’ve been through the streets once, why do it again? The reason is that they’re changing. There might be potholes, or there might be changes to local traffic laws and traffic patterns. The world is dynamic. So over time, maps of streets that need cars to drive on them will need to be updated. The way self-driving cars work is big data. It’s not some brilliant artificial brain that knows how to drive a car. It’s that the streets are digitized in great detail.

So where does the data come from? To a degree, from automated cameras. But no matter where it comes from, at the bottom of the chain there will be someone operating it. It’s not really automated. Whoever that is — maybe somebody wearing Google Glass on their head that sees a new pothole, or somebody on their bike that sees it — only a few people will pick up that data. At that point, when the data becomes rarified, the value should go up. The updating of the input that is needed is more valuable, per bit, than we imagine it would be today. Cabbies themselves, that’s irrelevant. There won’t be cabbies. They’ll have to be doing other things.

Been: His other question is “how many [online] services would survive his proposed reforms?” Morozov brings up Wikipedia and says the “introduction of monetary incentives would probably affect authors’ motivation. Wikipedia the nonprofit attracts far more of them than would Wikipedia the startup.”
Lanier: But in what I’m proposing, Wikipedia would not pay you — it would be a person-to-person thing. I’m proposing that there’s no shop and people are paying each other when they create things like Wikipedia. Which is very different. If it’s going through a central hub, it creates a very narrow range of winners. If it’s not, it’s a whole different story.

The online services that would survive would be the ones that can add value to the data that people are providing anyway. Instagram could perhaps charge to do cool effects on your pictures, but the mere connections between you and other people would not be billable, it would just be normal. People would pay each other for that. The services would have to do more now than they are. A lot of services are just gatekeepers and would not survive and they shouldn’t. It would force people to up their game.

Been: Speaking of upping one’s game, you get a strong sense throughout the book that you think society is no longer future-minded. Towards the end, you write that you “miss the future.” What do you mean by that statement?
Lanier: It seems that there’s a loss of ambition or a lowering of standards for what we should expect from the future. We hyped up things like being able to network — and we understood it was a step on a path — but these days I call the open-source idea the MSG of journalism.

An example would be this: Take some story that would be totally boring, like garbage bags are being left on the street. But if you say, “open-source software is being used to track garbage bags on the street,” there’s something about it that it makes it seem interesting. And that makes it a low bar for what seems interesting. A very unambitious idea of what innovation can be.

Photo of Jaron Lanier by Dan Farber used under a Creative Commons license.

May 21 2013

15:00

Tuesday Q&A: CEO Baba Shetty talks Newsweek’s relaunch, user-first design, magazineness, and the business model

A brand guru. That’s what they called Baba Shetty when he was hired away from advertising agency Hill Holliday by The Daily Beast to be the new CEO of The Newsweek Daily Beast Company.

1348078198601.cachedLess than a month later, the company announced that Newsweek was putting an end to its print edition and going all-digital. Last week, Shetty released the beta version of the relaunched website, a simple, colorful, responsive, and easily navigable new home for the decades-old news brand.

Shetty began working with the magazine on a “Mad Men”-themed issue on retro advertising back in March 2012. So maybe it’s not surprising that the new site’s first feature article is an exploration of what makes contemporary television so addictive. Shetty has big plans for capitalizing on on the historically respected Newsweek name, blending a New York Times-like metered paywall approach with an ambitious sponsorship model that will see a lot of creative ad work coming off the Newsweek desk.

On Monday, Shetty and I spoke about how he sees that plan unfolding, as well as some of his favorite new design features, bringing classic Newsweek covers into the digital space, and why ad agencies should act more like newsrooms. Here’s our conversation:

O’Donovan: So let’s start with the redesign! Congrats, first of all — very exciting.
Shetty: Oh, thank you.
O’Donovan: I’m curious, first, who you were looking to for inspiration with the redesign and what your major goals were.
Shetty: The audience is a combination of the people who’ve always looked to Newsweek for its sense of authority, its sense of editorial authority and its stature — its ability to offer perspective on the happenings in the world. But we also wanted to really innovate around the narrative formats for longform publishing on the web.

The real story of the Newsweek relaunch is that it allowed us to think about innovation in a way that really hasn’t happened much for professional journalism. Actually, there’s been a ton of innovation in microblogging and other formats — look at the Tumblr news from the last couple days. Enormous value from thinking about beautiful user experience for content consumption.

