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April 08 2013

11:00

Automated Ad Exchanges Will Dominate If They Address Fraud, Privacy Issues

Imagine if advertising functioned like a complex modern stock exchange, through which billions of dollars flowed electronically in transactions lasting fractions of a second.

Publishers would place their pages and videos in the exchange, specifying their "asks" -- what they thought the adjacent ad spots were worth, based on the presumed value of the content and the people consuming it.

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Advertisers would place "bids," saying how much they were willing to pay to get their ads in front of individuals who matched desired attributes such as age range, gender, family status, income level, geography and interest in the advertiser's type of product.

When the "bid" matched the "ask," the ad would be placed seamlessly, and the money would flow from advertiser to publisher -- with the exchange and a few other go-betweens taking their slivers.

The scenario isn't imaginary. Chances are you've experienced the result of just such a transaction on your computer, tablet or smartphone, and perhaps even an electronic billboard, TV or radio.

Programmatic advertising -- in which advertisements are bought, sold and placed through automated exchanges -- is "a multibillion-dollar marketplace growing faster than search, video, or anything else for that matter," advertising entrepreneur John Battelle wrote in a blog post in January.

For advertisers trying to sell products and services, the appeal of exchanges is easy to understand. For privacy advocates and some publishers, it's easy to see why they are often suspicious. For all sides, it all has to do with how the technology works.

While ad exchanges account for a fraction of digital advertising today, their share is growing. An investment bank estimated last year that 35 percent of digital display advertisements were "biddable" in 2011, up from nothing -- literally 0 percent -- in 2007.

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Those ads account for billions of dollars, and some experts predict that programmatic buying and selling will handle half or more of all digital advertising in years to come -- in part because it's much more efficient than the more laborious practices common today.

"A traditional advertising deal takes hundreds of emails, insertion orders, manual tagging and trafficking. Then there's reporting, change orders, bill synching. You find out why an agency has 200 people just to execute buys," said Mike Shehan, CEO of SpotXchange, a video ad exchange for which my company, Teeming Media, recently produced an 11-chapter white paper. "Programmatic advertising is the automation of all of that."

The Technology Holds the Key

Advertising exchanges sit at the center of a complex ecosystem of technologies that on one end represent the advertising, or "buy" side -- those looking to buy a spot in which to place an ad.

At the other end are the sellers like publishers who have content (such as a video or a web page) into which the ads will be inserted.

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What differentiates the exchanges from other types of advertising insertion systems is their level of sophisticated, real-time decision-making.

They place the ads by correlating them to multiple factors, and can do so for almost every individual "impression" in real time.

An ad network, by contrast, tends to buy large swathes of impressions from a range of publishers up front then guarantee advertisers placements in those spots for a set fee.

The network may, for example, buy placements from a range of large publishers and smaller blogs in content about a specific subject such as cooking, then tell the advertiser that they can through the network reach people interested in cooking.

There are, of course, also "direct" deals -- ones in which a salesperson from a publisher deals directly with an advertiser or their agency, and then receives and traffics the ads.

Publishers Get Less Skittish

Advertisers in recent months have become increasingly enamored with the exchanges because they seem to have a higher assurance of showing an ad to just the right person at just the right time with the right message that will entice him or her to buy.

Let's say, for example, that a woman in a choice age bracket and geography has visited the IMDb page to learn more about a new movie.

What if the studio could then show her an ad about that movie while she's looking for something to do on a subsequent evening?

If the ad's on her phone, and she's near a theater, even better. The advertiser can add location to the range of factors that makes the ad relevant.

It's all done through a chain of tracking, usually via cookies, that gives a level of probability that a correct match is made. The higher the probability the factors match up well, and the more high value the content, the higher the price for the ad is likely to be.

While reputable publishers have been skittish about exchanges -- suspecting they are auction systems that buyers use to try to pinch pennies -- more have started to experiment with them.

Many ads in Google's empire are sold through exchange systems, and both Facebook and Amazon last year announced they were launching exchange-based advertising systems. They all want to capture dollars the advertisers are allocating to exchanges.

In some cases, the sellers set pricing "floors" beneath which they will not accept a bid for their content when they believe they can command a higher price.

In other cases, high-profile publishers with billions of impressions to sell, including Conde Nast and Time, have also constructed "private exchanges," in which they offer ads only to a limited set of choice clients instead of on the open market.

Some are also using "yield management" platforms, which evaluate impressions individually to determine whether each one will get more money on an exchange, an ad network or via a direct deal a salesperson has closed with an advertiser.

"Yield management on an impression basis can decide of the three available revenue streams which can provide the most value," Paul Dolan, CEO of Xaxis, an advertising buying company that spends many thousands of dollars on exchanges, told me in an interview.

Future: Concerns, Sophistication

Privacy advocates, not surprisingly, are nervous about all the tracking, and bristle at the idea of advertisers and merchants collecting and using data, despite promises it's all anonymized.

If current legislation being explored in Washington is passed, the advertising exchange industry could take a huge hit.

And though the evolving ecosystem is what Battelle called "rife with opportunity," he also called it "riddled with fraud," citing automated bots that mimic humans, invisible tracking pixels, and ads shown in places no human sees them.

Major publishers, exchanges and ad networks have been working with the IAB industry trade group to solidify standards and certify the upstanding participants in the marketplace.

As IAB standards take hold, and more premium publishers release ad inventory, higher profile brand names have also increased their spending levels. Major hotel chains, brewers, soft-drink brands and telecom companies have all served both static and video ads into advertising exchanges within the past year.

Publishers, in turn, have become more assured they can command reasonable prices and have quality ads that look appropriate next to their content, and fewer of the flashing lights and blinking types of junk ads we've all seen on occasion.

It's a sure bet that the predictions of increased dollars flowing through exchanges are correct, and that more sophisticated technologies will emerge.

We will likely see a day when ad spots are bought and sold via options and derivatives, with sophisticated machine trading that mimics NASDAQ and the NYSE. Experiments along these lines have already begun.

Let's hope that when that happens, the algorithms create real value -- enhancing people's experiences as they consume their favorite news and entertainment -- while respecting privacy and stamping out fraud.

An award-winning former managing editor at ABCNews.com and an MBA (with honors), Dorian Benkoil handles marketing and sales strategies for MediaShift, and is the business columnist for the site. He is a founder at Teeming Media, a strategic media consultancy focused on attracting, engaging, and activating communities through digital media. He tweets at @dbenk and you can Circle him on Google+.

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April 04 2013

10:32

Game Changer? Inside BuzzFeed's Native Ad Network

After quietly piloting the concept for months, BuzzFeed officially launched its own native ad network this March. The mechanics of the network are bizarre, yet intriguing: Participating publishers allow BuzzFeed to serve story previews on their sites which, when clicked, bring visitors to sponsored stories on BuzzFeed.com. The network, whose ads resemble real story teases, is brash and a bit risky, but it may just help publishers circumvent the abuses of today's established, banner reliant, ad network ecosystem.

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The current ad network model, or indirect sales model, is a mess. It functions based on an oversupply of simple display ads and is rife with inefficiencies, opening the door for middlemen to reap profits while devaluing publisher inventory. BuzzFeed's native ad network, along with others in a similar mold, has the potential to minimize these drawbacks by giving publishers a simple, safe way to make money through indirect sales channels.

How We Got Here

The ad networks we know today came about as a result of the poor economics of the banner ad. A little history: In the early days of Internet publishing, the banner ad seemed to make sense. Just as many publishers began figuring out the Internet by taking content produced for print and slapping it on the web, they took the standard print ad format -- selling advertisers designated space on a page -- and brought it online too. Instead of selling these ads by the inch though (a measurement suitable for edition-based print publishing), digital ads were sold by the impression, or view, a better fit for the unceasing nature of online media.

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Over time, the acceptance and standardization of the banner ad brought a number of side effects along with it, the most important being an incentive for publishers to pack their pages with as many banners as possible. For publishers, the decision was easy: The more banner ads they placed on a page, the more money they stood to make. So instead of running a more manageable (and more user-friendly) three or four banner ads, publishers cluttered their pages with 10, 15 or even 20 of them.

Placing ads on a page was only half the equation though; publishers still needed to sell them. As they soon found out, selling premium, above-the-fold ads was a lot easier than getting advertisers to pony up for the glut of below-the-fold, low-quality inventory. A significant percentage of ads thus went unsold, and into the void stepped ad networks. Even at a heavy discount, publishers figured, it was better to get some money from remnant inventory via ad networks as opposed to making nothing. This would prove to be a poor calculation.

The Dark Side of Ad Networks
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Rather than question the logic of creating more inventory than it was possible to sell, publishers stuck with the model, growing their audiences along with their inventory and watching the original ad networks evolve into a multibillion-dollar tech industry fed largely on remnant inventory. Soon, publishers found themselves exposed to more drawbacks than they perhaps initially bargained for, and the original premise of making more money with more ads came into question.

As it grew, the indirect ecosystem not only enabled advertisers to buy publisher inventory at cheaper prices, devaluing even premium inventory, it also allowed them to buy premium publisher audiences on non-premium sites, thanks to the third-party cookie. The Atlantic's Alexis Madrigal zoomed in on this problem in a long piece about the tough economics of the online publishing industry.

"Advertisers didn't have to buy The Atlantic," he wrote. "They could buy ads on networks that had dropped a cookie on people visiting The Atlantic. They could snatch our audience right out from underneath us." The indirect system, in other words, commoditized his audience, leaving his impressions as valuable, in some ways, as those on third-rate sites.

Recognizing these and other abuses as endemic to the system, publishers today are starting to fight back. Many are trying to limit their dependency on banner ads either by cutting them out of their business completely or by constricting supply. David Payne, the chief digital officer at Gannett who oversaw a major USA Today redesign which dramatically reduced the site's supply of banners, put it this way when I spoke with him for an article for Digiday: "I think we've all proven over the last 12 years that the strategy we've been following -- to create a lot of inventory and then sell it at 95 percent off to these middlemen every day -- is not a long-term strategy."

Publishers have started looking for alternative forms of revenue to fill the gap and, so far, the hottest alternative is the native ad. Everyone from The Atlantic, to Tumblr, to the Washington Post, to Twitter is giving it a try and BuzzFeed, perhaps the extreme example, is all in. It sells only native ads, no banners.

BuzzFeed Susceptible to the Same Problems?

Which brings us to BuzzFeed's ad network. At this early point, it seems like the network should indeed be free of many of the abuses listed above. Its simple nature, for example, ensures that most of the value won't be siphoned out by a group of tech middlemen and will be largely shared by BuzzFeed, participating publishers and minimally, the ad server. Participating in the network, furthermore, should not devalue publishers' existing inventory since it will not provide advertisers access to the same inventory at cheaper prices.

BuzzFeed also claims its networks steers clear of third-party cookies, the audience-snatching culprit that The Atlantic's Madrigal railed against.

"We believe the ultimate targeting is real human-to-human sharing, digital word of mouth, so we don't do third-party cookie targeting," BuzzFeed advertising executive Eric Harris told me via email. "We're not collecting individually identifiable data and will not sell any data."

The approach should help participating publishers breathe a bit easier -- and they may just want to consider demanding the same from any network they engage with, not just BuzzFeed's.

"It's cleaner; it's more straight up," said Fark.com CEO Drew Curtis of BuzzFeed's network. His site, which is one of the partners participating in the launch, embeds BuzzFeed sponsored story previews on its home page, marking them as sponsored. "I just like the fact that there's no screwing around," Curtis explained in a phone interview, "It's exactly what it appears to be, no more no less." Rates from BuzzFeed's ad network, he added, are significantly higher from other indirect channels. "Advertisers," he said, "are willing to pay for less bulls#*t."

Of course, one question participating publishers might ask themselves is why they are helping BuzzFeed profit from sponsored posts instead of selling them on their own sites. The answer might worry BuzzFeed -- at least until it can get its traffic up to the point of advertiser demand -- but if publishers decide to go that route and withdraw from the network, they may be able to pull themselves away from the bad economics that brought them into the network game in the first place.

Alex Kantrowitz covers the digital marketing side of politics for Forbes.com and PBS MediaShift. His writing has previously appeared in Fortune and the New York Times' Local Blog. Follow Alex on Twitter at @Kantrowitz.

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April 03 2013

10:33

What's Holding Back Responsive Web Design? Advertising

Responsive web design -- where "one design fits all devices" -- continues to gain momentum. Dozens of responsive sites have popped up, and a recent post on Idea Lab from Journalism Accelerator outlined how and why media sites should go responsive.

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But hold your horses. Despite the mounting hype, responsive websites are still far from becoming ubiquitous, and for good reason.

As much as responsive web design improves user experience and makes it easier for publishers to go cross-platform, the industry's struggle with delivering profitable ads during the first big shift from print to web is still happening. And in this second big shift to a responsive web, that struggle is magnified.

It Has To Look Different

The surface-level problem that a responsive-designed website poses for advertising is that ads are typically delivered in fixed dimensions (not proportional to the size of their container) and typically sold based on exact position. Initial solutions to this issue largely focus on making ads as flexible as the web page, i.e., selling ads in packages that include different sizes to fit all sorts of devices, rather than the traditional fixed-width slots, or making ads that are themselves responsive. Ad firm ResponsiveAds, for example, has come up with various strategies for making ads adjust to different screen sizes.

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These diagrams from ResponsiveAds show how display ads themselves can respond to different screen sizes.

But these approaches are not yet ideal. For example, when the Boston Globe went responsive in 2011, the site used just a few fixed-sized ads, placed in highly controlled positions that could then move around the page.

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Andrés Max, a software engineer and user experience designer at Mashable, told me via email: "In the end technology (and screen resolutions) will keep evolving, so we must create ads and websites that are more adaptive than responsive."

Here, he means that ads should adapt to the medium and device instead of just responding to set resolution break-points. After all, we might also need to scale up ads for websites accessed on smart TVs.

Miranda Mulligan, the executive director of the Knight Lab at Northwestern University and part of the team that helped the Globe transition to responsive, agrees. She told me via email, "We need a smarter ad serving system that can detect viewport sizes, device capability, and they should be set up to be highly structured, with tons of associated metadata to maximize flexibility for display."

