Think small: the new metrics of engagement for news

Forget about the big numbers of total page views per month or unique users per month.

Fans are engaged and willing to give their time and money.

Those numbers are misleading and meaningless. They had meaning only in the days when the media business depended on mass media, massive audiences, and products aimed at the masses.

That was when the news media depended on advertising.

Today the business of media is all about touching potential customers with personalized, customized messages. It's about identifying the small number of people who are truly fans of your publication or the stars on your team. It's about strengthening the emotional attachment people have to your brand and its mission.

How the big numbers mislead us

In their very successful campaign to reach 1 million paid subscriptions for their digital-only edition, the Washington Post learned that the users most likely to subscribe came to their site three times a month.

Media seek 'emotional engagement' of audiences

Sylvia Chan-Olmsted is one of the leading scholars of media economics, and she stopped by the University of Navarra Dec. 13 to chat about some of the trends she is seeing in the industry.

"Media companies need to translate data into intelligence."

Chan-Olmsted, a professor at the University of Florida, singled out three trends:

1. There is a new value chain in media. Content is becoming "unbundled", meaning users can buy individual movies, TV shows, or songs without having to pay for products they don't want. 

Content is becoming crowd-sourced, meaning that consumers are recommending things to each other through social media.

And the major media companies are harnessing their data about users to recommend media products and even create content based on their customers' tastes.

Media platforms like YouTube, Apple, Amazon, Hulu, and Facebook are all starting to invest billions of dollars in original content to challenge Netflix, whose business model has disrupted the movie studios, TV networks, and cable services.

The audiences are in charge: are publishers listening?

Recently I was invited to give a lecture at the University of Malaga--"The audiences are in charge: Are publishers listening?" The audience had students in their doctoral, master's and bachelor's programs, as well as a number of faculty.

Below is a summary of the presentation.

1. The marriage of convenience between advertising and journalism is over. For proof, look no further than the graphic below, which shows that newspapers in Spain have lost more than 500 million euros in ad revenue since 2009, and that includes the revenue they get from digital. (The U.S. is very similar.)

In the future, news media will need to develop a deep relationship with their users. The important thing will be not the quantity of eyeballs reached, as measured by page views and unique users, but the quality of the relationship with the users.

Versión en español

Journalists and sales: don't sell your soul

Over the past several years, I have written a number of blog posts about how journalists can get involved in sales and marketing without violating their ethical standards or damaging the credibility of their publication. Here are a few of them.

1. Journalists selling ads: think of it as a fair exchange

When I was going through the transition from editor of a business publication to the role of publisher, I dreaded sales calls with clients.
"It meant I had to ask clients for money, which was a new and uncomfortable experience. The hilarious irony of this is that, as a reporter and editor, it was my job to ask people much tougher, more-intrusive questions, and I did it with no problem -- grieving parents about the death of their child, a political candidate about his sexual escapades, a business executive about her salary.
How tough could it be for a former reporter to ask an advertiser for money?

It takes a village to identify false news

Filloux: A credibility scorecard

Liberal democracies are being tested around the world by the rapid diffusion of misleading or false information designed to influence voters.

It has happened in France, Catalonia, the U.K., and, of course, the U.S.

Many have proposed--for example, the World Economic Forum--that two of the most powerful vehicles for spreading information, Facebook and Google, should be responsible for filtering out material that is demonstrably false or misleading.

Versión en español. 

But it turns out that this is not easy to do. False information is often irresistibly appealing and moves too fast to be stopped.

Why we're Still in the Dark about Facebook's Fight Against Fake News -- Mother Jones

Nine experts offer opinions on how to fix Facebook -- New York Times

Not an editor, but a scorecard

What's more, it is hard to define false news in a way that can be automated by algorithms. Journalist and media consultant Frederic Filloux has developed the News Quality Scoring Project, which attempts to use automated systems to evaluate the likely credibility of a piece of news content. It doesn't label news as false or fake. It simply gives a credibility score based on a series of indicators such as a publisher's or a journalist's previous reliability.

Filloux's Publication Quality Score criteria

Facebook, Google, and Twitter themselves are working with the Trust Project on an automated system to display "trust indicators" alongside information they share with users.

