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Why Audience Engagement Matters Now More Than Ever
Now more than ever in history, online audiences are the largest audiences, replacing major events, sporting contests, and all other physical congregations of people with a variety of digital surrogate experiences.
Primarily because of social distancing measures, digital interactions now predominate as the primary mode for personal and professional activities.
In times of crisis (as now) community strength and support becomes central to coping and cooperative response. Correspondingly it becomes critical for publishers to foster, support, and manage their audiences with more vigorous attention.
Many will find a virtuous (and ultimately profitable) dynamic between community interaction and customer advocacy which can be sought without much incremental effort, and the right tools. This post is intended to provide some guidelines toward fostering that virtuous dynamic.
Firstly, what do we mean by digital audience engagement? Generally, we mean the amount of attention customers give to our business or brand.
Here are some common engagement measurements.
- Pages Per Visit
- Time Spent
- Interactions (votes, likes, bookmarks)
- Social Shares
- Attention Data given (e.g. comments, polls)
- User Registrations
- Newsletter signups
- Bounce Rate (a measurement of poor engagement)
Some measurements are more important than others, depending on the nature of your business and strategy, but all will help you better understand how to measure, then grow, your audience, via various tactics.
In what follows, I offer some focus areas to consider.
Foster, Love, and Manage an Audience Community
If you love your work or your mission, it shouldn’t be hard to welcome and support your audience of current and potential customers/consumers. Here are some core approaches to consider:
- User Registration. Grow your first-party data and marketing potential by allowing users to create an account with you. But don’t ask for something for nothing; do outline the ample benefits for registration in a concise benefit statement. Use a simple customer data platform, or your email newsletter system for starters, to gather or augment your customer marketing lists.
- Email Newsletter Signups. Include a prominent way for the user to sign up for your e-mail newsletter (and if you don’t have one, get one and work a separate strategy for email). Include push or exit-initiated modal dialogs for these signups, but avoid popping these dialogs for users who already get your newsletter, lest you alienate your existing, earned email audience.
- User Personalization. Where you have users registered, make an effort to customize their experience to their expressed preferences… and allow them to share and fine-tune their interests through progressive registration (which means – obtaining supplemental information in context at later stages after initial registration).
- User Comments. Absolutely allow and enable Comments and commentary, and apply automated anti-abuse measures to keep things as clean as your brand requires. Vuukle has great solutions for this, including the truly differentiated AI powered Toxicity Meter to proactively notify users when what their typing has become too toxic to be allowed.
- Customer Feedback. Always allow feedback to be submitted, and always provide a two-step response: 1) an automated “we received your feedback and it is important to us” message; and 2) a human response, ideally with a person’s name signed on it. People can be genuinely impressed and lifelong customers created by this simple step. Every person in your company should be interested to participate in responding to customers. People can volunteer for the privilege. See how that works!
- Manage Abuse. Use tools to manage against spam or general abuse. Vuukle also has great AI-based solutions for this, including the truly differentiated Toxic Meter to proactively notify users when what they’re typing has become too toxic to be allowed. Customize automated services by tending to your blocked terms list, and blocking abusive sources by IP, etc.
Make That Visit Count! Editorial Operations & Workflow Considerations
When there is a superabundance or a glut of news, entertainment, or branded content, every consumer interaction becomes more important. Customer acquisition is relatively more challenged by the increased volume of customer attention options. So, for every acquired visitor, it’s well worth the analysis and planning to make the most of that visit. Some ways to do so:
- Spur conversation with leading or provocative questions in the content body. And please note, you don’t need to be sensational in order to be interesting and to express an earnest desire to hear what your customers think.
- Support your audience with every word and message you send. That counts for brand marketing efforts, as well as every one-to-one customer interaction whether it be on Twitter, in your comments, or in the human responses given to customer feedback. And yes, you should send a human response to every piece of customer feedback (which is not spam), as above.
- Use real-time tools to find out what is working for your audience, and AMPLIFY IT. Tools such as Google Analytics Real-Time, Chartbeat, Parse.ly, and the Vuukle real-time dashboard can enable you to find an opportunity as it happens. When a post trends, be sure it is optimized for engagement. Create and tune a checklist for what to hit when a post trends. Include some of the above, such as: ask a provocative question; include a signup form; ask users to share; post related content mid-post or as next-step content, etc.
Then and Now
Not long ago, companies shied away from allowing user-generated Comments or commentary on their publications or brand messages. Brands complained it was too hard to prevent abuse; the trolls, the spammers, etc. And apart from risks, brand strategists disagreed on the business benefits of allowing community action within their brand umbrella. A Twitter presence was created, and not much more in many cases.
Anecdotally I can say from my experience as a product leader for multiple online brands [including Interactive One a long time Vuukle partner], my business stakeholders pushed us all over the shop about user-generated anything. We went through phases where Comments or user uploads were critical, too risky and thus removed, to be “replaced by Facebook comments” or “Disqus on Facebook” buttons, back to Comments again. We had a few brands with true user registration and accounts, but for most of our publishing and media purposes content-based commentary and user feedback form management were sufficient. In all of this, though, I continued to feel that truly connecting with, and understanding and speaking to our audience was more important than people knew or realized.
So what is resounding most now in these newly uncertain times? My recommendation is to focus on these words: Authenticity, Conversation, and Ownership.
- Authenticity: Consumers can spot inauthentic, tone-deaf or out-of-context marketing a mile away. So, be positive, supportive, and as in touch as possible with your audience’s interests and sensitivities.
- Conversation: Then, create meaningful and helpful conversations, so that you can guide and manage them. It’s far easier to guide conversations that you proactively enable, than ones that happen outside of your awareness. So, in other words, own your conversations.
- Ownership: Own your customer relationships and put in the effort to keep the conversations voluntarily within the bounds of your open and positive, but controlled, experience. For example, comments or reviews left elsewhere (e.g. Yelp, GlassDoor) as a result of a poor brand experience can actually cripple a business. Instead, consider how you might own, lead, and support audience conversation. Authentically.
What do you think?
What’s different now, about engaging an audience?
And what else has worked for you?
NOTE: This post was originally written for Vuukle – a powerful real-time engagement and analytics platform. It is reposted from the original post, “Why Audience Engagement Matters Now More Than Ever”.
Revenue Diversification for Digital Publishers – The Future
The Future?
In this fourth and final post of the series on revenue diversification, we take a look at some movements that may forecast what the future may hold.
Platform Reckoning
In areas of “big tech,” leading companies are being called by critics “evil tech” or the social web “the toxic web” on account of the huge control and leverage companies in the FAANG nexus, and notably Faceook and Google, exercise on people’s everyday internet content and recommendation consumption. Government agencies are now playing catch-up. See the below table from Axios Research for a quick view into what’s going on there.
Will this result in more privacy legislation? Likely. Will it cause antitrust breakups of companies like Facebook, Google, Amazon, or Google? Possibly. Will fines be levied at the very least? Probably. Regardless of what happens, the lens of government is now squarely on these big tech titans and this may help the plight of smaller publishers, with time. But it would be unwise to count on any of these possible outcomes as a part of your revenue strategy.
