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April 27 2012

14:34

Who or what exactly is The New York Times’ R&D Ventures?

The New York TImes Co. took the lid off a new advertising product Thursday with the introduction of Ricochet, which lets companies fuse their brand messages onto sharable NYT Co. content. Using the service, companies can create custom links to New York Times stories they select; the links take readers to a version of the story where the ads on the page are all for the company. It’s a new kind of targeted advertising: Companies select which stories they want to be associated with, then figure out the ways they want to deliver it: tweet, Facebook post, newsletter, or more.

Ricochet will be available on a handful of sites within the Times Company’s stable of properties including NYTimes.com, BostonGlobe.com, Boston.com, and About.com. The first advertiser to use the program is SAP, and you can get a sense of what Ricochet does here (compare it with the same page without the customized link). Pricing for the product will depend on the duration of a campaign and will be sold through the sales staffs at the respective NYT Co. brands.

But beyond an interesting advertising idea, Ricochet is being run out of an interesting new structural idea at NYT HQ. It’s part of a newly formed unit called R&D Ventures, a spin-off from the Times Company’s R&D Lab, a unit we’ve written a lot about. Michael Zimbalist, vice president of research and development operations for the Times Co., told me the new group is a more commercially minded extension of the R&D Lab that focuses on “how to scale and monetize, instead of what does a new user experience look like, or how does content evolve into new spaces.” In other words, the R&D Lab thinks of something new; R&D Ventures works to turn it into a product.

It’s a small group — a handful of people, Zimbalist says — with experience in product development, sales, business development, and other areas. While Ricochet’s been in development since last year, the Ventures group was formed more recently. Zimbalist told me the R&D Lab and R&D Ventures would work almost like a relay team: If an idea from the lab seems like it could find a broader audience (and make money), the baton will be handed off to Team Ventures to bring it to market. “When we contemplate the future of media and marketing, we actually build examples of what we’re thinking about,” Zimbalist said. But the R&D Lab’s work still focuses a bit more on the theoretical — thinking about ideas that might be two years out, not that might be shipped as a new service or feature within months.

That’s basically the story of how Ricochet, and R&D Ventures came to life. Ricochet is rooted in Project Cascade, a time-based visualization of how Times stories move across Twitter. Cascade shows how a story rises and falls, the people who drive pick-up of certain links, the time it takes for a story to come down to earth, all plotted across a graph that makes the social media universe look a bit like an actual universe.

By studying the life of Times stories they discovered something interesting: Companies and consumer brands were tweeting a lot of their work. That’s how they identified the opportunity to transform Cascade into a marketing tool. As part of running Ricochet, companies also get access to a version of Cascade for their own analytics so they can assess their campaigns. With many companies producing content directly for consumers, outlets like the Times can help by providing relevant, authoritative content that doesn’t feel overtly marketing-y, ZImbalist said. “Brands are becoming publishers and developing their own content strategies,” he said.

The story of Ricochet should sound somewhat familiar. Around two years ago, the Times was developing a prototype for social news reader that it eventually moved over to Betaworks. Working in conjunction with ex-Times staff, Betaworks later launched News.me. Zimbalist said they learned from that experience that there are costs and benefits to developing in-house versus outside the company that depend on what’s being built. While ZImbalist wouldn’t discuss any future projects coming out of the R&D Ventures pipeline, he said it’s important that they’re ready to iterate new products when the time comes.

“I think we learned from [News.me] that in order to bring a new product to market, it needed a focused team of entrepreneurially inclined people who were both technically inclined and business inclined,” Zimbalist said.

April 22 2011

14:00

This Week in Review: The Flipboard dilemma, Trove and News.me arrive, and a paywall number for the NYT

Every Friday, Mark Coddington sums up the week’s top stories about the future of news.

