Attention v. relationship economy

Oddly, Google chief economist Hal Varian analyzes newspapers‘ problems and prescribes solutions strictly from an old-media perspective — based on attention to marketing messages — rather than an internet (namely, Google) perspective of relevance and relationships.

In a speech to Italian journalists, Varian says that “the basic economic problem facing news is increased competition for attention” and that newspapers must use such tricks as tablets and dayparts to get people to spend more leisure time with news so they can show them more ads (ignoring, for one thing, the fact that advertising abundance — championed by Google — lowers advertising prices and takes from newspapers the pricing power they once had). “The fundamental challenge facing newspapers is to increase the time people spend on their content,” Varian says. “More time reading the newspaper online translates into more online ad revenue.”

I couldn’t disagree more. Pardon me for suggesting to a Googler that we would be better off asking, what would Google do?

Google reinvented the advertising model, moving past attention as a proxy for intent (“if they see my ad I can convince them to buy my product”) and placement as a substitute for relevance (“men read the sports section and men buy tires, ergo we will advertise our tires in the sports section”). Google also killed the beloved myth of mass media that supported it for a century: All readers see all ads so we charge all advertisers for all readers. Google understands that users have variable value that is increased the closer it can get to delivering relevance and intuiting intent through signals — search, location, context, behavior as well as consuming content — which come from having a relationship of mutual value with the user.

The last thing newspapers should do is continue to try to shovel their old relationships, forms, and models into a new reality. No, don’t just sell space for messages to advertisers (for they’ll soon wake up and realize the pointlessness of the exercise). Don’t try to recreate old forms in new devices like tablets. Don’t measure the value of relationship as page views or time spent. Don’t think your primary value is manufacturing content that you then try to sell.

Newspapers and other former media outlets should become — as Google is — services that still inform — that is their core value — but now can use their own signals to learn about and return relevance to people as individuals and communities rather than masses, thus deriving greater value in the transaction.

For example, through my use of its Maps, Google knows where I live and work. My local newspaper doesn’t. When I ask for “pizza” in search, Google doesn’t give me a hundred archived articles with the word “pizza” in them but gives me the nearest pizza (soon, I hope, the best pizza, the pizza I’d most likely enjoy, the pizza my friends like with ever crisper relevance … and crusts). If my newspaper knew where I lived and worked — if it gave me reason to reveal that — it could target content to me the way it already tries to target ads. Why does *every* newspaper site still treat its home page as a one-size-fits-all print page when it could prioritize news that might be more relevant to me?

The reason: because newspapers still believe in the myth of mass media; they want to hope that with enough time you will look at all the pages they make and all the ads on them. That is the old attention-based media model Varian still recommends. This is also why newspapers continue to sell advertisers space for messages when instead they should be helping those merchants build better relationships with customers. But first, newspapers have to learn how to build relationships themselves.

That is the lesson Google teaches us. That is the new media market Google, more than anyone, created.

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  • Great point, Jeff — and you are right to question the economist.

    The only piece I would say you missed to make that work is a bit more of a shift in how Journalism is done. might serve me a version of the site rolled through my relevance markers — topic, location, recommendation, friend activity — but it would be a very short read.

    Now, when the newsrooms and sites figure out how to properly curate news instead of just create it, there will be enough information there to make it worth my while.

    I used to work in TV news (out nearly 10 years now,) and my nightly exercise involves watching the lead story at 10. Very often, the lead is something I would not care about even if it was happening live down the street from me.

    A paradigm shift that embraces Curation will ensure there is enough “news for Ike” coming in that I would pay for it.

  • There is a lot of good thinking out there about the future of journalism (e.g. I, too was completely underwhelmed by the address Varian gave.

  • Fighting for attention is like trying to honk the loudest on the freeway. You’re still stuck in the same old traffic jam. Instead, focus on creating a path for your readers out of the traffic jam – offering unique value – and earn their trust.