Meanwhile, platforms are showing signs of warming back up to publishers – at least outwardly – and even if because pushed. Google’s News Initiative is one example. Facebook’s engagement decline may have resulted from less quality content being surfaced, and may have resulted in their upcoming Surface News offering, which is inviting major publishers to negotiate content licenses from publishers, by Facebook – as Bloomberg CEO Justin Smith discussed in DigiDay.
Publisher / Platform Consortiums
To generate political and market leverage, many groups of publishers and journalists are banding together.
The Trust Project, and Civil.co
Sometimes this is done in collaboration with platforms to combat the proliferation of untrustworthy news, as in the case with The Trust Project, and Civil‘s blockchain registry.
The Trust Project is “a consortium of top news companies led by award-winning journalist Sally Lehrman, is developing transparency standards that help you easily assess the quality and credibility of journalism.” Its leadership council includes members such as Richard Gingras from Google’s News Initiative, Andrew Anker from Facebook (formerly Wired CTO), publisher leads from The Washington Post, Wall Street Journal, Hearst, Gizmodo, The Globe, Financial Times, and many academic luminaries. Their goal is to establish and maintain journalistic “Trust Indicators” which, when present on participating publisher sites, are “consistent technical standards” used by platforms including Facebook, Google, and Bing.
Similarly, the Civil registry uses blockchain technology to vet and certify (with blockchain tokenization) verified trustworthy news sources to include in their registry, which not only should help with trust factors, but also may be extensible to future forms of revenue / monetization (more of which below).
The News Project
The News Project takes the approach of offering a suite of best-in-breed publisher services which can help bootstrap smaller publishers into a sophisticated publishing and monetization ecosystem. Founded by Merrill Brown and augmented with an impressive team of digital experts and partner companies, they offer “the resources and expertise you need to launch, sustain and scale your news venture” including
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- State-of-the-art editorial tools and high-performance display templates
- Revenue and member management for subscriptions, sponsorships, metered content, payments and programmatic advertising
- Audience development and engagement tools for social media, Apple News, Google News, email campaigns, push notifications and mobile-optimized layouts
- Enterprise-class managed hosting for scale, security and performance
- Dashboard featuring customized analytics and business metrics
- World-class news and features to supplement your original content
Their first implementation was announced this past July with CalMatters, as featured in Techcrunch, with Merrill Brown quoted to say “reader revenue is the future.” They charge a $25,000 up front fee and a monthly subscription, which may end up being far more affordable than a self-build scenario with individual partner contracts.
Newspack
Similarly to The News Project, WordPress.com is launching its own bundled news publisher services package called NewsPack. It provides essentially similar publisher service offerings from hosting, revenue, distribution, marketing tech, analytics, and revenue tools, and is currently rolling out a one-year pilot for selected applicant publishing organizations, with a cost starting at $1,000 / month (I believe this is the base offering, with add-on costs for email marketing, video delivery, etc modules). It would seem that NewsPack, spearheaded by WordPress.com under former NY Times executive Kinsey Wilson, and funded also by the LENFest Institute, Google’s News Initiative, and others, is a parallel but separate effort from The News Project headed by Merrill Brown and a different group of luminaries, and also funded by Automattic, via WordPress VIP enterprise managed hosting.
Other Publisher Platforms: Chorus, ARC, and more
Clearly there are many groups who identify with the challenge of managing operational overhead for publishers. There’s a great breakdown of the entire landscape in the presentation recap from Davis Shaver’s WordCamp for Publishers Columbus 2019 presentation “Real Publishers, Real Problems, Real Opportunities,” which outlines the offerings not only from News Project and Newspack but also makes mention of other systems such as INN’s Largo Project and LION Publishers, which includes access to the Civil Blockchain trust-verification system. And if you’re a substantial publisher there are also the Washington Post’s ARC publishing system, and Vox Media’s Chorus, as enterprise focused publishing platforms, to consider.
Google Publisher Subscriptions
If you’re comfortable going all-in with Google, Google Publisher Subscriptions, part of the larger Google News Initiative, may be alluring. It offers a turnkey method for adding two major services: a metered wall and a subscription conversion funnel. Pricing is not disclosed on their main site but according to one recent post, publishers retain 85%-95% of the subscription revenue and Google’s publisher implementation has raised subscriptions for many by 30% because it is a “friction-list” experience.“ Also check out their guidance on Flexible Sampling (configuring the metered wall).
Publisher Subscription Networks
Some companies are making it their mission to bundle one-time subscriptions into premium access to multiple publishers’ content, or to create a whole new value chain which will reward both consumer and publisher company in some equitable arrangement.
Scroll, a forthcoming subscription service founded by Chartbeat founder Tony Haile, intends to provide an ad-free, very fast-loading mobile and desktop experience for multiple partner’s content (see from their site below). They also plan to offer “pick up where you left off” functionality to make reading on the go easier.
Other companies have attempted this approach, including Texture, which was acquired and taken off the market by Apple.
New Value Chains and Virtual Currency
What about virtual currency? There’s much in play there as well. Some companies are looking to disrupt the content value chain entirely with new and often virtual-currency enabled ecosystems.
Invisibly, founded by Square founder Jim McKelvey and formerly called “The McKelvey Project,” which (on last understanding) seeks to create a new publisher value chain of atomic content purchases, incentives, ads, and virtual currency.
Brave is another example of an alternative monetization value chain. Their Brave Browser, a browser which incorporates ad- and tracker-blocking natively, asserts that its future includes the utilization of an Ethereum-based “Brave Attention Token” rewarding users for their attention given to individual pieces of content, with a portion of the value of that attention paid back to the content creator. This value system is sufficiently nascent to any recommendation speculative at best, but it’s worth noting directionally to publishers interested in revenue diversification and comprehensive revenue capture. In short, it’s worth being aware of and, if the lift is not great, entertaining partnering in a pilot program with these kinds of players. But it shouldn’t be at the top of your list from a near-term revenue perspective.
Summary
To sum up, it’s a brave new world, but still a pretty bleak one in the immediate term for many publishers. In the words of Bloomberg CEO Justin Smith, “The reality is that the industry is not dying, it’s not going extinct, but it’s actually just going through a process of slimming down.” Near-term revenue will continue to be down due to the disintermediation of publishers by platforms that has taken place, and the reduction in effective revenue potential by programmatic ad tech. Many brands do not have the kind of content people are ready to pay for. Options are materializing and some companies are making good use of them.
But progress is not made fast enough for many; major publisher networks are deciding to merge instead, to recognize efficiencies to offset ongoing revenue shortfalls. For example, Vox Media’s acquisition of New York Media, and the even more recent acquisition of Refinery 29 by Vice Media.
