Alex Albrecht (left) and Kevin Rose host Diggnation Live at Revision3 five-year anniversary party in San Francisco. (Chris Germano, Perfect Market, June 25, 2010)
It was a misty San Francisco eve and there was not a geek to be found, that was, until you entered the doors of a dark alleyway into the venue hosting Friday night’s most geek-a-licious event.
The occasion being the Revision3 five-year anniversary party and live Diggnation recording by our ever-so-popular heroes: Kevin Rose and Alex Albrecht. Hordes of fans, engineers, gamers and techies filled the dark-lit hall which was plastered with spotlights, tech banners and tunes that were blasting from everywhere.
Ford’s Fiesta, the car manufacturer’s first subcompact car to be sold in the U.S. since 1997, was displayed outside behind a rope and security. I have to hand it to Ford for doing a great job building a feature-rich small car that can clock hybrid-like mileage while still being affordable to the masses. As a geek, I admire the amount of effort Ford put into engineering forward-thinking features in its cars while touting them at sponsored niche tech events like Revision 3 and the do-it-yourself expo Maker Faire.
Once all the Revision3 magic performances ended — they included nail-in-the eye squirms, fire-swallowing amazement, and cinder block smashing; the guys behind Revision 3 came out and welcomed the crowd. The horde of geeks and nerds seemed to be anxiously awaiting Kevin and Alex’s arrival for Diggnation Live.
The live Digg show seemed to attract fans from many distant places, including some we met from Ireland. The laser lights turned on while the other music and lights went down. Everyone stared at the projector screens trying to figure out what was about to happen.
A cool cut-scene, a desaturated short video à la “Bourne Supremacy,” began to play. The video featured Kevin and Alex as they drove the Ford Fiesta around San Fran in car chase spy-style leading them up to the doors of the venue. The crowd cheered loudly. The Diggnation theme started and Alex and Kevin jumped up onto the stage from the crowd.
Kevin and Alex were quickly united with their iconic beer stash. This time a dedicated box of Bud Light had been tampered with like a man in the middle wifi hack attack.
Alex and Kevin get 'iced' on one knee. (Chris Germano, Perfect Market, June 25, 2010)
Instead of beer, inside there were two large bottles of Smirnoff Ice. As is well documented in Digg culture, the ritualistic prank, “You’ve been iced,” commenced. In this new rite, any box at the Digg (or Facebook or Perfect Market) offices can be “iced” by concealing a bottle in a larger container (think: birthday cake, or six-pack). After being unknowingly accepted by a recipient, tradition dictates that the “ice” must be chugged. Kevin and Alex assumed the position as the crowd chanted “get on knee.”
After several readings of Digg stories, and making fun of the audience’s responses from our buzzed hosts, Alex, a PC fan boy, came out with a surprising truth: He now owns the latest Apple product. Yes, the feature-endowed, ever sold-out, ever-so-long-waited-for-iPhone 4.
Meanwhile, Kevin, a known Apple fan boy, had yet to claim an iPhone 4. Alex did a quick straw-poll to survey the audience about its phone of choice. Half the crowd held up their iPhones while the other half held up their Android. A shouting match over technical superiority, quite common among our fellow geeks, diverted the event for a few loud minutes.
Kevin Rose with Perfect Market's Chris Germano
After all the stories, free swag (seriously, how many hundreds of red squishy dice were shipped to Digg this week for the event?), our hosts appeared among the crowd for quick pictures, much like Hollywood super stars. Rushing fans, geeks, and dice were being held off by security. Each fan shouted out their Twitter, Facebook, Digg account names like they were at a bingo event or horse race.
The event was a blast, and set the stage for many more successful years of Revision 3 broadcasting. If you have not heard of Revision 3, go check them out at revision3.com. They are one of the Internet’s most up-and-coming online television networks, producing some really great tech-minded shows such as: Diggnation, a spot light for the extremely popular social news site digg.com, and The Totally Rad Show which covers today’s geek news.
From a technology standpoint Apple “i” products, and mobile platforms, like Android, were clearly all the hype. The growing trend of accessing formatted content on mobile and tablet devices should push content providers to seriously evaluate their market and targeted audiences in order to provide the best possible user experience.
There’s Yahoo and AOL vs. DemandMedia. And then there’s always Facebook vs. Google.
That’s the thing about techno-capitalism, it sets up some exciting rivalries. Facebook vs. Google is the new Apple vs. Microsoft (unless, of course, Steve Ballmer suddenly steps up.)