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Moreover, many web ads today are rich media ads -- i.e., takeovers, video, pop-overs, etc. -- so incorporating these interactive rich ads goes beyond a flexibility in sizes. A lot of pressure is resting on designers and developers to innovate ad experiences for the future, but evolving tech tools can help clear a path for making interactive ads flexible and fluid. The arrival of HTML5 brought many helpful additions that aid in creating responsive sites in general.

"HTML5 does provide lots of room for innovation not only for responsive but for richer websites and online experiences," Max said. "For example, we will see a lot of use of the canvas concept for creating great online games and interactions."

Display Advertising Is Still Broken

In the iceberg of web advertising problems, what ads will look like on responsive sites is just the tip. According to Mulligan, a major underlying problem is still the lack of communication between publishing and advertising. The ad creation and delivery environment is infinitely complex. Publishers range from small to very large, and much of the web development code and creative visuals are made outside of the core web publishing team.

One of the problems is that there are so many moving parts and parties involved: ad networks that publishers subscribe to; ad servers that publishers own themselves; ad servers that publishers license from other companies; sales teams within large publishers; the Interactive Advertising Bureau (IAB); and more. The obligatory silos make it very hard for good communication and flexible results to transpire.

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The challenge of mobile advertising on responsive sites, Mulligan later said via phone, "has very little to do with the web design technique and has a lot to do with the fact that we have really complicated ways of getting revenue attached to our websites."

In other words, the display ad system is still broken. And now, the same old problem is more pronounced in responsive mobile sites, where another layer of complication is introduced.

"We have to go and talk to seven different places and say, 'you know how you used to give us creative that would've been fixed-width? What we need from you now is flexible-width,'" Mulligan said.

While responsive web design inherently may not be the source of advertising difficulties, the fact that it amplifies the existing problems is a good reason for web publishers to be cautious about going responsive. In the meantime, a paradigm shift in how web content generates revenue is still desperately needed. Instead of plunging into using responsive ads for responsive sites, perhaps everyone can get in the same room and prototype alternatives to display ads altogether.

The Boston Globe screenshots above were captured by the BuySellAds blog.

Jenny Xie is the PBS MediaShift editorial intern. Jenny is a senior at Massachusetts Institute of Technology studying architecture and management. She is a digital-media junkie fascinated by the intersection of media, design, and technology. Jenny can be found blogging for MIT Admissions, tweeting @canonind, and sharing her latest work and interests here.

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April 02 2013

10:49

Native Advertising Shows Great Potential, But Blurs Editorial Lines

Radio legend Paul Harvey was such a great storyteller that he could totally enthrall you before you realized you were listening to an ad.

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Today, you'd call that sponsored content. The larger term is native advertising -- strategies that mesh branded messages into the media where they appear. They include articles on news sites; funny videos and animated GIFs on humor sites; tweets and Facebook updates, and more. Instead of interrupting the flow like a typical TV commercial, pre-roll, pop-up or print ad, it blends into its surroundings and, in theory at least, offers the reader/viewer/listener something interesting.

Pew Research Center's 2013 State of the News Media Report found that while the amount spent on native advertising in 2012 was comparatively low -- $1.5 billion compared with $8.6 billion for banner ads -- it's rising fast. Spending for sponsored content grew 45 percent in 2011 and almost 39 percent in 2012. That's second only to video ads.

A Word from Our Sponsor

Some fear sponsored content blurs the ethical church-and-state division between advertising and journalism, while others say the revenue keeps reporters employed.

Reuters' Jack Schafer put it strongly in a recent piece, "A Word Against Our Sponsor": "If, as George Orwell once put it, 'The public are swine; advertising is the rattling of a stick inside a swill-bucket,' then sponsored content is the meal so wretched that even pigs will reject unless sugar-frosted," he wrote.

But whether you love or hate native advertising, examining the recent history of the news business, including declining revenues and widespread layoffs, sheds light on why it's growing so quickly.

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Mark Jurkowitz, associate director of the Pew Research Center's Project for Excellence in Journalism, told me that tough economic realities and the "anemic" growth of digital ad revenue opened the door.

"The grimmer news is that basically for every $16 that a newspaper is losing in print revenue, they're gaining $1 in digital," he said. "Just as the case with classified ads, which disappeared ... it's very possible that other forms of digital ad revenue are maybe more difficult than previously thought."

Forbes Leading the Way

Forbes was the first major news site to integrate sponsored content. In 2010, I wrote about how Forbes Media chief product officer Lewis Dvorkin shook up the established formula with AdVoice -- which hosted sponsored articles on Forbes.com.

Forbes Media chief revenue officer Meredith Levien told me it was slow going at first, especially since few companies had the staff or mindset for content creation. But in the last 18 months it's grown dramatically, in part because the publication added a team of writers, editors and graphic designers -- separate from the editorial team -- to help brands produce their articles. "We can't staff it fast enough," she said, adding that BrandVoice was "No. 1 on the list" of factors that made 2012 revenues the best in five years.

Last year, Levien successfully lobbied for the name to be changed to BrandVoice.

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"AdVoice conveyed the notion it was part of the advertising mix," she said. "This is really about content and thought leadership."

Levien adds that she was gratified to see the Washington Post adopt a similar model earlier this year. "I don't think we can take credit for it, but we were especially pleased to see the Post get into it," she said.

A recent random look at BrandVoice content showed a piece from Oracle titled "King Richard III: Villain, Hero, or Tragic Victim of Identity Theft?" NetApp offered "3 Steps To Build Your Personal Brand For Tomorrow's Business (Tips From The CIO)." The CapitalOneSpark credit card team offered: "Optimize Your Website To Convert Visitors To Buyers." The "Voice" pages include links to more from the sponsor, which in some cases includes press releases.

In February, Dvorkin blogged that BrandVoice now has 20 partners. While he remains passionately upbeat, others are more cautious.

Digiday recently quoted Businessweek.com editor Janet Paskin saying she's treading lightly: "Our credibly and integrity, for all journalists, is sometimes harder to defend than it should be. We don't want to compromise that or allow for that perception."

Edgier Sites Jump In

While the traditional journalism community remains divided, many edgier news and entertainment sites see no problem at all. Some of BuzzFeed's snappy content is sponsored, as is some of what you'll see on Cheezburger, Gawker, Vice and others.

Onion Labs, the in-house advertising and marketing team of The Onion humor site, works with sponsored content in several ways. It integrates brands into its own video content -- such as 7-Up's placement in its morning show, "Today Now." It creates original content for major brands. It also posts or links to content produced by the brands themselves, like this video for Adobe:

CollegeHumor CEO Paul Greenberg said his site embraced the concept five years ago. At the Native Advertising Summit in February, he said there's such interest that the site's inner workings now resemble a digital ad agency.

"We've really had to turn into a machine to super-serve the clients that come to us and meet the demand that we're seeing in the marketplace," he told me. Listerine, he says, saw a 17 percent jump in sales after its native ad campaign.

Matt McDonagh, vice president for national sales at The Onion, says a Nielsen study shows that humor is the best way to reach a young target audience. Even big names such as Hilton and Coke Zero are dipping their toes into the comedy pool. "Brands are willing to take a few more risks than they were a few years ago because to hit 18- to 24-year-olds -- you're not going to do that on '60 Minutes,'" he said.

It seems that when it comes to entertainment sites, sponsored content has found a comfortable home.

"Those kinds of sites have pretty seamlessly integrated this," Pew's Jurkowitz said. "It's a more controversial choice for traditional legacy news organizations."

What Not to do

In 2010, Gary McCormick, then-chair of the Public Relations Society of America, publicly warned that poorly labeled sponsored content could be confused with objective news, especially because disclaimers can be lost as information is shared. Three years later, he feels media and brands understand the need for authenticity and transparency.

"It may be that it's no longer always the 'buyer beware' -- it's now the 'manufacturer beware' of putting out false claims," McCormick said. "If you come out with something hidden behind the wall it only takes one consumer to spot it ... They're going to dig deep."

When The Atlantic ran a boosterish Church of Scientology native ad, then deleted critical comments, the outcry prompted an apology with the opening line, "We screwed up."

At the Native Advertising Summit, The Atlantic Digital's vice president and general manager, Kimberly Lau, called the Scientology incident a lesson in what not to do. "The whole experience clarified how it is people are going to judge these things," she said.

The Onion did a scathingly hilarious take featuring fake content praising the Taliban.

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The Onion's McDonagh notes the parody came from the editorial, rather than sales side, but he feels their pain. "To The Atlantic's credit, they're testing some things out and trying to make themselves a smart digital publisher," he said. The key, he adds, is to understand and stay true to your audience.

Sharing the Wealth

The native ad boom is also already creating new business models -- maybe even a whole new advertising sector.

Take, for instance, the success of Sharethrough, which helps increase the reach of sponsored content. For example, if a brand creates a post for one site, Sharethrough carries it to other platforms such as WordPress, Forbes.com, The Awl and Thought Catalog, which direct traffic back to the original post. Videos can be embedded and viewed in a number of blogs and sites.

Although it's only four years old, it's worked with 20 of the top 25 brands of AdAge magazine's Megabrands list. Relationships with many websites and publishers helped it create the Native Advertising Summit. (As a matter of fact, it popularized the term "native advertising," building off the phrase "native monetization" used by venture capitalist Fred Wilson.) Sharethrough has also become a clearinghouse for information about the new industry with tools such as the Native Advertising Leaderboard, which is searchable by brand, publisher, topic and social actions.

"There's a lot of creativity happening in this space right now," said Chris Schreiber, the firm's vice president of Marketing & Communications. One recent project promoted an infographic Pop Secret developed about how people watch movies. "They were delivering value -- something you didn't know and was easily sharable," he says.

When sponsored content -- especially videos -- work, he says, it's great. "It's more about thinking what's valuable for the audience and the consumer rather than what's valuable for the marketer."

Microsoft met its marketing goals while engaging a new audience with its The Browser You Love(d) to Hate campaign for Internet Explorer 9. Roger Capriotti, director of Internet Explorer product marketing, hired producers to create visual content that targeted young people who might otherwise disregard the product. The effort relied on viral shares and news coverage instead of paid posts; the most frequently shared video recalled memories of growing up in the '90s:

As anyone who's tried to make a video go viral knows, 25 million video views -- including 22 million for "Child of the 90s" alone, is nothing to sneeze at, even for Microsoft.

"If we can build good content, we can engage them in a way that we haven't engaged them in the past," Capriotti says. The best part, he says, was reading positive reviews posted by new-found fans.

The Rest of the Story?

Jurkowitz, of the Pew Research Center, questions how far the native ad trend will reach.

"Obviously the growth rate is high, but we're talking about a universe of small numbers here," he says. "There's some momentum in this direction, understandably, but it's not by any means a foregone conclusion that this is going to become a dominant form of advertising in mainstream news outlets going forward."

But The Onion's McDonagh clearly sees brands moving away from conventional ad campaigns, and demanding more creativity. "Brands are trying to develop content and trying to act more like publishers, and that's a sea change from where we were three to five years ago."

Sharethrough's Schreiber notes that as soon as new platforms crop up, advertisers jump on them -- as they've done with Twitter's Vine app, which creates short videos. He expects newer platforms will arise specifically for native advertising. "You're going to see new media created with native advertising, knowing that's how they're going to make their money," he says. And brands, he says, will learn what works best for their audience and their message. "They'll find their voice," he concludes.

Usually at this point in a Paul Harvey show, he would knowingly say, "And THAT's ... the rest of the story." But right now, prospects for native advertising are not so clear-cut that any one person or group can claim to have the last word. The only thing that's certain is that they will continue to evolve.

Terri Thornton, a former reporter and TV news producer, owns Thornton Communications, an award-winning PR and social media firm. She is also a freelance editor for Strategic Finance and Management Accounting Quarterly. Follow her on Twitter @TTho

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April 01 2013

11:00

Special Series: Online Advertising, Evolved

If the banner ad isn't dead, it's certainly on life support.

Once upon a time (actually, not so long ago), there was one way to advertise online: the almighty banner ad. But, the banner ad just didn't do enough. It didn't fully take advantage of the medium, it was hard to track, and it certainly didn't keep up with the lightning speed at which the medium changed.

Even Federated Media CEO John Battelle, who was there at the birth of the banner ad, said recently to Business Insider that as an industry, "we messed up when we decided banner ads would be how we make money on the Web."

Today, as the banner ad of old gasps what could be its last breath, brands, publishers and industry leaders are breaking the ad mold wide open to find new ways to connect online readers with marketing. All this week on MediaShift, we're looking at the ways they're doing this with our "Online Advertising Evolved" special.

We'll still look at banner ads -- but we'll look at how they're innovating and changing. After all, some of the banner ad's ancestors will survive. But, how those ads are targeted, how they're purchased, how they're measured ("viewability" is hot on industry minds), and how they're used will determine their fate.

Then there's scrapping the banner concept altogether and working with something new -- so-called "native advertising." The definition of a native ad can be as narrow or as broad as the person defining it would like. (There's a whole push there -- to define native advertising better so everyone is speaking the same language.) But, in essence, native advertising is advertising that folds more seamlessly into the content around it. It could be just an old-fashioned advertorial -- a story written by a marketer next to an original magazine piece. Or, it could be in-stream ads that pop up in your Facebook newsfeed. Or, it could be a short digital film that's part ad, but also part content. But, no matter what it is, if it's called "native advertising" it has some major buzz around it these days for publishers, marketers and the industry as a whole.

Stay tuned as we tackle a few of these issues this week on MediaShift. Below is a list of what we have planned so far. Have an idea to share? Let us know.

Also, to get you up to speed, see our list below of some of the best reporting, opinion and analysis from other outlets on this topic.