If I had to predict anything, I’d say there will be more of these M&A consolidation moves between major players, while the real utility of emerging publisher subscription networks may allow content consumers to accept the value of a single subscription to pay for content from multiple content sources. So it’s worth watching these as options.
This overview of the landscape for publisher revenue diversification has been extensive but by no means comprehensive. There are whole areas left out and many important companies involved, missed. But I am hopeful that with the past, present and future partly helpfully outlined, readers with a stake in content publishing will raise their apprehensions, and possibly find new opportunities to reward their quality content with commensurate revenue.
Missed the previous posts in this series?
This post was originally posted on the Vuukle blog, and is reposted here.
Key Learnings from NY Product Conference 2019
On Saturday, November 9, 2019 I attended the NY Product Conference, a fascinating gathering of digital product leaders working in and around the New York City area.
As there was a designated note-taker and lots of live-tweeting going on, I decided my focus would be to listen and think, and record only the key points that really resonated with me. So, in what follows I will share my own key insights from various presenters.
Increasing Your Impact
Brent Tworetzky, SVP Product at InVision, was one of the conference hosts, and he kicked off the day reminding the group that the day’s theme was “Increasing Your Impact.” Prior to the conference, Brent conducted a survey with a variety of key areas in which organizations can place focus and asked respondents to rate them on total impact to the business. Overwhelmingly, the top 3 areas with the highest impact, were:
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- Strategic and Business Thinking
- Outcomes vs Outputs
- Organizational Culture
What about adding resources, or investing in more tools? Somewhat ironically, the area that most of us hear the most about, “Resources and Tooling” was considered to be one of the lowest areas of total potential impact.
Which to me means that focusing on problems and their solutions, and developing the people needed to maintain that focus, are the most likely areas to result in positive impact. And while resources and tools are necessary, overloading on them can end up distracting or diluting the overall effectiveness of an organization’s potential to make really impactful work happen and have desired outcomes for company and customer.
Grow Your Strategic Muscle by Understanding the Business
Shelley Perry from Insight Partners gave a great talk about how to advance in product management by “closing the gap” in your knowledge and communication approaches by “understanding investors or c-suite stakeholders and what they’re looking for.”
She cited areas in which many PMs may lack knowledge, and constitute such a gap. These include “Strategic, Finance, Go-To-Market, and Executive Presence.” In her experience she stated, C-Suite stakeholders are looking for “Balanced Executives that Drive Overall Results,” not just results aligned to product success metrics. In order to become such a balanced executive, PMs may need to “Learn a new language for CEOs that don’t speak in product language.” For example:
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- Increase SAM/TAM
- Improve LTV/CAC
- Improve EBITDA
Without the acronyms, that means to me:
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- Come to know your market and how it might be grown
- Do the math on the revenue each additional customer adds vs the cost of acquiring that customer and refine product and marketing strategy to increase the ratio of revenue / cost
- With points 1 and 2 above in hand, focus on growing company earnings by increasing revenue while managing cost
In the image below are specific examples of tactics for accomplishing each goal.
These are learnings which are part and parcel of a standard MBA curriculum. However, she offered that you may not need an MBA to close this understanding gap. One method of such acceleration is to ask to shadow peers in other other departments, such as finance, legal, sales, or support. Attending board meetings would be ideal if possible, I think, but even where not, joining investor calls or doing research on investors may provide additional circumspect learning.
Simplify and Standardize Communications
Alexander Powell from Greenhouse.io gave a fun lightning talk illustrating how offering a dozen different ways to submit product intake, and a dozen other ways to share the results of that intake back to the organization, can create noise versus signal. In his experience, adding constraints to the information flow yielded salutary results. Specifically, if all intake went through the same consistent form, into one master database, and if all responses or updates to that intake went to the same product blog, there resulted a clear I/O communication. As a side benefit, the blog becomes over time a knowledge base and permanent, searchable record of all responses to product intake. My summary: limit and standardize intake methods, and limit and standardize output methods. Consistency and reliability will result in effective communication.
Alexander also cited a useful technique of incorporating a “10 minute rule.” The 10 minute rule stated that unless a question was simple and easily answered, any questions or requests should have a wait period of at least 10 minutes before a response is given. A wait period enforces that deliberation and thoughtful articulation will go into a response, and that the time will be available for that thoughtful response to result in a documented, searchable, archived response.
Avoid Echo Chambers and Fight Biases
Inga Chen, PM for Homepage Personalization at Spotify, provided detail on how Spotify manages to personalize every of their over 140MM users’ home screen experiences, without necessarily just recommending the same things all over again, all the time. With a truly massive catalog of music and huge amounts of data pertaining to every artist, album and track, mapped against individual users’ attention data through music listening, it becomes important to ensure that users have the ability to experience things they have never experienced before.
In order to introduce serendipity to discovery and variety to personalized homepage programming, Inga explained that Spotify completely randomizes the programming for 2% of all homepage visits. So that, even if 2% of the time your experience seems suddenly, random, you are exposed to new music outside of your preferences. And thus there is a way out of the echo chamber of known personal preferences.
Build High-Trust Environments
Paige Costello from Asana gave a superb talk about the critical value of trust in building effective products.
"There's a story that says..." "I'm feeling kind of under the line today..."
She started the talk by describing her immersion in the Asana culture as a new hire, explaining that people did not express their opinions, but rather positioned them as “stories” for consideration. “I have a story that says…” someone will begin; or, “there’s a story about this that goes like…” might explain how a situation might go wrong if the current path is pursued. The concept at play I gleaned from this was that the use of selective dialectic can put ideas at a distance from possessiveness and unclutter free exchange of ideas from being “mine” or “yours” to defend or dismantle. If ideas are all on the table without name assignment, they become more objectively transferable into consideration.
She also gave a primer in some core tenets of mindful thinking and how they relate to productivity. In this dialectic the “line” is an individual’s mindful baseline. As one becomes more self-involved, closed-off, or defensive, it is called being “below the line.” By comparison, when someone ascends “above the line,” they are being more curious, open, and willing to learn from others; more accepting and giving in exchange of others’ perspectives. By articulating how you are feeling, and self-identifying your current disposition by comparison to “the line,” at the very least you can share that you may be “below the line” at present and explain a difficulty in that way.
Through the process of sharing ideas openly and overtly sharing one’s feelings during an exchange free from assignment, blame, possessiveness or defensiveness, a more consistent basis of trust can be assumed, and the configuration of multiple Areas of Responsibility (AoR) can take flight to work more seamlessly and easily together.
What did this mean for me? I found myself inspired to take more inventory of myself more frequently in the future. For example, during collaborative conversations, to pause on occasion to ask myself “where am I?” either with regard to this helpful “line” or what is my place in the world, and my place here and now in this situation. Other examples: How can I be most helpful to myself and others here? What can I learn here? I think a brief moment spared for this kind of internal dialogue may provide helpful break points to recenter and reemerge (probably seamlessly) back into conversation with much greater positive effect.
