In a business environment that closely resembles the last five minutes of a James Bond film, where the klaxons are blaring and guys in white jumpsuits are frantically running around and dying in explosions because Bond just set the reactor to overload... the absolute stupidest, most dangerous thing you can possibly do is just stand still. Act defensively. [...more]
The kids are all right. Despite my best efforts…
On Friday, I had five cohorts of students graduate from Annenberg-USC. Three graduate student cohorts (broken down into two cohorts that attended USC for two years, and one in the brand-new one-year accelerated Master’s program). One group of quirky, hardworking undergrads. And a summer school class of “Specialized Journalism” grad students.
USC-Annenberg class of 2015, right after the ceremonies ended – and reality started to sink in (at least for a few of them). The rest were ebullient, as evidenced by student Yingzhi Yang in the foreground, grinning and waving at me.
I had to start traveling at 4 a.m. in Sonoma County, to get to the graduation before all was over; but it was worth every second of sitting on runways and grinding my teeth while crammed into a coach seat (they get tinier every year, it seems). I got to see all my students, beaming and full of excitement, enthusiasm and hope. God knows we need those three emotional energy states in journalism these days.
The IAB has published their view. I have my own opinion. One of the biggest problems with “native advertising” is that it is such a new, made-up term of digital art, that it’s taken on an Alice in Wonderland-esque quality, in which the phrase means whatever the speaker thinks it means in that moment, while […] [...more]
The IAB has published their view. I have my own opinion.
One of the biggest problems with “native advertising” is that it is such a new, made-up term of digital art, that it’s taken on an Alice in Wonderland-esque quality, in which the phrase means whatever the speaker thinks it means in that moment, while the listener pretty much has their own interpretation.
“When I use a word,” Humpty Dumpty said in rather a scornful tone, “it means just what I choose it to mean — neither more nor less.”
Quick hit: It’s been about 2 months now, and all I see on Klout is this message: Not that I’m obsessed with my Klout score or anything (no, that would be terrible), but at some point, it would be nice in terms of UX/UI to have something a bit more useful here in an error […] [...more]
Quick hit: It’s been about 2 months now, and all I see on Klout is this message:
Well, this is helpful. Anything else we can do about this? No? K THX BYE.
Not that I’m obsessed with my Klout score or anything (no, that would be terrible), but at some point, it would be nice in terms of UX/UI to have something a bit more useful here in an error message. Particularly if it’s something that lasts since, oh, I don’t know, JANUARY.
I’ve been doing a long rundown of social media tools that’s set to get published on our main DigitalFamily.com site, and this is unfortunately something that I’m gonna hafta mention. I’ve seen increasing signs that Klout is struggling with its business model; thing is, most of the social media management tools are piggybacking on its numerical rankings in their “influencer-spotting” panels.
Kred kind of came and went. Is there some other social tool startup that purports to measure influence out there? ‘Cause I’m not seeing it at this juncture. Guess I gotta do some more research (sigh).
As the “New” wears off of “New Media,” investors start to expect results Years ago, I did the first big case study for the NAA, back when newspaper revenues were in free fall, and publishers were desperately flailing around for a revenue stream – any revenue stream – that might provide a lifeline with their […] [...more]
As the “New” wears off of “New Media,” investors start to expect results
Years ago, I did the first big case study for the NAA, back when newspaper revenues were in free fall, and publishers were desperately flailing around for a revenue stream – any revenue stream – that might provide a lifeline with their news organizations. At the time, paywalls were still a very dirty word with the digerati, as they seemed to reflect the very worst of Old Media Thinking.
Is the modern newsroom going to turn into something of an ad production studio? Or will there be some other way for it to survive?
Information wants to be free after all, and back then, there were some very prominent failures with trying to get people to pay for content. El Pais, which had been the market leading national newspaper of Spain, put up a paywall in the early 2000s, and then three years later, took it down after it had basically destroyed their standing in the marketplace. El Pais spent millions of dollars trying to win back the audience that had deserted them.
But then along came the crash in 2008, and the bottom fell out of the ad market (again). This time, unlike the dot-com crash of 2001, the revenues did not bottom out in 6 months, and then start climbing back again. No, this time there were insidious new technologies on the rise that have pretty much destroyed the value of the banner ad: the rise of RTB (real-time bidding) or “programmatic ad buying.”
In a nutshell, RTB allows an advertiser to reach an audience, no matter where it is on the web. Say you want to reach housewives under 35 with kids in school, who looked at washing machines in the past year. No problem. Just sign up with a programmatic bidding outlet, and you can buy banner ads across the internet that will deliver you that audience.
