by Bill Densmore and Daniel L. Williams
3 September 2012
In today’s reality, information scarcity has been replaced by human attention scarcity. The Day’s new membership model, based on the aggregation of user profiles, reflects the challenges and potential successes — revenue, reader relationships, and registered digital users — of today’s newsmedia industry. What does the Attention Age mean for the rest of us?
As the economics of the newsmedia industry come unglued, what will sustain journalism? The answer involves a conceptual challenge, a marketing opportunity, and a need for a unique, non-profit collaboration.
The Attention Age
can represent for journalism institutions either slow death or a chance to experiment and thrive without relying on mass-market advertising. It calls on newsmedia organisations to become better “information valets” for their users. In this new age, trust, identity, and information value are core issues, affecting access, convenience, privacy, and personalisation.
In less than a decade, the world has shifted from relative information scarcity, with access restricted by a variety of technical choke points — such as presses — to one of information abundance. Now, the average user’s challenge is not how to access information, or even how find it, but how to personalise, trust, and make sense of it. With the Internet, control of raw information has largely shifted from from publishers to consumers.
In this article, we’ll review and update some of the findings and assertions of that paper, and look closely at one U.S. daily newsmedia company – The Day, in New London, Connecticut, which is a pioneer at turning challenge into opportunity.
According to the report, an Attention Age -- with its economy that treats human attention as a scarce and valuable asset -- is characterised by five trends enabled by worldwide open networks. These trends are transforming information businesses as well as the future of journalism, participatory democracy, and communities:
- Mass-market advertising is giving way to targeted, permission-based, direct marketing. Advertising is no longer sufficient to sustain journalism in print or on air. The two have come almost unglued.
- Abundant, accessible, and unbundled information disrupts copyright and makes human attention a scarce resource. Curation is therefore valuable.
- The success of social networks shows there is business and civic value in network collaboration and sharing rather than hoarding or silos.
- We now consider our “personas,” or use-specific demographic profiles and interests, to be valuable. We, and some regulators, assert that value with the concept of “privacy.”
- There is a shift for publishers from being gatekeepers to being information valets — curators, stewards, agents, and brokers — that offer personalised, customised access to knowledge.
The concept of “persona”
RJI’s “From Paper to Persona” argued newsmedia organisations must shift from thinking they are in the business of producing products (newspapers, articles, or broadcasts) and instead view their roles as providing a service: they must help people sift, identify, and make efficient use of the information they need to get through their professional and personal day.
What’s a persona?
It’s a profile — a set of interests and attributes, a mix of elements, attributes, and interests, all drawn from the same verified dataset of age, sex, race, income and education, interests, lifestyle choices, groups, and physical location on earth. The user may present different personas in different contexts, for example, health care, local government, news reading,or purchasing.
With the help of their information valet, the user maintains the core dataset of the persona.
For the information valet, or infovalet, managing the privacy and information preferences of individuals is an opportunity. As The Day is learning, database technology can allow a publisher to take advantage of that opportunity and become a trusted steward and curator of a reader’s attributes, information preferences, and privacy. Publishers can make money enabling memberships, commercial messages, transactions, subscriptions and — ultimately — metered access to information across a growing network of partner news sites, all personalised for individual readers. Meanwhile, other technology could account for payment and access to information at multiple, independent Web-wide sources.
The defining challenge for news organisations in the 21st century is no longer merely selling ads and charging for proprietary stories but learning to help the public knowledgeably manage and share ubiquitous, disaggregated information. The value of news lies in the service, not in a physical product, or a single story.
So the opportunity of sustaining journalism requires that news organisations:
- Acquire technology and skills to perform as trusted managers of identity and privacy for their users.
- Collaborate on a shared-user network for trust, identity, privacy, and information commerce fostered and governed by a public-benefit entity to support competing agents.
By implementing these two essential steps, newsmedia publishers can cultivate customised, one-to-one relationships with users, provide them personalised information, and get paid for doing it. Publisher might make money referring their users to each other’s content — via a micro-accounting exchange system.
The Day membership model: delivering audiences, not sites
In the advertising industry, two trends make it clear that the publisher’s traditional role of delivering content in products or on Web sites is becoming marginalised:
- The CPM pie is splintering as data providers, exchanges, and an array of “infomediaries” get in between the advertiser and publisher.
- Advertisers want to deliver messages to audience targets wherever they are on the Web — not on a single Web site.
Taken together, these two trends help explain why publishers must become infovalets who help manage the demographic profiles and interests of their users. Increasingly they must be willing and able to share their audiences across the Web -- and to make money doing so. In addition, they must know where else their users are going to be fairly rewarded for referrals.
In 2010, The Day Publishing Company in New London, Connecticut, engaged in a strategic process to clarify its mission and to move into the future as a “comprehensive hub of content and conversation with a local connection from a trusted source.”