For Profit or for Good, Language is Power
Osi Imeokparia’s superb presentation on “Building Products for Commercial Success vs Social Impact” taught me much about what would be involved were I to transition from a for-profit to a for-social-good context in my next career act. She described her own arc from Google to the Hillary 2016 campaign onwards to the Chan / Zuckerberg Initiative and provided thoughtful examples of differences and similarities in the work involved in achieving adoption and making an impact in both scenarios.
What really stuck with me though was her focus on power, which opened her conversation. Power as something given or taken away from people, is in large part a dynamic in companies, in teams, and in societies. In the latter case, power imbalance in societies can be a cause of injustice and result in movements for social good or reform. Power struggles in companies or in teams can completely derail focus on the useful and the good, across the board. We have all seen it. Hence, starting with power in this talk.
Osi focused on a few very simple examples where the use of language, or specific terms, can shift power dynamics in teams. For example, she said when she joined the Chan/Zuckerberg Intitiative, in one meeting with some scientists, she used product-technology lanaguage, describing the people, or the public, as “users.” One of the scientists said, “what do you mean, are they drug addicts?” It was a funny example of a malapropism in this case, but the idea was driven home when she explained that by calling our product customers “users,” we are genericizing them into computer terms, in a way of speaking. This case is not so very harmful, but in other contexts can take on more dire consequences when language is designed to make people ” less than.” It can lead to “othering” – setting up lines of privilege or entitlement, between haves and have-nots – rather than “including” and being open to diversity of peoples and ideas. Which is preferable for building products? My money is on inclusiveness and diversity.
So my main takeaway from Osi’s presentation was to be mindful (as in “above the line”) about inclusiveness in my language and communications, which should logically lead to a greater diversity of consequent ideas shared, and better designs, and better decisions.
Close the Empathy Gap
Janelle Estes from UserTesting.com gave a fantastic presentation surrounding empathy’s role in the product creation process. As she illustrated, firstly with research from Forrester’s Consumer Experience Index, and with some statistics (shown below), most companies believe they are in touch with their customers, but most customers do not feel the same way. This difference in understanding or misalignment is “The Empathy Gap” which companies must strive to close up if they want to understand customer needs, design products to meet them, and market the products for customer adoption. Ideally, with products designed so nearly exactly to what was needed, customers will be joyful for and thankful to the teams who designed them.
I know a thing or two about empathy because more than one management consultant has given me the good news and the bad news about my personality type. “As an amiable,” they might have stated, “you’re less likely to push hard to get what you want, and more likely to go along with what others want.” I didn’t like that, so much. “But,” they continued, “this personality also endows you with a great capacity for empathy, so you can better understand how others feel and imagine what it might be like in their position.” So, all things considered, I’m alright with being an amiable, if I also get to be an empath. Seriously, it’s important to me, especially in my role in understanding customers and designing product solutions specifically for them.
But not everyone needs to be an amiable to be empathic. Janelle shared many techniques for closing the Empathy Gap which she has deployed at UserTesting.com and in other customer research functions in her career. For example, “Empathy Interviews” may be conducted, where customer respondents are asked to answer questions and also their behaviors are observed. Janelle was particular that customer research science has shown that people may say one thing (e.g. I will go to the dentist this year) and do another (I did not go to the dentist this year). Only through mixing interviews with observation can a fuller picture be gleaned. Also, she described the use of “Empathy Maps” to document the particular conditions and needs / desire quotients of individual respondents – kind of like a customer journey document but directed at one person’s particularities at a moment in time.
Lastly, Janelle walked us through “The Squiggle” (above) wherein she recommends front-loading on research and definition, so much more free-form time (squiggle) is taken understanding and defining customer and product problems before ideating on the fit of product to problem, and then getting into more straight-lined prototyping and testing.
Product People Mix Hard and Soft Skills
A variety of presenters keyed into a similar theme: that product people need technical and domain expertise, but they also critically need to be effective with people.
Sitting as it does in between the business-end of a business (making money), and the human end of it (its customers), it’s critical that a product executive is very close to the business end, as Shelley Perry made clear in her opening talk (detail above).
But not everyone is or will be or even wants to be a C-level executive like the CPO. Having been one myself, I can now comfortably say I’d be happy continuing at that level, or reporting to one, so long as I am working with smart people making products people love to use. But how do you find those smart people, and since people come in so many varieties, how do you find the ones that are most likely to succeed as product leaders?
Giff Constable, CPO of Meetup.com, had a lot to say about this question of finding good product talent and he has a specific recommendation: locate, trial, train, and hire up from within. Depending on the size of an organization, its budget and the influence the CPO or VP of Product has on resourcing, he recommended setting up an APM (Associate Product Manager) Program where internal employees in other departments at whatever level can elect to join a trial program and shadow product managers for six months, and if all are in agreement after six months, become a product manager. There are various considerations (grandfathering salary, will old job be available if trial does not work out, etc), but that’s the basic gist of it. Anecdotally, Giff shared his experience of this program’s success in his own work, and stressed one key factor – that in identifying potential talent, one must focus on Skills (core, learned, capabilities or work experience) and Traits (soft skills or more human-level capacities). He showed two “spider-graphs” he uses to determine any person’s quotients in both areas (see below);
Another noteworthy participant was Oded Gal, CPO at Zoom, who was interviewed remotely, using Zoom, by Brent Tworetzky on stage. As Brent said, “this is either going to go horribly wrong, or it’ll end up being a fantastic advertisement for Zoom.” As it turned out, the quality of the video call was fantastic, even when blown up to the size of the projector in the Times Center auditorium (see image below).
We were treated to many lessons learned in developing and bringing Zoom to market, but regarding people, Oded stressed the importance of finding people who:
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- have a good mix of right and left brain
- truly have a passion for the product and the space
What this meant to me was yet another reinforcement that great product people need those left brain analytical skills and right brain creative skills: to have the hard experience and capabilities to understand a space, analyze it, brainstorm options, test things, and be integrated enough to understand how the pieces must fit together, all very quickly and on demand. And also, to be much more than a machine, but to be human enough to understand and care deeply about the human quotient of designing something – anything – for human problems.
Optimization and Innovation are Both Critical
Lastly, a couple presenters touched on the subject of ongoing optimization or “tweaking your way to success,” as sometimes counterpointed against innovation or making true step changes to realize a large scale strategic improvement instead of ongoing tactical improvements. My takeaway was that both are critical, and that good leaders and organizations should invest consciously in ensuring that both can happen. Of course no product organization will get far without having mechanisms in place to ensure constant improvement. But investing in large scale strategic step change is more elusive for some companies who get stuck in a chronic reactive cycle.