Great for advertisers. Disastrous for publishers.
Why? Well, because the supply of space on the web is basically infinite. That means our old friends supply and demand kick in – with a vengeance. The result has been that CPMs for ads are on a race to rock-bottom. Banner advertising is essentially going to be utterly worthless soon, which means that there is going to have to be yet another shift in how premium content publishers support themselves.
And no, we cannot just crank up subscription rates to the point where the readers pay for everything. Even at the mighty New York Times, with its much-lauded paywall, there is a recognition that doubling the subscription rates will pretty much kill the business. Not to mention the fact that putting all good & decent information behind a paywall pretty much ensures that anyone without means – that is, ordinary folks – are going to have to subsist on a diet of cheap&shoddy news. Yep. Find the flaw in that plan.
The situation gets even more dire when we consider the headlong rush to the mobile web. Banner ads are even less effective and valuable there – here, take it from the New York Times again:
The appeal of being able to buy targeted audiences at scale and the simple efficiency of automated advertising makes it a no brainer for most advertisers, and thus most publishers.
Meanwhile, the shift to mobile makes developing effective native ads even more important because, as Levien says, “we have not yet arrived at an effective interruptive format, a banner format, in mobile”.
Social media companies such as Facebook and Twitter are taking the lion’s share of mobile ad revenue in part because their ads come in the same container as the rest of their content, which works better on mobile devices. The thinking is that publishers need to do the same to compete.
…and here at last we arrive at what is shaping up to be the big fight of 2015. Call it “native advertising,” call it “content marketing,” call it what you will. It’s advertising messages that are inextricably mixed into the news content on news sites. You’ve already seen it in your Facebook feed, on Twitter, on blogs, hell, for the longest time, even in the midst of radio shows.
Why is this going to be A Thing? Well, check out what John Oliver has to say about it:
Is it no longer identity theft when law enforcement does it? OK, on one level, this is kinda clever, and analogous to those scams where cops send out invites to a special event to lure in crooks. Usually, it’s under the guise of having won free tickets, or a relative croaked and left a boodle […] [...more]
Is it no longer identity theft when law enforcement does it?
OK, on one level, this is kinda clever, and analogous to those scams where cops send out invites to a special event to lure in crooks. Usually, it’s under the guise of having won free tickets, or a relative croaked and left a boodle of money in an inheritance – you can see an example in the intro scene in the movie “Sea of Love.”
There is a long tradition of deceptive practices by police that are legal, they noted. For example, officers assume a false identity to go undercover. “What’s different here,” said Ryan Calo, a professor at the University of Washington School of Law, is that the agent assumed the identity of a real person without her explicit consent.
Apparently, her boyfriend was using her apartment to store and dilute cocaine. He pled guilty and got 16 years. So he was a legitimate bad guy. But there are still some troubling issues here; is this really all that different from pretending to be a crook to gain the confidence of other crooks – see: Donnie Brasco? Or any number of cops over the years, showing up to a drug deal and pretending to be the guy that they just hooked up, all to catch other crooks?
Is this the future of the news business? Or has it always been this way, and we’ve been deluding ourselves to think otherwise? Gallup’s analysis in 1928 basically says, “Yup. Nobody has ever read those long investigative pieces.”
Back then, they had tried various methods to track what people actually pay attention to, down to gathering the used newspapers off the floors of trolley cars and seeing what page they were left open to (and aren’t you glad you don’t have that job, back when people routinely chewed tobacco and spat?). Gallup came up with the novel idea of sending his researchers into people’s houses in Iowa and watching them read the paper (call it ur-Google Analytics).
People are liars. “The person who believes he has read all of the front page may not have read a fourth of it,” he wrote.
Nobody likes serious news nearly as much as they report on questionnaires. Gallup’s interviews reported that front-page stories were actually no more popular than small features in the back of the paper.
The most-read thing in the newspaper wasn’t news at all: It was the front-page cartoon by J. H. Darling, read by 90 percent of men compared with just 12 percent reading the day’s local government news.
For women, the most-read parts of the newspaper were “style and beauty pictures.”
This is very timely, as Wednesday’s class is going to be about using SEO and analytics to track what readers actually read – and the advisability of just giving them “fast food news”.
