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  • feedwordpress 15:31:31 on 2020/06/17 Permalink
    Tags: , , , journalism, , Recount Media, , The Recount, , ,   

    Marketers Have Given Up on Context, And Our National Discourse Is Suffering 


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    It’s getting complicated out there.

    Marketers – especially brand marketers: Too many of you have lost the script regarding the critical role you play in society. And while well-intentioned TV spots about “getting through this together” are nice, they aren’t a structural solution. It’s time to rethink the relationship between marketers, media companies (not “content creators,” ick), and the audience.

    So let’s talk about it. Grab your favorite beverage and read along. I’m heading into a bit of media theory for the next couple thousand words – I hope this will start an interesting conversation.

    For those of you who want a TL:DR summary, here it is: It’s time to get back to the work marketers used to be really good at: Deciding on the appropriate context in which to engage your audience. And it’s time to pull back from a habit most of you have fallen into: Letting the machines choose your audience for you. Thanks to new approaches which fuse at-scale ad targeting with high-quality editorial product, you can step into this renewed role without sacrificing the reach, precision, and targeting afforded by the likes of Facebook, Google, Twitter, and their kin. To understand how, let’s review some history.

    The Old Media Model

    If you read this site back when I wrote regularly on media (roughly 2003-2015), you’ll recall I laid out several basic tenets about how the media business works. It’s comprised of three core components: Editorial (the media company’s content), Audience (people who give their attention to the content), and Marketer (commercial actors who desire the Audience’s attention in the context of the Editorial). Of course, in the past ten years, a fourth component has eclipsed all three: The Internet Platform.

    Before the major Internet platforms deconstructed the media business, the three original components came together in what we’ll call a media product (I’m still partial to “publication,” but many think only of print when they hear that word). Print, television shows, and early web sites all served as vessels for a commercial relationship between  Editorial, Audience, and Marketer. The media company took the financial risk of creating and distributing the media product, and if successful, the marketer paid to run advertising inside the media product. In some cases, the audience also paid a subscription fee for the editorial. But for most media companies, advertising support was crucial to chin the bar of profitability and make a go of it as a business.

    A critical element of the media-product-as-vessel model for commercial transactions was that context matters. The media product created context for audience engagement, and if the marketer offered messaging that aligned with that context, it stood to reason that the audience would be more receptive to the advertiser’s message. Suffice to say that with the rise of audience buying on massive platforms, context has been lost, with nearly incalculable downsides across the media ecosystem (and society at large). More on that later on.

    Meanwhile, back in those pre-platform days, distribution was important, but it was also a constant. Most media companies consolidated distribution by acquiring broadcast licenses or cable networks (for television) or print distribution networks (if you were a magazine or newspaper company). And if you were a media startup, you could leverage those distribution networks for a relatively predictable rent – often without spending any capital up front. When we started Wired, for example, we secured newsstand distribution by agreeing to split the revenue earned by our nascent magazine with our distribution agent.

    I call this old-school model “Packaged Goods Media.” Fifteen years ago I noted that “PGM” was giving way to a new model, which I termed “Conversational Media,” or CM. CM, of course, was the precursor to “social media” – Twitter, Facebook, YouTube – and as I thought out loud about this new phenomenon, I noted several crucial distinctions between it and Packaged Goods Media. I predicted that the economics of Editorial, Audience, and Marketing were all going to change dramatically. In many ways I was spot on. But in several others, I was dead wrong. Here’s a summary of a few key points:

    • Editorial models would evolve from “dictation” to “conversational,” where the audience – and knowledge of the audience through data – became a central driver of editorial creation.
    • Distribution would become nearly free, obviating the rent-seeking monopolies held by major media companies. In fact, I wrote: “economic differentiation based on the control of distribution – the very heart of PGM-based business models – is irrelevant in CM-based services.”
    • Online, publications become more like a service, rather than a product. I noted that software, which was still largely a packaged product, was also heading in this direction. That means media will have different economics and different advertising models over time (I called them “native advertising” at the time).