Coming Soon

>Digital Magazines Dive Into Native Advertising, by Susan Currie Sivek
>Where Native Ads Have Been and Where They're Going, by Terri Thornton

>Advertising Remains Revenue King, but the Future Is in Innovation, by Marianne McArthy

>Ad Exchanges: Automated Systems Hold Great Promise, But Raise Concerns, by Dorian Benkoil

>Why Are the 'One Old Trick' Ads Surviving? by Laruen Orsini

>How Responsive Design Is Changing Advertising, by Jenny Xie

>What's Behind BuzzFeed's Native Ad Network? by Alex Kantrowitz

Recent required reading on the evolution of online advertising

Native Advertising Study Shoots Some Bullets at Pre-Roll (MediaPost)

BuzzFeed, Sharethrough Battle to Bring Native Ads to the Masses (AdAge)

Native Advertising Is Bad News (Digiday)

What's All the Hype About Native Ads, Anyway? Looking Beyond the Buzzword. (AdAge)

Native + Content: A Powerful Advertising Combination (MediaPost)

The Washington Post Dives Into Native Advertising (Forbes)

Ad War: BuzzFeed, the Dish, and the Perils of Sponsored Content (The Atlantic)

Where You Can Go Right, And Wrong, With Native Ads (TechCrunch)

We Need a Better Definition of Native Advertising (Harvard Business Review)

AOL Eschews Banners, Leans Into Native (AdWeek)

Native Advertising Works -- If You Don't Embarrass Yourself (VentureBeat)

3 Out of 10 Display Ads Are Never Seen by Consumers (ClickZ)

5 Marketing Predictions for 2013 (Mashable)

The New York Times' Plan to Save the Banner Ad (Digiday)

Industry Effort to Improve Web Ad Metrics Goes Nowhere (AdWeek)

Study Says Half of Media Buyers Will Try Native Advertising in 2013 (PaidContent)

Solve: Media Buyers Warm To Native Ads (MediaPost)

Is Your So-Called 'Native' Advertising Really Native? (AdAge)

Sponsor Content Doesn't Fool Anyone Except Advertisers (AllThingsD)

12 Tips to Avoid The Atlantic's 'Sponsored Content' Meltdown (PBS MediaShift)

Managing editor Courtney Lowery Cowgill is a writer, editor, teacher and farmer based in central Montana. In addition to her work with MediaShift, she teaches online courses at the University of Montana's School of Journalism. Before she came to MediaShift, she was the co-founder and editor in chief of the now shuttered online magazine NewWest.Net. When she's not writing, teaching or editing, she's helping her husband wrangle 150 heritage turkeys, 30 acres of food, overgrown weeds or their young daughter.

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11:00

Digital Magazines Dive Into Native Advertising

Ah, that awkward moment when you're interviewing someone about online advertising and you have to pause to quit your ad-blocking browser plugin so you can view a sample ad.

Clearly, I'm part of the problem, not the solution, for magazines trying to develop online monetization opportunities for their digital products. Yet most online advertising options, like banner ads, provide little profit to magazine publishers.

But a new (old) approach is rising to the rescue in the form of revitalized, interactive, and highly tailored sponsored content within digital magazine products. That is to say, yes, magazines are also taking advantage of the "native advertising" boom.

While some of the sponsored content looks a lot like digitized versions of the "special advertising sections" that print magazines have long used, today's innovators are coming up with more creative ways to integrate sponsored content to increase its effectiveness and to maximize profit.

Sponsored content on the web and in replicas: GTxcel

One of the challenges of using sponsored content for today's digital magazines is that standard PDF-like replica editions typically only include static ad pages, like those in print issues. GTxcel (the just-rebranded company formerly known as Godengo+Texterity) is releasing a new product, Turnstyle, that will allow publishers to add interactive sponsored content to an HTML5-based magazine app.

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Available first for iOS apps and later for other platforms, Turnstyle allows a publisher to insert interstitial full-page ads that can show video and lead to additional pages of sponsored content within the app, accessible through touch interaction with the ad. Readers can interact with all of this content without leaving the magazine app. Interactivity will be fully functional offline as well. Personalization and geolocation features are likely to be added in the future.

"In magazine apps, the industry is pretty much banners and ribbons at the bottom, maybe an introduction page. Then you get into the flip experience," says Kim Keller, executive vice president for sales at GTxcel. "The ability for you now to be able to insert an interstitial ad that is completely interactive is very powerful."

Keller sees this new product as especially valuable for magazines that want to create standalone special issues for regional or seasonal themes. "They can create it very easily with Turnstyle -- a 20- to 30-page app with sponsored content that is highly interactive and relevant to that special edition," he says.

The goal of the new product, along with the other sponsored content strategies GTxcel recommends for its magazine customers, is a positive user experience of marketers' messages -- "not sponsored content that gets in the way, that is obviously just an advertisement," says Keller. "When a publisher does sponsored content correctly, the reader doesn't care. They actually love it."

Sponsored content made customized and current: Nativo

Part of creating a good user experience for sponsored content is ensuring a seamless, relevant look and feel in the context of a magazine's usual content. Nativo (known as PostRelease prior to its rebranding this month) is creating ways to help publishers integrate native advertising (another term for sponsored content) into their web and digital magazine experiences with a smooth, integral feel.

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"When [publishers] are redesigning their sites, they are looking at native advertising as not just an option, but perhaps their lead option," says Justin Choi, CEO of Nativo. "They can get improved monetization because they're focusing on driving engagement, as opposed to interruption" caused by banner ads and other forms of display ads.

Nativo allows publishers to use native advertising that marketers have tagged and customized in such a way that it matches the editorial content's existing online appearance. So far, the company has attracted magazine clients including Maxim, Source Interlink (publisher of Motor Trend, among other magazines), and Entrepreneur Media. The service works across platforms, including mobile devices and the web.

"The publisher says, 'I want the native ad here.' They start tagging, and the system knows to replace those elements when they get a branded element," explains Choi. "Once it's integrated, they can control that native ad the same way they do other advertising. They can turn it on and off. They can geotarget it. All the same ad controls they can do with advertising, they can do it with native."

This kind of branded content is an especially good option for mobile publishing, says Choi, at a time when other kinds of mobile ads are bearing little profit for publishers. While mobile traffic is growing rapidly, advertising formats for mobile haven't adapted to maximize that audience.

"Monetization has to be solved by publishers. Smart editors realize that. Native placement works remarkably well on mobile, for the user experience but also for monetization," says Choi. "Publishers are thinking of this holistically."

Of course, making sponsored content or native ads a truly seamless part of a digital magazine experience is an issue of not just transparency, but also brand voice: Who produces the content? What kinds of brands fit with the publication's editorial perspective? Nativo's focus is on the technology to integrate these ads, one part of what Choi calls a "whole ecosystem now helping brands produce better content."

Sponsored content across media properties: Brightcove

For companies that publish more than one magazine or have other digital properties, the ability to reuse sponsored content across more than one website or app is alluring. The same content can be rebranded and republished in more than one place, maximizing its value to the publisher.

Brightcove is one company exploring ways to make this reuse easier for publishers. With a long list of magazine publishers as customers, Brightcove's platform allows the sharing of a single video -- like one created by a sponsor -- in different settings, with unique branding and distinctively formatted players for each publication.

"If I'm ... creating sponsored content because it has good upfront value and will invest my reader, I'm going to take that sponsored content across a number of platforms," says Chris Johnston, vice president of digital media solutions for Brightcove. "If I have that on my homepage, that's great, but if I have another property that has a whole gallery of videos, it adds value to them, too. If another property has a feature on a related topic, they may already have a video, but they may want to show another to show depth of knowledge."

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The possibility of applying sponsored content to multiple media properties may appeal to publishers that want to make the most of an initial foray into sponsored content.

"Most magazines aren't working on lots of sponsored content. They more typically lean towards the traditional CPM-based model because it's easier," says Johnston. Creating sponsored content in-house for an advertiser, or managing its creation by an outside firm, is difficult for publications already stretched to just create their print and digital products. "Lots of content creation and distribution takes effort," he says.

So while magazines may like the idea of integrating more sponsored content into their digital products, and the payoff may be greater than the investment in other advertising efforts, it's going to take time for these innovations and others to find a place at many publishers -- plus a willingness to face the other challenges of sponsored content, like ensuring readers' positive experience of the content and maintaining a consistent editorial identity.

Keller of GTxcel, however, is optimistic, comparing the integration of sponsored content today to the early adoption of Google AdWords by publishers.

"They had text in them, and people were concerned it might look like editorial. It's not uncommon for that view to be applied" with sponsored content today, Keller says. "What we've found is that over time, as more and more publications have adopted native advertising, that concern has subsided."

Susan Currie Sivek, Ph.D., is an assistant professor in the Department of Mass Communication at Linfield College. Her research focuses on magazines and media communities. She also blogs at sivekmedia.com, and is the magazine correspondent for MediaShift.

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August 02 2012

14:00

6 Questions for Rafat Ali on Skift.com, His New Travel Startup

Rafat Ali is one of those rare people in the media industry who understands the power he wields with his written words, yet can be so humble and friendly in person. I was struck by that quality in him when we first met probably 10+ years ago when he was first starting the paidContent blog as a one-man operation focused on digital media.

What he accomplished with that site was a lesson for all of us who are running small media ventures, taking a one-man operation and expanding it into a full-fledged online business. Ali received venture funding, expanded staff and built more sites, and eventually sold the site to the Guardian (which later sold it to GigaOm).

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After selling his baby, Ali decided to take time off to travel the world and disconnect from the intense 24-hour news cycle that consumes everyone who lives on Internet time for breaking news. And now that he has resurfaced, his new baby is Skift.com, billed as a "travel intelligence media company."

As he has described the startup on various Mediatwits podcasts (we co-host the show together for MediaShift), Skift will put a laser-sharp focus on the business of travel, the travel business and business travelers, disrupting the current incumbents who cover the industry in a less intense fashion.

We recently connected by email, and he answered my six burning questions about Skift and his plans for the site.

6 Questions for Rafat Ali

1. Why did you decide to target the travel business with Skift? From all your trips abroad?

Rafat Ali: It is in the travel sector, but not really built upon my own travels over the last two years. The cliche is: A startup guy sells his company, goes off to travel the world, and through his experiences during his travel, hits a brainwave in the middle of Mongolia on how to solve all the travel woes in the world. Thankfully, mine isn't that.

My travels inform my worldview on how we want to build Skift, how broadly we look at travel, but the genesis of Skift is more prosaic: We saw a big white space in the travel information industry, and we're attacking it.

2. What lessons did you learn from paidContent, and how did you apply them to Skift?

For one, we're bringing the same energy of the saturation coverage of the digital media industry that we did for years at paidContent, and now bringing it to the world's largest sector: travel. We'll be a digital native, 24/7, breaking news, analysis, opinion, somewhat similar to what we did with paidContent.

Also pC, back when it started in 2002, brought together then disparate silos of the larger media-information-entertainment industries, and with Skift, we're attempting the same with the very large silos of aviation, hospitality, destinations, cruises, technology and others, and bringing them together. The underlying assumption, that these silos will collapse, is the same as paidContent. We'll see if they're borne out.

3. Who are your first investors, and how did you find them?

A long list of 17 angels, 14 disclosed: Chris Ahearn, Luke Beatty, Gordon Crovitz,
Craig Forman, Jim Friedlich, Tom Glocer, Vishal Gondal, Jason Hirschhorn, Peter Horan, Alan Meckler, Mohamed Nanabhay, Sanjay Parthasarathy, Amol Sarva, Chris Schroeder.

These are all very accomplished business execs in the media-tech industry that I've known for years, covered them at paidContent, they spoke at pC conferences, and I have developed relationships with.

So they're betting on us, the team, to build a large media+information+data business in a very large sector.

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4. How is it different starting a site in 2012 vs. when you started paidContent?

We realize trying to scale just using media/content will not cut it; we're trying to build a very large travel intelligence company, and that means we have to go beyond what we did at pC.

For us, that means building the company at the intersection of travel and data, and that means first pulling in that data, and then building services on top, all of which we hope the industry will pay for.

Also unlike paidContent, where we tried in small ways to do some crossover stories, with Skift we really will attempt it, aimed on the consumer side at business travelers. While paidContent helped define the digital media industry as it exists now, our ambition was to go deeper into the vertical, not go broad and consumer.

Skift hopes to redefine a new generation of data- and information-heavy media companies, built to break out of the vertical media ghettos and scale.

5. Tell me more about the "studio model" and how much revenue you think you'll get from services vs. ads.

This for us means we'll build a slew of data services, some of which will succeed and some won't. It means we'll be quick to prototype, and quick to discard if it doesn't work -- that's what we mean by studio model. It means we'll learn what the information and services black holes are for the travel industry and professional travelers as we grow, and we'll adapt quickly to address those needs.

We think we'll get a majority of our revenues from services. Ads will be a decent part, both on B2B and especially on the business traveler side. Business travelers are a very addressable and lucrative category for all sorts of advertisers, including travel brands, financial services, luxury and others.

6. Will you ever look at travel the same way again after getting so deep in the weeds on the business side? How will things change?

Great question. I hope I don't lose my sense of wonder in travel. If I can keep traveling to the kinds of places I have over the last two years, then I surely won't, but if I just restrict myself to work and business travel, then I'll always be in work mode!

*****

What do you think about Skift.com and its "studio" business model? Can an upstart disrupt the business travel industry? Share your thoughts in the comments below.

Mark Glaser is executive editor of MediaShift and Idea Lab. He also writes the bi-weekly OPA Intelligence Report email newsletter for the Online Publishers Association. He lives in San Francisco with his son Julian and fiancee Renee. You can follow him on Twitter @mediatwit. and Circle him on Google+

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December 07 2011

15:20

Tear Down the Wall Between Business and Editorial!

For too long, reporters and editors have been unaware, even hostile to the business sides of their organizations. Those attitudes have helped push the news industry into its current dire state.

And that's why I say: Tear down the wall between business and editorial.

Before you start sharpening your pitchforks, hear me out.

I'm not proposing a free-for-all money-grab that destroys journalistic imperatives. I am calling for those who make the "product" to learn how it's sold so they can better do their jobs and contribute to the bottom line.

If editorial staff is the first to be pared in news organizations, perhaps that's in part because they haven't known enough to make a strong business case for what they contribute.

Jim Brady, the former executive editor of WashingtonPost.com, and now the editor in chief of Journal Register Company, seems to agree that journalists need to learn the business ropes.

Jim Brady

"We don't want to see people sent out into the world slaughtered by the wolves because they don't know anything about the business side," he said at this year's Online News Association conference when I asked his thoughts on journalists learning business principles.

MediaShift managing editor Courtney Lowery Cowgill, co-founder and former editor in chief of the now-defunct New West, was also encouraging. She told me that while she and others were building their sites, they were stymied while trying to get advice on how to support the news businesses while maintaining proper standards.

"Friends in similar startup situations were struggling with how to blur the lines in an intelligent and ethical way," she said. "There was nobody to help us with that. They were all just saying, 'No, no. Don't do it.' We all need a roadmap for how to do it, a good guide on how to do that ethically, intelligently and efficiently."