It’s led to the rise of what we in the biz are calling “hamster wheel” journalism. I talked last week to the editor of Metropolitan magazine, who said that he gets staffers from fairly reputable outlets, like Fast Company, where the reporters have an Excel spreadsheet with 200 stories that they are REQUIRED to do each month. These story “ideas” are generated by having bots track Google Trends to see what the target audience is clicking on, and then backwards-engineering that to have stories that will then fit those audience interests.
On the one hand: it makes sense to give your customers what they want. On the other hand: aren’t we supposed to be serving a slightly higher calling than the fry cook down at Mickey D’s? What does it mean when the news isn’t what you need to know to function in an increasingly complex and demanding world — but just the lowest-common-denominator pap that can be quickly shoveled out and morticed around the ads.
Mediapart in France is profitable because it gives readers what they are willing to pay for. Imagine that. Quick hit here for my students, who are increasingly upset about their job prospects after graduation. I shared an article from Neiman about the upheaval in the newspaper business in France. Apparently, the same problems that plague […] [...more]
Mediapart in France is profitable because it gives readers what they are willing to pay for.
The Mediapart organization makes its living by doing hard-hitting investigative journalism that its audience is willing to support. They also make a point of including lots of video on their pages.
Quick hit here for my students, who are increasingly upset about their job prospects after graduation.
I shared an article from Neiman about the upheaval in the newspaper business in France. Apparently, the same problems that plague the French economy at large are at work, writ small & exceedingly acerbic, at the major newspapers. They are tech-phobic, rely on business models that no longer fully function, and react angrily to anyone threatening the promise of a cushy work situation with guaranteed employment and 1/4 of the year spent on vacation.
But about 2/3 of the way down the article, there appeared these grafs, which I am going to excerpt here, although I do urge you to go to the Neiman site & give them some traffic-love, ’cause @petergumbel did a damn good job with this write-up:
Edwy Plenel, for one, is incensed by the conflicts of interest inherent in the French press. But then that’s not entirely surprising, since outrage is Plenel’s mojo.
He has come a long way since his revolutionary youth, which he wrote about in a 2001 memoir. He made his mark as an investigative journalist at Le Monde; one of his most celebrated scoops was uncovering the role of French intelligence in the 1985 sinking in New Zealand of the Greenpeace boat Rainbow Warrior. He made the Elysée so nervous that it illegally bugged his phone during the presidency of François Mitterrand. He spent a total of 25 years at Le Monde, including a stint as editor in chief, but he left in 2005 during one of its sporadic crises, after attacks on his management style.
He launched Mediapart as a subscription site in December 2007. Three years later it was at break-even. Today, it’s racing toward 100,000 subscribers, each paying the equivalent of about $12 per month. This year he expects the site to make about $2 million net proﬁt on just over $10 million in revenue. It has a staff of 50, 33 of whom are journalists. It now outsells Libération, which has almost six times as many staff members. [Emphasis mine – dlf]
The secret: a laser focus on exclusive news, especially revelations of high-level political and ﬁnancial skullduggery. Mediapart’s subscriptions soared in 2010, the year it broke the story about a convoluted political and ﬁnancial scandal involving France’s richest woman, Liliane Bettencourt. They leaped again in 2013, after it revealed that the then-budget minister Jérôme Cahuzac, whose job included ﬁghting tax evasion, himself had an undeclared Swiss bank account and had transferred funds to Singapore. After denying the allegations for months, Cahuzac eventually resigned, acknowledging that he had lied to parliament and to President François Hollande.
Work the numbers, folks. $10 mill in revenue-$2M profil = $8M in expenses. $8M/50 employees = $160K/yr per employee. Figure about 40% of that per-employee allocation is insurance, pension, and building/maintaining the site & gathering news costs, and you still get a salary of $64K/yr on average. For a journalist, that ain’t bad. Plus you’ve got a warchest of $2M that you can throw at a big story, should one come up, and to use to build out the site & extend its reach.
So. There’s a lot going on here. I’ve written in the past about how I disagree with the authors of The Death and Life of American Journalism, who called for exactly the kinds of government subsidies for newspapers that are allowing them to continue to try to deny reality, and live in a fantasy-bubble. At the time, I was reacting to what I’ve seen in Latin America, Georgia, Kazakhstan and other places where allowing the government to get its hands on the revenue stream is akin to letting criminals loop a choke-chain around your throat. They can lead you around by it, and if you start getting out of line, all they need to do is give it a quick, sharp yank, and you fall back in line, suitably docile.
I’ve seen that happen. First-hand. In Venezuela, when I was a very young editor.
Government subsidies are kinda like this. Nothing really sticks until you try to do something that the person holding the leash doesn’t like.