    I’d argue that over the next ten years I got the first and third predictions relatively right, but I entirely whiffed on how distribution would play out. I simply failed to imagine how Facebook, Google, and others would leverage their newfound control of audience attention. In one piece from 2006, I wrote:

    “…finding massively scaled Conversational Media companies [besides Google] is a rather difficult search … it’s unclear whether CM companies will mature into massive conglomerates like Time Warner.”

    Well, it’s certainly clear now. Facebook, Google, and their peers are among the most powerful and well-capitalized companies in the world, and they got that way by doing one thing very well: Capturing the attention of billions of us. That gives them a near monopoly on digital distribution, which they’ve leveraged into a near monopoly on digital advertising. In the process, these tech platforms have eliminated the traditional role of publishers as a proxy for audience interest and engagement. I used to believe this trend spelled the end of high-quality independent media brands – indeed, it’s why I didn’t start a media brand after selling Federated back in 2013. But media models are always evolving, and I now see a new way forward. To understand that, we must first review where we stand today. And to do that, we must examine arbitrage.

    The Arbitrage 

    If I were writing a sequel to “The Search” focused solely on how digital media models have shifted in the past 15 years,  I’d probably title it “The Arb.”

    It would not be a pretty story. In the past ten years, audience arbitrage has become a dominant model of the digital media business. It’s an awful business practice that erodes trust, devalues media brands, and dilutes the importance of marketing. What follows is a bit of a rant, but hell, you’re still reading at this point, so refill your glass, and let’s get to it.

    The dictionary definition of arbitrage is “the simultaneous buying and selling of securities, currency, or commodities in different markets or in derivative forms in order to take advantage of differing prices for the same asset.”

    In media, the asset being arbitraged is audience attention. The arbitrageurs are publishers. Their enablers are the major tech platforms, fueled by dollars from advertisers.

    Here’s how it works. A big publisher like Buzzfeed or Cheddar sells a million-dollar advertising deal to a marketing brand. The media company guarantees the marketer’s message will collect a certain number of audience impressions or views, charging the marketer a “cost per thousand” for those impressions. (Known as “CPM,” cost per thousand pricing ranges widely, from a few pennies to $25-40 for “premium” placements). Utilizing a Packaged Goods media model, the publisher might fulfill those impressions on its “owned and operated” properties, but over the past ten years, doing so  has accrued significant drawbacks. The top three:

    • It’s expensive. Acquiring and retaining audiences on a media company’s own property is often far more costly than finding those same audiences on an at-scale platform like Facebook or Google.
    • It lacks sophisticated targeting. In the past decade, marketers have grown accustomed to the data-rich precision of large platforms. They don’t want to pay for just any old Buzzfeed or Cheddar audience member. They want their messaging to reach exactly the target they specify, and most publishers don’t have either the technology or the audience scale to fulfill the data-driven demands of modern marketers.
    • It forces extra work on the marketer. I am not the first, nor will I be the last to note that marketers and agencies don’t like to do extra work. While plenty of larger publishers have built high-quality advertising solutions on their owned and operated channels, marketers view these point solutions as  just one more channel they have to manage, analyze, and report on. It’s just So Much Easier to buy Facebook, after all.

    Because of all this and more, publishers have become audience buyers on Facebook, Google, and other networks. Enterprising publishers began packaging their own content with marketing messages from their sponsors, then they got busy promoting that bundle to audiences on Twitter, Facebook, and Youtube, among others.

    This is where “the arb” comes in: The publisher will charge the marketer, say, a $15 CPM, but acquire their audiences on Facebook for $7, clearing an $8 profit on every thousand impressions.

    You might ask why the platforms or the marketers don’t put a stop to this practice, and you’d be right to ask. But consider the economic incentives, and things get a bit more clear. The platforms are getting paid for what they do all day long: the delivery of precise audience impressions at scale. As far as platforms are concerned, the media brands are just advertisers in different dress.  Over the years, Facebook and Google have even accommodated the arbitrage by connecting all parties directly through their advertising technology systems.