The latest development in the saga occurred this week, when Facebook confirmed (as reported by Nick O’Neil of AllFacebook.com) that “all Open Graph-enabled web pages will show up in search when a user likes them.”
A lot of people are calling this a “declaration of war”– the beginnings of Facebook’s “search strategy.”
AllFacebook argues that it’s time to start optimizing for “Facebook SEO,” adding yet another wrinkle to the publisher’s battle to optimize their content for search.
Greg Sterling of SearchEngineland, however, does not see Facebook’s threat as particularly dangerous for traditional search engines.
Facebook’s user experience, in terms, of search he argues, is too cluttered and unwieldy to truly undermine the search giants. “Google, Yahoo and Bing (proper) provide a much more coherent and complete user experience when people really need information.”
Based on the domain names under which these authors write, (SearchEngineland vs. AllFacebook) it comes as little surprise that both would defend their respective platforms.
Time will tell whether or not this is truly a “blitzkrieg” by Facebook (as O’Neil argues) or more of a “sitzkrieg.”
Publishers, however, do have a wonderful opportunity to become early adopters of Facebook SEO and get their content maximum exposure on the platform. They’ve been struggling to catch up in the search engine world, it would be a shame squander a second chance with “social semantic search.”
I like to think of emails as gifts, every day I approach my inbox filled with excitement for the riches of information that live inside. Some days are disappointing, filled with emails that get deleted within seconds of opening. Others days, I am blessed to discover something thought-provoking, clever and occasionally funny.
An Ari Rosenberg piece in defense of paid content from Media Post falls in the “thought-provoking” category. His title makes his position clear “Rupert’s Right.”
While I cannot help but agree with Rosenberg’s argument that in the current system publishers are not benefiting as much as they should for their content, there are certain steps publishers can do apart from erecting a pay-wall which can allow them to take greater ownership of their work and its potential revenue.
Rosenberg argues that certain companies benefit disproportionately on publisher’s content:
“What types of companies have benefited the most from the decision all publishers have made to offer free access to their content online?
Try this list on (in no particular order): Ad servers, Ad Networks, Rich-Media Vendors, Behavioral Targeting Companies, Online Agencies, Data Mining Companies, Analytics and Research Companies, Malware, Search/Portals, Content Aggregators, Yield Optimizers.”
While its true that these companies clearly reap the rewards of free online content, Rosenberg does not also acknowledge the boon to consumers of this content.
He acknowledges that “Free content means far greater page views and subsequent ad impressions for sale,” but argues, “this helps the companies listed far more than the very publishers producing the underlying ‘product’ diving supply — and worse, has resulted in self-inflicted harm to the publishing business.”
Rosenberg describes what he sees as a flawed relationship between publisher and advertisers, “Publishers must convince advertisers they deliver consumer engagement before anything positive can happen. In less poetic terms, a publisher’s sales force must demonstrate the person consuming their content cares more because of where that content was produced.”
Such statements undervalue the power of branded content, which has been shown (“What is a Brand Worth Online?”) to be worth far more online than unbranded content.
Moreover, there is a difference between loyal brand users and those who visit the newspaper’s pages through search. These users offer a different opportunity for advertisers. They have an identifiable intent. If newspapers optimize their content for search, they offer a unique opportunity and audience for advertisers. In this situation, it is possible to match the right content, to the right user, with the right ads for their query. This is a potent and profitable combination.
Rosenberg praises Murdoch’s bravery. But will his daring pay off?
In today’s content rich marketplace, users demand free news and are happy to go elsewhere when they are asked to pay. While composing this blog, I happened to receive an email with a link to Hitwise UK’s analysis of the change in traffic to the Times and other British newspaper sites now that the Times online has begun to implement the first stages of the paywall (users don’t have to pay yet, but they do have to register before getting access to the content).
Hitwise found that already, “the title’s market share has dropped from 4.37% during the week ending May 22nd to 2.67% last week.”
Daily market share has dropped even more precipitously, “down to 1.81%, under half of its average during May.”
It’s going to take nerves of steel to remain confident if the Times’ online readership continues to drop. Recent acquisitions by News Corp demonstrate that they are trying to figure out other ways of getting users to pay for their content (eReaders and bundling with other services).
News Corp’s vast resources, thus, make such gambles possible. For smaller publications seeking more market share and generalist publishers seeking broader readerships erecting a paywall is a much more dangerous proposition. In these cases, alternative business models and revenue streams make far more sense.