Here, I hope, is a start.

Remember: It's a Business

One place to start is attitude.

Can you name another business in which the people who make the key product are allowed, even encouraged, to be ignorant of how they make money?

I've found many journalists to be uncomfortable with money. But money is lifeblood. As much as you might labor to get a story in before deadline, you'll sweat bullets when you're responsible for payroll and the money isn't there.

A for-profit business is just that. That profit is what lets you not only continue another day, but also gives you the freedom to determine your own mission.

Yes, the news business is special, and has a special trust. But many businesses are, and some of them -- such as health care and food -- deal much more literally with issues of life and death. They, too, must juggle ethical and commercial imperatives while doing their work.

Keeping the public trust, even one protected by the Constitution, is not contradictory with the the idea of making your enterprise financially self-sustaining.

The more revenue you have, the more creative ways you can use it to produce a better product, and the more diverse the revenue is, the less beholden you will be to any single source.

Know the Business

The more you know about the business workings, the better arguments you'll be able to make to gain resources to do good work. You can point out the profits one section you're handling brings in that can support another effort you believe in.

You may be able to make a case that something that seems like a cost center will, over time, create new efficiencies or revenue-enhancements. You can note that an investigative story may not bring in advertising, but it could bring in page views that you can show lead to new advertising or subscription revenues.

Even better is if you can back up your case in a way a business person can understand, by using data to make a cogent case that applies to the bottom line.

Understand the Finances

The more literate you are about the finances, not just income, assets and depreciation, but also cost of capital and market conditions, the better you'll understand the reasoning behind some decisions.

The better grounding you have in the finances, the more respect you'll have for the business on both the income and expense sides -- and the more you'll want to control costs, or spend appropriately to get the job done.

You'll be able to see the company through a business lens. You'll put yourself in a cooperative, collegial position, rather than going begging to the money people with hand out.

If you're running your own operation, the better you'll know how close you are to meeting payroll, or how creative you can be to raise some funds.

If Sales Influences Editorial, It's OK

Do you think newspapers run separate real estate, car or fashion sections for editorial reasons? Or could it be because those sections generate healthy profits?

It's fine if commercial reasoning influences editorial projects, as long as the projects fit into your overall mission. Let me give an example from MediaShift.

We have sometimes adjusted timing on stories or special series if there was no good reason not to in order to accommodate a client who wanted to sponsor them.

Sometimes we've even extended a series by a couple more stories than we might have without the added funds. Producing that extra content can be additive and contribute to the richness of the site.

If we can serve our community and earn revenue at the same time, that's a home run.

We are mindful of the danger of working so hard to serve sponsors that we neglect the needs of the larger community. That's very important.

Create Things That Make Money

Sometimes, you'll package material in a way that garners interest from viewers and sponsors. Packaging and repackaging can be a great device.

It's easy to demean "link bait" such as "Top 10" or "How To" lists, but if your users like and share them, and they generate profitable page views, is there really harm? If there's sponsor interest, all the better.

You can also launch efforts to make money in order to support other operations that don't. I'll later be writing a column about news companies that have done everything from sell web consulting services to hand out sponsor postcards at local gatherings.

Try to Get to 'Yes'

A former managing editor at Newsweek (where I used to work) once told me proudly of throwing a salesperson for the magazine out of his office with harsh words.

Perhaps, instead, he could have worked to help craft a solution that met the advertiser's needs without violating Newsweek's core principles.newsweek_headroom_max4aa.jpg

There were times at ABCNews.com, where I was a liaison between the sales and editorial sides after having been a managing editor, when I created products the editorial team accepted while explaining justifiable limits to the sales team.

I have, as a journalist doing business deals, sometimes had to fight the urge to give a sponsor an outright "no" to one of their ideas, and instead tried to glean their ultimate goals and worked together to find an acceptable way to meet them.

Be Willing to Say "No"

You also have to be willing for the long-term health of the business to say "no." You may be asked to do things you consider unsavory. You have to have the spine to make a sponsor uncomfortable, as MediaTwits podcast co-host Rafat Ali did at his former site, PaidContent, when he reported on a sponsor in a way they didn't appreciate.

Advertisers rooted in your community (whether that's a community of professionals, of like-minded individuals, or of geographic proximity) will usually understand if you explain that a request they're making could damage the operation's credibility. That damage will also damage their ability to have their message in front of a happily engaged community you've worked hard to amass.

You do need core principles that can't be bent -- even if that means the business doesn't meet payroll. Remember the point above about diversified revenue streams? The more there are, the less any one sponsor can damage you.

Be Prepared for Uncomfortable Conversations

In smaller communities, the people who sponsor a news operation can be the ones being reported on. They'll ask for favors. You and people you work with have to be able to explain, even in the midst of reporting, what can and can't be done on their behalf.

At the risk of repeating: The more profit your company makes, the more leeway it has to do its work, to remain independent of government or other interference, and the more freedom to do good work.

An award-winning former managing editor at ABCNews.com and an MBA (with honors), Dorian Benkoil handles marketing and sales strategies for MediaShift, and is the business columnist for the site. He is SVP at Teeming Media, a strategic media consultancy focused on attracting, engaging, and activating communities through digital media. He tweets at @dbenk and you can Circle him on Google+.

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September 16 2011

16:30

Mediatwits #20: Newspaper Special: Boston Globe Pay Wall; Guardian U.S.; Philly Tablet

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The Mediatwits podcast is sponsored by the CUNY Graduate School of Journalism, which offers an intensive, cutting edge, three semester Master of Arts in Journalism; a unique one semester Advanced Certificate in Entrepreneurial Journalism; and the CUNY J-Camp series of Continuing Professional Development workshops focused on emerging trends and skill sets in the industry.

Welcome to the 20th episode of "The Mediatwits," the weekly audio podcast from MediaShift. The co-hosts are MediaShift's Mark Glaser and Rafat Ali, the one and only founder of PaidContent. This week is a special edition on newspapers, newspapers and more newspapers. First up, the Boston Globe launched its new pay-walled site, BostonGlobe.com, which is free for print subscribers but costs $3.99 per week for non-print subscribers. The old Boston.com site will look more cluttered and have less content from the paper. The special guest this week is Chris Mayer, publisher of the Globe, who talks about why they went with a two-site strategy, and how people will still be able to see Globe content if they come from social media or search links.

Next up is the move by the U.K. newspaper the Guardian, with its third attempt to take on the American market. The paper launched a new site, GuardianNews.com, helmed by Janine Gibson, and will be moving over star reporter Nick Davies as well as new hire Ana Marie Cox. Can they finally get a foothold in the States? And finally the Philadelphia newspapers and Philly.com are subsidizing an Android tablet for subscribers at $99 with a two-year subscription contract. Will people take up their offer?

Check it out!

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Subscribe to the podcast here

Subscribe to Mediatwits via iTunes

Follow @TheMediatwits on Twitter here

Intro and outro music by 3 Feet Up; mid-podcast music by Autumn Eyes via Mevio's Music Alley.

Here are some highlighted topics from the show:

Intro

1:40: Update on Michael Arrington leaving TechCrunch

3:10: Big conflicts of interest at TechCrunch Disrupt

4:10: Rafat likes "retro" feel of print NY Times

5:15: Rundown of topics on the show

BostonGlobe.com pay wall

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7:20: Rafat likes clean look of BostonGlobe.com

8:35: Special guest Chris Mayer, publisher of the Boston Globe

10:30: The split between two groups of Globe readers

15:40: Mayer: Readers appreciate advertising, as long as it's not disruptive

18:20: Will BostonGlobe.com do a special app or stay out of App Store?

21:10: The Globe's marketing push for its paid content

23:30: BostonGlobe.com will allow free reads of stories via social media and search without limits

25:45: Mark wonders if having two sites will really hurt the Globe

Guardian launches new U.S. site

26:20: Guardian moves Nick Davies stateside and hires Ana Marie Cox

28:20: Rafat impressed that they're hiring 20 to 30 people

Philadelphia papers subsidize Android tablets

30:35: Get a $99 tablet if you subscribe for two years at $9.99 per month

32:40: Allows many possible advertising deals

34:45: Why we're still watching moves by newspaper companies

More Reading

Four Observations (and Lots of Questions) on the Boston Globe's Lovely New Paywalled Site at Nieman Journalism Lab

Boston Globe pioneers double website strategy as it erects paywall at the Guardian

Judgement Day: Does the Boston Globe's paywall site have a chance in hell? at the Boston Phoenix

BostonGlobe.com, the pay site, now free until Oct. 1

The Guardian Launches a U.S. Homepage with a Special American U.R.L. at New York Observer

Nick Davies, Ana Marie Cox Join Guardian's New U.S. Operation at Capital New York

The Guardian Launches in America at the Next Web

GuardianNews.com, the new U.S. site

Philly papers offering subscribers $99 Android tablet at CNET

Sound Familiar? Philadelphia Newspapers Subsidize A Tablet To Sell You A Subscription at Wired

Weekly Poll

Don't forget to vote in our weekly poll, this time the best business model for metro newspapers:


What's the best business model for metro newspapers?

Mark Glaser is executive editor of MediaShift and Idea Lab. He also writes the bi-weekly OPA Intelligence Report email newsletter for the Online Publishers Association. He lives in San Francisco with his son Julian. You can follow him on Twitter @mediatwit. and Circle him on Google+

CUNY-J LOGO.jpg

The Mediatwits podcast is sponsored by the CUNY Graduate School of Journalism, which offers an intensive, cutting edge, three semester Master of Arts in Journalism; a unique one semester Advanced Certificate in Entrepreneurial Journalism; and the CUNY J-Camp series of Continuing Professional Development workshops focused on emerging trends and skill sets in the industry.

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July 20 2011

15:48

February 11 2011

22:05

WSJ Series Inspires 'Do Not Track' Bill from Rep. Jackie Speier



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We didn't plan it this way, but the timing was perfect. Rep. Jackie Speier (D-Calif.) introduced a bill today in Congress that would give the FTC the power to create a "Do Not Track" database so people could opt out of online tracking. And her bill comes right during our special series about online privacy, which included a roundtable discussion (and debate) about the "Do Not Track" database and its feasibility. And Speier told me one of the inspirations for the bill was her outrage from reading the Wall Street Journal's What They Know series.

On one side is privacy groups such as Consumer Watchdog and the Electronic Frontier Foundation who worked with Speier on the bill. On the other side are behavioral ad firms and publishers who would prefer that massive numbers of people don't opt out from tracking, which helps them serve targeted ads. In the 5Across roundtable discussion, Yahoo's chief trust officer Anne Toth put it this way: "I think it's critical that people realize that collecting data about consumers online gives enormous benefits. Right now, advertising makes the Internet free. And people want a free Internet. And information leads to innovation and ideas. What I'm worried about most is that with 'Do Not Track' and government regulation, we throw out the baby with the bathwater and stifle innovation."

I talked with Rep. Speier today by phone and she wasn't buying that argument. She believes that the technology exists to create a one-button "Do Not Track" solution so people can opt out of tracking. Her bill is far from alone in the online privacy debate, as a flurry of bills are expected in Congress this year. Plus, she does not have a GOP co-sponsor on the bill nor is she a member of the House Energy and Commerce Committee. She still remains confident that the overwhelming public support for "Do Not Track" will give her bill momentum and she is "cautiously optimistic" she can get a GOP member to sign on.

The following is the entire audio of my interview with Speier this morning, and below is a transcript from that call.

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Q&A

Why did you decide the time was right to introduce this bill now?

Rep. Jackie Speier: I think there was a growing clamor for privacy protection by the public. For the longest time, we have operated with the ignorance of bliss, I guess, that nothing was going on. There have been a number of recent exposes that have made it clear that there's a lot of tracking going on. And I must tell you that until I read it in the Wall Street Journal, and their 13-part series, I didn't know that Dictionary.com was just a means by which tracking takes place. And they're using something like the dictionary to identify you and then to track you. I was pretty outraged when I read that.

What about self-regulation. A lot of companies in Silicon Valley would prefer to do it themselves. What do you think about those efforts?

Speier: I have a long history on the financial privacy side of this issue. We've had lots of efforts by the industry to offer up pseudo financial privacy protections in California when I was working on that legislation. I'm happy to see the industry step up, but I'm not interested in fig leaf solutions. I want it to be simple and straightforward for consumers to click on one button and not be tracked. I want the FTC to develop the mechanism, and a simple format so the consumer does not have to read 20 pages of legalese.

How would you define tracking? Because it's not as simple as the Do Not Call registry. There's tracking online that people see as being bad, using their information in bad ways, and there's tracking that's just analytics for a website and not really harmful.

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Speier: I think tracking is much more insidious than "Do Not Call." [Those telemarketing calls] were interrupting your dinner hour. Tracking is an activity that often times you don't even know it's going on. They're creating a secret dossier about who you are, they're making assumptions about you and then they're selling that information to third parties that then will market to you products or not, and then the information is then transferred from one source to another.

It starts to impact fundamental things like whether you can access health insurance, life insurance, what premium you're going to pay, based on assumptions they make. The example I used in the press conference today was I'm the chair of the refreshment committee of my church's bazaar so I go out and pay for 15 cases of wine and charge it to my credit card online. That information is then sold thousands of different ways to thousands of different data companies, and then it's sold again.

So let's say a life insurance company that I'd like to get life insurance from has that information and believes I'm an alcoholic. Either they don't sell me life insurance or charges me a higher premium. Or let's say I'm a prospective employee at a new company and they access this information and decide I'm an alcoholic and they don't want me as an employee. It becomes insidious.

I understand the worst-case scenarios, but what about the tracking that's done to give you recommendations on a site or you get ads that are served up that align with your interests? Some of those things aren't insidious or bad.

Speier: That's why you should have a choice. If you're going online to buy a new barbecue, you should be able to click to opt-in to see other barbecues. That's fine. That's your choice. But if you click on the target site, you know you want that barbecue and you don't want to be bothered and don't want to be tracked -- you can buy that barbecue and move on.

You talk about having one button to opt-out, but is that solution going to work or will people end up opting out of things they don't want to opt out of? Should there be more layers to this idea?

Speier: You'll still have advertisers seek you to opt in. The presumption is that somehow everyone is going to opt out. That's not necessarily the case. It's a choice.

What do you think about the solutions that the browsers have offered, from Microsoft's Internet Explorer, Mozilla Firefox and Google Chrome? Do you think what they're doing is a good start?