The solution that Mediapart has come up with here may not last. It may not work everywhere. But it’s something that makes a lot more sense to me than journalism that exists as a kind of state-supported performance art piece. Because I’ve seen that as well: journalists who are completely disconnected from the concerns of their audience, sporting paternalistic, condescending attitudes, producing self-indulgent “investigations” that nobody really reads, and that don’t really threaten the people who give them checks each month.
Look, I am not hooting and hanging on the rim here, delighting in the travails of people still stuck in jobs at tottering media empires, hanging on for dear life through ownership changes, strategy changes, and promises that melt away like morning dew.
Long-term, market forces are going to prevail. If journalists produce a product that people want, and give them a means by which to support/purchase/share it, then that audience will fight to ensure that this important part of their lives is still there. The very first case study I ever did was centered around that fact. It makes me sad to see so many journalists, who base their entire journalistic ethos on pushing people and institutions to change, to adapt to the times, to leave behind (even if painful) the habits & traditions of the past … ignoring their own best advice.
Liberation may not be a cafe. But it may also not be an outlet for journalism much longer either.
Web-native companies strive to eliminate “transactional friction.” Newspapers? Not so much. I’ve been a subscriber to the LA Times for as long as I’ve lived in Los Angeles, and I’ve watched as the big beast evolved from a gray morass of 100-inch stories to the biggest (and most profitable) paper in the U.S. in the late 90s. […] [...more]
Web-native companies strive to eliminate “transactional friction.” Newspapers? Not so much.
I’ve been a subscriber to the LA Times for as long as I’ve lived in Los Angeles, and I’ve watched as the big beast evolved from a gray morass of 100-inch stories to the biggest (and most profitable) paper in the U.S. in the late 90s. Which has made the last decade and a half so very hard to watch. Still, I’ve stuck by Gray Lady West through some very tough times, and I have many friends who either work there now, or have in the recent past.
“Frictionless commerce” is what makes iTunes, Amazon, Google AdSense, Craigslist and so many other web titans so successful. It means that you make it as easy as possible for customers to actually buy something from you. (Image credit: Wikimedia Creative Commons)
First: a lesson in what “failure of the last mile” means: consider what goes into making a successful restaurant. You have to have a prime location. Decorate the exterior. Decorate the interior. Hire a great chef. Hire great kitchen assistant chefs. Come up with an innovative menu, with food that appeals to your core demographic. Procure the freshest ingredients. Ensure that the food prep space is clean and gets an “A” from the city inspectors. Advertise. Market. Give out coupons. Sweet-talk reviewers into coming and writing reviews. Have valet parking. And so much, much more that all leads up to the “last mile” – what the experience is like at the “touch point” where the customer actually engages with the product.
In a nutshell: all this effort in preparation to make a great restaurant counts for nothing if the waiter is snotty to the diners.
I’ve seen this in action again and again with the startups I’ve been involved with. Early on, we faced epic levels of “cart abandonment” when trying to coerce people into making a purchase, because (at the time) people were really, really reticent to type their credit card numbers, expiration dates and security codes into a browser window. Since then, we’ve obviously learned that data theft can pretty much happen anywhere. However, this hurdle was gradually overcome via the efforts of eBay, Amazon, iTunes and PayPal. All of which add layers of security, and money-back guarantees if your card gets hijacked and used to buy pallets of AK-47s in Cote d’Ivoire.
So here’s what trying to buy a subscription from the LA Times looks like. You dial a number. There’s a choppy, slow voicemail hell, with choices that really don’t seem to apply to what you want to do. There is no dedicated 800 number for renewing subscriptions – you just get dumped into the bin with people who want to report their paper getting stolen, or who want to turn it off while they go visit the grandkids. So that’s turnoff #1. Even as a dedicated subscriber, I wanted to hang up and just try the website to see if I could get a better experience. Still, I hung in there to see whether things would improve.
It took 3 steps and 2 minutes to get to a place where I could finally start to accomplish what I came for. Unfortunately, rather than talking with a human – I had to manually enter a credit card number over touch-tone. That’s Strike Two, folks. If you’re going to be giving up that kind of info, consumers kinda want to get rewarded with a human voice, particularly if they have any queries about what they’re buying and how much it costs. Which I did.
So I grimly stuck to it, even after entering my financial information, hoping to get someone on the phone to explain the rather complex choices on payment amounts and term of subscription that came on the paper bill I was mailed. Pressing the “0” button just kicked me back into the main menu. Somewhere along the line, as the frustration increased, I heard that I had to “Press 9 to Speak to a Representative.” Only, that kicked me back to the main menu as well.