I often come across stories about how publishers are failing to maximize their content online while searching through stories tied to the future of publishing. Still wedded to print traditions, many publishers have yet to make the most of opportunities offered by the digital platforms.
Thus, I was happy to discover two recent stories of publications, which had (gasp!) died in print form, but have begun to successfully reinvent themselves in the digital arena.
Earlier this year the demise of Gourmet was bemoaned by foodies everyhwere. This week however, it was announced that Gourmet was being kept “alive” as a brand, as Conde Nast revives the magazine as an iPad app called (appropriately) Gourmet Live.
This is a striking example of a publisher harnessing the power of branded content in the digital space and, more specifically, on a new platform. The iPad is forcing publishers to rethink their digital approach, as evidenced by the statement Conde Nast’s Chief Executive made to the New York Times, “It’s not a magazine and it’s not a digital version of a magazine. It’s a whole new way to engage with consumers.”
One question: why are publisher’s willing to invest in re-purposing their content for users of new platforms like the iPad but not for search driven users? They have awoken to the necessity of optimizing for the “app economy,” so why not optimize for the “search economy” as well?
Similarly, the New York Times reported on the efforts of two former Domino employees who are finding success with a new interior-design web magazine, not too dissimilar from the tone and voice of the defunct Domino.
The site, Lonny, takes a unique approach to presenting its content in an online format.
“Lonny looks and acts like a print magazine, not a Web site or a blog,” according to New York Times’ Claire Caine Miller. “It has pages to turn, a table of contents and full-page ads. But it offers Web-only benefits like zoomable, clickable images, so readers can inspect a lamp displayed in a photograph of someone’s living room and then click to buy it. ”
Lonny demonstrates the power of designing content to fit its context. As with Gourmet Live this lesson can and should be extrapolated out to other areas in the digital sphere.
Publishers are beginning to experiment, and take risks with their content. In the process, however, they should not overlook the power of less “trendy” platforms, such as search engines, as vehicles for disseminating and monetizing their content.
I spend a tremendous amount of time online researching and reading various opinions on the “future of journalism.” It can be easy to become consumed by speculation about the iPad, the merits of paywalls or “metered models,” and the pros and cons of DemandMedia’s content strategy and to loose sight of journalism’s present issues.
There’s nothing like statistics to bring you crashing down to earth.
The Operation for Economic Co-Operation and Development (OECD) recently published a report on the state of newspapers around the world. By and large, most nation’s publications are struggling, hindered by a decline in “advertising revenues, titles and circulation.” The world wide recession has only added to their woes.
Newspapers in the United States and England have been the most affected by these declines. However, as we’ve seen in this blog they are also two of the most active countries in terms of news oriented startups and innovative in business models. Necessity is the mother of invention.
Some of the OECD’s most striking figures are related to ad revenue. Their report states, “On the revenue side, the global newspaper publishing market derives about 57 per cent of its revenues from advertising. The reliance on advertising is extremely high in countries such as the United States.”
However, online advertising only makes up about 4% of all newspaper revenue in 2009 (a decline from previous years). The OECD reports, “In general, the online revenues of newspapers are miniscule in comparison to total revenues and online revenues of other digital content industries.” Thus, online advertising is at once one of newspaper’s biggest weaknesses and greatest opportunities.
The OECD’s report also includes some heartening figures, however. They found that around 5% of internet visits are related to “reading news online, which is a conservative estimate.”
They found that in most OECD countries more than half the population read news online (most striking number: 77% of Koreans read news on the internet!)
Moreover, online news has continued to see growth in unique visitors per month. Ofcourse, the report also suggests that search engines and new aggregation remain an essential part of “referring” traffic to these sites.
While few of these numbers comes as much of a surprise, they underscore the dire necessity for new (and efficient) business models for news.
One other interesting number out today: Tech Crunch reported that Apple has sold 3 million ipads, (up by 1 MILLION since its last report on May 31s).
There are now 11,000 iPad apps on the market. As more and more publishers make their content available as an app for the iPad, it will be interesting to see if and how revenue is impacted. Strikingly, USA Today announced that they will not yet charge for downloading their iPad app, instead chosing to rely soley on ad sales.
USA Today’s decision stands in contrast to other publishes who, as Ad Age reports, “think the iPad is a chance for a do-over. If they just charge from the beginning, the reasoning goes, consumers will never become trained to expect free news on this platform.”
On cannot help but wonder, then, if the iPad could serve as a kind of Pavlovian device for reprogramming consumers to pay for online content.
