Whether you are rooted from traditional media or a born-digital company, there are two core missions for survival: The first is to report the news, and the second is to generate enough cash to keep doing the first.
Both the traditional and born-digital media firms have come to realise that the generation of cash in the digital space isn’t as easy. Many of the born-digital companies that built their business models around the idea of “the Internet is free” have long since gone out of business. It seems switching to a paid model or mining/selling the data collected around their customer bases couldn’t generate the cash in a post-venture capital-funded world to continue.
Unfortunately, for the remaining news purveyors, the last gasps of survival mode efforts from the “news is free” Internet company models still cast a big, ugly shadow on the remaining companies. That is, their acceptance of ultra-low CPM advertising and the pay-per-click. Balancing a variety of journalistic stories just doesn’t generate enough when the biggest stories run produce US$1,500 in revenues under the low CPM/click revenue models.
Ultra-low CPM has all of the attributes of a commodity based business sector. That is, one where someone other than the producer decides price.
In print, the publisher controls price. In digital, this is not always true — and it is never true in the remnant space. In print, someone wanting to run an advertisement pays what the publisher asks (via an ask on a rate card).
In digital, much of the advertising is pitched to the publisher as something like this: “We have access to ad inventory and this is how much it pays. Can we run on your site? You’ll make money. You don’t want to turn away money, do you?”
In the early days, publishers said yes to just about anything to see a revenue stream. (Woohoo! We get 10% of our revenue from digital!) Now, cash flow has to be real and business sustainable. The “who” in who decides price is out of balance. Sustainability will only come with revenues that allow the content creation to continue. The buy/sell and create/attract/pay battle is just beginning.
The masters of the Web have to recognise that when impression-based payment gets converted to paying the journalists’ salaries, the net/net of US$20 offered for a story is not going to pay the mortgage, and impression-based pay will have to become realistic.
Media content is different from a search-based list and click-type of engagement generation. People are going to media sites to learn about something, not to find the best price on the Dewalt table saw needed for a cabinet project.
As long as the imbalance between content production costs and ad payment schedules exist, there will be a strategy to generate the clicks needed to get to survival-revenue levels. The Internet monsters have created the very thing they now want to kill — click-bait. To some degree, the content creators (publishers) have to use techniques the Internet monsters don’t like in order to survive.
One such technique is putting what some call “too many advertisements” on a page (generating impression space) to get enough micro-payments to cover costs. The other is what some of the monsters call “poor site design,” but they generate clicks/pages to view (and thus even more ad impression opportunities).
Until the right pay/value balance is achieved or a better value measurement of the engaged media content consumer (versus Dewalt shopper) is created, there will be a battle to fight. I suggest publishers work together to find a better measurement tool as the opposition has no interest in differentiating content creators’ engagement value from that of someone searching for that table saw.
In an era of classic (print) media, publishers used circulation and readership as the key indicators of engagement value. In the modern era (print, digital, and bundled), news producers are blending print metrics and digital to highlight total reach.
Doing so requires defining a new measurement to show the value of the digital distribution medium (Web site, tablet, mobile) paired with the print distribution metric for a total value. Those paying the advertising bills want to know if they are buying something people are reading and, therefore, seeing their products.
So what is the magic new measurement? Can you validate it (isolate and toss out the click-bait)? Can it be cheated? Is it pageviews? Or clicks? Unique IPs? Unique MAC addresses? Unique browsers? Time on site? Likes? Referrals?
I imagine 250 years ago there were similar conversations on measuring engagement in print. In the era of town criers, you just counted the people milling about and listening to the crier. (“I’m a better crier than you. I had 50 people listening, you only had 20.”)
When the print newspapers started to take over as the news distribution channel, I’m sure the town criers complained that no one was reading print. Someone had to invent a way to measure print readership and came up with what we now except without question — that printed copies sold is the measure. We then used independent firms like AAM, CVC, VAC, and BPA to put their seal of approval on the reported numbers.
Digital readership (viewership) is in its infancy of defining a standard. IAB, MRC, Forcepoint, Google, and Facebook, among others, are defining rules, but from a very different perspective than that of the publisher.
The monster Web site people treat the Dewalt table saw search the same way as a search for a school board meeting schedule or the crime rate in a particular city. One search leads to a purchase; the other leads to an occupied chair in a meeting or to a statistic — democracy and discovery in action, if you will.
As a code-cutter, I can manipulate just about any of the bantered about traffic measures to make a site look better than it is. (Side note and full disclosure: I have nothing to do with the site measurements used where I work, and we rely on an independent company’s metrics across the board for all of our measures.)
Each of the companies vying for setting a standard used to measure viewership is making its own case on why its method is the best. The big monster companies have already declared their methods are the best and are pitching or forcing them upon us as a (or is it “the”) standard.
Well, are they right? Do they account for how content consumption is different from product search or purchase intent? How can you tell what they are doing? Their measurements are proprietary and they aren’t sharing what is inside the black box, so do you believe them?
Take the early benchmark of pageviews as a starting point for defining engagement/value. Site designers saw this as a popularity standard and then quickly started designing pages that look like a single “view” but were many separate elements designed to generate pageviews.
How does the search for the handling of funds by a school board member compete against a search for the best 4K TV? One search, one story versus one search returning 15 manufacturers, 5,000 retail outlets, 10,000 Web-only outlets. Yet one generates an instant result and the other maybe nothing. One generates a pageview while the other could be dozens.
Pageviews as a fair standard? No way.
How about counting user clicks on content as the measurement? Well, even that school board story can be manipulated in site design to generate multiple click. This is illustrated with the use of “read more” and “next page” links used just about everywhere. Enter the pure click-bait design seen every now and then. Out goes another measurement possibility.
What is next?
Enter the era where the monster companies are now telling the content producers (media firms) that they (the monsters) will take care of the measuring. Oh, and as an added benefit, the monsters will adjust how their customers (note: they are not your customers) see your content on their news feeds based on some algorithm only the monster knows (and controls) to bring their customers the information “they want.”
Do you trust them? Can you trust anyone with your numbers? How do you know they are right? These companies will not show you how they computed the number as that would reveal their algorithm. Trick-the-Algorithm Games begin today at noon!
So the measurement battles continue. And the pay battle continues. The monsters generate money on content searches and your content. They also control the revenue the content producers can generate through News Feed sorting, adblocking/un-blocking tricks, search keyword lock-up, and more.
So where does the publisher sit? Well, how about sitting in on the digital team’s morning scrum to witness the brainstorming of the latest tricks in the cat-and-mouse game of generating the revenue to sustain the content creation?