Sure enough, there was a silent blip as the call was transferred to a call center. Not in India – the costs for call centers have gone up there. No, this one was to the new lowest-cost call center hub – in the Phillippines. The operator was friendly enough, but the problem started when I asked about the payment terms. Under the subscription plan they now offer, the LA Times gives me unlimited web access (which is mostly how I engage with their news product these days no surprise), and charges me about $12 every two months. But looking at the rate card I was mailed, it seemed as though they were trying to incentivize me to subscribe for 6 months or an entire year by offering price breaks for these longer-term commitments.
So sure. Maybe if you let me shave a few bucks off the bill, I’ll pay you the whole amount upfront and let you make some money off the “float” of having my entire wad of subscription money that you can earn interest on. It’s one of the ways that smart companies entice consumers into locking themselves into making a yearlong commitment.
Unfortunately, the call center operator had no earthly idea of the pricing structure for the product she was trying to sell.
After having to verify (for the 3rd time on this now 15-minute call) my phone number, address, name, credit card number, etc., just asking how much I was going to pay flummoxed this person. I was quoted three different prices for the subscription I now have. I corrected the operator a couple of times, and finally after teaching her about the product she was trying to sell, got to the bottom line.
I can pay $12 every two months for the next year. Or I can pay $83 up front to “lock in” the subscription price.
Let’s do the math here.
If I pay every two months, that’s six payments a year, right? Simple math: 6 payments x $12 = $72 a year.
And you want me to pay $83 upfront in one lump sum? How does that make financial sense? I’d be paying MORE for a yearlong subscription rather than saving a few bucks.
The operator stammered and then went back to the script of “locking in the subscription price.” Well, is the price going to go up then? No. I don’t know. Maybe.
By how much? I don’t know. When? I don’t know. But it might. Is there anyone else I can talk to about this? Not right now.
OK, at this point, I hung up. Deconstructing this entire experience, from a webconomics point of view, this is an absolute disaster. The LA Times has made it difficult and frustrating for existing subscribers to attempt to continue to be subscribers. They’ve cut costs in their circ department by outsourcing all the call center jobs to places where ill-trained people stumble over what should be easy points. And finally, their pricing structure makes no sense once you drill down and work the numbers for yourself. And the numbers are completely different on the web, in the mailers, according to the people on the phone. The price just keeps changing!
This makes it impossible for the end-user (i.e. subscriber) to trust the prices that we’re being given. Yeah, it’s only a few bucks, but come on, now. You guys know – or SHOULD KNOW – how consumers react when they start to suspect that someone else is getting a better deal.
I’ve written at length over the years about the migration from an ad-supported revenue model to a subscription-based model (AKA “paywalls”). The jury’s still out on how well this is going to work out for the newspaper industry; yes, the New York Times, Financial Times and Wall Street Journal are often cited as success stories (although detractors point to weaknesses in their underlying dynamics). News organizations across the board are looking to ways that they can support themselves by charging subscriptions to access their material.
This only works when that transaction is quick, easy and painless.
The battle is against Putin's propaganda machine - basically, Russian TV and their associated army of hackers and online purity trolls - and they are having to fight on multiple fronts against the every-shifting narrative of manufactured outrage, faked provocations and deceptive spin that is coming out of the Kremlin. [...more]
This is why it is important to teach journalists how to use social media.
My friends and colleagues in Ukraine are fighting a protracted battle in the global court of public opinion, and they are using all the digital tools and techniques that I’ve been referencing/showing off/misusing during the last seven years that I’ve been teaching and training there. Read More
Russian ISPs openly brag about how much pirated content they have – it’s their market differentiator Years ago, working in Russia, back when the whole “Content Pirates” project was just the mere glimmering of an instinct, I was talking with the local techies about how the web works in Russia. At the time, we were […] [...more]
Russian ISPs openly brag about how much pirated content they have – it’s their market differentiator
Years ago, working in Russia, back when the whole “Content Pirates” project was just the mere glimmering of an instinct, I was talking with the local techies about how the web works in Russia. At the time, we were trying to implement an internet-centric business model for a publishing company, and were coming up against massive cultural differences in how to make money off of content.
This profile for vKontakte founder Pavel Durov is particularly ironic, since he just bailed out of the company, citing intense pressure from Kremlin-backed investors. The site has 143 million users worldwide, 88 million in Russia. They generate about $170 million a year in revenues, mostly from advertising. And the site is rife with pirated works.