Sam Gardenswartz from Warby Parker shared his experience in iterating toward success very clearly with his example of the “Virtual Try On” for Warby Parker glasses. He and his team knew that the “holy grail” of virtual try on – a true, augmented reality experience whereby a user would have any model of glasses manifested on top of their faces in live smartphone selfie-mode video – would be a tall order and require significant investment. To try to get from here to there, they resolved on an iterative model, where they started with a simple image upload with glasses superimposed, then asked customers for feedback, then when feedback to “add color” was unanimous, they added all the different glasses models and colors; and when subsequent customer feedback was solicited and unanimously came back with “they should look more realistic” they were able to take advantage of the new iPhone X’s depth of field function to use actual 3D vector models to superimpose realistic glasses on top of a customer’s live video. This is not necessarily the same thing as “optimizing toward success” because the changes were minor, but significant steps. But it illustrates how planning a series of changes, with validation steps to reinforce the path remains a good one to follow (or not), is one good way of ensuring product market fit is maintained, and also, to ensure ongoing company investment in the process.
Regarding investing in step changes, we were treated to another great talk by Ben Foster, founder of the product organizational consultancy, Prodify. He walked us through a graph of relative value (in revenue) by focusing on operations, optimizations, or innovations, where the key area to punch through is the “customer value barrier” separating functional optimizations from strategic, fundamental, step change level innovations.
Key Takeaways from our Conference Leaders
To close out a long day (a Saturday, nonetheless!) of product learning, thinking and networking before a much-deserved networking happy hour, conference organizer Dan Storms, VP Product of Updater, recapped what he and our designated note-taker had captured as the key takeaways for Increasing Your Impact.
They were:
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- Customers reward companies that nail the user experience
- Great product leaders need to contribute to the corporate strategy in addition to the product strategy
- Fight echo chambers and biases
In Conclusion
These were the salient points I gathered from a great day of listening, thinking, learning, and meeting new people at the NY Product Conference. I’m glad I attended! I wasn’t able to hit every single talk available, but I’m more than satisified with what I was able to gather at this fine, well-organized conference. I hope that these notes may be useful to others who have a mind to improve their presence and effectiveness as product leaders.
Revenue Diversification for Digital Publishers – The Present, Part 2: Premium Content Subscriptions
In the prior two posts in this series, we covered The Past, wherein publishers focusing too heavily on display revenue found themselves in a mighty pickle; and The Present, part 1, where we discussed a variety of methods for diversifying revenue, other than subscription-based, direct-to-consumer revenue, which is now the subject of this post.
Premium Content and Subscriptions
The meat of where publishers are focusing attention at present is around having some kind of paid content or premium play. We’re familiar with implementations which have been in place for the past years on big name publishers such as the New York Times, Wall Street Journal, Washington Post, etc. More and more publishers of large and now medium sizes, however, are making an effort to get direct consumer revenue from their content.
There are several approaches to generating premium content, which vary in degrees of sophistication and investment required. Here are a few.
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- Ad-Free
- Metered Wall
- Hard Wall
- Behavioral Pricing
- Membership
- Free Registration Wall
- Strategic Partnerships
Ad Free: Handling Ad Blockers or offering an Ad Free experience
The advent of Ad Blockers to the mainstream market is another factor to complicate the revenue value chain. Ad blockers work most effectively on desktop browsers, where most ad spam takes place. They are generally browser plugins, but some new browsers such as Brave have native ad and tracker blocking, and encryption, built in from the get-go.
What’s important to publishers here is a pretty simple determination.
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- Find out how much of your traffic (desktop and mobile) is utilizing an ad blocker
- Calculate the loss of pertaining revenue due to that segment not seeing or loading ads
- Determine if that is a large enough problem to warrant doing anything about it
If you want to do something about it, your options are a) to engage with a company that offers “ad replacement” (very cheap usually text based ads that are not blocked by ad blockers), or, more often, to offer gating options to users of ad blockers, as follows:
Scenario 1: “We see you’re using ad ad blocker. Please deactivate it to continue to our ad-supported content. It’s important for our ads to support our journalism.”
Scenario 2: “We see you’re using an ad blocker. If you’d like to continue to enjoy an ad-free experience, please register for our premium account…”
Both of these scenarios or others like them essentially use the detection of an ad blocker as a springboard for transacting a more advantageous delivery of content to the end user. All of these scenarios take on the implicit risk that the visitor will walk away, removing both traffic and revenue. This is why the publisher should determine (as above) the size of the problem and whether it is worth doing anything, at all.
In scenario 2, however, the option is also open to offer users who do not use ad blockers, to get an ad free experience if they pay. Anecdotally, I would offer that just offering users not to view ads, will not generate much in the way of subscription revenue conversion. Consumers, accustomed to getting publisher content for “free” (with ads) often have a problem with paying for the same content, without anything extra to the value proposition. Unless you are a staple brand (such as NYT or WSJ) some users just can’t do without, asking for users to pay simply to turn ads off, may not be quite enough. It follows that the other varieties of direct to consumer revenue generation add additional benefits, in a variety of ways.
Metered Wall
The New York Times is a great example of a Metered Wall. Clicks from search into a NYT story will generally let you read the story, but only so many times per month. A customized subscription elicitation will appear at the bottom of your story, showing you an offer to subscribe. If you do not subscribe, and click to subsequent stories, eventually you will exhaust your count of free views. At this point, the top of the story appears, with the rest blurred out and covered by a large, blocking elicitation to subscribe. You cannot scroll, or attempt to capture the story before the wall pops up. Yes, there are ways around it (use a different browser, try clearing your cookies, use a different computer or your phone) but it is inconvenient enough for a sufficient amount of interested readers, that the NYT has seen great subscription growth using this method. Then again, they are the New York Times. Will your audience pay when they hit the wall? Or is your content not consistently important enough for them to do that? These are the questions you need to address. One approach to answering them is to do some customer research about price tolerance. In many cases (in my experience) you may find that the revenue returns you model based on that research, may not warrant the investment in a walled approach.
One significant benefit of the Metered Wall approach is that you may fine-tune the meter as time goes on. For example in my own personal experience, the New York Times initially gave me 10 free views per month, and it later reduced to 5, and then finally, 2. Then, I subscribed. This optimization of the meter can be done for all users equally, or differently for individual users (where they can be identified across devices, platforms, and browsers). This approach verges into Behavioral Pricing (below).
A great many other publishers have implemented or are implementing approaches to the metered wall. Examples include Conde Nast, The New Yorker and local news groups e.g. Tribune Media.
Hard Wall
The Hard Wall is the easiest implementation of all, because it’s all or nothing. Every single post requires a premium subscription. This is the approach the Wall Street Journal has taken (for the most part), and due to their stalwart financial audience, it seems to serve them well. It works also for other audiences who have high tolerance for investing in exclusive content, such as trade publications or brands who release incisive analyst research which can potentially guide investors toward wiser decisions.
Behavioral Pricing
The concept for behavioral pricing is that the more data a publisher can gain, via first party user data all the way to 3rd party licensed data, the finer decisions can be made about what price to offer what users. Fly-by users may be given free access, whereas regular visitors may have a good introductory price, with a lower price offered if they choose not to engage. Then, some users may be known as high-ticket users, and may be given the highest price point of all, for starters. If a decent volume of these subscriptions can be sold, the recurring revenue can be material enough to justify the investment in the technology behind the behavioral price targeting.