Its senior management team enlisted a brand strategy firm to gain an understanding of its audience’s mindsets, wants, and needs; to discover the unique attributes that shape how The Day will evolve; and to establish a foundational brand identity that can be rendered in all communications while making the competition irrelevant.
Among the key considerations was the need to replace a patchwork of make-do technologies and archaic business systems. They needed best-of-class, open-source platforms that offer deeper insight into individual users and their preferences; that support and encourage content sharing and discovery; and that focus on the user experience rather than accommodating the restrictions of outdated technology.
Despite its more than 100-year history serving a community of deeply loyal and engaged readers, The Day found it had a narrow understanding of its relationship to those customers. To realise the full potential of its market, it needed to treat customers as strategic assets (individuals with unique interests) rather than commodities (circulation units), which implies investment and ROI.
Business model transformation: all access to content
To support its business model transformation, The Day constructed a proprietary enterprise data warehouse. It functions as the central nervous system supporting its consumer and business revenue divisions. Additionally, as part of its membership and metering model, The Day developed a premium user authentication solution to enable universal access to digital content, rewards platforms, and e-commerce sites through a single sign-on.
In The Day’s membership model, those who pay for access to content — regardless of preferred medium or level of engagement — are entitled to all the content in all the forms it publishes. Over time, this amounts to a paradigm shift away from an address-based delivery model to a user-based content access and information exchange model. A full-service member center is fully integrated with the content management, third-party rewards, digital publishing platforms, and subscription system. The user authentication service functions as both the registration and transaction management system, and as the single repository allowing customers to manage their preferences and access levels.
Meanwhile, a newly formed “audience department” envisioned a three-year process. The first-year is devoted to constructing the infrastructure and technology, and developing the skills to achieve its long-term vision. The focus of the second year would be on implementing the new business model. And in the third-year, the emphasis would be on leveraging the vast stores of exchanged information in the new product and revenue development models in a way that respects, honours, and fortifies the trust between reader and publisher.
As the gatekeeper of user preferences, The Day is developing ways for members to receive tailored content based upon their unique interests:
- One recent example is the “Your Town” widget that is positioned on the home page of theday.com and allows registered users to receive the latest news from their choice of 40 towns in The Day’s coverage area.
- In another example, The Day has developed a lifestyle site that serves dual purposes as the entry point for new membership activations, as well as promoting brand engagement and social sharing of dynamically served content.
- In July, a revamped HTML5-based mobile site was introduced to the market, and the next generation of apps currently in development will be tailored to individual user preferences, using the same open-source framework that supports the lifestyle site.
- And the latest project involves using the consumer marketing database and campaign management system to automate the creation and delivery of content e-mails to distinct affinity audiences based upon a user’s preferences. Each of these affinity e-mails are forecasted to yield US$15,000-$30,000 in sponsored revenue annually based upon embedded ad positions sold at a CPM equivalent to behaviorally targeted ads served on its Web site. The e-mail automation is achieved through an application programming interface between The Day’s content management system and e-mail service provider. The technology supports test and control to optimise response and deliverability.
So while newsmedia companies are uniquely positioned to act as the trusted sentinels of a local marketplace that encourages and rewards voluntary exchange of information between buyers and sellers, what differentiates The Day’s approach is that digital metering and compulsory site registration are tactics to a broader, more holistic strategy: the direct and indirect monetization of its audience through membership, rewards, affinity content, and sponsored contest marketing and e-commerce programmes.
Result: tripling of registered users
In the 12 months since launching membership, The Day has tripled its base of registered users from 14,857 to 42,332, while growing its paid membership levels 3%. In addition, 45% of its approximately 20,000 home delivery subscribers have fully activated their digital access through synching their print and Web profiles. And The Day pegs consumer revenue growth in the “hundreds of thousands of dollars” since the deployment of its marketing database and membership model.
The Day is ahead of goal regarding registration, paid digital subscriptions, and membership activations. But of greater long-term value is the accumulation of user-provided data that brings into focus the unique relationship that individual readers have with The Day’s expanding portfolio of products.
We can lament the structural collapse in large advertising categories and rationalise why consumer revenues now account for one-third of our top line. But the reality is that consumer revenues are increasingly vital in our business model going forward. It is crucial that newsmedia companies pivot and devote adequate financial, technological, and human resources to derive maximum value of these customer relationships in a way that delivers a high trust quotient.
Even privacy advocate sees a need to experiment
Other publishers are also beginning to engage in aggregation of user profiles alongside the advertising industry, says Jeff Chester, director of the Center for Digital Democracy, a Washington, D.C.-based privacy watchdog group. And Chester’s optimistic view is that this might help sustain journalism — but that it must be done openly and with the consumer’s consent.