Speier: I think it's a good start, but I think we need something uniform. I've been told Mozilla's approach [with Firefox] is one that's not enforcing [Do Not Track] so what does that mean? It's more of a fig leaf at that point.

So it's more of a suggestion. "Don't track me... please."

Speier: [laughs] What is that? What it looks like to me is that they're trying to give the appearance that they're doing something, when they're not. I've been down this road before with the financial institutions in California with the financial privacy law. A placebo isn't going to work here.

I've heard from someone at Yahoo that the "Do Not Track" list could stifle innovation and the way they do behavioral advertising. And it could hurt not just Yahoo but startups as well.

Speier: I'm not persuaded by those arguments. That argument was used with the financial privacy law in California, that it would somehow stifle innovation of financial products. It didn't stifle innovation. Credit default swaps were out there for many to engage in. I'm just not buying it.

How will your bill differ from others that are being introduced? Are you coordinating with them in some way?

Speier: I'm hoping that we will coordinate. The bill from Bobby Rush (D-Ill.) is similar, though his would be site-specific. So every time you went to a site, you'd have to click, instead of a one-stop shop for purposes of opting out. My bill is more simplified and universal.

How will the bill dovetail with what's coming out from the FTC? They are in a comment period now, and they'll come out with a final report soon. Are you working with them?

Speier: First, I want to applaud the action they have taken, but we need to give them authority so they can move forward in a meaningful way in this area. They don't presently have the authority to do what we want them to do.

Part of your bill is giving them that authority?

Speier: Yes.

Did they ask for that?

Speier: No. They realize they need it in order to be effective in this area.

How long do you think it would take to implement what you're asking for in this bill?

Speier: I think the technology is already there. I think it should be as instantaneous as the Egyptian freedom. [laughs]

Within 18 days?

Speier: Yes, within 18 days. [laughing]

*****

What do you think about the "Do Not Track Me Online" bill? Would you sign up for such a database? Do you think the FTC should have the power to set up such a database? Share your thoughts in the comments below.

Mark Glaser is executive editor of MediaShift and Idea Lab. He also writes the bi-weekly OPA Intelligence Report email newsletter for the Online Publishers Association. He lives in San Francisco with his son Julian. You can follow him on Twitter @mediatwit.

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18:09

On Facebook and Online, Privacy Is Only an Illusion



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As our public selves merge perceptibly with our private selves on social networks, our notions of what constitutes privacy -- arguably even the very definition of privacy -- is undergoing a radical revision.

Mark Zuckerberg audaciously quipped in 2010 that privacy was no longer a social norm. For many of the 600 million-plus users of Facebook, the idea of a "private" profile apparently persists. Yet, there arguably is no such thing.

The Illusion of Privacy

Consider a recent study [PDF file] of online social networks by Northeastern's College of Computer and Information Science.

It started with this premise: Given the known attributes of some fraction of users in an online social network, can we infer the personal details -- geographic location, interests, and schools attended -- of the remaining users?

The conclusion was perhaps predictable: Yes.

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It was the high degree of accuracy that wasn't. Even when given information on as little as 20% of users, the personal attributes of the remaining users could be determined accurately an astonishing 80% of the time. (One sample graph from the study is at left.)

The study's findings align neatly with the formulation known as homophily and defined as love of the same, a term coined by sociologists more than half a century ago. Put more simply, we are friends with people like us.

And yet this natural grouping into tribes actually inhibits privacy. We can adjust our privacy settings on Facebook, cloaking our friend lists to "friends only" or "friends of friends," yet this is a fool's errand.

"Almost all privacy mechanisms available to users today are based on access control: users can specify which other users are able to view the content or information they upload," the researchers wrote. "Our results show, however, that even information that is not provided by users can sometimes be inferred from the user's location in the network."

In other words, our online networks reflect commonalities easily inferred by even the most basic of algorithms. Just by joining -- often under the illusion of privacy -- we reveal ourselves.

Users' Gift to Advertisers

But few stop there. We share some of the most intimate details of our lives -- romantic entanglements, snapshots of children, education, and work history. We even friend and "like" brands, post news of purchases in our Facebook News Feeds, and berate companies for bad customer service.

This pervasive conversation on our collective consumption habits turns what was once one-dimensional data into a more holistic and contextualized profile of specific consumer groups.

Online networks reflect offline connections. We live near, go to church with and spend time with friends like us. Yes, online networks infuse data streams with a level of granularity never before available, but the ability for brands to isolate a certain group of people isn't exactly new.

Ironically, it's the data required by government institutions that's made traditional consumer targeting possible -- from the Census Bureau and U.S. Postal Service to birth records, court records of marriages, and even traffic tickets -- all sources that arguably spawned the multi-billion dollar direct marketing business. This data isn't optional; participation in a civilized, market-society requires it. And all of it, to varying degrees, is publicly available for companies to access and interpret.

By contrast, many of today's online advertising applications operate in the zone of halfnimity -- a middle ground between full identity and online anonymity. Terms like "targeting" and "tracking" tend to conjure more troubling notions, something comparable to a credit report or medical record.

That's not to suggest that more insidious tracking and trafficking of such information doesn't occur. Private investigators, for example, can now acquire certain profile information, such as your Facebook username, from various paid databases, and that data may be linked to other identifiers, like your Social Security number, creating a permanent history. Unlike criminal, civil, credit and driving records, use of this kind of information in a pre-employment check or background investigation is not currently limited by federal law.

A Transparent and Uncertain Future

In 2011, online behavioral marketing will be coming out of the shadows and into the spotlight. Consumers need to understand the indirect benefits of online ads and the potential tradeoffs of opting out. Brands should be telling that story, too.

Because it's not just government intervention that could pull the plug on online ads. The free, open-source AdBlock Plus (yep, the name says it all) recently became the first browser-based add-on to be downloaded over 100 million times.

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As Facebook grows ever larger and more powerful, we're increasingly caught in a zero-sum game between participation and privacy. The emerging cultural norms of transparency, openness and connectedness involve some inherent sacrifices.

In massive numbers, we are opting-in and theoretically making ourselves vulnerable -- but vulnerable to what, really? RapLeaf and other companies that sell your personal data? The People's Republic of China? The threats remain largely abstract, opaque, and seemingly academic. Persuasion is the stock-and-trade of marketers and brands, not coercion. We are not required to reveal the intimate details of our lives. Instead, we are increasingly choosing to do so.

If we are hurtling toward an irreversible rewriting of the collective definition of privacy, isn't the author all of us? With every new status update, we may be entering a Faustian bargain, but we really can't see whose hand we're shaking.

Mya Frazier is director of trends and insights at Engauge, one of the nation's largest independent advertising agencies. This article is adapted from the Engauge 2011 Digital Outlook, a comprehensive report on the future of marketing in the digital era. A former business journalist, she has been a staff writer at Advertising Age and The Cleveland Plain Dealer. You can follow her on Twitter or read her blog on Forbes.com.

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January 03 2011

21:14

2011 Flash Points: Open vs. Closed, Google vs. Apple

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Social Media content on MediaShift is sponsored by the John S. Knight Journalism Fellowships, a program offering innovative and entrepreneurial journalists the resources of Stanford University and Silicon Valley. Learn more here.

We don't know exactly what media and technology stories will occur in 2011. Will Facebook finally go public? Will Gawker Media achieve mainstream respectability? Will Jon Stewart start his own cable network? But we can be sure that a lot of stories will occur around a few areas of tension.

Here, then, are flash points I predict will define media trends in the coming year and beyond.

The Battle of Open Vs. Closed

Media entities will grapple, argue, battle, and rage over whether to make what they produce freely available to all comers or take a more "walled garden" approach.

In fact, nearly every other trend of the year could be squeezed into the Open vs. Closed debate: Should material be freely available to anyone who pays on any platform? Should media that's available without charge always be free everywhere? Will companies finally be able to charge for digital content at a scale that really starts to pay the bills? Will non-Apple tablet computers with more open systems start to take hold? Will Republicans in Congress win a challenge to the FCC's regulations for Net neutrality? What Hulu-like solutions will arise in which one level of service is free and ad-supported, but others will pay for full access to richer levels of content? These all revolve around the issue of how openly and freely available our media can and should be.

The battles will play themselves out at individual entities, in which their media on some platforms -- the web, for example -- will be available to all, but other forms of distribution are limited to paying or otherwise vetted customers on, say, iPads or smartphones. In other cases, media companies will do battle with each other on the principles of Open vs. Closed media, with some holding fast to the principle that all comers can consume what they produce and never be forced to pay.

News organizations will likely be at the center of this trend, and we'll continue to see them experimenting with diverging paths. Some, such as NPR and our own PBS, will keep working to keep their media as ubiquitously available as possible for anyone who can access them on any device. Others, such as News Corp., will try to get consumers to pay each time they want a publication such as the Wall Street Journal on every new screen.

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Higher-tech consumers always pay attention to what gives them more control, and they'll increasingly gravitate to devices that are more open, as well. We'll see more people move to web apps, for example, as they get more used to the idea that "there's an app for that" doesn't necessarily mean that the app has to be on a phone, let alone an iPhone. HTML5 will allow for new kinds of functionality in browsers that are less proprietary platforms than the ones people are used to on mobile devices.

We will also continue to see "Open vs. Closed" battles between officialdom trying to control access to "secret" information and sites like WikiLeaks and its offshoots working to make that information available.

The Battle Over Privacy

With Congress, the FCC, the Commerce Department, the FTC and industry groups jostling to regulate what data media and advertising entities can and can't collect and use, consumers will finally start to pay some real attention to what's being collected about them.

And that should give media and advertisers the incentive to more explicitly tell users what they're getting for sharing their information. Want to access a website and all its nifty functions? Well, you'll have to click "yes" to allow it to drop cookies on your PC and track your use. If you give a higher level of data -- maybe your name and ZIP code -- perhaps you'll get a little something more, such as access to a walled garden area.

We'll also see users start to become more sophisticated about protecting their info, using false names and log-ons, clearing browser cookies, and accessing the blocking functions of their browsers. While companies will do all they can to collect information within legal bounds, that data will become corrupted, at least at the edges, by people doing more to befuddle the collection and manipulation of that data. There are business opportunities for those who help users learn to protect their privacy, mask their usage, etc.

Behind the Battles Over Free vs. Fee

As media companies try to charge for the content they control, they'll also do battle over rights to their content. Consumers will be faced with multiple offerings from different providers, be they cable TV companies, Netflix, or news conglomerates. Producers will try to strike deals that limit distribution of their wares or give them a cut of each individual outlet.

Media companies will also start to see that the network effect noted in Metcalfe's Law -- in which the value of a device or application becomes more valuable the more people use it -- is impinged upon by those who charge for access. Yes, there may be short-term monetary gains, but there will also be a limit to how fast and far word spreads about the media for which there's a charge.

Google vs. Apple and Beyond

The battle between Apple and Google will continue to rage.

Samsung_Galaxy_Tablet.jpgIn the same way we saw smartphones based on the Android operating system start last year to take a significant share of the market Apple's iPhone helped create, we'll likely see Android-based tablet computers start to compete with the iPad in a real way. Global sales of the Samsung Galaxy tablet, the first Android tablet widely available outside the U.S., hit 1 million worldwide two months after its release. More will come.

Google will try to get publishers to go with them by offering a better financial and data deal than Apple, and Apple will be spurred to offer publishers a better deal, as noted by the Wall Street Journal.

Google Chrome will continue to take share from Apple's Safari and other browsers thanks in part to the trend toward more more sharing of documents and use of the cloud, and more use of web apps based on HTML5. Also, more people will discover that the "incognito" function in Google Chrome helps protect privacy and avoid certain kinds of tracking. More people will use Google Docs and find they can make do without Microsoft Office software.

And people will want the ability to use Google Books to more easily read e-books they got from somewhere other than the Amazon or the iBookstore.

Social Media Will Not See a Dip

Some have predicted that social media are riding a "hype cycle," a term coined by the Gartner Group consultancy to quantify how trends rise then flatten over time. I don't think social media will fall into the trough of the hype cycle this year. Yes, any individual social medium, be it Twitter, Digg or Delicious, may find itself on the outs.

But it's clear that communicating in real-time across screens with mixes of text, video, pictures, graphics and other overlays (be they hashtags, location, links or something that hasn't been invented) will continue. Email, after all, is a form of social media, as are chat, SMS texting and MMS. People are too used to communicating, sharing, spreading and integrating it all into their daily lives to let it all go away. Not to mention the efforts by large companies spending significant dollars to reach people through social media.

Anyone can say with confidence that Facebook will not go away. Too many power players, including Goldman Sachs, according to today's New York Times, are invested in its success to let it fade any time soon. Facebook will continue to experiment with new interfaces and where to draw the line to keep people in its realm versus letting them interact with functions outside its control. The increased attention to privacy may again cause the company some discomfort. A newcomer like the now-delayed Diaspora open-source social network may pick off a few users, but Facebook should remain strong.

So Where Does This Leave You?

If you're a media professional, you'll want to hedge your bets and not assume things will break one way or another. Don't be wedded to any one model, but do be wedded to trying things with your audience, and giving them more of what they want, within the bounds of your business and editorial principles. Know that a lot of what you do can be mimicked or copied outright, but count to three and consider the benefits before you lash out against someone who copies you. There may be a win-win solution, in which you both reap benefits. Make sure that every contract with every distributor has an "out" clause, and that you're not wedded to any one technology or platform for long.

If you're a consumer, don't buy any device you can't afford, because it may not be of as much use a year from now. Reward those media companies who behave in ways you appreciate by buying what they make or visiting their ad-supported operations. Contribute and share it with everyone. And hold on for a very fun, if sometimes infuriating, ride.

Me, I'm going to go play with my company's new iPad (I know what I said, but I have to learn it for professional reasons, and am having a little personal fun, too), buy a new Android device, hack a used netbook computer I bought for my daughter, and see if I can keep my eyes on where the waves are cresting as I try to help media entities like MediaShift negotiate these wonderfully roiling seas.

A former managing editor at ABCNews.com and an MBA, Dorian Benkoil has devised and executed marketing and sales strategies for MediaShift. He is SVP at Teeming Media, a strategic media consultancy focused on attracting, engaging, activating communities through digital media. He tweets at @dbenk.