    OK, so the platforms get paid to deliver audiences to marketers on behalf of media companies, but why on earth do the marketers put up with being arb’d? Couldn’t they just pay the same $7 CPM directly to Facebook, eliminate the middle man, and save the $8 spread?

    Well, indeed they can, and in most cases when it comes to buying audience on Facebook or Google, that’s exactly what they do. But remember my comments about context way up toward the top of this article? Some marketers still believe that the context of a media brand can help their messaging perform better, and they’re not wrong in that belief.  So they’ll pay a bit more to have their messaging associated with what they believe is quality editorial. And if that media brand does the work of acquiring that audience for them, so much the better – that’s less work for the marketer to do.

    But let me be clear: arbitrage sucks. Arbitrage is only lucrative in markets with imperfect information. It’s usually a great strategy in the early stages of a new ecosystem, when media buyers are less familiar with how advertising technology works. As those buyers get smarter, they start to squeeze the media company’s margins, devaluing content and context, and pressing ever closer to the price they could get directly from the platform. A good example is Demand Media – a company that, a decade ago, managed to insert itself between Google’s search algorithms and an advertiser’s desire to be associated with content around a particular topic. Demand pulled off a billion-dollar IPO based on creating advertiser-friendly “content farms” around popular Google searches. But advertisers figured out the arb, and Demand’s once billion-dollar valuation fell more than twenty fold in the past five years.  A similar fate has befallen the once high-flying arbitrageurs  of social media. Cheddar, Vice, BuzzFeed, and many others all played the game, but over time, markets will root out an arb. (Cheddar was smart enough to sell before its arb was uncovered – but it sold at a fraction of the sky-high valuations its peers once held).

    But wait, one might ask – aren’t the media companies adding true value? What about that context, which makes a marketer’s message more relevant and engaging? Isn’t that worth something?

    It certainly is, but this is where the lack of transparency around ad buying on platforms comes into play. Audience buying is cloaked in opacity – the major platforms are deeply invested in making sure no one truly understands how attention is priced. That means a media company buying audience on Facebook or Google will always be at an informational disadvantage – exposing them to a new kind of arbitrage, one executed by the platform’s own algorithms and benefiting the platform’s bottom line. Again, arbitrage works best in markets with asymmetric information features – and informational asymmetry is built into how Platforms operate. Over the past five or so years, most major media companies have come to realize they’re the ones being gamed.

    Audience arbitrage on platforms has even more destructive attributes. Because media buyers have outsourced their audience acquisition to either the media company or the platform itself, the marketer becomes disconnected from the context of its audience. Millions of impressions are scattered across millions of tiny content bundles, all of which are lost in a sea of endless posts on nearly every imaginable topic. The context and meaning that holds all brands together is lost.  Media companies, pressed by ever-thinning margins, will cut corners, buying “junk traffic” or worse, creating junk content that titillates or tricks audiences into false engagement. On the surface, boxes get checked, audiences get served, impressions get logged. But over time, editorial content deteriorates, deep relationships between brands and audiences attenuate, and the media ecosystem begins to fail.

    So what can be done about it?

    Well, at The Recount we’re exploring a way forward, through a brand new partnership we’re launching on Twitter this month. We’re calling it “Real-Time Recount,” and in the next installment of this post (I’m pushing 2500 words here, after all), I’ll explain more about the theory of the case behind it. For now, you can read more about what we’re doing in this Ad Age piece (paywalled, alas), or over on Fred’s blog. Thanks for coming along, and I look forward to the conversation I hope this will spark.

    Image: http://shop.drywellart.com/product/bourbon-empty-glass-print
     
  • feedwordpress 15:32:15 on 2020/04/06 Permalink
    Tags: , , journalism, , ,   

    An Open Letter To American Corporations: It’s Good Business (and Smart Marketing) To Support Quality Journalism 


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    Brands and journalism need each other.

    “Outbreaks have sparked riots and propelled public-health innovations, prefigured revolutions and redrawn maps.” The New Yorker, April 2020

    “Nothing will be the same.” 

