Posts about advertising

Quality over crap

We keep looking at the problems of fake news and crap content — and the advertising that feeds them — through the wrong end of the periscope, staring down into the depths in search of sludge when we could be looking up, gathering quality.

There is a big business opportunity to be had right now in setting definitions and standards for and creating premium networks of quality.

In the last week, the Guardian, ad agency Havas, the UK government, the BBC, and now AT&T pulled their advertising from Google and YouTube, complaining about placement next to garbage: racist, terrorist, fake, and otherwise “inappropriate” and “offensive” content. Google was summoned to meet UK ministers under the threat they’ll exercise their European regulatory reflex.

Google responded quickly, promising to raise its standards regarding “hateful, offensive and derogatory content” and giving advertisers greater control over excluding specific sites.

Well, good. But this seems like a classic case of boiling the (polluted) ocean: taking the entire inventory of ad availabilities and trying to eliminate the bad ones. We’re doing the same thing with fake news: taking the entire corpus of content online and trying to warn people away from the crap.

So now turn this around.

The better, easier opportunity is to create premium networks built on quality: Not “we’ll put your ad anywhere except in that sewer we stumbled over” but instead “we found good sites we guarantee you’ll be proud to advertise on.”

Of course, this is how advertising used to work. Media brands produced quality products and sold ads there. Media departments at ad agencies chose where to put clients’ ads based on a number of factors — reach, demographic target, cost, and quality environment.

The net ruined this lovely, closed system by replacing media scarcity with online abundance. Google made it better — or worse, depending on your end of the periscope — by charging on performance and thus sharing risk with the advertisers and establishing the new metric for value: the click. AppNexus and other programmatic networks made it yet better/worse by creating huge and highly competitive marketplaces for advertising inventory, married with data about individual users, which commoditized media adjacency. Thus the advertiser wants to sell boots to you because you once looked at boots on Amazon and it doesn’t much matter where those boots follow you — even to shite like Breitbart…until Sleeping Giants comes along and shames the brand for being there.

So why not sell quality? Could happen. There are just a few matters standing in the way:

First, advertisers need to value quality. There has been much attention paid to assuring marketers that their ads are visible to the user and that they are clicked on by a human, not a bot. But what about the quality of the environment and its impact on the brand? In our recent research at CUNY’s Tow-Knight Center, we found that brands rub off both ways: users judge both media and brands by the company they keep. This is why it is to the Guardian’s benefit to take a stand against crappy ad adjacencies with Google — because The Guardian sells quality. But will advertisers buy quality?

Second, there’s the question of who defines and determines quality. Over the years, I have seen no end of attempts to automate the answer to this question, whether by determining trust in news or quality in media. Impossible. There is no God signal of trust or virtue. The decision in the end is a human one and human decisions cost money. Besides, there is no one-size-fits-all definition and measurement of quality; that should vary by media brand and advertiser and audience. Still, the responsibility for determining quality has to fall somewhere and this is a hot potato nobody — brands, agencies, networks, platforms — wants because it is an expensive task.

Third, there’s the matter of price. Media companies, ad agencies, and ad networks will need to convince advertisers of the value of quality and the wisdom of paying for it, returning to an ad market built on a new scarcity. With fewer avails in a quality market — plus the cost of monitoring and assuring quality — the price will rise. Will advertisers give a damn if they can still sell stuff on shitty but cheap sites? Will the cost of being humiliated for appearing on Breitbart be worth the premium of avoiding that? On the other hand, will the cost of being boycotted by Breitbart when the advertiser pulls ads there be worth the price? This is a business decision.

I always tell my entrepreneurial students that when they see a problem, they should look for the solution, as an engineer would, or the opportunity, as an entrepreneur would. There are many opportunities here: to create premium networks of quality and trustworthy news and content; to create mechanisms to judge and stand by quality; to audit quality … and, yes, to create quality.

Our opportunity is not so much to kill bad content and bad advertising placements and to teach people to avoid all that bad stuff but to return to the reason we all got into these businesses: to make good stuff.

Native advertising: Another false messiah?