Membership
Membership is a promising approach many publishers of middle-to-larger sizes have adopted. The concept around membership is that while you capture a potential subscriber’s interest with excellent free content, you surround the content with a finely-merchandised array of membership benefits. Membership benefits might include:
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- Premium Content (e.g. investor analysis)
- Community Access (e.g. commenting, social networking features)
- Exclusive Access (VIP event access, membership tokens or free member merch)
- Events (e.g. tentpole offline events, online live streaming events)
- Custom Features (e.g. UGC / authoring capability)
- Mobile app (with custom features e.g. podcasts, calendar integration, etc
The diversity of publishers using this approach demonstrates its popularity. You have got industry content creators such as DigiDay or TechCrunch (who have expensive exclusive events periodically through the year) and also have premium-only content. There are individual thought leaders or pundits such as Ben Thompson’s Stratechery, or Jessica Lessin’s TheInformation, which both have member-only access and whose hugely popular newsletters are a staple to a great many, who may choose to subscribe to access all of their posts and analysis. The Business Insider, now TheInsider, is largely built around premium analysis subscriptions. TheChive has an interesting spin on membership, offering the BFM (Bill F… Murray) coin, which members can show to get into Chiver parties all across the USA for free.
Free Registration Wall
Not ready with a sufficient value proposition to ask users to pay? Well, it might be worth it to put up a wall just to collect email addresses and have users create free accounts. Now more than ever as changes to browsers will affect the utility of 3rd party cookies to target ads. First-party data will always be the best, so get it where you can. Just, as above, make it clear why the user should want to create a free account, with a pithy benefit statement, or an appeal to maintaining free journalism, as seen often on The Guardian or Wikipedia. Max Wilens wrote in his 9/30 DigiDay post, “Even though the right value exchange will vary from site to site, each publisher should be able to come up with something.”
When you’ve succeeded in setting up an effective registration wall that doesn’t unduly impact your gross traffic, you’ve succeeded not only in generating an ongoing source of first-party user data; you’ve also laid most of the groundwork for later introducing premium offers, if and when you are ready.
Strategic Partnerships
Other publishers or content service platforms create partnerships with other companies to provide exclusive benefits to members (for example, 20% off on luxury auto rentals via Audi Silver). Indeed, the bundling of Spotify with major wireless carrier contracts or new line additions is an example of strategic partnerships which are offered as a benefit of membership.
With a defined audience, publishers can offer much more than just original content to paying members as a benefit of membership. Major publishers or content providers of all types have partner management groups whose main focus is on closing mutually advantageous deals with commerce, travel, financial service, career recruiting, or other value-added service providers, to help them convert more sales on their end, while the publisher converts more paid subscribers on their end. This is akin to co-marketing grown up, to include financial conversions on a quid pro quo custom negotiated partner contract.
From Here to There: Implementation of a Registered or Premium Content Strategy
All of these approaches will require some investment in either building or buying technology which enables the publisher to collect registrations and to segment or specifically target users based on what is known about them, for premium upgrade or general marketing or ad targeting purposes. Are they unauthenticated visitors? If so, try to convert them using a free registration or paid subscription conversion flow. Are they authenticated registered free users? If so, continue to try to convert them to paid during site visits, but do so also via email marketing (where opted in). Are they authenticated paid users? If so, do not hassle them with upgrade nags, give them what they paid for, and do your best to retain their paid accounts.
Large publishers such as NYT and Dow Jones (WSJ) have invested millions in their metered wall, hard wall, or behavioral pricing technology. Luckily, the market of publishers for solutions in this area is a fast growing one, and many partner options exist. They are usually structured on a SaaS model, and generally take on the burden of financial account processing so that the publisher does not need to worry about hosting customer credit card details or other personally-identifiable information beyond the profile basics of name, email address, etc. My recommendation is to choose a solution that is cost-effective but which also includes some element of strategic consultation for the implementation itself. Asking for an ROI analysis of the SaaS costs is always a good idea, even if you don’t get it.
A few examples to look at, with no particular preference given, are: Chargify, LaterPay, Piano, Pico, Recurly, Zuora. It’s easy to find others via comparison sites such as G2. Another very turnkey option with likely lower flexibility, is Google’s Publisher Subscriptions product. And more recently, WordPress.com announced integration of Stripe for recurring subscription payments.
Summary
It’s clear that there are many ways to approach direct to consumer revenue via premium content, membership benefits, etc. – most all of which require some subscription mechanism to process payments, and some product marketing work, all of which is hoped to result in the much-sought revenue. Finding a turnkey solution for such solutions will come at a cost, so be sure you believe your value proposition and benefit statements to users has a good chance of generating sufficient subscriptions to offset those costs on a planned timescale. I’d suggest doing some research about price tolerance and benefits to assess your target market’s willingness to pay, at all, and if so, for what. Or, if you’re certain that subscriptions are necessary for continued survival, go ahead and implement quickly and cheaply, then iterate. Every publisher’s business is somehow different, so your approach will require some thought, analysis, and planning. I am hopeful the above guide will be informative and useful toward that effort.
Continue on to what we may see in The Future…
NOTE: This post was originally published in the Vuukle Blog and is reposted here.
Revenue Diversification for Digital Publishers – The Present (Part 1)
With all that was mentioned last week as a backdrop, it is clear why publishers should never again put all their eggs in one basket. Focusing too heavily on one source of revenue is like stacking your investment portfolio with only one company’s stock. If that company has a bad year, so do you. So like good investors, publishers have taken to diversifying their portfolio of revenue-generating channels. Here are some approaches to doing so.
Branded or Sponsored Content
Branded content, or sponsored content or “native ads” are pieces of content, usually very clicky or appealing, with great headlines and enticing thumbnail images. They can be trafficked just like display ads (in fact often are ad served) and several businesses have been made around doing just that. They can often feel like “just another ad” or an “ad in disguise” to consumers, but they have an important place in the ecosystem, particularly where social placements bar outright advertising, and sponsored social posts must be more strategically crafted.
Sponsored content continues to be a great approach for publishers who have good newsletter lists and open rates; some publishers (such as Quartz or Axios) have begun eschew display ads entirely and tend to have one sponsor per experience. It is generally less intrusive than the multiple spots and dots of display placements and is considered more exclusive therefore earning a higher premium in rate card.
Audience Amplification
Audience Amplification revenue. We’re all familiar with the array of related content items that appear below most posts, or to the right rail, or even in the middle of content, on major publisher sites. The major players in this business have been Outbrain, Taboola (Outbrain and Taboola just merged), Zergnet, and there are many others. Generally their promise is that their algorithm, keying off of natural language processing of your content posts, plus what they know about individual users from their network and via their cookies, to populate their recommended content with the most “clicky” content. Some of it can be of low quality “clickbait” variety, but some companies e.g. Zergnet make a point of driving toward quality. Most will also give you the option to circulate your own content through their recommendation network, and your deal with them can be for inbound traffic to your site (driving engagement driving ad or other revenue) or revenue directly to you for traffic you drive to their network.