Chasing clicks isn't bringing in readers or money

Some observations by media economics expert Robert Picard's observations about the challenges of media today, from an interview done by the University of Navarra Faculty of Communication:

Media companies need to develop revenue from many more sources than they did in the past.

Media companies are diluting the quality of their product by chasing reader clicks with light or frivolous digital content. "This is not bringing in money, and it's not bringing in audience."

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Maybe 15 to 25 percent of the reading public will pay for serious news, Picard says. These are the people who really want news.

Journalists think their work is really important, and for the journalists, it is. But for most people, they just want to get on with their lives. If something important happens, then they will go online and read it somewhere, but most of the time they won't pay for it.

Newspapers have to stop thinking of themselves as a product for a general audience. The people who still subscribe tend to be the most active politically, socially, and financially in their communities. Newspapers should be selling that aspect of their audience, not a massive audience.

Picard to publishers: get cozy with readers, users

Robert Picard speaking to class at University of Navarra.

Robert G. Picard is one of the founding fathers of the academic discipline known as media economics. The field has attracted more attention lately as news outlets, ravaged by digital competitors, have gutted their reporting staffs and slashed public-service coverage.

Policy makers, media executives, investors, and journalists themselves look to experts like Picard for answers about how to deal with the industry's financial crisis and the diminishing supply of news.

Picard admits that he is unsure of exactly what the future holds for the industry. What he does know is that the people who are running media organizations--TV, radio, newspapers, magazines, and even digital outlets--know far too little about their readers, viewers, listeners, and users.

Publishers need to invite these consumers into the processes of creating and distributing content, he said. They need to think about how to create value that will satisfy the needs and solve the problems of their users. 

Publishers look beyond Facebook, Google for revenues

A deal with the devil.

A new study by the World Association of Newspapers and News Publishers (WAN-IFRA) confirms what I have suspected for a long time: when publishers rely on Facebook for distribution, they are making a deal with the devil.

"Reality Check: Making Money with Facebook" was based on a survey of an "expert group" of 150 publishers. On average, Facebook was contributing only 7% of their revenues in spite of the fact that much of the publishers' content was being consumed on that platform.

And Facebook is stingy when it comes to sharing revenue with publishers, compared with Google, Spotify, Twitter, and others. It "seems to share proportionally less revenue with content creators than other platforms do."

Loss of branding power

The WAN-IFRA findings are also troubling because studies by Pew Research (see paragraph 4 of the study) and the Reuters Institute for the Study of Journalism (see p. 16 of the study) have shown that users think Facebook or Twitter produced news stories that were actually produced by a news organization. In other words, news organizations are losing their brand identities in social media.

If news organizations are going to have a chance of survival in the new digital economy, they will need to rely on the power of their brands  as trusted sources to persuade people to pay for their content.

'We interrupt this class for news of your ex-girlfriend'

As a professor, I often wonder what effect my class presentations are having on the minds of my students. Honestly, is it really possible for any human being to pay attention completely to a class for 45 minutes? Or does the mind wander?

While I am explaining the theory of market externalities, every media company in the world is fighting for the attention of those students. These companies are desperate to attract eyeballs for their content and their advertisers' messages.

They have developed ever more powerful tools to distract people from what they are doing and look at their smartphones. They use pings, vibrations, badges, flashing lights, lock-screen messages, and who knows what else.

What human being could pay attention to me when they receive a notification on their smartphone that their ex has commented on their new profile photo? Or that there is breaking news about the latest silly statements by a president? It's no contest.

Versión en español

The Notification Experiment

I wondered how this affected my students. So I did a simple survey in my Media Economics class at the University of Navarra. I asked the students to keep track of how many notifications they received from all of their apps and news sources during one 45-minute period.

Women are making their mark in digital news startups

Women are taking a leadership role in the development of digital journalism in Latin America, according to a new study of 100 startups.

The study, Inflection Point, by SembraMedia in partnership with Omidyar Network, offers many clues to achieving the elusive goal of sustainability for new digital media.

Click to enlarge.

One clue is that women have the skills and experience to lead the way: 62% of the 100 organizations in the study had at least one woman founder, and women represented 38% of the total founders of all the media (p. 41 in the PDF version).