But really, a lot of the professional editorial products kind of slavishly follow a set of conventions that are all about maximizing pageviews. You look at a long article that might require seven clicks and page reloads to get through — and then there’s a lot of display advertising that is competing for attention with the actual content. We thought there was an opportunity to do for professional journalism what Tumblr and Pinterest and Flipboard, so many of the other innovative new startups, have done for other kinds of content.

So what we see with Newsweek is the user first. I’ve been talking about it as user-first publishing. The idea is, let’s deconstruct the sense of magazineness — not as a physical thing, but as a concept. The sense of magazineness is about a beautiful user experience. You think about your favorite magazine and sitting in your favorite chair at home and reading it — there’s a sense of editorial coherence. You know — the cover communicates a sense of editorial priority, there’s a table of contents that lends a sense of coherence to the issue. It’s a beautiful package that results.

But when magazines go digital, so much of that’s lost because of the conventions I talked about before — you slice and dice content into the slivers that we call pageviews, and it’s not a very satisfying experience to read professional journalism on the web.

So we really wanted to take a leap forward with Newsweek. In addition to the idea of the editorial stature and credibility of Newsweek, also creating a radically creative user experience around that content. I can talk about a few of the features if you think that would be useful.

O’Donovan: Yes, but I’m still curious about other projects, other sites, other redesigns, that you might have taken something from, or tried to emulate at all. Or maybe this is a ground zero thing. But for example, The New Republic’s redesign, or maybe Quartz — is there a trend?
Shetty: There really weren’t — we didn’t really emulate anything. What we were trying to do was stay true to Newsweek and what the ideal user experience would be.

The cover — there actually is a cover, and it was static in the first issue, and in future issues it will be interactive, video-based multimedia. It’s this idea of drawing a reader in to something that has great editorial to prominence and priority, and we’re going to explore what the cover could be in the digital age. There is a persistent table of contents which is available to you at any part of the experience, and that lends a sense of completeness and coherence to this experience.

O’Donovan: Yeah, the table of contents gives an element of navigability — it helps you understand the fullness of the product.
Shetty: Exactly. It’s persistent. No matter where you are, in an article or on a page, when you mouse over the window, the table of contents dissolves into view, and you can access it. So there’s a sense of, again, an ideal concept of magazineness, and part of it is this sense of complete control over the content consumption experience. So we thought, we’d love to make that real in a natively digital format.

Of course, we took account of all the devices that people read on now, so the site is fully responsive and looks beautiful on a handset or tablet screen or — you should really try it on a 23-inch monitor. It’s gorgeous in large format screens. It gracefully apportions itself to whatever the screen happens to be.

O’Donovan: What would you say, right now, the focus is on in mobile, in building apps? I feel like there’s this turn back towards building cross-platform websites and away from apps. Where did apps fall into your priorities when you started compared to where you are now?
Shetty: Yes, you’re exactly right. I think 18 months ago, everybody was talking about native apps as absolutely the way to go. But there’s a lot of friction in the app experience, and what I mean by that is apps have to be downloaded, apps have to be used and accessed on a regular basis, apps sometimes make it a little more difficult to share content. People are sometimes not as adept at sharing content via apps as they are across the open web. So for us, it’s about giving consumers a choice. We’re going to parallel-path for a while — we’ll also have a Newsweek app available. But the open web launch we did last week we think is actually a beautiful experience across devices. It’s friction-free — there’s nothing to download, there’s nothing that prevents easy sharing. So it’s designed to kind of be — I don’t want to say post-app, but it’s post- the initial way of publishing thinking, that native apps are the only way to go. I think a well designed, thoughtfully engineered open web experience can be terrific for the user.
O’Donovan: You mentioned building an interactive cover page earlier — I’d be interested in knowing what other kinds of engagement you’re interested in building across the site. How did you think about structuring comments? How do you want people to respond to the site?
Shetty: We thought a lot about socially driven content, and if you actually look at an article called “The Way They Hook Us — For 13 Hours Straight,” which is about longform, binge-viewing, addictive TV shows — you know, “Breaking Bad,” “Game of Thrones,” et cetera — if you look at that story, you can see how we handle social. Instead of having commentary being a thing that is relegated to the bottom of the page, there’s a set of functionality on the left side margin that moves along with the story. Right now, there’s 2,100 opinions listed — it’s a way to kind of over time have the idea that engagement opportunities are persistently available, no matter where you are reading these stories — it’s not just a thing that’s relegated ot the boot of a page. There’s a tray that actually slides out to reveal the social features. And there’s a lot of innovation we have planned in that area as well.