    To me, that’s the crux of the difference between the attention-based model and the relationship-based model: the former tries to be the loudest, the latter tries to be the most useful. Great post, Jeff.

    • “Attention” is from the perspective of the speaker: “please listen to me”. “Relevance” is from the perspective of the user/customer/public/person: “please serve me”. We should concentrate on the latter.

      • In either case, you need the person to pay attention. They’re more likely to do that when your message is relevant as opposed to simply louder. That’s the only point I was trying to make.

  • Juan Giner

    His point about multi-section ads distribution shows that he doesn’t have any idea about newspapers or advertising.

    Just look at any multi-section newspaper and what you will see is that advertiser want to be in the (First) News Section, where the rates are higher.

    And NOT in sections with NO advertising.

    Just the opposite of his point.

    Oh Gosh!

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  • jeddings

    I’m not sure about this thesis, and respectfully disagree with its premise. I agree that when intent exists, the Google model of “give them what they’re looking for” when it comes to advertising makes fundamental business sense (not to mention delivering value to the end user). What makes a newspaper different from search or maps is that a reader isn’t consuming news content because they have commercial intent – they are doing so because they are spending their digital recreation time to catching up on what’s going on in the world. As someone who worked on AdSense at Google, the biggest challenge we had was trying to understand if any sort of intent existed, much less how to intuit it.

    Studies (good ones, not bad ones) have shown that brand and awareness advertising, when done properly and with the consumer in mind, can be effective in driving purchase. Trying to tie a brand impression to an ultimate purchase decision is too far removed to be able to assess any sort of usable signal, and without that intent, the best we can do today target the right ads to the right user are things like contextual behavioral, and social targeting.

    Google is a smart company with many smart people working hard on these problems. A lack of a good solution today is probably not for a lack of ideas or effort. It’s a very messy situation that has no easy answers.

    • I think you’re still sticking with the content-for-attention model rather than the information-for-service and service-for-value model. Yes, some newspaper reading is recreational/entertainment. But if it is to have any value it must have information you can use, information that is relevant to you — and that is a signal of what you need and want, if the service organization can only hear you.

  • Go further, Jeff! Why is the newspaper a middleman and not a representative? If the paper hurries, it can represent the interests of its readers to those that used to be advertisers, instead of the other way around.

    In a world of so much choice, the smartest and most lucrative consumers will pay their attention to the middleman that acts the most on their behalf.

    • jeddings

      Terrific idea! I love this tact, though I wonder how many readers want to give that kind of information? When I was at StumbleUpon and we gave users the option to choose the kinds of ads they saw, almost none of them took the time to do so. Should newspapers try to use implicit signals they collect on their users to try and represent those interests? And how is that different from what is happening today?

      • What happens when the media company commissions products or services, or gets providers to bid against one another for the privilege of supplying its readers?

    • Amen, Seth.
      I’ve been talking with smart folks recently about the journalist as community organizer — helping the community accomplish what it wants to accomplish and not just through information but through action.
      Further, I’ve been grappling with the question: How can we start the journalistic process with the outcomes needed and wanted by citizens and their communities and then backfill the appropriate information, representation, convening, and action? It’s the opposite today: We, the journalists, think you should know this. No, what if we could listen to what people actually need. After Sandy, it would have been easy to understand my needs in NJ: lists of closed streets and open Starbucks and help in yelling at my town and utility to get more information on my behalf. Instead, media gave me articles because that’s what they are built to manufacture. That’s no service at all.

      • Derek

        hmmm.reading this as a potential advertiser, here is what I want. I offer a service, don’t scale, and could have to hire someone screen calls, because we don’t do everything. Google works well, x service in y town.

        But, if a media was on the ball they would place themselves between the vast rabble and my limited time and resources. Qualify buyers, know what they need and what I have to offer. I’m not looking for page clicks, or response volume. I’m looking for folks that need my services, and folks are looking for me because they need my services.

