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By Michael D. Silberman, SVP Strategy
After a decade building the New York Media digital business and new digital brands, and before that helping to create MSNBC.com and the digital news category out of whole cloth, I’m joining Piano Software, the preeminent company providing paywall and user engagement technology and services to top media companies across the industry and around the world. So why, after a career spent making media, have I made this move?
Part of the reason is personal — I’m eager to help build and grow a company and Piano is at an exciting moment as a growing technology company. The main reason is that the digital media business is finally making the shift from attention to user engagement — seeing users as individuals rather than sets of eyeballs, focusing on winning hearts and minds. This is a huge, ultimately positive change that will produce a much healthier media ecosystem. But it’s not going to be easy. It requires new technology, new marketing and product skills and most importantly a change in mindset from content-first to customer-first. Piano, I believe, is uniquely positioned to guide media companies through this transition and have an impact across the entire industry.
If you’re reading this, my guess is you’re in the business and already aware (painfully, perhaps) of the troubled history of the ad-based attention model for digital media. But let’s relive it for a moment: The first 20 years of the consumer internet, especially in media, have been almost entirely about aggregating audience — sites seeking to attract millions, often tens of millions, occasionally hundreds of millions of people, with all those eyeballs “looking” at billions of banner ads. That focus on big, unidentified, often undifferentiated audiences made it possible for media companies to take the existing ad models—based mostly on audience size—and adapt them pretty easily to digital. Yes, there were significant creative and technical challenges in making that shift—learning to create digital stories and to sell and serve digital ads. But fundamentally the model itself didn’t change much.
The relationship with the audience was still largely a one-way, anonymous relationship, despite the new ability to engage directly, to measure behavior and to learn more about that audience. Most media companies were shortsighted, opting to avoid friction-inducing roadblocks like registration in order to maximize unique visitors, pageviews and ad impressions, missing a chance to develop a direct relationship with readers.
The end result: massive harvesting of user data, ad-cluttered sites powered by the ad tech Lumascape, “recommended for you” widgets, ad fraud, and ultimately unhappy, ad blocking users.
Signs of the attention model’s collapse were everywhere in 2017 — from Google and Facebook gobbling up most of the ad revenue and virtually all of the growth to Mashable’s fire sale to big ad revenue misses at Buzzfeed and Vice. It became clear that advertising alone is not enough to support quality media.
Finally, media companies are taking action. In November and December alone, The Atlantic, Business Insider and Wired launched paid products and the New York Times reduced its free story count. More is certainly coming in 2018, especially following Facebook’s pivot away from publishers, and the likely change in publisher audience strategy.
But simply launching a paywall, adding affiliate links or announcing an event series isn’t enough (hello, Buzzfeed). That’s just throwing new revenue streams up against the digital wall like spaghetti. There are four essential elements required for success in the new user-engagement era of digital media: customer knowledge, product strategy, enabling technology and marketing skill.
Let’s dig into each in turn.
Customer knowledge: In the attention era, media companies didn’t need to change their fundamental model. We could still follow an editor-first content strategy — writing about what editors thought was important or interesting. And the ad tech revenue stream didn’t require any understanding of who was reading beyond some basic demographics. Yes, there were audience analytics, paying attention to SEO trends and later social traffic. But the starting point was always what WE thought was interesting. We didn’t truly know our customers. In the user engagement era, understanding the reader (or viewer) has to come first. Whom are we serving? What can we learn about them? What do they need to live their lives, do their jobs or be entertained? Then we can apply editorial and product creativity to serve, surprise and delight them with great products and stories they didn’t know they wanted.
Product strategy: Once you know your customer, developing the right product to serve them takes more than creativity. It also requires focus, experimentation and iteration. In product management terms, it’s “finding product-market fit.” Focus means keeping your eye on the customer you’ve identified when deciding what product ideas to pursue and rejecting ideas that aren’t a fit for those customers. Experimentation and iteration go hand-in-hand — building enough of the product to test it with your customers (or at least a few of them), seeing what works and what doesn’t, and iterating to make changes and improve the product. This method will apply across multiple dimensions of product and business decisions — from editorial and product focus, to features, to pricing. It’s also an ongoing process, continuing even after achieving success.
Technology: While there has been a massive investment over the past 20 years in ad tech, there’s been relatively little investment in software and services to understand and engage with users as individuals, to measure behaviors like loyalty and conversion to repeat usage. Driving user engagement and powering consumer-paid content requires a robust technology platform that provides measurement and reporting, customer messaging, content gating rules, entitlements and payment processing. Moving forward, machine learning will be a powerful tool for anticipating which users are most likely to become loyal and ultimately willing to pay.