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Social Media content on MediaShift is sponsored by the John S. Knight Journalism Fellowships, a program offering innovative and entrepreneurial journalists the resources of Stanford University and Silicon Valley. Learn more here.

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November 17 2010

23:48

Are Magazine iPad Apps Profitable in the Long Haul?

Magazine editors and publishers are excited about tablet devices like the iPad.

In them, they see a chance to give consumers the best that digital media can offer -- and to be able to charge them for the content.

But does the profit from the apps justify the expense of building and marketing them?

Conde Nast, Meredith, Hearst and other leading magazine publishers have all been experimenting with the iPad. They are touting their successes, while acknowledging it's too soon to tell what the ultimate business will be.

"Our tablet strategy," said John Loughlin, executive vice president and general manager of Hearst Magazines, at the recent Ad:Tech conference in New York, "is to learn by doing." To determine what's sustainable, what's a fad, and what's "a significant new component to our business model."

Here Come the Apps

Conde's Wired magazine in June released a $4.99 iPad app that sold 100,000 copies of that month's issue, more than the 73,000 newsstand copies typically sold at the same price, according to WWD.

Earlier this month Conde's fashion flagship Vogue announced the release of an app as well, adding to a growing stable of magazine apps from the publisher.

It's easy to see why the editors are excited. After watching print subscriptions, newsstand sales and advertising drop sharply, and unable to make up the difference on the web, they now see a way to regain the ability to not only charge consumers but also make advertisers pay a premium to reach them.

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Loughlin ticked off some encouraging figures: Popular Mechanics sold 54,000 single copies in its first six to seven weeks; there will be eight magazines on the Barnes & Noble Nook e-reader by the end of the month; most titles will also be on the iPhone, PC, Mac and Android devices, which compete with the iPad and iPhone. Users were using Hearst magazine apps "well beyond the issue expiration date," which presumably gives Hearst a way to continue to reach them for more sales and advertising.

Lauren Weiner, who oversees Meredith publications' digital and emerging media business, said at Ad:Tech that the company was working to transform itself "from a print publishing entity into a multimedia powerhouse," and that apps were a part of that strategy.

Loughlin noted how his company was moving beyond simply putting magazines with complementary video and interactivity into apps and was instead gearing experiences for the devices themselves. He mentioned Cosmopolitan magazine's version of the Kama Sutra which was revamped in an app called "Sex Position of the Day" and sold more than 100,000 copies for the iPad. A version has also been released for Android.

Weiner talked of popular for-pay recipe apps that lived separately from the many popular home-oriented titles Meredith publishes such as Family Circle, Better Homes and Gardens, and Ladies Home Journal.

Is There a Profit?

Still, despite the froth, it's difficult to make a case for apps as a savior for the magazine industry.

Weiner noted it can cost $75,000 to $300,000 to produce a paid app worthy of her magazines' brands.

Even assuming a generous 50 percent margin on each app sale, that means a magazine would have to sell 30,000 to 120,000 copies at $4.99 before it breaks even (assuming they aren't selling iPad-specific ads). That doesn't include added costs such as reconfiguring the app for other platforms and marketing it to consumers.

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And users can be notoriously fickle in buying single-issue copies. Wired's iPad app sales were reported to have plunged to 31,000 in July and 28,000 in August.

The market for apps is much more limited than for magazines. Consumers with iPads, other tablets and e-readers are a fraction of the media-consuming public, and those who would buy magazine apps are a fraction of those. Even if a subscription model comes to all the devices, revenues in the near- or even medium-term are not likely to match print.

Magazines like Wired and Popular Mechanics have a natural appeal to the technically adept who are using tablet devices. Many magazines, though, sell only in the low thousands for their apps.

Not a Savior

"Will the tablet save the magazine industry? No," said noted magazine and digital media designer Roger Black, who is a partner in a new e-reader platform venture called Tree Saver. "Will they get a percentage of the market? Sure."

The paid magazine apps, which tend to range in price from $2.99 to $4.99 for single issues, also compete with free ones, like Conde Nast's Epicurious recipe app and their one for Style.com.

Commenters in the iTunes store, meanwhile, show their ire, complaining about the pricing, and in some cases, the technology. "Boycott full price mags," wrote one, adding, "Digital magazines are fantastic but we should be able to buy a year's subscription for close to the price of a paper subscription." It was a call repeated by many others.

"Would give five stars [as a rating], but paying that much for a magazine is ridiculous," wrote a user ID'd as William Shelton on the Popular Science page, where the app, which had been $2.99, now lists for $4.99. He gave one star.

To justify the cost of producing apps, magazines have to amortize them over time. But "what happens in the year 2012 when Steve Jobs announces that, 'We've upgraded,' and your app suddenly no longer works?" Black asks.

Magazines are also competing on the iPads for attention from social networks like Twitter and Facebook; apps for TV shows; movies and music; mashup applications like Flipboard that combines social networks and media; games and more.

True, development costs are coming down as more programmers learn the tablet programming languages. Plus companies like AppMobi are helping web developers write programs in JavaScript that can then be ported over to mobile devices. HTML5, which allows new kinds of functionality and interactivity in a browser, could also prove to be a solution.

The technology is improving, and there will be economies of scale, as well. As Loughlin noted, this is an experimental period, when magazines are learning what they can offer and how much they can charge. Some apps will be breakout hits. A combination of web, apps, mobile and print sales may bolster magazines and give them new life and sustained profitability.

But the excitement over apps has some difficult realities to confront until that day is reached.

A former managing editor at ABCNews.com and an MBA, Dorian Benkoil has devised and executed marketing and sales strategies for MediaShift. He is SVP at Teeming Media, a strategic media consultancy focused on attracting, engaging, activating communities through digital media. He tweets at @dbenk.

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November 15 2010

19:07

City Magazines Expand Audience and Revenues with Web, Apps

Even back in 1888, King Kalakaua of Hawaii recognized the power of city and regional magazines. His royal charter led to the creation of the magazine Paradise of the Pacific, whose goal was to display the civilization of the islands and to draw tourists and business.

Kalakaua would be amazed by the transformation of the publication now called Honolulu Magazine. Today, the king could follow the magazine on Twitter, watch its web videos, receive email newsletters and read it in print or multiple digital formats.

Though not every city or regional magazine has such a long history, many of them are today drawing on their established credibility and brand recognition to support new digital experiments. Many have crafted sophisticated websites, creative mobile apps, and innovative advertising strategies. These experiments may help the magazines remain definitive resources for information about their places, even as they are challenged by new, online local media outlets.

Reaching Readers Often

Like other magazines, city and regional publications have had to find ways to provide timely, interesting web content that can draw audiences between print issues. One method has been to create locally oriented blogs on their sites, sometimes maintained by existing editorial staff and sometimes by paid part- or full-time bloggers. The magazines have also linked to external local blogs to curate quality content.

Honolulu Magazine has an online real estate column updated almost every weekday, in addition to new online posts on other topics and web-exclusive content.

"A monthly magazine has traditionally lived in its own time zone, a month or two removed from what's going on in our community," says A. Kam Napier, the magazine's editor. "It's fun to react to news and what's going on around town."

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Opt-in email newsletters about dining, shopping and local events have been valuable for local magazines. Many of the local magazines owned by Today Media have associated e-newsletters, including Delaware Today and Westchester Magazine.

Chris Calloway, digital media project manager for Today, said both advertisers and readers like the e-newsletters. In all the digital formats the magazine uses, Calloway said, the ability to analyze readers' interests has helped the magazine and its advertisers.

"It's a very important tool to find out what interests the consumers," he said. "We're sifting through the data to find ways to organically make changes."

Readers Near and Far

For city and regional magazines, there are unique advantages to offering digital editions and mobile apps.

Thanks to the immediate delivery and easy accessibility of digital editions, local magazines no longer have to rely solely on distributing print editions nearby. Apps for the iPhone, iPad and Android are increasingly making these magazines available wherever interested readers might be -- even far away.

"I've noticed an increase in international sales," says Calloway of Today Media. "The digital edition has reached a whole new audience overseas, including people who used to live in the area and want to learn about it."

Local audiences also enjoy the benefits of mobile apps. New York Magazine has a truly nationwide audience, but it's also providing the local audience a variety of focused apps. It bought the website MenuPages two years ago and now offers an iPhone app that provides menus and reader reviews for 30,000 restaurants in eight market areas. There's also an Android app for reading the magazine's blogs.

"There are some other kinds of category-specific mobile apps for the iPad, iPhone, and Android that we're working on," said Michael Silberman, general manager for digital media at the magazine's parent company New York Media. These will probably include a fashion app and an app for Vulture, the magazine's highly successful entertainment and culture blog. Eventually, Silberman hopes to develop a variety of apps to help users "navigate New York."


h2. New Revenue Streams

New York has also found new revenue opportunities through its mobile and web presences. For example, in the MenuPages app and in the magazine website's restaurant listings, users can click through to make a restaurant reservation using the OpenTable service. Some restaurants also permit online ordering through SeamlessWeb.

"We have some little experiments going with click-to-buy theater tickets or movie tickets, or stuff from Amazon or iTunes," Silberman said. "The stuff that's really firmly in our wheelhouse like restaurant reservations and online ordering -- that's pretty interesting from a revenue point of view."

Other types of retail connections have not yet been as profitable. "People don't come to a news site to download music or buy DVDs or books. They may read about it on our site, but they're unlikely to do it there," he said.

New York magazine has also worked with Foursquare, the popular location-based social app, to offer restaurant, bar and shopping information and deals to its followers on that site.

"We're still one of the top 15 media brands on Foursquare as far as the number of followers, and we update that every week with new tips," Silberman said. This type of location-based activity seems like a promising growth area for other local magazines as well, offering opportunities for brand development, advertising and coupons.

The Challenge of Being Local

One of the challenges for city and regional magazines -- those much smaller than New York -- is that they typically don't draw enough of an online audience for advertisers to be interested in making online buys.

"We have a real hard time in our meetings bringing in any national expert on anything electronic. It doesn't translate," said Jim Dowden, executive director of the City and Regional Magazine Association. "You can't get millions of hits in Des Moines when you're writing about Des Moines. You're not going to generate money from hits on a website about Des Moines if what you're relying on is pennies per hit."

A new enterprise called the Community Magazine Network, launching later this month, is trying to unify these smaller publishers to help them generate additional ad revenue and develop their online offerings. Brian Ostrovsky, CMN's founder and CEO, compares his company to a national television network that provides assistance with ad sales, technology and best practices, with the goal of getting smaller publishers -- especially those in suburban and rural areas -- into the digital game.

"Community magazines have struggled online because they're simply not staffed to have fresh content, and to provide the kinds of web content people expect for a compelling experience," said Ostrovsky.

CMN aims to build upon participating magazines' community relationships and existing content by integrating curated and social content online, while also helping construct print and online advertising deals with regional and national advertisers who might not otherwise be interested in smaller publications.

City and regional magazines, no matter the size, are doing fairly well in maintaining their print circulation, said Dowden, because there are few quality local media left in many areas -- especially as newspapers downsize and lose local content. However, local magazines have to diversify their revenue sources and begin moving into digital while maintaining the integrity of their existing product.

With all of these new opportunities, publishers will have to get used to making money not just from print, but also to "getting money back in 10 different pots, instead of just the Internet or just the website," according to Dowden.

Maintaining Identity and Credibility

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Wherever the money comes from, city and regional magazines' greatest asset appears to be their brand recognition and editorial integrity. Though it might seem that sites that offer user-generated, local restaurant and shopping information, such as Yelp, might challenge these publications, the magazines I talked to unanimously argued that their recognized credibility on such topics will sustain readers' loyalty. Sites like Yelp are also less useful in smaller communities.

"Where we stand apart has been in offering expertise, analysis, historical perspective, and editing," said Napier of Honolulu Magazine. "We narrow down their options to things we know they'd like because we know our audience. We focus on trying to bring that expertise."

For example, the magazines emphasize that they use critics who visit restaurants repeatedly and then write quality reviews, overriding the widely varying quality and tastes of users at crowdsourced websites.

The magazines are, however, interested in integrating user-generated content with their sites. New York uses reader reviews in its restaurant section of its website and on MenuPages. Calloway of Today Media said, "These could be ways to engage with the consumer about the types of restaurants they like to go to. We can do polls of our readers about the best places to eat and shop and include those on the Today websites."

Though the city and regional magazines' formats may change, their continuing goal is to engage area readers in unique ways that other local media can't offer.

"Magazines are uniquely positioned to make local lifestyle content compelling and relevant," said Ostrovsky. "These magazines have established relationships. They are a part of the community."

The experiments in new ways of developing, delivering, and selling advertisers on the power of that content are just beginning.

Susan Currie Sivek, Ph.D., is an assistant professor in the Mass Communication and Journalism Department at California State University, Fresno. Her research focuses on magazines and media communities. She also blogs at sivekmedia.com, and is the magazine correspondent for MediaShift.

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November 10 2010

16:30

Augmented Reality Invades Newsrooms, Kids' Shows, Ads

You point your wireless device -- cell phone, iPad, whatever -- at a graphic on a box of unassembled furniture and then the instructions, complete with 3-D diagrams, instantly appear on-screen. Point at a piece of paper and it's suddenly a game board shared by friends across the room or across the world.

This is augmented reality, or AR. While still in its infancy, it's light years ahead of old-fashioned virtual reality. For one, you don't need bulky gear; you can use AR anywhere your wireless device can go. Plus, the environment is real -- only the graphics are simulated. All you need is a webcam or wireless device with the proper software and a nearby "marker," a graphic that activates the application.

"With augmented reality you can go around the real world and see information and data overlaid on top of anything out there," said Ori Inbar, co-founder of augmented reality firm Ogmento.

Inbar and AR experts from PBS, Qualcomm and Alcatel-Lucent spoke recently on a panel at FutureMedia Fest at Atlanta's Georgia Tech. They all agreed that AR is about to show explosive growth. It's already cropping up all around us.

AR By CNN

CNN debuted an augmented reality effect during its 2010 election night coverage. Instead of routine full-screen graphics, Ali Velshi strolled through a 3-D bar graph of exit poll results that seemed to hang in mid-air. Watch it here:

Anderson Cooper used a huge virtual Capitol to set the stage for the results. John King used a touch-wall election matrix to scroll through 100 races, showing the depth of the Republican incursion into Democratic incumbent territory.