Is Flipboard a competitor or collaborator?: Flipboard has quickly become one of the hottest news apps for the iPad, and it continued its streak last week when it announced it had raised $50 million in funding. Flipboard’s Mike McCue told All Things Digital’s Kara Swisher he’d be using the money to hire more staff and expand onto other devices, including the iPhone and Android platform. But he also talked to TechCrunch about using the money to fend off a rumored competitor in development at Google. (The Houston Chronicle’s Dwight Silverman told Google not to bother, because Zite already does the trick for him.)

All this prompted a fantastic analysis of Flipboard from French media consultant Frederic Filloux, who explained why Flipboard’s distinctive user-directed blend of news media sites, RSS feeds, and social media is so wonderful for users but so threatening to publishers. Filloux argued that every media company should be afraid of Flipboard because they’ve built a superior news-consumption product for users, and they’re doing it on the backs of publishers. But none of those publishers can complain about Flipboard, because any of them could have (and should have) invented it themselves.

GigaOM’s Mathew Ingram advised media companies to be willing to work with Flipboard for a similar “if you can’t beat ‘em, join ‘em” reason: Its app has their apps beat in terms of customizability and usability, so they’re better off trying to make money off of it than their own internal options. ReadWriteWeb’s Dan Rowinski wrote about the possibility that Flipboard could be a better alternative partner for publishers than Apple, and Marshall Kirkpatrick wondered why publishers are up in arms about Flipboard in the first place.

Traditional media’s personalized news move: One of the reasons that media companies might be less than willing to work with Flipboard is that some of them are building their own personalized news aggregation apps, two of which launched this week: The Washington Post Co.’s Trove and Betaworks’ News.me, developed with the New York Times. INFOdocket’s Gary Price has the best breakdown of what Trove does: It uses your Facebook account and in-app reading habits to give you personalized “channels” of news, determined by an algorithm and editors’ picks — a bit of the “Pandora for news” idea, as the Post’s Don Graham called it. (It’s free, so it’s got that going for it, which is nice.)

All Things Digital’s Peter Kafka suspected that Trove will be most useful on mobile media, as its web interface won’t be much different from many people’s current personalized home pages, and David Zax of Fast Company emphasized the social aspect of the service.

News.me is different from Trove in a number of ways: It costs 99 cents a week, and it’s based not on your reading history, but on what’s showing up in other people’s Twitter streams. (Not just what they’re tweeting, but what they’re reading — Betaworks’ John Borthwick called it reading “over other people’s shoulders.”) It also pays publishers based on the number of people who read their content through the app. That’s part of the reason it’s gotten the blessing of some media organizations that aren’t typically aggregator friendly, like the Associated Press. [Note: We're one of the publishers licensed in the app. —Ed.]

Since News.me is based so heavily on Twitter, it raises the obvious question of whether you’d be better off just getting your news for free from Twitter itself. That’s what Business Insider’s Ellis Hamburger wondered, and Gizmodo’s Adrian Covert isn’t a fan, though Martin Bryant of The Next Web said it could be helpful in stripping out the chatter of Twitter and adding an algorithmic aspect. GigaOM’s Mathew Ingram looked at both services and concluded that they signal a willingness by some traditional media outlets to adjust their longtime broadcasting role to the modern model of the “Daily Me.”

A good sign for the Times’ pay plan: The overall news from the New York Times Co.’s quarterly earnings report this week wasn’t good — net income is down 57 percent from a year ago — but there was one silver lining for online paid-content advocates: More than 100,000 people have begun paying for the Times’ website since it began charging for access last month. (That number doesn’t include those who got free subscriptions via Lincoln, but it does include those who are paying though cheaper introductory trials.)

As Advertising Age’s Nat Ives pointed out, there’s a lot that number doesn’t tell us about traffic and revenue (particularly, as paidContent’s Staci Kramer noted, how many people are paying full price for their subscriptions), but several folks, including Glynnis MacNicol of Business Insider, were surprised at how well the Times’ pay plan is doing. (Its goal for the first year was 300,000 subscribers.) Here at the Lab, Josh Benton looked back at the numbers for the Times’ TimesSelect paywall and concluded that an initial influx of subscribers doesn’t guarantee continued growth after launch.