Marketing skill: It’s become conventional wisdom among media business observers that President Donald Trump deserves a lot of credit for the recent success driving subscriptions at The New York Times, The Washington Post and other media companies. The follow-up question is often “What happens when the ‘Trump bump’ fades?” Piano’s CEO, Trevor Kaufman, points out that’s a pretty limiting way to look at it. No one asks, “Will consumers pay for Nike shoes?” the way media pundits ask “Will people pay for journalism?” The problem is that most media companies don’t know how to think like product marketers. They generally don’t have the skills in house, haven’t got the tools available and aren’t building marketing into their business plans and P&Ls. So, once you understand your customer, create a compelling product they’re willing to pay for and have the technology support, the last element to put in place is the ongoing marketing plan to drive customers through the engagement funnel. Then Google and Facebook transform from behemoths with the power to slash your audience and destroy your business into just another channel for marketing your product.
The vision we are working toward at Piano is a healthy media market based on true relationships with known customers, enabled by great software tools and smart consulting services. For publishers, creating products that meaningfully connect with a loyal audience will unlock multiple revenue opportunities—whether consumer-paid products, events, merchandise sales or even advertising based on that real customer connection.
I’m thrilled to join the team.
Industry Trend of the Week
Who is really looking at online content? How do publishers know that a page view is a story that’s read, an ad that’s viewed and not just someone who has clicked through from social media or a search engine and then bounced? Current analytics tools return page views, but do they really show how users are engaging with, reading or viewing content? Page views were established as a metric to help online publishers sell advertising, why has it been adopted by the newsroom and isn’t there something better? Thomas Baekdal addresses this issue in the story of the week.
Story of the Week
Accurate Analytics is Painful
Baekdal sums up why analytics, like Google Analytics, used by most publishers, simply don’t tell the whole truth. Baekdal argues that if you want to get a better feel for what people are reading, then there are different ways, much different ways, to look at the metrics being returned.
Shoptalk: Can Publishers Step Away From the Brink of Peak Content?
There’s been a lot of disparagement of publishers who employ clickbait. Though the definition has shifted from its origin as a term for the gap between what a publisher promises and what the article actually delivers to a more generic term for lazy reportage or crummy lists, nobody wants to be seen endorsing a model that prioritizes empty clicks.
Industry Trend of the Week
Last week saw a number of publications announce they were culling staff to cut costs; this week the buzz is all about how much ad money Silicon Valley is removing from online publishers’ coffers. The $60B that Google collected in advertising revenue last year dwarfs the entire publishing industry, including print, which clocked in at somewhat less than $25B. Sadly it doesn’t seem like either Google or Facebook will be returning ad revenue to publishers – ever – leaving publishers to cut staff and figure out different monetization methods to stay afloat.
Story of the Week
Can anyone save The New York Times from itself?
As noted last week, seismic waves are rocking major publications; this story details what’s going on behind the scenes at The NYT two years after Dean Baquet became editor, and the deeper changes that are coming from changes he’s already implemented.
Silicon Valley’s hoover leaves newspapers hunting for profit
In the last year there has been an unprecedented exodus of spending, as the UK’s top 10 newspaper advertisers, which includes names like Sky, British Telecom, Tesco and Asda take their business elsewhere. This is forcing unprecedented cost cutting by newspapers, laying off journalists, decreasing office space and reducing scale. Keep reading
Industry Trend of the Week
Journalists are again in for a tough time as their employers are cutting yet more reporters and editors. First The Daily Telegraph announced it was culling senior newsroom staff including their Deputy Editor. Then new media darling Vice axed both London-based foreign correspondents and another 18 people in the UK and the US as they restructure. Finally, The New York Times announced buyouts as part of its overall effort to remake their entire organization. Even with more digital revenue filling the coffers, sadly it’s not enough to prevent a dramatic loss of talent from top news organizations.
Story of the Week
Looking for a sustainable business model for a regional newspaper? Start at the Minneapolis Star Tribune
The Star Tribune’s revenues are up in 2016 after holding even for the past couple of years. This news won’t provoke envy at Google or Vox, but it’s good news for a newspaper publisher nonetheless. CEO and publisher Michael Klingensmith talks about how the Star Trib is keeping ahead of trends to keep their ROI up.
Fee or free? When to charge for online content
An interesting look at how to charge for content under different online subscription models – focusing on how content appeals to audience in cycles. For instance, when a sport is in season, there is more demand for content surrounding that sport and subsequently, it becomes easier to charge for related content. Keep reading
Industry Trend of the Week
This past week a lot of different reports were released with different but similar emphases like: mobile users won’t pay to block ads or for content, or online news consumption is reaching a plateau. Yet industry commentator Tomas Baekdal makes an important point, most studies being done today are still reporting digital content in print verticals and thus aren’t accurately reflecting the true state of the industry. While print is still an incredibly important part of publishing, it needs to be differentiated in reports from digital because increasingly, the two are completely separate, disconnected products.
Story of the Week
We Need Better Digital Media Studies
Another really great call to action from Thomas Baekdal, this time asking the media industry to stop doing study after study that break down digital content into print verticals and instead redefine digital media into specific digital verticals that can be used to understand the industry better going forward.
The Washington Post tests personalized “pop-up” newsletters to promote its big stories’
An idea the WP is testing is personalized email newsletters that are based on readers’ interests and behavior. Right now the tool is outsourced, but it will be moved in-house soon using Amazon’s personalization engine. Thus far the approach seems to be working as click through rates are three times above average. Keep reading