After last week’s flurry of announcements from AOL and Google, could I be blamed for starting the week expecting fewer announcements from media behemoths?
On the heels of the Google vs. DemandMedia speculation comes the news that Google has debuted a “one-click tool” to allow easy online checkouts for paid content–essentially a PayPal for the paywall.
This represents Google’s latest effort to play nice with online publishers, who have long felt that the search engine has done more harm than good for their online content. The advent of aggregator Google News, only made it worse.
Still, many, both in and out of Google’s camp, have defended the search engine because of the tremendous amount of traffic it generates for online publishers. Indeed, here at Perfect Market, we’ve long advocated that harnessing the power of the search engine can be a tremendous boon to newspapers, especially when pages are monetized effectively for search users.
Nonetheless, Google is planning to test out its new technology, named “Newspass,” at Italian publication, La Repubblica.it
According to Media Post’s Laurie Sullivan, “La Repubblica.it reports that Google has contacted publishers to test the platform. It’s an effort for Google to become partners with publishers, especially in Italy where action by antitrust authorities has flared.”
News Corp does not seem to believe in summer vacations, either. Early last week, they announced the acquisition of Skiff, and e-reader, leading to speculation about the potential for a WSJ tablet.
Now, News Corp has made a bid to purchase British Sky Broadcasting, leading the New York Times to ask, “What’s Rupert Murdoch up to?”
There’s speculation that this may be the latest effort to combat the supposed “curse” of the paywall. The e-reader, Skiff, might make it easier to get users to pay for premium News Corp content.
Eric Pfanner of the New York Times proposes, “Getting consumers to pay for news online is going to be difficult. Might it be easier if access to the Web site were bundled into a satellite television subscription?”
Google’s paywall and News Corp’s push for British Sky Broadcasting are both major pushes to make it easier for publishers to charge for content, by making it easier for people to pay for it.
It remains to be seen, however, if their efforts will change the hearts and minds of the majority of web users, who’ve come to accept free content online as something of an inalienable right.
And yet, they have some of the most enviable resources in the online space: professional journalists and opinion leaders with fact-checking chops capable of producing nuanced, in-depth and often tide-turning prose.
Yahoo, AOL and DemandMedia could be seen as potential competitors, but only if newspapers chose to relax their standards of journalistic excellence.
If the likes of DemandMedia pose a threat to mainstream publishers it is because of their highly efficient, targeted and cost effective content creation and delivery systems.
If DemandMedia succeeds in filling the hole in intent-driven content, journalism may be crowded out and lost in the immense sea of Demand’s two million articles on terrariums.
Should publishers fail adapt to this “new frontier” in content monetization, they could face extinction by their own failure to keep up.
Newspapers must capitalize on certain innate strengths — strengths that AOL, Yahoo and DemandMedia will long struggle to fully replicate = a major newspaper’s brand power and authority.
New data from comScore Media Metrix showed that “57 percent of Internet users in the US looked at a newspaper site in May at home or at work.”
What is more, ComScore reports that a newspaper’s average CPM (cost per thousand) for their online content was $7. The average CPM for other (non-newspaper) sites was $2.52.
Trusted, branded, premium content has high value for advertisers. And this $7 figure, while three times larger than other sites, still has room for improvement.
Google News creator Krishna Bharat spoke at the IJ-7 “Innovation Journalism” conference at Stanford this week (see below).
Bharat predicted that in five years, online news will include “ads that understand the audience better and market the right type of products to the reader.”
Right now, there’s a window of opportunity open for publishers. It is time to act, before “content farms” overwhelm the space.
First it was Yahoo, then AOL and now Google is starting to encroach on DemandMedia’s “demand” content creation space.
The Financial Times reported yesterday in “Google shadow over new media groups” that the dominant search engine obtained a patent for “technology that could position it to compete with a new breed of digital media companies that are generating story ideas for the internet by mining online search data.”
Google’s technology allows them to identify “inadequate content,” that is, content which people are searching for but not finding adequate results. It would be interesting to do a study of newspaper’s content and see how much of it would fulfill these “unanswered queries” if only they had better SEO resources.
Google’s technology poses a threat to DemandMedia, Yahoo’s Associated Content and AOL, especially if Google follows the promise of its initial patent. As the Financial Time’s Kenneth Li reports, “The filing said data from the Google system could be sold to online publishers or given away for free.”
With Google’s entrance into the fray, its clear that the battle for intent driven content is reaching a “fever pitch.” In another article on the subject (“Google eyes DemandMedia’s way with words“) the Financial Time’s quotes David Mason, senior vice president of AOL’s content platform, “Google’s entrance into the field could be ‘a significant change to the market.’”