Those numbers are particularly critical for the Times given the difficulty its company has had over the past several years — as Katie Feola of Adweek wrote, many analysts believe the pay plan is crucial for the Times’ financial viability. “But this means the paper’s future rests on an untested model that many experts believe can’t work in the oversaturated news market,” she wrote. “And the Times has to pray the ad market won’t decline faster than analysts predict.”

A few other paid-content tidbits: Nine of Slovakia’s largest news organizations put up a paywall together this week, and the pope is apparently pro-paywall, too. At the Guardian, Cory Doctorow mused about how companies can (and can’t) get people to pay for the content online in an age of piracy.

Google’s hammer falls on eHow: When Google applied its algorithm adjustment last month to crack down on content farms, Demand Media’s eHow actually came out better off (though others didn’t fare so well, like the New York Times Co.’s About.com, as we found out this week). Google made a second round of updates last week, and eHow got nailed this time, losing 66 percent of its Google juice, according to Sistrix.

Search Engine Land’s Matt McGee speculated that Google might have actually been surprised when eHow benefited the first time, and may have made this tweak in part as an effort to “correct” that. Demand Media, meanwhile, called Sistrix’s eHow numbers “significantly overstated,” though the company’s stock hit a new low on Monday. Mathew Ingram said investors have reason to worry, as Demand’s success seems to be at the mercy of Google’s every algorithm tweak.

A Pulitzer first: The Pulitzer Prizes were announced this week, and while the awards were spread pretty broadly among several news organizations, there were a couple of themes to note. As Felix Salmon and others pointed out, an abnormally large share of the awards went to business journalism, a trend the Columbia Journalism Review’s Dean Starkman opined on in a bit more detail.

The biggest prize from a future-of-news perspective may have gone to ProPublica, whose series on some of the machinations that worsened the financial crisis was the first Pulitzer winner to never appear in print. The Lab’s Justin Ellis noted that other winners are including significant multimedia components, perhaps signaling a shift in the emphasis of one of journalism’s most elite institutions. If you were wondering where WikiLeaks was in all this, well, the New York Times apparently didn’t submit its WikiLeaks-based coverage.

Reading roundup: No huge stories this week, but a few little things that are worth noting:

— Your weekly AOL/Huffington Post update: Jonathan Tasini came out swinging again regarding his lawsuit on behalf of unpaid HuffPo bloggers, Business Insider’s Glynnis MacNicol responded in kind, Eric Snider told the story of getting axed from AOL’s now-defunct Cinematical blog, and HuffPo unveiled features allowing readers to follow topics and writers.

— Missouri j-school students are chafing against requirements that they buy an iPad (they previously had to buy an iPod touch, and they called that plan a bust). Meanwhile, Ben LaMothe of 10,000 Words had three ideas of social media skills that j-schools should teach.

— A weird little fake-URL spoof turned into an interesting discussion about the possibility of libel through fake URLs, in thoughtful posts by both the Lab’s Andrew Phelps and TechCrunch’s Paul Carr.

— Two interesting data points on news innovation: A group led by Daniel Bachhuber put together some fascinating figures about and perspectives from Knight News Challenge grant recipients. And journalism researchers Seth Lewis and Tanja Aitamurto wrote at the Lab about news organizations using open API as a sort of external R&D department.

October 21 2010

14:00

The Newsonomics of the ad recovery

[Each week, our friend Ken Doctor — author of Newsonomics and longtime watcher of the business side of digital news — writes about the economics of the news business for the Lab.]

Reading the news about the news business, you may have missed this: advertising is booming, again. Well, booming may be too strong a word, but overall, it’s growing. Unfortunately, the news about the news ad business is still negative. Not as negative as the negativity of last year — down 27 percent for 2009 — but still down in single digits over 2009. Being less negative than last year is good, it’s better, but my math doesn’t add that up to a positive.