Chester was among the participants in a panel on advertising and privacy at the National Conference for Media Reform in April 2011, in Boston, where he said:
“I'd like to think if you told the user exactly what was going on and gave them opt-in control, I think there's a market for that. I think you have to explore not only the contradictions but also the tensions between personalisation and ‘anonymisation.’ People like this personalisation stuff. So you are going to have to compete on that level and that requires the data. I think we need to come up with sustainable, public-interested news organisations. This thing could generate lots of revenues between the advertising and the marketing and subscriber donations for serious news. But I think we need to practice it, we need to try it.”
U.S. government pushing private sector to cooperate on “identity”
Private industry has been struggling for years to develop a coordinated system for dealing with user identity on the Web. Now, the U.S. government is applying money and its influence as a major customer to nudge the private sector to action.
The White House and U.S. Commerce Department are seeking roles for the government. In March, an office within the National Institute of Standards and Technology (NIST) announced it would seek to create a public-private “steering committee” to develop protocols for Web identity management. It awarded a US$2.5 million grant to a Washington, D.C., Beltway consultancy. The Identity Ecosystem Steering Group
’s first meeting, which took place in mid-August in Chicago, may well have been the start of a national push for universal identity services on the Web.
Key issues include: Who will make the rules? What rights consumers will have over information about them that is requested, gathered, mixed or created? In the private proceedings leading up to the August meeting, dozens of major technology and identity companies met and talked. Notably absent were any news or entertainment interests, despite what would seem to be an obvious interest in how user identity and privacy are handled in what is becoming their primary publishing venue — the Web.
Uncle Sam vs. Facebook Connect as de facto identity card?
Whether one likes the idea or not, a role for government in assuring a reliable identity system on the Web would be in stark contrast to what is happening now. With more than 700 million registered users, Facebook now manages more digital “identities” than any state driver’s license facility, any single bank, or most governments -- a prospect that worries some observers.
“Although it's not apparent to many, Facebook is in the process of transforming itself from the world's most popular social media Web site into a critical part of the Internet's identity infrastructure,” Simson S. Garfinkel, a privacy expert, wrote in the January 5, 2011 edition of the MIT Technology Review.
Paul Trevithick, who pioneered the creation of digital type fonts in the 1990s and now runs an Internet startup, Azigo Inc., focused on helping users manager their online identity. Trevithick is blunt in his assessment of the situation: A decade or more of multiple, uncoordinated, industry, and academic efforts to develop an agreed specification for user identity management on the Web have been a failure. He includes his own “information cards” effort, which he has worked on with Microsoft.
Trevithick says the result is that Facebook Connect is becoming the de facto identity standard for the Web — one company, a closed, proprietary system where Facebook has all our data, with little or no rules about how they use it. Trevithick can't fathom why many big companies are blithely encouraging their customers to use Facebook Connect for all their online identity needs.
Facebook alternative: The Information Trust Association
Exploring how the news industry collaborates to create a shared-user network for trust, identity, privacy, and information commerce is beyond the scope of this article. But one scenario, “The Information Trust Association” (ITA) is laid out in the previously mentioned white paper “From Paper to Persona
Single-site charging for content puts up walls that destroy the brilliant utility of the open Web. A non-profit ITA could establish voluntary protocols for a free market for digital information that support and extend existing Web protocols. An ITA-sanctioned system . . . platform . . . clearing house . . . should uniformly exchange payments for the sharing of text, video, music, game plays, entertainment, advertising views, etc., across the Internet.
It could, for example, manage background, wholesale payments for text, video, music, game plays, entertainment, and advertising views. It could manage content that is repurposed for advertising gain by bloggers, collecting, sorting, and settling copyright and other value exchanges among users, publishers, and aggregators.
Consumers should have a choice of providers — agents — for accessing services, with one account and one ID providing simple access to multiple resources. Technical protocols and business rules could be developed using the model for the creation of the Visa card network.
“Information valets” might anchor such networks. Trusted agents could help consumers manage their privacy and take control themselves of their online identity — their “persona” — out of the hands of product- or service-selling vendors. But the establishment of such a network entails making some key decisions about how trust and identity are established and maintained.
Revenues and advertising will be shared, but each owner-user of the collaborative will retain complete control of its existing customer (reader/advertiser) base, including name and account information. Demographics will only be shared based on the opt-in permissions set by consumers and the joint business rules of the collaborative owners.
So far, public and private efforts in this area have not coalesced on any common solution.
Thus in the Attention Age, the news and broadcast industries must:
- Migrate from a historic role as the most-trusted consumer information source to the “information valet” — a ubiquitous curator, advisor, authenticator, and retailer of personalised news, entertainment, and service information from anywhere.
- Aggregate for advertisers and sponsors audience measurement and selected demographic data optionally provided by unique users whose identity persists across a federated network. The network should track, aggregate, sort and share revenues, including payments to users for the use of their “persona.” The user should be in control of the data use and flow concerning them.
- Put technology in place for the optional sharing of content by subscription or click with dynamic, variable pricing and bundling options.
It's time for the world’s information creators, aggregators, technologists, and citizens to stand and create an open playing field enabling trust, identity, privacy, and information commerce.