I’ve been waiting for this: the leak in the native advertising balloon.

Tablets were going to save the news business. Not so much. Paywalls were our salvation, damnit. Nope. Native advertising is our future. Think again.

Digiday reports on the latest problem with the native advertising strategy:

Digital ad sales intelligence platform MediaRadar said the average renewal rate for sponsor content this year is 21 percent. Meanwhile, native ad tech company Polar recently described renewal rates as “weak,” with 40 percent of the publishers it surveyed showing renewal rates below 50 percent.

Native advertising isn’t going to cure all our problems because:

1. The ROI is debatable. Says Digiday: “Behind the low renewal rates is the fact that advertisers are uncertain about the return they’re getting on native advertising.” This has been my worst fear. We give the advertisers what our standards and ethics forever forbade — confusing our readers about the source of content — and then the advertisers wake up and say, ‘Well, that was fun. But we’re bored with that. What can you sell us next?’ Except with badly done native advertising, we’ve already sold our brands, our souls, our seed corn. We have nothing left. Jack, you gave away our only means of support for what? Magic beans?

I have long wondered whether native advertising would do what advertising is supposed to do: drive sales. What is the efficacy of replacing five-word banners with 500-word stories? Perhaps we are beginning to find out.

2. Competition is rushing in. Digiday: “Three years ago, there were about 15 companies helping brands produce sponsored content, according to MediaRadar CEO Todd Krizelman. Today, there are more than 600, and the number is growing.” I have long said that in media need to compete with creative agencies but we can’t imagine that they won’t fight back. Content is a commodity. Anybody can make it. That is the key lesson of the internet for media. So we surely couldn’t believe we’d hold onto the business of “telling brand’s stories” for long.

3. It’s expensive. It takes a lot of resources to make content for finicky advertisers.

4. It’s no longer enough to write a “brand’s story” and put in in our editorial space (barely camouflaging it as an ad). Media’s audience is insufficient. So media has to spend money (a) placing ads elsewhere to drive traffic to our native ads, (b) placing the native ads we make at other media sites, and (c) trying to buy social traffic. That, too, is expensive.

So what is the profit margin on native advertising after we are left marketing our services to replace the clients who churn out, after spending a fortune on making native advertising, and after spending another fortune advertising the advertising? Native ad distributor Polar says it’s a high-margin business still and that’s good. But where do those trend-lines fall given the news above?

This is the moment where you say, “Goddamnit, Jarvis, you shoot down tablets, paywalls, and native advertising, not to mention programmatic advertising (because it commodifies media) so what do you expect us to do?”

Mind you, I am not against doing native advertising well. See Quartz, for example. I am in favor of media companies competing with ad agencies for both creative and media business. What I object to is the idea that this could have been our sole salvation, any more than our earlier magic beans, without embarking on the much harder work of reinventing ourselves.

Our only salvation will be to question *everything* about our mass-media business models as we enter a new reality, starting with the value of reach in an age of abundance and endless competition. Yes, reach matters but only if we have something of value to convert all those folks to. We have to shift from reach to relevance, volume to value. We have to rethink the essence of what news and media are. That’s why I wrote this: to begin questioning and exploring.

That’s also what I said to our incoming students at CUNY’s J-school last week. At the end of our week together, the students listened to voters about their needs in this election and their proposed solutions didn’t look like content-based mass media at all. They’re all journalists but they are learning to question their assumptions. We need to do the same with business people and reinvent what they do. Instead, we’re grabbing the deck chairs on the Titanic hoping they will act as flotation devices.

* * *

Content.ly — a reputable native advertising company (with whom we are doing at study at CUNY) just released some further data on media’s behavior. 68% of publishers have editorial staff make native advertising. Nooooo! 45% think the biggest threat to native advertising is the lack of separation between church and state. Jeesh.

Advertising sucks. Let us listicle the ways.

From my Observer column (read the whole thing here):

Advertising sucks, let us listicle the ways:

1. Advertising is almost always irrelevant.

2. Advertising is oppressively repetitive. That is only worse now that so-called retargeting advertising will note when you look at a pair of pants online so those pants can stalk you across the web for months.