So what we have here is a trend that’s held true from boom to bust through tepid recovery: newspaper companies’ continue to be the laggards, losing market share in ad revenue, by the week, month, and year.

This week’s reports from The New York Times Co., Media General, and McClatchy, and last week’s from Gannett, all point to the same numbers with a minus sign in front of them. Let’s look at the numbers, and the newsonomics of the ad recovery.

Overall ad spending is up 2.5 to 4 percent through the first nine months of the year, and forecasts call for it to come in at that rate for the full year.

Let’s pick that apart.

Local TV advertising is up 13 percent in 2010, according to BIA/Kelsey. National broadcasting is putting up double-digit numbers. Cable advertising is growing in single digits. Radio’s up about 6 percent.

Even magazine advertising, subject to similar doldrums as newspapers, was up 5.3 percentin the third quarter, its second consecutive quarter of positive growth.

Digital advertising picked up its pace rapidly at the beginning of 2010: up 11.3 percent over the first half of the year to $12.1 billion, according to the Interactive Advertising Bureau. This digital growth is a long-term trend — online advertising is now a close No. 3 among advertising media in the U.S. (behind TV and newspapers). It’s surpassed TV, to become No. 2 in the UK, and surpassed newspapers to become No. 2 in Japan. (See The Newsonomics of online ad trending.)

As an aside, consider how much faster Google is growing than the online ad market, from which it derives almost all its revenue. In the third quarter, Google reported revenues of $7.29 billion — a 23-percent year-over-year increase.)

Now back to newspaper advertising. Gannett’s publishing revenues dropped 4.8 percent in the third quarter, while the The New York Times Co. was down 2.7 percent. McClatchy saw a 5.7-percent decline. Media General had even more problems: down 7.6 percent in pub revenues. Gannett’s and Media General’s revenues, overall, were helped by owning broadcast properties, as Media General’s 18.4-percent increase in broadcast helped it report an overall increase in year-over-year revenues. Broadcast revenues at Gannett were up 22.3 percent.

Why the great disparity between newspaper — meaning print newspaper — and the rest of the recovering ad world? We won’t take the space to parse it here and now. Suffice it to say that the long-term declines in classified categories — auto, real estate, and recruitment — have hurt the industry greatly. Now, though, even retail advertising is “coming back” quite unevenly, the bumpy road to recovery New York Times CEO Janet Robinson highlighted in her third-quarter report remarks.

The possible silver lining of the newspaper reports: Some digital revenue reports were on a par or better than the growth of online advertising overall. That hasn’t been the case consistently over the past couple of years, so the the latest numbers offer a ray of hope for the future.

If online advertising grew 11.3 percent overall, then compare that to the 3Q growth rates (not quite apples to apples, but not far off) at the New York Times Company (15 percent), Gannett (10 percent), MediaGeneral (15-22 percent, depending on how you count it) and McClatchy (1 percent). Those numbers indicate that some of those newspaper companies are doing a better job of selling digital advertising.

My talks with publishers and online directors point to several reasons for that good performance, ones long in discussion, but now becoming more routinely operational. The No. 1 reason: Publishers have simply focused more resources on selling digital products. They are also increasingly un-bundling products, not forcing as many print/digital buys. And, of course, they’re putting themselves in position to get spending in the fastest growing ad category — online — and devoting fewer resources to mining print revenues, which are declining in general.

So here’s the rub, and the conundrum. Newspaper companies are now pedaling as fast as they can, trying to get as digital as they as fast as they can, because that’s what the growth in ad dollars is happening. The New York Times Company says that 27 percent of its ad revenue is now driven by digital, and that’s up three points year over year. So it has a quarter of its ad business in the new world, and three-quarters in the old world. Add it up, and you get those negative numbers overall. The trick of the next several years: pedal (and peddle) even faster on the digital bike, while stoking the steady, if slowing train of print — and pray that the train doesn’t run out of coal too quickly.

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