    That’s the overwhelming takeaway I’ve heard from dozens of conversations I’ve had with C-suite leaders, physicians, policy experts and media professionals these past few weeks. 

    When it comes to the business practices of large corporations, there’s no time to debate whether or when things might return to normal. If corporations truly stand for something – and nearly all of them claim to nowadays –  the time to prove it is right now, as the crisis deepens and consumers look to corporations to step up and lead. Companies that wait this crisis out will learn – quickly – that once loyal customers will readily turn to competitors who made it a priority to be in service during this extraordinary moment.

    Communicating that message of service means marketing. With that in mind, here’s a list of fundamental truths given today’s media landscape:

    • Context matters more than ever. Every customer is consumed with understanding the threat and implications of the pandemic. High quality, trusted information is critical.
    • Given this new context, marketing messaging can and must shift toward communicating how a company is adding value to society and its customers. Companies must recognize the severity of our times – brand messaging becomes serious and information dense. 
    • The majority of global marketers have frozen or cancelled their marketing plans, and all are struggling to identify and roll out relevant new messaging.  
    • When those messages are ready, marketers will find that traditional vehicles for messaging have shrunk or disappeared, or seem frivolous and out of context. No NBA or MLB, no Olympics, no live entertainment, and most advertising-driven television production has been suspended. 
    • Stuck inside and online, consumers are glued to news outlets, and have retreated to streaming video for escape – and the lion’s share of those services are ad free. Those with advertising models (Pluto, Roku, etc) have previously been viewed as nascent and unproven. This will change, but at present the connected TV sector lacks the inventory to satisfy the marketing needs of the world’s biggest brands.
    • Pushing context-driven marketing messaging on audience-driven services like Instagram or Facebook Newsfeed will come across as tone deaf. Again, context is now king. Where can serious, service-driven marketing messaging find the right context?   

    Turns out, there is a massive media channel that lives in a serious and information-dense context every minute of every day. This channel has nearly unlimited inventory, deep and consistent consumer engagement, and is eager for partnership with brand marketers.

    This channel is called news. And if marketers are smart, they’ll realize that running their messaging in high quality news channels isn’t just good business, it’s good for society as well.

    For decades, marketers have been eschewing journalism as a serious marketing channel, claiming that brands can’t be built adjacent to coverage of plane crashes, natural disasters, politics, or other staples of the news business. This misguided philosophy has led marketing agencies to create massive blacklists of terms like “Trump,” “guns,” and now, “COVID.” These lists direct tens of billions in programmatic advertising away from local and national news outlets, and toward “safer” channels like live sports on television and Facebook or YouTube online.  

    But it’s time for that to change. Perhaps the most important element of society’s response to the global pandemic lies in the curation and communication of high quality information, and calling that truth to those in power. Who but journalists will hold the governor of Georgia to account for mistruths, or the President of the United States? This has always been the role of journalism – and despite decades of declining revenues, most news outlets are rising to the challenge. Traffic and engagement to news channels has skyrocketed since the COVID outbreak – at The Recount*, we’ve seen spikes of up to 10-20 times our normal viewership. 

    It’s time for brands to rethink news as a marketing channel. This doesn’t mean brands should abandon their metrics of success – but forward thinking leaders in the industry have already proven that news channels can offer more engaged and receptive audiences. A friend and industry leading marketer (who prefers to not be named) has led the way in this regard, investing at least one in three of his media dollars in news channels last year. He tells me that not only are news audiences influential and affluent, they are five times more likely to recall advertising than general audiences, and six times more likely to engage with ads when they recall them.

    Right now, we need more leaders like him to step up and support the news business. And it’s not just good business: journalists are keeping people informed at one of the most important and perilous times of our history. As our finest corporations bend to the work of finding ways to be in service to their customers, they can and should partner with the one media channel that has been committed to serve the public since its inception: Journalism. 

    ###

    *Yes, this post can be seen as self serving, and I’m fine with that. I’m convinced that the thesis is sound regardless of my position at Recount Media.