Audience Engagement
Audience Engagement in particular is worth addressing in and of itself. If your site could be more engaging to visitors, creating a session of 5+ pages per visit, versus the low internet average which is usually just above 1 page per visit, you’ll not only increase advertising or other revenue associated with this traffic, but you’ll also gain (usually) a better relationship with your visitor, increasing the chances of a return visit.
Ways to increase engagement vary. The best way is to provide the very best content first of all, and secondly to recommend the very best (usually related) content for next-steps. But there are other ways, such as adding comments, and adding other opportunities for users to engage with content, such as adding emoticon reactions, or liking or sharing the content. The use of an engagement analytics platforms can help editorial staff know what is trending so they can capitalize on success — for example, Chartbeat, Parse.ly, and Google Analytics’ Realtime dashboard.
Vuukle’s Audience Engagement Ecosystem offers a unique combination of all of the above, providing:
- Related content
- Commenting (including anti-spam “toxicity” meter functionality)
- Emoticon Reactions
- Share, like, and following bar functionality
- Real-time analytics showing top engaging content (cf. Chartbeat, Parse.ly)
Vuukle also drives revenue to publishers via one single ad placement above their comment well, thus lifting revenue both by lifting engagement, and paying publishers directly a cut of the ad revenues from their ad unit.
Newsletters
A good Newsletter strategy is key for any publisher, since the inbox still is a great place to be and most people check it regularly. It takes work (editorial, deliverability, campaigning) to make newsletters work for you, but it can become a great source of quality, loyal traffic, and a great source of revenue, either from site-generated revenue, or via newsletter ads, or better, newsletter sponsorships. What’s critical to consider here is that most people will never think to go to your site, you need to be where they are, whether that be on platforms (if you can get indexed/ranked/featured there, or via your social publishing), or via inbox through newsletters, or increasingly, via desktop and mobile notifications. Good companies to look at for newsletters include Mailchimp and Sailthru (now part of Campaign Monitor), but there are dozens of excellent partners. Same applies for push notifications. In the past I’ve used Airship and Moengage, but there are literally dozens of options. You should get recommendations from others, and shop around!
Platform Distribution
Before moving onto direct consumer revenue options, it’s worth mentioning how you can gain greater audiences by participating in the latest offerings from the major Platforms, namely Google, Facebook, and Apple. The revenue upside on each of them differs but all have one thing in common – the publisher cedes some level of control to the platform’s terms of service, or at the very least, to the platform’s technical specifications / requirements.
Google AMP & Google News
Google AMP (Accelerated Mobile Pages) was invented to make mobile content consumption faster and better. It’s worthwhile (in my mind) investing the smallish effort to make published content AMP-compatible. An AMP plugin is available for multiple CMS’s and a self-implemented approach is not at all prohibitive. Essentially a different template with Google-AMP-compliant specifications is used for mobile user agents. There are various allowed and disallowed ad formats, however, so be aware of the tradeoffs if your audience is heavily mobile and you rely heavily on advertising.
Google News is a kind of certification for verified news sources. If you pubilsh content which you believe is news, and are willing to adhere to certain standards you an apply to be crawled, indexed, and ranks in the News section of Google (news.google.com). Here are some tips from Moz.com on how to do it.
Both Google AMP and Google News are probably good things to do if you can, because they will likely increase your inbound, free, organic search referrals. AMP in particular will sometimes land you in the coveted “Google Carousel” of thumbnailed results at the top of the page.
Facebook Instant Articles
Facebook Instant Articles (FBIA) are similar to Google AMP in that they are designed for very fast loading content with a great user expeience. They have similar technical specifications and requirements you must follow for inclusion in Facebook results and also can be featured as an instant article particualrly for mobile users. The investment in setup is low (a plugin can be used for CMSes like WordPress), but the monetization potential is much lower as ad executions are more limited in scope (only N placements per Y words, for example), type, and yield. Thus there is a strong business decision to make around modeling how much, when, or if at all, to send content over to your FBIA feed. Many publishers have tried it and discontinued it; on the other hand many send all of their content through FBIA. Whatever determination is made, be sure to consider the editorial workflow and, where possible, automate the criteria for inclusion in FBIA, so that editors won’t forget to flag it, or flag content incorrectly.
Apple News
Apple News is quite similar to Facebook Instant Articles and was lagging behind (because arrived last) for some time. However, the number of people who start their day with Apple News has increased since the comprehensive integration of it to MacOS and iOS. Implementation is very similar to AMP or FBIA. A plugin can be used. Ad executions are similarly constrained. The same business decisions should be made, and the same attention paid to content inclusion workflow. It’s worth noting that many major publishing brands have embraced Apple News, including premium stalwarts such as The Wall Street Journal. However, the WSJ you get on Apple News is not the WSJ.com in total. It’s a sampling – determined by whatever modeled strategy and content inclusion workflow the WSJ business and editorial staff have landed upon. The New York Times, on the other hand, has been very cagey about Apple News inclusion, with CEO Mark Thompson cautioning any content creating company about giving access to its entire library, to any one platform distribution channel which they do not control.
Commerce and Affiliate Revenue
Many publishers do not have e-commerce as a critical element of their revenue strategy, but all publishers can add commerce revenue to supplement other revenue channels. There are two primary ways, depending on whether or not you manage any of your own ecommerce inventory.
Without inventory: Affiliate links. If your content pertains often-enough to merchandise of any sort (think, a post on top 2019 tennis racquets, or a post a celebrity and discussing the sneakers they’re sporting), then you can make money for every click-to-purchase with affiliate links. An Amazon Associates account can be set up and earn you around 5% of each purchase referred. There are also affiliate networks like Commission Junction which bundle multiple major retailers into one affiliate linking scheme. Most of these require your content creators to take the time to create links with your affiliate ID in them, however. To solve for that, some time ago smart companies inked their own deals with Amazon and other e-retailers, and provided a middle-man service by automatically detecting and rewriting all e-commerce links in your entire site, to include your account ID with them, which then generates revenue back to you (less the middle-man cut). This is the easiest way to achieve scale without the risk of editors forgetting, or incorrectly adding, one of possibly many affiliate account IDs to their URLs, so it’s probably worth the middle-man cut. For these services, check out SkimLinks and Sovrn \\commerce (formerly VigLink). For most publishers, adding an affiliate URL rewriting product like Skimlinks is so easy to do, it’s worth doing, regardless of how much you post content with product links in it.
With inventory: Simple e-commerce stores can be added to sites using services such as Shopify and WooCommerce. They provide guidance on setup and merchandising and often can be as easy to set up as installing a CMS plugin. Then the process of selling can be as easy as populating your catalog, taking orders, and fulfilling.