"What we did [on election] night was actually incredibly complicated," CNN senior vice president and Washington bureau chief David Bohrman said the day after the elections.

While the effect looked seamless, Bohrman said it required a huge network of infrared lights, computers and of course, people. "What's important is that we're able to clearly explain what's happening," he said. "The election matrix was absolutely illuminating on the changes in Congress. It was one of the most revealing and informative graphic devices I think I've ever seen used anywhere."

The correspondents were indeed manipulating the graphics themselves, he says. Velshi, for example, controlled the graphics from an iPad app. "It made it much better," Bohrman said. "It's better to have the person who's telling the story trigger those things than have someone off-camera."

Bohrman, who also dreamed up the 2007 CNN/YouTube presidential debate and the virtual Capitol and hologram effect in 2008, is already planning for 2012.

Other News Media Applications

Ogmento's Inbar sees additional potential uses for AR by news organizations. "You see a big crowd and you don't know what's happening there -- you point your device and all of a sudden you get 'the president is visiting' or 'there's been an accident,'" he said. "It's kind of like Twitter but with a visual aspect to it."

Aside from CNN, another TV operation in Atlanta has already adopted AR. WXIA-TV 11 Alive will beam the day's headlines at you if you click on a graphic next to the Twitter and Facebook icons on its website. The station will also use AR at two upcoming public events. The audience at a Social Media Atlanta 2010 discussion about the Democratization of News will be able to receive information and videos about the panelists on their phones. (Disclosure: I am providing public relations services for that conference.) The station will also put a marker in a printed program for a holiday lights display to give visitors traffic updates in order to help them get home.

Magazines dove in last year when actor Robert Downey, Jr. leapt off the cover of Esquire's December "augmented reality issue":

A fashion spread inside the issue also let readers change both the weather and Jeremy Renner's clothes. Floating animation surrounded actress Gillian Jacobs as she told a joke.

AR For Kids and Ads

Aside from the world of news, it also has tremendous potential for education.

"Every new technology is an opportunity for learning," said PBS Kids Interactive vice president Sara DeWitt, who notes that one of AR's most exciting aspects is its ability to connect kids to the real world. "We see some real possibilities for young kids to interact with these 3-D objects in a way that they normally wouldn't."

PBSKids.org recently launched Dinosaur Train Hatching Party, an augmented reality game for 3- to 5-year-olds. An adult prints out a colorful graphic and when a pre-schooler holds it in front of a webcam, a 3-D dinosaur egg appears on-screen. Because eggs need the warmth of the sun to hatch, the toddler turns the paper so light hits it from different directions. A baby dinosaur cracks open the egg and asks the child simple science questions he or she answers by touching the paper.

AR also opens up a whole new world for advertising. This spring Calvin Klein Underwear partnered with GQ to present AR underwear ads. In July, Gannett subsidiary PointRoll and marketing company Oddcast announced they'd bring AR to banner ads. The press release cited a possible use case: "a car manufacturer can create an AR environment that mimics a new car model's interior where users can examine the interior freely, almost as if they were physically sitting inside the car."

More gee-whiz uses, especially in gaming, could be coming soon. On October 4, Qualcomm announced it was giving away its AR Software Development Kit for Android smartphones in order to encourage developers to build new applications. Then, of course, there is the potential for AR to integrate with and impact the world of social media.

"I think social media is inseparable from augmented reality," Inbar said. "You're in the real world and you want to interact with your real friends. In a sense it's going to be an integral part of any AR experience in the future."

There are still barriers to be overcome before AR is commonplace. On the panel, Jay Wright, director of business development at Qualcomm, joked that augmented reality is a battery's worst nightmare due to its power-draining abilities. Much more work is needed to make AR reach its potential on devices. User adoption is another significant challenge.

While it could take years to enter the mainstream, augmented reality is clearly gaining momentum. It's only a matter of time before it enters a classroom -- or a newsroom -- near you.

Terri Thornton, a former investigative reporter and TV news producer, owns Thornton Communications, an award-winning PR and social media firm. She is also a freelance editor for Strategic Finance and Management Accounting Quarterly.

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November 08 2010

16:49

Can Social Sharing Survive the Rise of Rewards-Based Campaigns?

Left alone in a room, a group of people were given a complicated seven-piece puzzle, known as a Soma cube, and told to assemble the pieces into specific designs. One group was offered a monetary reward for each correctly assembled puzzle; another group was offered nothing. They worked at the puzzles until being told they could stop. And then the experiment really began.

Edward Deci, the research psychologist behind the study, told the subjects to read a collection of magazines while he recorded his findings. Instead of tabulating the puzzle data, he observed the subsequent behavior of both groups. The group promised payment tended to quit assembling the puzzles, picking up the magazines instead. The group offered nothing was more likely to keep trying.

"When money was used as an external reward, intrinsic motivation tended to decrease," Deci wrote of the experiment. (Click this link to read the full paper, "The Effects of Externally Mediated Rewards on Intrinsic Motivation," as a PDF.)

Deci's psychological experiment precedes the invention of Facebook by 24 years and Twitter by more than a quarter of a century. But it's even more relevant today as the influx of rewards-based campaigns by brands -- such as coupons, free giveaways, discounts -- changes the nature of sharing on social media. Facebook just announced "Deals," a feature that allows brands to offer a reward to consumers willing to share their location. Major brands have signed up for the service, including Starbucks and McDonald's.

Social media "rewards our intrinsic desires for membership and sharing as well," writes Clay Shirky in "Cognitive Surplus." If a substantial body of research on human motivation says people aren't really motivated by monetary reward, why are brands taking this approach?

Rewards-Based Sharing

In part, because it works. Consumers who "like" brands on Facebook have been inundated with monetary rewards and free food. Chipotle's Halloween social media Screen shot 2010-11-04 at 4.22.40 PM.pngcampaign included free Booritos and a chance at $7,500 in cash prizes to people willing to dress up like a "horrifying processed food product."

Consumer products behemoth Procter & Gamble recently launched Future Friendly, a campaign that offers as much as $200 in annual rewards per household for recycling, green blogging and sharing with friends.

Granted, sharing content online in social media platforms is not exactly the same as putting together a complicated puzzle, but if the core of Deci's theory of human motivation holds true in the fragmented and chaotic environment of the social web, it raises an important question: Can sharing for sharing's sake survive in an ecosystem that increasingly turns every sharing exchange into monetary reward?

It's telling that a recent report proves what common sense tells us: The motivation to "like" a brand on Facebook is most often driven by monetary gain, with 40 percent saying they become fans to receive discounts and promotions. Yet only a small percentage of consumers (17 percent) say they're more likely to buy a brand after becoming a "fan" on Facebook, according to the same survey.

Of course, there's a longstanding gulf between what consumers say they do in self-reported quantitative studies, like the one cited above, and what consumers actually do in the real world. And, in most cases, it remains impractical to link transactional sales data to a person's "fan" status on Facebook.

This gulf isn't really new. Mass advertising can't make a clean connection with sales, either. But it's far easier to see results in the social media space -- fan growth, wall posts, sharing and tweets. Even if fan numbers don't prove deep loyalty to a brand, it's a metric nonetheless. Although with "Deals," this long coveted link might be easier to make.

Social Media Spend On The Rise

A consumer deciding to "like" a brand on Facebook isn't much different from the old-school way of signaling brand affinity by, say, wearing a Coca-Cola T-shirt.
Screen shot 2010-11-04 at 4.24.37 PM.pngIt's just now there's something given in return for effectively wearing a logo T-shirt online, be it a coupon for a box of onion rings from White Castle or a $1 off coupon from Tide. And that's one reason the deluge of rewards-based social media campaigns isn't going to stop.

Consider that in 2010, a mere 5.9 percent of marketing budgets was spent on social media. By 2015, this should explode to 17.7 percent, according to a recent survey of CMOs by Duke University's Fuqua School of Business.

Facebook has survived the rash of branded pages and reward-driven ad campaigns. It continues to add users at an astonishing clip. But is there a line when the commercialization of the human impulse to share becomes just too crass?

In announcing the launch of "Deals," on its blog, Facebook noted that "today's mobile phones allow people to connect on the go and to share interesting moments as they happen all around them." Could Facebook users' walls end up full of brags about freebies? Indeed, how many of us haven't shared the details of a bargain with friends, colleagues and family. This too is a very real human impulse. The question is whether this flood of ads and rewards changes irrevocably the essential nature and ecosystem of social media today.

Meanwhile there's a fledgling movement to take back the social web and create new environments brands can't co-opt. Diaspora, an alternative platform that touts itself as the privacy-aware, personally controlled, do-it-all open-source social network, is the antithesis of Facebook.

As Diaspora's founders try to build an alternative social network, Twitter is quickly adding advertisers and expects to have more than 100 by the end of the year. The micro-blogging site, which has just started publishing ads in users' streams to execute a moneymaking corporate strategy, will now be commercialized just like Facebook.

Twitter has arguably thrived by tapping into the intrinsic human motivation to share ideas, musings and interesting links. Could the flood of ads -- and, undoubtedly, rewards and coupons will be part of this -- unwittingly suppress the human desire that's driven its success?

Mya Frazier is director of trends and insights at Engauge, one of the nation's largest independent advertising agencies. As the advertising correspondent for MediaShift, she chronicles the impact of digital, mobile and social marketing trends on content, culture and commerce. A former business journalist, she has been a staff writer at Advertising Age, the Cleveland Plain Dealer and American City Business Journals. Her work has also appeared in the Economist, New York Times and Next American City. You can follow her on Twitter @myafrazier or at myafrazier.tumblr.com.

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October 23 2010

00:12

4 Minute Roundup: Hard News Pays More than Celeb Stories?

news21 small.jpg

4MR is sponsored by Carnegie-Knight News21, an alliance of 12 journalism schools in which top students tell complex stories in inventive ways. See tips for spurring innovation and digital learning at Learn.News21.com.

In this week's 4MR podcast I look at new research from Perfect Market that shows news sites earning more "revenues per thousand page views" (RPM) for serious stories about immigration and Social Security than stories about Lindsay Lohan. Is this finally proof that hard-hitting journalism will pay off online? I talked with Perfect Market exec Sheigh Crabtree to learn more about the study and how Perfect Market helps publishers get more value out of their archives.

Check it out:

4mrbareaudio102210.mp3

>>> Subscribe to 4MR <<<

>>> Subscribe to 4MR via iTunes <<<

Listen to my entire interview with Sheigh Crabtree:

crabtree full.mp3

Background music is "What the World Needs" by the The Ukelele Hipster Kings via PodSafe Music Network.

Here's the findings on RPM from Perfect Market:

perfect-market vault index.gif

Here are some links to related sites and stories mentioned in the podcast:

Traffic Bait Doesn't Bring Ad Clicks at NY Times

The 10 Most Valuable News Topics Of Summer 2010 at Business Insider

Hard news brings in more revenue than celebrity news, according to Perfect Market at Editors Weblog

Quality journalism translates into higher CPMs at Marketing Vox

Hard News Pays Better Than Fluff -- or Does It? at GigaOm

Celebs Are Loud, But Hard News Pays at CJR

Perfect Market's Vault Index Summer 2010 at the Perfect Market blog

Also, be sure to vote in our poll about how you would describe the iPad:




How would you describe the iPad?online survey

Mark Glaser is executive editor of MediaShift and Idea Lab. He also writes the bi-weekly OPA Intelligence Report email newsletter for the Online Publishers Association. He lives in San Francisco with his son Julian. You can follow him on Twitter @mediatwit.

news21 small.jpg

4MR is sponsored by Carnegie-Knight News21, an alliance of 12 journalism schools in which top students tell complex stories in inventive ways. See tips for spurring innovation and digital learning at Learn.News21.com.

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October 13 2010

17:30

Revamped Forbes Pushes Advertorials, Social Media, Conflict

Earlier this year Kevin Gentzel, the chief revenue officer of Forbes, took a look at what the chief marketing officers in the Forbes CMO Network were doing with their companies. He realized they were becoming content creators -- and that this had big implications for his magazine and other traditional media.

Gentzel said this underscored the massive shift that was taking place in media and publishing.

"It was almost a monologue that existed in media up until five or six years ago," Gentzel said. Now, after helping make some major changes at Forbes, he says his organization is "embracing that and not running from it."

Gentzel said his realization led him and his Forbes colleagues to start paying close attention to True/Slant, a website Forbes alum Lewis DVorkin started that featured "entrepreneurial journalism," in which writers received part of the ad revenue their pages produced. It also offered a product called "AdSlant," which offered marketers a paid blogging platform.

In a much talked about purchase, Forbes bought out True/Slant earlier this year. DVorkin, whose journalistic pedigree includes the Wall Street Journal, Newsweek, the New York Times, AOL and TMZ, re-joined Forbes as chief product officer, responsible for all editorial areas of the company including the print publications and Forbes.com.

Advoice Crossing the Line?

Now Forbes has an offering called Advoice, which, like AdSlant, offers paid blog space to advertisers. "In this case the marketer or advertiser is part of the Forbes environment, the news environment," DVorkin told Ad Age. "Marketers need to reach the audience. This is where publishing is headed."

Some marketers praised the idea, but many journalists did not. Mathew Ingram of GigaOm questioned whether Forbes was selling its journalistic soul.

Advertorials -- special advertising sections in print publications that evoke an editorial tone and design -- remain a source of controversy, said Rick Edmonds, the Poynter Institute's media business analyst and leader of news transformation. Reporters, he said, don't want readers to confuse objective reporting with advertising.

"As a reader of [Forbes.com] I would have a reasonable comfort level if it's labeled as advertising but not so much if it isn't," he said. He also noted that many blogs and websites currently fail to disclose when content is sponsored or produced in exchange for free products.

Gentzel said advertisers will hold no sway over Forbes' writers. And if the Advoice bloggers need coaching or help, assistance would come from the business, not editorial, side.

"We are not out to ever try to confuse a reader or user," Gentzel said. "It's the exact opposite of that. This will only work -- and will work -- by the clear and transparent labeling of the voices. The last thing we'd ever do is confuse a reader about what they're reading."

lewis-dvorkin.jpgDVorkin has written that Forbes wants to provide opportunities for the voices of content creators, the audience and marketers to all engage in print and online.

"The bold steps that Forbes is taking to evolve its products will help lead journalism to its future," he wrote. "Our goal is clear: to put news and the journalist at the center of social media. If we can accomplish that, we will go a long way to providing our audiences with the information they want -- and enabling the three vital voices of the media business to be active participants in the larger conversation."