     

     

     
  • feedwordpress 16:24:01 on 2020/03/25 Permalink
    Tags: , , , journalism, , , , ,   

    Will The Coronavirus Save Big Tech? 


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    Who’s Really Behind That “Death of the Techlash” Narrative?

     

    One of my least favorite kinds of journalism is the easy win. It’s the kind of story that just lands in your lap. It feels immediately counter intuitive and of the moment, and  it simply writes itself. It’s the kind of editorial sin most often committed by columnists facing immutable deadlines, and a perfect example can be found in the Wall St. Journal last week. “OK, Fine, Let’s All Get Back on Facebook,” the headline read. The subhead explains further: “All it took was a pandemic to make Facebook’s privacy-challenged products seem highly appealing.”

    Couched as a review of Facebook products helpful in our current era of social distancing and mandated work from home, the column may well stand as a turning point in what was once knows as the “techlash.” Has the coronavirus pandemic earned the world’s most powerful purveyors of surveillance capitalism a collective pass from the press?

    It certainly seems that way. A rash of articles over the past few days have picked up this narrative – and the comms teams at Apple, Facebook, Google and Amazon would be fired for malpractice for not stoking it. A good crisis must not be wasted, after all.

    But as the Journal columnist noted later in her piece, the reasons underlying society’s broad misgivings around Big Tech remain. With that prophylactic caveat duly administered, the columnist then profiled her own usage of Facebook’s services- and declared them a trend. Before COVID, the company’s many privacy missteps had led her to back away. But now that everyone she knew was stuck inside, she found herself once again checking her feeds, monitoring her neighborhood Facebook groups, and even pointing a Portal camera at her son.

    This narrative isn’t making it into the press without a bit of help. Facebook’s been quite public about the fact that people just like our columnist are in fact flocking to its products. “Facebook Is ‘Just Trying to Keep the Lights On’ as Traffic Soars in Pandemic” crows a recent Times piece. That headline quote comes from Facebook’s famously media-trained CEO, Mark Zuckerberg, who hasn’t exactly made a practice of calling the press and offering offhand observations these past few years.

    It’s always instructive to note when the company actively participates in stories, and when it declines comment. Lately, there’s been plenty of open lines of communication. The Times further wonders if “Big Tech Could Emerge From Coronavirus Crisis Stronger Than Ever.” And somehow (I can’t imagine how), an “internal report” from Facebook made its way into yet another Times reporter’s hands, leading to this chef kiss of a headline: ‘The Coronavirus Revives Facebook as a News Powerhouse.” Over at Wired, Facebook author Steven Levy asks “Has the Coronavirus Killed the Techlash?” He explains: “Facebook has gotten rare kudos for its responses to the pandemic, and perhaps even more significantly, more people are using it for the kinds of meaningful interactions that Zuckerberg has been promoting for a long time. Could this be a turning point?”

    Well, yes, but I certainly hope it’s not the kind implied by present day reporting. Again, the issues our industry struggled with Before Covid won’t disappear After Covid simply because the public is thankful for services (and business models) to which we’ve already become addicted. Perhaps instead, this pandemic could offer more of a step-change opportunity, one that might just offer us new approaches to connecting to others, buying shit we need (and don’t), and staying informed. I can see those new habits already starting to form, and I certainly hope they won’t be limited to Instagram dance parties. More on those in future posts, I hope. For now, back to work.

     
  • feedwordpress 17:32:13 on 2018/08/28 Permalink
    Tags: , , fake news, free press, , , , journalism, , , , ,   

    Hey Jack, Sheryl, and Sundar: It’s Time to Call Out Trump On Fake News. 


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    Next week Sheryl Sandberg, COO of Facebook, and Jack Dorsey, CEO of Twitter, will testify in front of Congress. They must take this opportunity to directly and vigorously defend the role that real journalism plays not only on their platforms, but also in our society at large. They must declare that truth exists, that facts matter, and that while reasonable people can and certainly should disagree about how to respond to those facts, civil society depends on rational discourse driven by an informed electorate.