Up Next: Direct Consumer Revenue via Premium Content & Subscriptions
In our continuation of “Revenue Diversification – The Present” we’ll dive into some of the areas pubishers are starting to focus most – namely, in obtaining affiliate or direct subscription revenue from consumers. Here’s a taste of what will be covered:
- Premium Content and Subscriptions
- Ad-Free
- Metered Wall
- Hard Wall
- Behavioral Pricing
- Membership
- Free Registration Wall
- Strategic Partnerships
- From Here to There: Implemementing a Registered or Premium Content Strategy
Continue on to Part 2: Premium Content Strategies
Note: this post was originally posted on the Vuukle Blog on 10/16/2019 and is reposted here.
Revenue Diversification for Digital Publishers – The Past
Introduction
The digital publishing industry has gone through quite a lot of change in the past decade, largely in its ability to grow revenue or even maintain steady revenue. Publishers have come from an industry largely built on display advertising revenue, to one which is struggling to make cents on the dollar in 2019 vs 2009, that way. There are many reasons for the deterioration of this revenue channel, but primary are changes in the “big tech” of social and search platforms, which have reduced the amount of referral traffic to publishers from their sources. In addition, the onset of “big ad tech” in programmatic advertising, and a bewildering array of ad tech companies, has added a bevy of entrants to the publisher advertising value chain, each exacting its own percentage of ad revenue, leaving publishers with a seemingly ever-smaller piece of the pie.
Publishers with foresight have been working on this quagmire for some time, under the rubric of revenue diversification, which is the subject of this series of posts. After all, display advertising, even with the addition of video advertising, isn’t the only way to run a business around quality original content. There are many other approaches, and a well-rounded, diversified portfolio of revenue channels, each continuously optimized, is recommended for all such digital businesses. In what follows, I outline the past, present, and possible future of this landscape, in some detail drawing from my own experience leading platform products for major digital publishing businesses, and in advising clients. I hope it is useful to many looking to gain a cohesive view into the challenges surrounding revenue for digital publishers today, and might help some to improve their outlook.
The Past: Publishers, Advertising, and Platform Disintermediation
A Simpler Time
There was a simpler time. Some ten years ago, making a business out of digital publishing was easier, and display advertising led the way. Sure, a digital operation needed to shell out some decent initial investment to host and manage its publishing stack, ensure it could scale, optimize for search engines, and equip a sales team to get before brands to secure campaigns bearing large ticket prices for direct insertion. But once that was done, it was fairly uncomplicated and the game became in getting larger audiences (measured by Comscore) to speak the language of media buyers, and collecting revenues on renewing or new advertising customers.
Getting Away With It
Businesses could get away with many sins, or at the very least take advantage of a formative value chain. Ad targeting was elementary, measurement limited, and audience quality quite often rather suspect. Publishers could to some extent rest on their laurels, as brands did not have many other or better options in digital advertising. And even better, traffic was quite often literally free. Organic search referrals were the leading source of traffic for many, and soon, social referrals began to take equal share with search, as Facebook strove to build the largest online audience, possible. It was all free. Until it wasn’t.
Killer Penguins
Midway through the 2010s publishers noticed some troubling trends in their traffic volumes, and asked their product teams what the problem was. Nothing had been changed in their site operations to cause this drop – the dropoff came entirely, and suddenly, from Google search referrals. And it didn’t happen just once – there followed a long and still ongoing history of Google updates with friendly sounding names like Hummingbird, Panda and Penguin. “They changed the algorithm, and it killed our traffic,” was the conclusion. Many strenuous efforts were made to adapt to these algorithm changes in ways Google (sometimes) (rather vaguely) suggested. This work continues and all those responsible for SEO are watchful for algorithm changes to adapt to them quickly, however possible.
No More Free Facebook Traffic for You!
Facebook was the same story but worse. The early 2010s had been a bellwether period for free Facebook traffic, and whole businesses were built on it (many no longer exist). But the effect of Facebook ads and their (valid) promise of “custom audiences” became painfully apparent to Publishers when the Facebook’s algorithms began also to change, no longer sending free traffic to publishers. Most notably a large change to Facebook’s EdgeRank took place in January 2018 to focus on prioritizing “friends, family and groups” and caused a huge decline in most publisher traffic. Publishers, beaten by their dependence on Facebook, joined them by beginning to invest in Facebook traffic buys – that is, buying Facebook ads to drive to their own sites. This was great for a publisher when in a bind to meet an impression commitment to an advertiser, but then the cost of the Facebook buy, as as cost of sales, counted negatively against the ad revenue, lessening the net profit. And to make matters worse — far worse — brands which formerly bought ads on publisher sites now began to buy direct from Facebook because larger and more highly targetable audiences were there. The platforms had disintermediated the publishers.
Programmatic (Diminishing) Returns
Ad tech was doing the same thing at the same time. Indirect advertising through Google DFP had been a good way to fill unused traffic avails with low-CPM inventory, but that also reduced the average CPM hugely and in some cases, brands would buy indirect vs working with direct sales teams from publishers. That was only the start, though; soon, the programmatic ad stack any given publisher needed to set up included DSPs, SSPs, Header-Bidders, and all manner of 3rd party data aggregators and resellers. Ad targeting became better, CPMs dropped lower, and every new entrant to the party took its piece of the pie while the publisher’s piece grew ever smaller. Publishers responded by adding more ad units. The customer experience became ever worse. Customers responded by adding ad blockers or just not coming back, so impressions dropped further and organic traffic took the hit on customer reprisal.
Pivot to Video!
Video became a much larger strategic importance to publishers because the CPMs were off-the-charts higher than display. It was a lot more work, though, which came with costs. Targeting and inventory were a problem. Getting people to click play was a problem, and publishers added insult to their existing ad-spam injury by setting up auto-play on all pages, which worked to inflate preroll revenue, except where modern browser updates blocked autoplay. More ad tech businesses arrived to solve the inventory and targeting challenges,, but they were for-profit businesses, too. Some publishers went all in and “pivoted to video” between 2015 2017 – laying off most of editorial, and building large video production teams. Some of them, like NowThis and Mic.com, lost their way in the process. And at the same time, OTT platforms were on the rise, with more customer time spent on SVOD or AVOD video platform offerings than ever before. Consumer tolerance for ad-spammed webpages was lower than ever while, ironically, consumer tolerance for additional premium subscriptions grew to its highest point yet. As such the “duopoly” of platform disintermediation expanded into “FAANG” aka Facebook, Amazon, Apple, Netflix, and Google (including YouTube). Digital publishers might be able to get distribution on these platforms, but seldom on their own, or very advantageous, terms.
The Publisher Pickle
Therefore by 2018 you could say that publishers were thoroughly in a pickle. Efforts were made by news consortiums to negotiate with platforms. Litigation and more recently extensive government investigations were started. Platforms began making heartfelt gestures about doing right by content creators. But reacting to the pickle publishers were in,was only exactly that, a reaction.
Proactive measures would have been far more effective to near-term revenue recovery and return to growth.
Continue on to read about “The Present: Revenue Diversification.”
Note: this post was originally published on the Vuukle Blog and is reposted here.