And while we’re talking about a long article page, you can kind of see the ability to use multimedia photography, video, infographics to help the journalistic storytelling of a longform piece. That’s another, I think, terrific step forward. It’s not the tyranny of the pageview, it’s not the conventions that are going to deliver more advertising properties — it’s thinking about he user first. What’s going to make for a great reading experience? in that way, I think it differs from a lot of the conventions that are in play across the web.

O’Donovan: So this is my understanding having read a couple things, so correct me if I’m wrong — but your strategy is first to build this product that people are going to want, and then slowly to introduce a paywall, and then later this sponsored content component. Can you explain how you see that unfolding and over what kind of timeline?
Shetty: I can talk a little bit about it — I probably can’t talk about all of our plans right now.

The metered access is going to be rolled out fairly soon, and that’s just the simple idea that, look, anybody can read any article on Newsweek, and initially that’s completely open and completely free. But only subscribers will be able to consume content over a certain number of articles. So it’s very similar to what The New York Times and others have done. Open access — we want a lot of social sharing, we want a lot of visibility of the content across the open web. But what we’re asking is, if people consume over a certain amount of content, that they subscribe. And that’s going to take place fairly soon.

The second question is how brands can participate. We have the same principles we’ve been talking about — thinking about the user first — applied to brand participation. What we’re going to do is limit the clutter — relatively few units, but really high impact — but stay with the design aesthetic of the site overall. They’re going to be beautiful, unignorable, but the value exchange with the reader is going to be very appropriate.

When you listen to a program on NPR, and there’s a sponsorship message before the program starts, you can kind of say, okay, well, I get that. I get how that works. It’s a reasonable exchange between the audience and the brand that sponsors the content. That’s really the model. It’s not as much about the standards of display advertising that have dominated the discussion on the web. It’s a sponsorship model — a different direction.

O’Donovan: From a structural standpoint, in terms of building the sponsorship and how closely married they may be to the content you have, I’m curious if it’s going to be an internal team and how closely they’ll work with the editorial team, or if it’s someone from outside. How does that all work?
Shetty: Oh, it’s all part of one organization in our company, and it’s a close partnership between the editorial and business sides.
O’Donovan: I was just reading earlier, you wrote, along with someone else, a piece for the Harvard Business Review about how advertising companies should act more like newsrooms. I was hoping you could explain that theory and maybe, I’d be curious to know if that was an idea that started to percolate for you having been in a newsroom for a little while.
Shetty: It actually started percolating for me well before I came into a newsroom. I think it actually a pretty clear direction that has been well represented by a lot of people. There’s a real opportunity for smart brands to publish content that’s useful, interesting, engaging, and helpful to their audience. It’s not a new idea — in fact I always talk about the fact that it’s an idea that’s been around for a very long time.

But what’s changed is all the tools that are available for content creation, distribution, measurement and all the channels that are available to brands. I think it’s a very powerful idea. I don’t think it’s one of these trend-of-the-season ideas. I think it’s a dramatic industry shift that we’re going to be tracking for years to come, through various iterations.

That was something I did with Jerry Wind, head of the Future of Advertising Program at Wharton. It was really based on the Wharton 2020 Project, which was asking a lot of advertisers about what they think about the future of advertising, and it was such a consistent theme — that it’s going to be less and less about what we think of advertising today, and more content that is voluntarily consumed by people because they view it as in some way useful or interesting.