3. Even with all its newfound data and artificial intelligence, advertising is still stupid. It doesn’t know that you already bought those damned pants and keeps selling them to you.

4. Advertising interrupts—first radio, then TV, and now our Facebook streams.

5. Advertising is intrusive of privacy. I will argue that the humble cookie has been unjustly demonized by the Wall Street Journal, for cookies do useful things like reducing the frequency with which ads are served to you (see complaint No. 2). Still it’s true that the advertising, media, and technology industries gather much data without giving their users any control or transparency into the reasons and consequences.

6. Advertising is irritating. It always has been. Go to anyone over the age of 50 and whine, “More Parks Sausages, Mom,” then watch them cringe.

7. Advertising is tacky, a glaring, blaring blight on the visual and auditory landscape. On most sites, there is just too much of it.

8. Advertising in inefficient. The only advance on the net is that marketers now have a better chance of determining which half of their dollars is wasted.

9. Advertising lies.

So how do we fix it? Not with native advertising. That is just another lie, designed to make us think an ad is not an ad. But we’re not as stupid as advertisers—and media companies—take us to be. As online metrics company Chartbeat has learned, users engage with a web page—that is, they scroll through it—71 percent of the time when the page contains real content but only 24 percent of the time when it carries so-called native advertising. And that leads me to one more complaint to fill out this listicle:

10. Advertising is an insult to our intelligence.

The column is devoted to fixing this.

Geeks Bearing Gifts: Advertising, the Myth of Mass Media, and the Relationship Strategy

OK, folks, now we are at the nut of Geeks Bearing Gifts: Imagining New Futures for News. This is where I begin exploring how the relationship strategy I advocate can bring business benefit to the news industry. Here’s the entire chapter, free on Medium. Here’s the start:

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The myth of mass media, lovely while it lasted, was this: All readers see all ads, so we charge all advertisers for all readers. The unbundling of mass media and the rise of endless competition punctures that myth and robs legacy companies of the pricing power — and monopolies — they had so enjoyed. Today, I believe we need to shift to a business built on the relationship strategy I began outlining in the first part of this essay. There, I argued that knowing people as individuals and communities — no longer as a mass — will allow us to build better services, and that, in turn, pushes us to develop new forms of news. Now I will look at how that relationship strategy can form the foundation of a stronger advertising business for news and media.

To start, if we provide our users with better relevance and value, that surely will build greater engagement, loyalty, usage, and attention, and that in turn will create more ad inventory to sell (though, granted, hardly any media company sells all the inventory it has today anyway). More important, the relationship strategy gives us the opportunity to increase the value of what we sell to advertisers. By knowing more about who our users are, we can sell and deliver more targeted advertising that is more relevant to their customers and thus more effective. Rather than serving only one-size-fits-all “impressions” to anonymous “eyeballs” by the thousands as advertisers and media companies do now, we can offer more productive measures of value like attention, engagement, action, impact, and even sales. We can serve specific groups of users to advertisers who value them highly. With privacy properly protected, we have the opportunity to become a trusted broker of data we gather about our users. And if we get good at the relationship business, we have a brief window of opportunity to teach and sell these skills to advertisers as a service — presuming they don’t wake up and learn them before we do. We also have the opportunity to move past selling advertising to selling products and services directly to users, venturing into commerce — which really is just a truncated form of marketing and advertising. The relationship strategy is one defense against the commodification of media’s old content business by new competitors and new technologies.

Read the rest here.

If you can’t wait for the rest of the book, then you can buy it here.

No silver bullets

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Lewis DVorkin performed a miracle with Forbes … almost. He almost rescued a dying brand, almost helped get it sold to a new owner, and almost rescued the Forbes family and its no-doubt-regretful investor Elevation Partners. I respect Lewis’ inventiveness and innovation. He has done the best he could with the brand he had.

But there’s only so much that can be done urgently with old media on the descent. As Steve Forbes himself said announcing the sale of a majority stake in his company to a group of Asian private-equity investors and cataloguing how his business used to be run: “The web has made this way of doing things obsolete.”

