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May 23 2013


The newsonomics of value exchange and Google Surveys


What happens when a reader hits the paywall?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

December 19 2011


Daily Must Reads, Dec. 19, 2011

The best stories across the web on media and technology, curated by Nathan Gibbs

1. Joshua Kopstein: Dear Congress, it's no longer OK to not know how the Internet works (Motherboard)

2. Schools explore rules to limit how teachers and students interact online (New York Times)

3. Demonstration of touchless control of smartphones and TVs (BBC News)

4. What does life after IPO look like for Zynga? (Inside Social Games)

5. Apple moves forward with TV plans (Wall Street Journal)

6. Mathew Ingram: Publishers still missing the point on e-book prices (GigaOM)

Subscribe to our daily Must Reads email newsletter and get the links in your in-box every weekday!

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December 16 2011


Daily Must Reads, Dec. 16, 2011

The best stories across the web on media and technology, curated by Nathan Gibbs

1. SAY Media acquires tech blog ReadWriteWeb (Tech Crunch)

2. Video ads with special effects are more successful (paidContent)

3. Viewers increasingly watch streaming video on game consoles (Los Angeles Times)

4. Zynga IPO could challenge Google's high score (paidContent)

5. Telling political stories in closer to real-time (Nieman Reports)

6. Google launches mobile app training program (ReadWriteWeb)

Subscribe to our daily Must Reads email newsletter and get the links in your in-box every weekday!

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August 03 2011


Twitter valued at $8bn after large investment from DST Global

Guardian :: Twitter, the microblogging website that lets users tweet messages of 140 characters or less, is now worth $8bn (£4.9bn). The firm's new price tag comes after a $400m investment in the loss-making venture from serial social media investor DST Global,  the investment fund led by Russian billionaire Yuri Milner, which also owns stakes in Facebook, online gaming firm Zynga and discount firm Groupon, all of which have plans to go public.

Continue to read Dominic Rushe, www.guardian.co.uk

January 19 2011


How Can We 'Gamify' the News Experience?

One of the biggest emerging conversations over the past year in Silicon Valley is around "gamification." Simply put, this is the idea of applying game mechanics, particularly those found in videogames, to all sorts of non-game experiences.

After following this conversation for many months, I've come to believe that over the next decade gamification will profoundly reshape the way we experience the web, to the same degree that social media and networks redefined the web last decade. To that end, I've been thinking in the broadest terms what that could and should mean for how we can reinvent digital news.

To carry this thinking forward, I'm announcing the launch of a new project: NewstopiaVille. The goal is to explore how game mechanics can be applied to reinvent the way we produce, consume and interact with news. My hope is that by thinking as ambitiously as possible about this idea, I can accomplish two things.

First, I want to get the concept of gamification on the radar on every news organization so that it becomes a central part of their discussions as they continue to push into digital media.

Second, I want to build a prototype of a fully gamified news experience. There won't be a single solution that makes sense for every news organization. But I'm hoping to demonstrate the possibilities to inspire others to pursue their own concepts in this area.

To be clear, all I have at this point is what I think is a big idea. I don't have any funding. I don't have a demo. And I don't stand here pretending to be an expert in the realm of videogames. In fact, until fairly recently, I wouldn't have even thought of myself as a gamer. That has changed as my own kids have plunged into videogames, bringing me along with them.

Let me start by elaborating on what I see happening with gamification.

About Gamification

Even if the term is new to you, the elements are probably not. Gamification suggests features like leaderboards, progress bars, rewards, badges, and virtual goods. Now that we live in a time where the majority of people play videogames of some kind, often many hours each week, it's fair to say that these kind of features have become widely familiar.

What has begun to change in the past year or so is the growing push to take these common elements out of the videogame experience and incorporate them into sites across the web. That's been driven in no small part by the explosive success of social games like FarmVille by Zynga. But it's also being pushed by a generation of developers raised on videogames, which have become one of the most popular forms of entertainment.

While it's easy to dismiss some of these games as trivial, in fact, they succeed because they take sophisticated approaches to tapping into fundamental human psychology. Developers use those lessons to build experiences that deliberately guide people to perform tasks and behave in specific ways.

Gamification represents a powerful intersection between videogames and social networking. Developers have seen the deep level of engagement these games create. And they have witnessed how games built around cooperative, non-competitive structures have gained a mass appeal.

That has led to a growing number of developers asking, "If I can get someone to spend hours harvesting virtual crops and feeding digital sheep, is there a way to take those same dynamics and get people to do something even more meaningful?"

Virtual Goods

Though not a gamer, I got started on this line of thinking about a year ago with the subject of virtual goods. I was staggered that people were willing to spend billions of dollars on virtual goods. In fact, I wrote about this idea last year when I asked, "Why will people spend $1 to send you a virtual beer on Facebook, but not to read a news story online?"