Gentzel said that while there's no firm launch date, the "larger conversation" could start very soon.

"As a content creator who's listening to marketing partners, we think marketing partners can provide amazing expertise to our readers and users," Gentzel said.

Tempest Over Obama Critique

At the same time Forbes is pursuing its new Advoice product and strategy, it's also investing heavily in social media. DVorkin has said this is part of a process of "opening up" Forbes.

Active Twitter accounts include @forbes, @ForbesWoman, @ForbesLife and @ForbesAsia. Reporters and editors regularly interact with readers online. In August Forbes.com launched new blogs written by both staffers and outside contributors. (Disclosure: I offered to become a blogger for Forbes and sometimes pitch stories about clients to Forbes.) In September, a new web platform for the Forbes 400 debuted, letting readers "follow" the richest Americans, receive email alerts and converse about them.

"I've been impressed with their aggressive rethinking of what qualifies as content," said consultant and CNN veteran David Clinch, president of Clinch Media Consultancy. He's helping Forbes utilize high definition Skype cameras to conduct instant video interviews with newsmakers and contributors. "They have moved far beyond just the idea of an article and a picture and byline and moved to real-time content, and they've done a good job of coordinating that and getting writers and contributors familiar with social media."

how-obama-thinks.jpgBloggers write what they like, even criticizing Forbes itself. Dinesh D'Souza's Sept. 27 cover story opened with the unattributed statement that "Barack Obama is the most anti-business president in a generation, perhaps in American history." The former Reagan policy analyst's essay suggests that people should examine the views of Obama's Kenyan father to understand the president's "hostility to private enterprise."

In response, Forbes' Craig Silver wrote: "I hope that the powers that be at Forbes will see that promoting such offal can't help but damage the brand, keeping serious journalists from wanting to appear in our pages and maybe even advertisers." Columnist "Shikha Dalmia:http://blogs.forbes.com/shikhadalmia/, a senior analyst at Reason Foundation, described D'Souza's story as a pathetic rant of unsubstantiated ideological accusations.

Dalmia told PBS MediaShift that Forbes insiders responded positively to her comments. "On the whole, I think they were fair in how they handled my response," she wrote in an email. "[They] didn't try and water it down or in any way soften my criticism of D'Souza or Forbes, which is unusual to say the least."

The Poynter Institute's Edmonds said such public disagreements can be healthy. "I'm a bit more disturbed by publications taking the party line or essentially sticking to a business agenda," he said.

Staff Changes

While several journalists, including editors Paul Maidment and Carl Lavin have indeed left, others have recently jumped to Forbes Media. They include AOL DailyFinance.com media reporter Jeff Bercovici, who covered Dalmia and Silver's criticisms of the controversial cover. (His article noted that DVorkin encouraged public conflict at True/Slant, where Bercovici was a paid contributor.)

Other recent additions include Kashmir Hill, an editor at the irreverent online legal blog Above the Law, Huffington Post world editor Nicholas Sabloff, and Halah Touryalai, who covered Wall Street for Registered Rep. Former staffer Zack O'Malley Greenburg returned after taking time off to write a book about rapper and businessman Jay-Z.

Long-time Forbes reader Michael Shmarak, a principal with Sidney Maxwell Public Relations, says Forbes' re-do "is like putting some Dolce & Gabanna clothes in a closet full of Brooks Brothers power suits.

"Forbes now has to treat itself just like many of the companies it has covered," he said. "All of these policies won't mean anything unless the staff believes in it, and readers embrace the change."

Terri Thornton, a former investigative reporter and TV news producer, owns Thornton Communications, an award-winning PR and social media firm. She is also a freelance editor for Strategic Finance and Management Accounting Quarterly.

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October 07 2010

19:13

Examiner.com Execs Push for Quality, Refute 'Content Farm' Tag

Journalists love to categorize, generalize and put everything into easily digestible chunks of information. But in our quest to explain something in simple terms, we also can oversimplify things. That may have been the case with MediaShift's recent series, Beyond Content Farms, where we included Examiner.com in no less than three stories. Examiner.com does create massive amounts of content, with more than 3,000 new stories per day written by more than 55,000 "Examiners," or paid local contributors.

And while Examiner.com was fine with getting the coverage on MediaShift, they don't like being cast in the same light as Demand Media and Associated Content. I recently met with Rick Blair, CEO of Clarity Digital Group (which runs Examiner.com for billionaire Philip Anschutz) and Leonard Brody, president of Clarity Digital and former co-founder of NowPublic (bought by Clarity last year). They were clearly uncomfortable with the "content farm" tag for Examiner.com and tried to emphasize the vetting process for hiring Examiners, their training program, and community policing of their work.

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"There's a philosophical difference between what we do and what Demand or Associated Content would do," Brody said. "Sometimes people will compare us because we have a volume of producing content so they think that we must fall into the 'content farm' bucket. But the philosophical difference is very simple: We don't start from the basis of content. We start from the basis of the Examiner. The Examiners are our core currency, that we build everything around -- our toolsets, the Examiner workflow -- we don't put the value on the content at the start. We're much more on the qualitative side, and have much more of a local focus and bent."

Yet, similarities to Demand Media do exist. Demand does pay for content that will show up in searches, and Examiner.com pays contributors based on a "black box" calculation that includes page views and traffic to the story. Rick Blair even touted a recent ad campaign on Examiner.com that was focused on helping boost the SEO (search engine optimization) for an advertiser because of the stories written by Examiners. Plus, there's the staggering numbers in content creation that all these sites produce. To wit:

> 55,000 Examiners in more than 200 cities in the U.S. and Canada, with a goal of getting more than 200,000 Examiners in two years.

> More than 3,000 stories posted per day, with an archive of 1.5 million stories.

> 20.8 million unique visitors to Examiner.com sites in July 2010, with 60.1 million page views served, according to Omniture figures cited by Clarity Digital.

These are impressive numbers for an operation that really only hit the ground running two years ago. Blair told me they are on the road to profitability, and have 100 staffers, remaining largely separate from the Examiner newspapers that Anschutz owns in San Francisco and Washington, DC. The following is an edited transcript of my recent interview with Blair and Brody, including some Flipcam video excerpts.

Q&A

Tell me how the integration with NowPublic has gone at Examiner.com?

Rick Blair: We purchased NowPublic about this time last year, and we've used their platform to launch our Drupal 7 platform, or Examiner 2.0, which is the largest consumer-facing Drupal platform in the United States. Everything's gone quite well. We have the normal slip-ups that you have with any technology platform where you're serving over 20 million readers a month, and 60 million page views a month. We just released a new publishing tool for our writers, and within a week, 75% of them are working with it and are happy with it.

Len, tell me how things have changed for you going from NowPublic to the world of the Examiners and Clarity Digital?

Leonard Brody: Well, now I have Rick yelling at me a lot instead of my board. [laughs] The big change for us was the paradigm in which we stored it, it was pure user-generated content. NowPublic was a free-for-all. You could sign up and contribute, and as long as you weren't doing anything illegal, your stuff was posted and the community sorted it out. The Examiner model is much more sophisticated... No one was doing pro-am very well, and the Examiner said, 'The time is right for someone to do a true pro-am model.' And they've owned that space very well from the way they heavily vet the people who apply to be an Examiner to writing samples to criminal checks (which is why Rick and I are not Examiners...). [Rick laughs]

The ecosystem of content has changed for us. We've filled out the whole picture, with NowPublic as pure UGC [user-generated content] with an unadulterated flow. That's been the big difference. Qualitatively you see a big step up in that respect.

Rick, what did you feel like you got out of NowPublic, outside of Len [Brody] himself?

Blair: Well, we looked at NowPublic for three things primarily. The management team was one of them, and Len's been a visionary and leader there... We were growing so fast at Examiner.com, that the wheels were coming off our platform. We needed an open source solution, and we found that with NowPublic. The third thing is that NowPublic had nearly 200,000 contributors, and we utilize NowPublic as a farm team for our Examiners, for the paid writers on Examiner.com.

Most of our Examiners come from referrals from other Examiners. There's some exponential math there that I can't do.

So there's a bit of an Amway angle to it?

Blair: A bit. We were looking at multi-level marketing when were first discussing the concept back in 2008 when we had six cities and 100 Examiners.

So if you referred someone who brought in a lot of traffic, you would get some kind of bonus for that?

Blair: We looked at and quite frankly, it was a bit complicated to explain to people, so we came up with a simpler way to do that, and a more successful way. Because now we have 55,000 Examiners in about two years' time, and we've grown from a million unique visitors to 20 million unique visitors a month. We produce about 3,000 stories a day and have an archive of 1.5 million stories.

The route we took to that was a good one. There are some multi-level marketing aspects to it because we've sent our Examiners to recruit other Examiners. What we find that is those Examiners find the best Examiners.

And if they can recruit for you, then they're doing your job for you?

Blair: It's one of the most expensive ways to recruit people, but over time, it's where we get the best people.

Blair explains how the editorial oversight and workflow operates at Examiner.com, including rigorous vetting up front, and allowing the community to fact-check:

Tell me more about your training program for Examiners.

Blair: We have 40 courses at "Examiner University" [an online set of tutorials for writers], and we teach them how to write headlines, how to tag stories, how to socially distribute their content. We also discuss how to use the AP Style Book, and make sure they don't creep over the line. We don't cover crime or politics, particularly, and we don't endorse politicians. Most of what we do is provide useful information for our passionate local insiders in the community.

How does it differ from what Demand Media does?

Blair: Demand Media, and even Associated Content, what they'll do is select a certain area, and even write the headline occasionally. They'll then submit that to their freelancers, have them write it and then they pay them a fee for that. We cover local, and in order to do that accurately, we have to cover areas that aren't as easily monetized as other stories. So we're not going to have 50 stories on gadgets in San Francisco. We have to cover the bar and restaurant scene as well. We're not about using an algorithm and telling people to write more about that topic.

Rick Blair explains how writers are compensated, but can't give all details because the exact system is a secret. Len Brody says they tell writers not to quit their day jobs:

So who do you see as competition? Is it hyper-local sites, local TV or newspapers, or alternative weeklies?

Brody: There are two answers to that question. Your competitors are the people competing for your revenue dollars. In that sense, everyone in the local broadcast area would be somewhat in that same pool. But in the content aspect, we are somewhat unique. When we started the company, we figured we would find lots of people in communities who were like-minded and passionate about similar things. But really there wasn't. So the model here was different, it was to create a reflection and recreation of America's town squares, and let people collect and discuss things they are passionate about -- not only in their communities, but geo-topically across other communities across the U.S.

Blair: In terms of scaling the business, we're a little different than others as well. We put a fence around North America, and said we're going to publish in 233 cities in the United States, 5 cities in Canada, and do two national editions -- one for the U.S. and one for Canada. And then we're going to get more hyper-local and grow that organically from local on up. In Los Angeles, for example, we have more than 2,000 Examiners today, but there's 800 neighborhoods, so we know we have a long way to go to be hyper-local, but we have a shorter trip than most.

We went through a local and hyper-local online boom before, with CitySearch and Microsoft Sidewalk and so many others, many of whom failed. Now we have Examiner.com and Patch and some others coming in. What do you think is different now?

Blair: Well, I was part of the Digital City team at AOL, and at that time, we weren't looking for individual contributors, we were looking to the local media. And it was online but not really the Internet, it was 1994, 1995. The tools didn't exist to have individual contributors such as Examiners. The tools for measurement of audience and advertisers and couponing online did not exist in 1995. We made our meal ticket at Digital City in classifieds. Today you'll see that someone else has capitalized on classifieds. I think he lives nearby. [A reference to Craig Newmark and Craigslist, based in San Francisco.]

We're focused on local sponsorships for as low as $29 a month. When I say sponsor, they can have their ad adjacent to relevant content. It's in a safe environment because we vetted all these people. We don't allow our Examiners to shill for advertising, and there's no direct compensation to them for [ad sales next to their content]. For distributing content over social media, we've created a product called Examiner Connect, which lets us combine social media content, SEO and paid Internet advertising to service the big brands.

Rick Blair explains how Examiner.com did a big campaign for Iams pet food about pet adoptions and helped them with SEO, and discusses how they separate Examiners from the advertising. Plus he describes the sales process for selling local ads:

Does Clarity Digital Group owner Philip Anschutz have input into what you're doing? How autonomous are you in what you do?

Blair: We're very autonomous. We get that question quite often because of the name that we use, Examiner.com, which is the same name as the Examiner newspapers. Phil has never asked us to slant our stories in any way, and we would never ask the Examiners to do that. He's a funder and a builder and he gives us business guidance. On our larger businesses decisions, since he's our sole investor, he has a lot of input. We meet with him directly about once a week. There's a large team, which in a public company might be called a board of advisors, and we have a group of Anschutz employees that are internal and work with his companies, and they really do help us.

What about the conflicts of interest for writers? If they don't have someone editing it, it might be easy to write something about a local business where you know the owner of the business. Seems like a lot of possible conflicts would come up.

Blair: We don't allow the Examiners to shill for folks. If we find out about it, then it's cause to take down the story, and if it continues to happen, we would cease our relationship with that Examiner. We do have a staff of about 100 employees, and most of them are on the content and recruiting side. And we have a team of five people who sit on top of the feeds. If they find something unusual, they'll delete them.

Brody: Since the early days of NowPublic, we found that statistically speaking, the level of errors and conflicts between traditional and non-traditional media is probably about the same. The difference is that in non-traditional media the transparency is so great... it's like the eBay phenomenon. If you care about your credibility in that community, you'll be very careful to do things that are not off-side. The community is very quick to police, and is very quick to ensure that people really are who they say they are. You get a faster self-policing there than you would in traditional media which is often a one-way broadcast.

Blair talks about future plans to expand to more than 200,000 Examiners in the next two years, plus adding mobile apps for Examiners so they can report on breaking news happening in their area:

*****

What do you think of the Examiner.com local model? Is compensation fair for the Examiners, and what about the quality of content? Share your thoughts in the comments below.

Mark Glaser is executive editor of MediaShift and Idea Lab. He also writes the bi-weekly OPA Intelligence Report email newsletter for the Online Publishers Association. He lives in San Francisco with his son Julian. You can follow him on Twitter @mediatwit.

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