Extensive interviews with the founders -- 25 each from Argentina, Brazil, Colombia, and Mexico -- produced data that clarified the elements of successful business models and showed the best places to invest resources and training.

"This finding suggests that women are taking advantage of the low barriers to entry in digital media startups to go around the glass ceilings of traditional media and build their own publishing companies," wrote the directors of the study, Janine Warner and Mijal Iastebner, who are also co-founders of SembraMedia. (Disclosure: I worked as an editor of the study.)

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100 digital news startups in Latin America show paths to achieving sustainability

A new study of 100 digital news startups in Latin America by SembraMedia in partnership with Omidyar Network -- Inflection Point -- offers many clues to achieving the elusive goal of sustainability.

Extensive interviews with the founders -- 25 each from Argentina, Brazil, Colombia, and Mexico -- produced data that clarified the elements of successful business models and showed the best places to invest resources and training.

Janine Warner, co-founder of SembraMedia and an ICFJ Knight Fellow, directed the study, which was managed by her co-founder, Mijal Iastebner. (Disclosure: I participated in the study as an editor.) Among the insights:

• You don't need a lot of money to get started. 71% of the media in this study had startup capital of less than $10,000, but a tenth of those now generate at least $500,000 in revenues (p. 8). 
• Those that focus on business development do best. Those with at least one sales person reported median annual revenues of  $117,000; those with no sales staff had a median of $3,900 (p. 9).
• Women are playing a key role in development of new digital media in a region where men traditionally have held almost exclusive control of the industry: 62% of the 100 organizations  had at least one woman founder, and women represented 38% of the total founders of all the media (p. 41).  
• Differentiation is key. In terms of content, technology, distribution, or style, these media positioned themselves as offering something different from traditional media and independent of political or business interference. In some cases, they exposed the cozy relationships between big media, politicians, and business (p. 25). 
• Even a small organization can have big impact nationally and internationally. Although these organizations had median staff size of 13 employees, 72% have had their stories picked up by national news media in their home countries and 66% by international media (graphic above).

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Top reason globally for paying for news? Mobile access

Richard Fletcher of the Reuters Institute has produced an in-depth analysis of the top reasons people around the world gave for paying for news online.

The Digital News Report 2017 included interviews of more than 70,000 adults in 36 countries.

Fletcher observed that the most common reasons people gave for paying were they wanted access on their mobile devices (30%), they like to consume news from a range of sources (29%), or they were offered a good deal or package (23%).

My take on Fletcher's data: The message to digital news publishers should be clear: they need to make sure their content displays rapidly and adapts well to the small screen--responsive design. Also, they should be testing various prices and packages for online content to see which ones produce the best returns. 

When they trust media less, they're willing to pay more

Alfonso Vara-Miguel

A new study of internet users in Spain shows that those who trust "the media" less are more willing to pay for news online. 

The explanation for this counterintuitive behavior is that those distrustful folks "are willing to pay for those specific media that they trust", according to the researchers, Alfonso Vara-Miguel of the  Universidad de Navarra and Manuel Goyanes of the Universidad Carlos III of Madrid.  

(The full text of their article is in Spanish:  "The probability of paying for digital news in Spain," in El Profesional de la Información.)

In other words, trust and confidence have an economic value that media organizations can monetize. 

Manuel Goyanes

Getting people to pay

Media economists like to say that the Spanish are legendary cheapskates when it comes to paying for any form of media. But the researchers believe they have identified some of the market segments most likely to pay for news. 

They base their conclusions on the Digital news report 2016, which came from a survey of a representative sample of 2,100 Spanish adults, executed by YouGov and coordinated by the Reuters Institute for the Study of Journalism at Oxford University. The most relevant findings follow.

Why digital networks are ruling the world

For the last few years, the name Manuel Castells kept popping up in things I read about digital media, social networks, and mass communications. He is a Spanish sociologist who spent much of his career at UC Berkeley.

Recently I have been reading his "The Rise of the Network Society," the first of three volumes in a series "The Information Age." He wrote them two decades ago, but he seems to have predicted many of the trends we are living through now.

The free flow of money, information, and power through global networks means those networks, not nations, are the source of power, he wrote. Institutions, societies, and ethnic groups with rigid structures that cannot take advantage of these flows will be left behind.