There is a HUGE opportunity here for mainstream media to harness related technology which would allow them to identify search user’s intent and deliver the appropriate content and relevant advertising.
What’s interesting, also, is DemandMedia’s response to Google’s entrance. Essentially, they seem skeptical that, should Google offer their technology up to online publishers, anyone would actually be able to capitalize on it. Demand’s Chief Marketing Officer Dave Panos told Financial Times, “It is hard to understand how this ‘levels the playing field’ for any company that doesn’t have all of the capabilities necessary to leverage it.”
Online publishers do have these “capabilities.” They have the content, they have the brains, now they just need the revenue and search algorithms too.
OMMA Publish kicked off in New York on Wednesday with a conversation between All Things D’s Peter Kafka (@pkafka) and Yahoo’s VP of Media, Jimmy Pitaro.
Pitaro provided background on Yahoo’s decision to buy Associated Content (more on Media Post.) He also revealed that Yahoo’s decision to focus on creating more local original content (rather than strictly linking and aggregating) stemmed from access to greater “audience insight.”
As Mark Walsh explained on Media Post’s Raw blog, with Associated Content comes not only an army of freelancers, but also “SEO-based technology for discerning stories people want to read about” — and what ad inventory can be filled.
According to Carlson, Yahoo initially had concerns about Associated Content’s ability to produce high-quality content and also “the fact that these freelance platforms assign some stories based on data gathered by algorithms — how can a robot know what people want to read?” Intent matters.
Before the purchase, Yahoo put Associated Content to a secret test and also performed a “quality audit” of their stories.
In the end, Associated Content’s local coverage generated a lot of clicks and reader interest, and as a result, Yahoo was sold on their product. The company is now in the process of integrating and developing new programs with both the new content and data intelligence.
The next step? Having “editors… commission stories based on what Yahoo can tell about reader interest from its vast reserves of Yahoo search data.”
We’ve been paying a lot of attention to these developments over the past few days. I suppose there is only one thing left to ask. If Yahoo can do it (i.e., monetize search users) why can’t newspapers, with their seemingly endless supply of superb, no “quality audit”-needed content, do the same?
While perusing my twitter feed this morning, a particularly compelling link caught my eye. In fact, the link was retweeted so many times it was virtually impossible to miss.
The Wall Street Journal’s Digits Blog reported “Internet Is Set to Overtake Newspapers In Revenue.” It’s a little surprising that this link would be so “hot,” since the writing has been on the (Web) wall for quite some time.
The internet has been steadily gaining, while newspapers have been hit hard by the recession and the shift inconsumer behavior that has resulted in the turn to digital.
Price Waterhouse Coopers projects that internet ads (excluding mobile, which is a big exclusion given its current growth rate) “is set to expand to $34.4 billion in 2014 from $24.2 billion in 2009.”
In contrast to online’s striking growth, newspaper ad revenue dropped 28.6% from 2009!
While both the internet and newspapers trail television for the number one slot, online advertising holds the greatest potential for new revenue. Factors include: “Shifts in consumer behavior, potential for inventory on the Internet, and increased broadband penetration in the U.S.”
Newspapers, however, should take heart in the immense opportunity for advertising revenue that exists online. Yahoo, AOL and Demand Media have each recognized the potential for online ad revenue when content is optimized for the user, mainstream media needs to do the same.
Yet another reason newspapers must begin to successfully monetize their content online comes with the announcement that the FTC will most likely not recommend either taxes or subsidies to help newspapers.
In “Uncle Sam Unlikely to Back Handouts for Newspapers,” Business Week’s Olga Khariff reports that “FTC officials won’t back financial aid because Congress is unlikely to approve it.”
Fallout over bailouts for car makers and banks, and now the oil spill, means that the government has little maneuvering room for such assistance.
Since many (including Rupert Murdoch and the CEO of the Newspaper Association of America) have opposed the idea of government aid to newspapers based (in part) on the principle of freedom of the press, one FTC suggestion could proove promising.
Business Week reports “the FTC may recommend that the Small Business Administration expand its program to provide loans to news startups. … The commission may also propose tax benefits for so-called hybrid news organizations, which are modestly for-profit while avowedly pursuing the public good.”
Its clear, then, that publisher’s are going to have to “save themselves.” Opportunity awaits online, if newspapers can rethink their approach and embrace innovative approaches to content distribution and monetization.