The Times, quoting unnamed sources, says the deal values Forbes at $475 million, but the Financial Times’ John Gapper properly asks:

Axel Springer, a leading European magazine publisher and digital company, was supposed to be interested in Forbes. But it and other media buyers dropped out early. Forbes had reportedly been hoping to sell the entire company for more than $400 million. That didn’t happen. Whatever the real valuation, given the buy-out of Elevation Partners — which had invested in Forbes in 2006 getting a reported 40% for $250-300 million, valuing the company then at under $750 million — and given the large chunk that Forbes is left with, I’d guess the family got something in the borderline nine figures. [I should add that as one commenter elsewhere points out, I’m not even trying to make a guess at such things as liquidation preferences for Elevation.] Not a deliriously happy ending for the Capitalist Tool, but — as people told me this week when I complained about turning 60 — it beats the alternative.

When DVorkin returned to Forbes in 2010, where he had been executive editor a decade before, with the purchase of his startup True/Slant, he brought with him what looked like a solution for a dying brand: He used that brand as candy to draw more than a thousand contributors to write mostly for free — the top few traffic attractors can make a decent buck — adding onto the work of a few score Forbes staff journalists. Thus he simultaneously exploded the quantity of content Forbes could serve while reducing the total cost of content to nearly nil. Now I’m all for media opening up to more voices, but let us acknowledge that not only the price but also the overall quality of Forbes content declined.

At the same time, the business side, headed by Mike Perlis, used that dying Forbes brand as candy for advertisers: Come appear on Forbes.com with your own pieces labeled “Brand Voice.”
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I’ve long said that if you have to put a link next to a label saying “what’s this?” then the label clearly isn’t clear enough. This was a pioneering entry into the the so-called native advertising that is now overtaking media everywhere. Just as it was supposed to be the salvation of Forbes it is now supposed to save legacy media.

Beware the silver bullet. It can backfire.

The problem in the end for Forbes, I believe, is that the brand became even more devalued. I illustrate this very simply: Now, when I see a link to Forbes on Twitter, I don’t know whether it is going to take me to (1) the good work of a Forbes journalists, (2) the good work of a Forbes contributor, (3) the bad work of one of many Forbes contributors, or (4) the paid and wordy shilling of a Forbes advertiser, e.g.:

Thus, I hesitate three beats before clicking on a Forbes link. That is the definition of a devalued media brand. And that is precisely what other media companies should fear as they more and more try to fool their readers into thinking that what we used to call advertising is now something else that can comfortably live under brands, enigmatically labeled.

The real lesson of Forbes is that there are no easy answers and quick solutions for transforming legacy media companies. DVorkin became a key tourist attraction for media executives touring New York. I know because I took many of them to meet Lewis. He generously shared his means and methods. But I also told these executives that the path was not without the peril I just described.

Media executives are looking for quick fixes still.

Tablets were going to save them, returning to them the control of user experience and business model the link had taken from them. Hearst Magazines has had some success with tablets. But salvation does not this way lie.

Pay walls were going to save them, finally recognizing the value of their content online. But as Gannett has learned, after grabbing cash flow the first year, growth stops. No Moshiach there.

Ad marketplaces were going to save them — or at least let them compete with Google. But programmatic advertising — those ads that follow you all around the web telling you to buy that kayak you looked at once on Amazon — commodify media. They value direct data about a customer over the context media provides — that is, it’s better to show a kayak ad to a kayak buyer than to buy an ad next to a kayak story. This is why I argue in the start of a white paper I’m finishing now that we must shift to a business based on known relationships with people as individuals and communities rather than as a mass.

Shifting to a relationship and service strategy over a pure content strategy will take not only urgency but also time, with much experimentation and failure and a need for patient capital — likely not the Hong-Kong-based private-equity investors Forbes now has, not the hedge funds that Digital First Media has, not the public owners that Gannett and Time Inc. have. This won’t be easy.

I’m not saying that DVorkin and Perlis ever thought that what they were doing was easy. But others did. They hoped that Forbes would show the way to a solution for all their problems. Well, so much for that. That way lies the skin of your teeth.