The reason had to do with the emotional context around those goods. But while I felt news organizations should be thinking about virtual goods, I realized that this was too limiting in isolation. The power of virtual goods comes in the context of an experience. I needed to think more broadly, and that led me into conversations about gamification.

The trap one can fall into is with gamification is to break it down into various tools and try to use a grab-bag approach. Stick a leaderboard here, a few badges there, and believe you've "gamified" your website. But used in that way, these tools will have minimal effect.

The reasons the best videogames succeed is because they offer an all-encompassing experience. They leave players with a profound sense of happiness by allowing them to accomplish a series of goals. And they tap into a central desire to do something with meaning, to be a part of something larger than yourself when you team up with others to accomplish shared goals.

Think about that: A desire to be part of something bigger, and to do tasks that are meaningful. Those are core, shared values that motivate the very best journalists I've known in the most successful newsrooms.

The concept of game mechanics is not entirely new in the context of news. I can recall several years ago talking to news executives who were fascinated with Digg and wanted to understand how game theory could help them. The problem comes with focusing too narrowly on the tools, like Digg's leaderboard. To really leverage the potential of gamification, it has to be central to the entire structure of the news experience.

CityVille Lessons

In that regard, I can imagine any number of areas where game mechanics might address some of the most important and challenging questions facing news organizations:

  • How do we improve commenting?
  • How do we get more people to participate in creation and processing of news and information?
  • How do we think differently about monetization?

Let me just give one example related to the last question. In recent weeks, I've been playing CityVille, the latest game from Zynga. The goal is to construct a city by accomplishing a series of tasks, like harvesting crops to supply stores, which then earn you coins. It's free to play and each time you begin, you have a set amount of energy that allows you to accomplish about 30 tasks. Once you run out of energy, you have a few choices.

First, you can take a break and come back later when your energy builds back up.

Second, you can ask your friends in the game to send you free gifts of energy that allow you to keep playing. This rewards you for being super social, and building up a big network of friends that you've helped accomplish other tasks.

Third, you can spend real money to purchase energy. You can do this by buying Facebook credits, or "buying" CityVille cash which you can then spend in the game to buy energy. The money and the credits are not one-to-one. So $2 of real money gets you $15 of CityVille money. This is an important psychological break that makes people feel like this is a trivial expense to feed their desire to keep playing.

Applying It to News

Think about how that could work at a news site that uses some kind of metered revenue model. Someone who is a free member gets to do 30 things: Read an article, post a comment, contribute to a news task. When they run out of credits, they could ask their network for more credits. Or, they could buy some more.

The ability to induce someone to do this would rest on the success of the larger experience a gamified site has created.

Let me also pause here to make another distinction. I consider this project to be distinct from the idea of "newsgames." While there are certainly similar dynamics, I think of them as complimentary.

For me, newsgames represent a way to reinvent storytelling. It is a contained object. (Here's a broader history of newsgames.)

Gamification is about bringing game mechanics to the entire platform and experience of news and information.

These two concepts certainly can and should fit together. I've thought about this relationship as I've watched my son play his favorite online game, Star Wars: Clone Wars Adventures. In the game, a player creates an avatar, usually a Jedi, who wanders around the virtual world. At times, he enters various rooms where he plays more specific games, such as a snow speeder chase.

Gamification would be about shaping the entire news experience for someone. At times, as they move around that gamified news platform, perhaps there would be rooms or spaces where they enter to play more specific newsgames. That would be one of many tasks that might allow them to earn rewards, or build their reputation or earn experience points.

Getting Started

But the question, then, is where to start? As I said before, it would be a mistake to begin by focusing on the various tools, the technology, or the protocols. Figuring out which of these to use would be something that would come at the end of the design process, not at the start.

Where I want to start is by asking the larger questions that I think are critical to the success of any game: What is the goal? What is the mission? What is the experience we want people to have?

From there comes a longer list of questions about what exactly we want people to do. What are their motivations? How do we reward them? How do we keep them moving through the game? What are the levels and rewards?

Next Steps

My next step: In the coming months, I'm going to accelerate my personal research and interviewing in this area. This coming week, I'll be attending the first ever Gamification Summit in San Francisco, and next month I'll be at the Game Developer's Conference.

I'll be blogging along the way at NewstopiaVille.com to share my thoughts and to hopefully get lots of feedback. Most importantly, by making this a public discussion, I'm hoping this will bring folks forward who want to take these ideas further.

In a few months, I'll try to gather these folks together for a more focused discussion. I'm thinking this might take the form of a meetup/bar camp/or hackathon. The goal being to produce something tangible that can test some of the ideas that have been formulated, and to figure out what resources would be needed to create a real prototype or demo.

As I said, I don't pretend to have all the answers. Just a serious curiosity driven by the belief that I think this is potentially a really big idea.

If you agree, then I hope you'll help me.

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