    Why am I on about this? I do my very best to ignore our current president’s daily doses of Twitriol, but I couldn’t whistle past today’s rant about how tech platforms are pushing an anti-Trump agenda.

    Seems the president took a look at himself in Google’s infinite mirror, and he apparently didn’t like what he saw. Of course, a more cynical reading would be that his advisors reminded him that senior executives from Twitter, Facebook, and Google* are set to testify in front of Congress next week, providing a perfect “blame others and deflect narrative from myself” moment for our Bully In Chief.

    Trump’s hatred for journalism is legendary, and his disdain for any truth that doesn’t flatter is well established. As numerous actual news outlets have already established, there’s simply no evidence that Google’s search algorithms do anything other than reflect the reality of Trump news,  which in the world of *actual journalism* where facts and truth matter, is fundamentally negative. This is not because of bias – this is because Trump creates fundamentally negative stories. You know, like failing to honor a war hero, failing to deliver on his North Korea promises, failing to fix his self-imposed policy of imprisoning children, failing to hire advisors who can avoid guilty verdicts….and all that was just in the last week or so.

    But the point of this post isn’t to go on a rant about our president. Instead, I want to make a point about the leaders of our largest technology platforms.

    It’s time Jack, Sheryl, Sundar, and others take a stand against this insanity.  Next week, at least two of them actually have just that chance.

    I’ll lay out my biases for anyone reading who might suspect I’m an agent of the “Fake News Media.” I’m on the advisory board of NewsGuard, a startup that ranks news sites for accuracy and reliability. I’m running NewsGuard’s browser plug in right now, and every single news site that comes up for a Google News search on “Trump News” is flagged as green – or reliable.

    NewsGuard is run by two highly respected members of the “real” media – one of whom is a longstanding conservative, the other a liberal.

    I’m also an advisor and investor in RoBhat Labs, which recently released a plugin that identifies fake images in news articles. Beyond that, I’ve taught journalism at UC Berkeley, where I graduated with a masters after two years of study and remain on the advisory board. I’m also a member of several ad-hoc efforts to address what I’ve come to call the “Real Fake News,” most of which peddles far right wing conspiracy theories, often driven by hostile state actors like Russia. I’ve testified in front of Congress on these issues, and I’ve spent thirty years of my life in the world of journalism and media. I’m tired of watching our president defame our industry, and I’m equally tired of watching the leaders of our tech industry fail to respond to his systematic dismantling of our civil discourse (or worse, pander to it).

    So Jack, Sheryl, and whoever ends up coming from Google, here’s my simple advice: Stand up to the Bully in Chief. Defend civil discourse and the role of truth telling and the free press in our society. A man who endlessly claims that the press is the enemy is a man to be called out. Heed these words:

    “It is the press, above all, which wages a positively fanatical and slanderous struggle, tearing down everything which can be regarded as a support of national independence, cultural elevation, and the economic independence of the nation.”

    No one would claim these are Trump’s words, the prose is far too elegant. But the sentiment is utterly Trumpian. With with apologies to Mike Godwin, those words belong to Adolf Hitler. Think about that, Jack, Sheryl, and Sundar. And speak from your values next week.

    *Google tried to send its general counsel, Kent Walker, but Congress is tired of hearing from lawyers. It’s uncertain if the company will step up and send an actual leader like Sundar or Susan. 

     

     
  • nmw 13:00:31 on 2014/05/10 Permalink
    Tags: attention, , currency, , , , graphic, graphics, journalism, , mobility, model, models, , , , , , , relevancy, snack, snackability, snacking, snacks, status, time, usability, , , , visual   

    What makes the natives click (beyond cute pictures + pretty colors) 


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    In short, we are the reason native advertising exists. We’re the reason cat videos on YouTube are popular. We’re the reason that in depth journalism is becoming an endangered species. On that note—I’ll end here before I hit 500 words. Because you won’t read more.

    http://davidarmano.com/logic_emotion/2014/05/native.html

     
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