O’Donovan: As we continue to see this trend toward sponsored content and cooperation between advertisers and news brands, I’m curious what your advice might be to other people who are following a path similar to yours — coming from the ad side and moving into newsroom, operating as the person who is trying to bring those two things together. Are there any specific challenges or surprises there? How would you tell someone to pursue that?
Shetty: I would just say think about the user first, and by the way, think about editorial standards. It doesn’t serve anyone to have editorial standards compromised. Users don’t want that, the consumer doesn’t want that, and certainly it doesn’t benefit the editorial side of things either. Nobody wants that. I think full transparency and good judgment are critical here.
O’Donovan: How do you telegraph that to the reader?
Shetty: Well, we don’t really — we haven’t really had any issues with telegraphing that. It’s just kind of clearly indicating where, what the source of a particular piece of content is. I think as long as you maintain these kind of standards, there really aren’t issues.
O’Donovan: And in terms of the user-centric experience you’re trying to build — you’re talking about how modern newsrooms have so many different kinds of metrics available to them now — when I hear people talk about building new products like this, they talk about building something light and flexible, and prototyping it so you can really respond to the audience’s initial reaction to it. I’d be curious to know how you’re tracking that, how you’re listening to the reader, and what kind of flexibility you’ve been able to build into the product.
Shetty: Absolutely. The iterative nature of web design development — or I should say, digital design development — is a terrific kind of approach for designing something that users really love and respond to. For us, it’s tools like Chartbeat, which we love, and other kind of leading-edge ways of getting real moment-to-moment feedback from not only what people are reading, but how they’re spending time with it, where they’re coming from, what kind of engagement they have with it. It’s all fed right back to the design and development process.

It’s a long way from the days of just building it and they will come. It’s really paying such close attention to what people actually respond to.

May 15 2013

14:44

Xaxis’ Schlikum: Programmatic Frees ‘Pesky Humans’ To Have More Fun

Nowadays, programmatic digital ad-buying technology automates targeted ad buying and removes the task from human operators. But those ad buyers should rejoice at throwing off the shackles of the mind-numbing task, according to a GroupM executive.

“What programmatic does is free up resource,” Caspar Schlikum, the EMEA managing director of GroupM’s data-centric ad unit Xaxis, told Beet.TV’s recent London Video Ad Strategy Summit.

“In the past, ‘pesky humans’ were doing a lot of things that were process-driven. They were super-boring and very repetitive, and often mistakes were made. That’s something that no media planner in their right mind wants to do.”

May 14 2013

15:35

Enders’ Maude: YouTube Will Make $4 Billion From Ads This Year

LONDON – Few video watchers could have failed to notice how YouTube is amping up the frequency of pre-roll ads on the service. But what will that bring to the operator’s bottom line?

“We estimate this year YouTube will generate about $4 billion in advertising revenue,” analyst Ian Maude of Enders Analysis told Beet.TV’s recent London Video Ad Strategy Summit.

Maude said data also shows YouTube is now more popular than BBC iPlayer on UK cable operator Virgin Media’s connected TiVO service – probably because Virgin Media has situated its YouTube app on a conventional channel number in its linear EPG.

“Overall TV viewing is growing, but that’s largely being driven by older people,” Maude added. “We’re seeing a divergence between what the under-35s and over-35s are doing.”

May 13 2013

00:46

Blip Finds Upside from YouTube’s Downsizing of Content Investment

With YouTube’s pulling back from the big investments in Web originals, which  it announced last year, there are now many opportunities for Blip,  explains Jason Krebs, the newly appointed president of sales and marketing at Blip, in this interview with Beet.TV

At recent Digital Content NewFronts, Blip unveiled a slate of new shows.  Krebs speaks about monetization opportunities around Web original sponsorships and via in-stream video advertising.

 

 

 

May 12 2013

20:07

Innovid’s Powers Interactive Ads for Crackle Across Multiple Devices

Innovid, a New York-based  provider of interactive video ad technology, recently launched a program with with Sony Crackle to serve ads across multiple devices. Beet.TV spoke with CTO and co-founder Tal Chalozin about this and other company developments in this video interview.

“The premise is that marketers that want to reach their audience can focus on finding the right audience and delivering the commercial without thinking in silos – without thinking, ‘this is a online video, this is a mobile video or this is a connected TV video or gaming console.’”

Disney is the first advertiser to use this new technology. For Disney’s recent movie Oz the Great and Powerful, Disney earned 300 percent more time spent and 6.7 percent of viewers engaged with the interactive ad, Chalozin says.

A recent study by Innovid involving 50 interactive ad campaigns for theatrical releases found that 15 out of 20 opening weekend top-grossing films were using the technology and over 4.5 percent of viewers engaged with the interactive ad, compared to the industry average reported by Google of 0.67 percent.

 

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