        I’m in a small town, word of mouth works quite well. Can a media organization be the word of mouth?

  • Citations are the reason all knowledge based systems exist. The desire to improve the existing system of citations is indeed what quested Sir Tim Berners Lee to create the web. Googles desire, to reverse this process, yet the citation couples both these efforts. Hang out in a Library, watch the paper being read, note the pad and pen at the ready and observe the quality of the readers attention span. Advertisers and journalist both share a citation protocol, one hopes Pulitzer, the other market share. There is a Ad for every Person, a cite/source for every writer and a reader for both….the rest is well, logistics, as a energy stream that greets all in its path . Define the path, cite the ads adventure, print it for readers.

  • News is a loss leader you need something else to sell, but classified ads, etc, have been cherry picked by others without requiring a newsroom.

    It’s disingenuous for Varian to say news never made money because it takes Google’s role out of the blame game. It’s like saying movie theaters never made money from showing movies but from the popcorn and soda they sell.

    I’m not impressed with Varian and his understanding of the newspaper business.
    Economists are hardly a science-based or even data-based discipline. After all these years, Shaw’s quote about if you laid all the economists in the world end-to-end they still wouldn’t reach a conclusion, continues to be true.

    After the crash of 2008 Greenspan was pulled into Congress to answer questions and he said all his models of the economy over a 40 year period were wrong! Yet he adjusted interest rates based on those models.

    Varian continues in the proud tradition of economists – he hasn’t a clue what is going on – but that doesn’t stop an economist or stop people paying attention.

    • woke

      > News is a loss leader you need something else to sell, but classified ads, etc, have been cherry picked by others without requiring a newsroom.

      There are too many counter-examples for “news is a loss leader” to be true.

      In broad strokes, profitable news has three attributes, quality, value, and scarcity. News-folk seem to think that quality is the most important, but they’re wrong. Readers pay more for value (to them) than quality, but they won’t pay any more than they have to.

      The internet means that readers can easily use multiple news sources, so if you don’t want to be in a low-margin commodity business, you must produce unique content. If your content is not unique, your readers will go with the lowest-cost option, no matter how good or valuable that content is.

      Of course, value matters too – you can charge more for high-value unique content than for low-value unique content.

      As a result, quality is less important than value.

      Journalists get this backwards.

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  • dhruva

    What you are suggesting is a Netflix like online newspaper whose core competency is like you said, personalized news etc, but we already have digg and it sort of failed.

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  • Luis Neves

    Hi Jeff
    First things first … I bought and read “what would Google do?”. Have to say it was a mind opener for me as to internet business and modern maketing. In this article you keep the very same reasoning, which is logical. Nonetheless, having (I think I did) understood your point I would like to suggest that maybe, just maybe, Google is introducing a serious set of changes.
    They created this platform were the idea was to integrate all their services … great idea … “keep’em inside our platform because we know what you like/want” … so one gets the adecuate adds, info or whatever. Makes sense. And it generates even more info on users thus (one might think) having better connection with each one of us.
    But then, for the last half year, they started to integrate AND revising usability, features and functionalities. The result … (my humble opinion) … Maps is less practical; Google + is more confusing; Google Keep is really useless; Hangouts is a flop; and YouTube is just being killed by removing it’s previous comment management system. As things are right now, interacting is getting worse … as youtube publisher HarshlyCritical puts it … Google “is killing communication”.
    Maybe I am totally wrong (probably I am) but it goes against several concepts that made Google what it is. Forcing people to be in Google+, making collaboration more complex and/or more difficult to manage is quite a philosophic change.
    Not just because they are big and with plenty free functionalities means “we are in the bag”.
    Google got our attention … now it needs to keep it. Chances are that others will come and might get a good chunk. Google did it … why not others? Keeping an eye on your “customer’s” needs is never a bad idea.

    Thanks for your time. Comments would be appreciated if you have some time to spare.

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