He wrote a new preface for the 2010 edition, before the Arab Spring, before the Syrian civil war, before Brexit, before Trump. He pointed out that structural changes were taking place in society because large sections of the world's population were being excluded from the global networks that accumulate knowledge and wealth.

Highly educated elites from financial and technological centers were profiting from the flow of money and power, while the rest of the world was being left behind.

Email bulletins help news media beat the duopoly

We talk too much about the New York Times when the crisis of journalism is also about saving local news operations and digital entrepreneurs.

But the latest news about how the Times is using email newsletters can be applied to all news organizations. Digiday reported that the Times has 13 million subscribers to more than 50 email newsletters.

What this means is that the Times has a direct communications channel with its users in a walled garden that Facebook and Google, the giants of digital advertising revenue, cannot touch.

When users get an email and click on a link, they go right to the Times website and the newspaper's own advertisers.

It also means that the people who subscribe to the free newsletters by registering have a more intimate relationship with the publication.

Versión en español

Slovakia is latest to prove subscription model online

Home page of Dennik N

Contrary to all the predictions about the public's unwillingness to pay for news when it is freely available online, more publishers of high-quality, in-depth reporting are making money.

The latest example comes from Slovakia, as recounted by Rob Sharp in Nieman Lab. The editors of a popular national newspaper there discovered that a news organization tainted by corruption accusations was about to buy a significant stake in their paper.

Versión en español

Anticipating restrictions on their work, the editor, Matus Kostolny, and a team of his lieutenants decided to start an independent online news publication, Dennik N.

As Sharp describes:

The outlet attracted €1 million of private investment and advanced subscriptions of around €300,000. They launched their daily website in January 2015, and a printed paper shortly afterward. Now, just over two years later, they are among the top five quality newspaper websites in Slovakia. In a country of 5.4 million people, the paper has 23,000 paying digital subscribers, the most nationally, and 110,000 registered readers.

'Know your clients, give them what they need'

Ingelmo: "Clients don't want to wait three hours for a graphic."

Manuel Benito Ingelmo has blended his knowledge of data, technology, and journalism to establish a news service with some of the biggest media in Spain as his clients.

His data-visualization service, Porcentual.es, just finished its most successful year, and Ingelmo continues to innovate and improve his products.

He and a team of two programmers have developed software that pulls data from public databases and produces graphics in minutes for media organizations to embed in their web pages. They can also customize the data geographically so that a newspaper in the city of Seville, for example, can get the latest unemployment figures for its area.

"We're very fast," Ingelmo says. "Speed matters. Our clients don't want to wait three hours for a graphic. They want it right now," he told me recently in a Skype interview from his home in Vitoria, northern Spain.

The day Maureen Dowd wrote f--- news and a revered political commentator didn't get the joke

Amid all the debate about what is true and what is f--- news, I am reminded of a remarkable journalistic moment that showed how hard it is to know when someone is kidding or serious. And how you can be sincere but spread false information.

Dowd (Fred R. Conrad photo, New York Times)

It was early in 2009, the first months of the Obama presidency, and Maureen Dowd, the sly and witty New York Times columnist, put tongue in cheek to describe how she had gained exclusive access to classified testimony of a supposedly secret meeting of the Senate Intelligence Committee.

In the scene created by Dowd, Democrats on the committee, led by Dianne Feinstein, are grilling former Vice President Dick Cheney about the torture methods he and President George W. Bush approved to interrogate terrorism suspects.

Dowd dropped hints all through the column that it was a put-on. The first clue should have been that a columnist was playing the uncharacteristic role of an investigative reporter writing about leaked information.

How quality content can win in the long run

Digital advertising is broken for many publications.

Back in the days when my job was persuading advertisers to spend money with our business publication, I would talk about the importance of a client's ad appearing next to credible, high-quality content. Editorial environment matters, was the argument.

Google, Facebook, and Yahoo pretty much destroyed that business model. They promised advertisers to deliver their ads to specific demographic groups with little waste -- for example, female executives in Baltimore who have searched for information about luxury automobiles in the past year. And their prices were much lower. 

But the importance of high-quality, credible content has just resurfaced in a big way. Some major advertisers in England pulled their ads from Google and YouTube because their ads were placed next to content of extremist organizations promoting hate speech.

Among those pulling ads were French advertising giant Havas, the BBC, the UK government, and The Guardian newspaper. The Times of London first broke the story (paywall). 

What this means is that digital publications can compete with Google, Facebook, YouTube and the rest by relying on a relationship of trust and confidence rather than scale -- totals of eyeballs. 

Winning digital strategy: Think first of the community you serve, not the audience you sell to

You already know the story well -- how the business model for traditional media collapsed in the U.S. (Pew: State of the News Media 2016).

And how digital advertising's market share surpassed print and will overtake television this year.

And how media organizations have responded by cutting staff and weakening their products in order to keep profit margins high -- newspapers eliminated 20,000 jobs in 20 years  (p. 17), a 39% decline in employment.

All of this has been done to serve advertisers and investors at the expense of the most important people in the media equation -- the public, the readers, the users. But now publishers are rediscovering the importance of focusing on serving readers.

Readers, viewers rule

Now that digital media have broken up that arranged marriage of advertising and news content, publishers are realizing once again that their business is a public service and that the most important people in the equation are not the investors and the advertisers but the public.

Investor sees 'great returns' from new digital media

Vucinic, photo by Ted.com

Many media investors see disaster everywhere they look, as traditional media lose audience, revenues, and relevance.

Sasa Vucinic, co-founder and co-managing director of North Base Media, sees great investment opportunities, especially in developing markets, such as Central Europe, Asia-Pacific, and Latin America.

"We invest in serious digital-only media oriented toward the younger audience that can disrupt their markets. And we think it’s a phenomenal business that will bring great financial returns."

Vucinic, who began his journalism career in Serbia, has been a crusader for media organizations that tell the truth about corrupt, oppressive regimes. I reached him via Skype in South Korea, where he was looking at investment opportunities. I wanted to ask him about social purpose investing, where investors direct their money toward organizations that not only give a financial return but also have a positive impact on society. 

Versión en español

Vucinic said he no longer talks about social impact with investors. "I spent 16 years trying to prove to investors that a media company has a two pronged nature: It is a business that will be sustainable and profitable, if possible, and at the same time it provides an incredibly important role in the society," he told me. "I actually think that if you do not understand that media plays an important role in society, you're not very likely to invest in it anyway."

A voice for free speech in a free world

Marty Baron, center, with U. of Navarra faculty and students. Photo by Manuel Castells

Marty Baron, editor of the Washington Post, came to speak at University of Navarra events in Madrid and Pamplona last week.

Baron's message made me proud to be an American and a journalist. The whole world looks to the U.S. for leadership. Here is an excerpt from his speech in Madrid.

"At the center of our mission is journalism that holds powerful institutions and individuals accountable. We have an obligation to speak truth to power. And the powerful in our world should never be allowed to suppress it.
For all the challenges we face in the media today, this is the greatest. It is why we as journalists must stay faithful to our central purpose. Someone must still tell things as they really are.
No government power, no powerful institution, and no powerful individual should have the right to stop us. And we in the press should not stop ourselves because of fear or self-censorship. These are times to remind ourselves what it means to be a free people, times to think hard about what is required of us if we wish to hold on to the freedoms that we value.
In too many countries, in too many ways, our liberties are being placed at risk. Among those most in jeopardy are free expression, including a free press. For those of us who work in the press, and for all who cherish the free expression that gives meaning and life to our democracies, the quality we now need most, is courage."

How digital media monetize their social capital

From GDJ's Clipart, Openclipart.org

Lately I have been reading a lot about a new way of valuing media that would benefit entrepreneurial journalism ventures, which nearly always lack capital to launch and sustain themselves.

Sociologists and economists have been writing about it for years -- social capital -- and I am embarrassed to say that I have just started learning about it. 

Social capital is a value that media entrepreneurs possess through their ethnic, social, professional, and business networks. It is also a value that they create through their work's impact on society. Below I will show how three entrepreneurs are making it work, in France, Holland, and Spain.

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Hard to value

Investors, the public, and the media entrepreneurs themselves have tended to undervalue their work because it is hard to place a value on their social capital. By contrast, it is easy to value a publication through the advertising and subscription revenue it generates and the capital assets it owns.