Uhh, No that’s not Digital First

John Paton successfully encapsulates practically every argument I’ve been making to the companies I’ve worked for since the nineties.

I had only rare success because of the great point he makes. No leader was truly committed to the web. No single department besides mine was Digital First. They may have even thought they were.

Sure, they wanted the web to succeed, but not at the cost of print, and so success in both areas was compromised. In fact, it wasn’t only waffling at the compromise of print. None would take any risk whatsoever toward a future that might cost the company in the short term but turn profitable in years to come.

If the folks that started the newspapers in the first place took that attitude there would be no newspaper at all. Startup costs were a lot greater back then.

I do understand the reason, in many cases, was that they did not understand the sweeping changes that were happening around them, and so they were scared to gamble. Gamble with shareholder’s money. Gamble with their retirement goals.

But that’s exactly why John Paton says to put the Digital folks in charge. That doesn’t mean they won’t have any fiduciary responsibility.

It’s often ego, let’s face it.

In some cases it was worse. Intentional conflicts of interest from Publishers that put their own self interest before that of the company’s future.

I’m thrilled to be working for a company that gets it from the top down. All I see is great opportunity.

And yes, I love the sentiment that Paton exposes from the incumbent folks that would rather keep things rolling smoothly,

Of course we should engage the community! We’ve always done that.  And we are Digital First. We post to Twitter!

Uhh No, you aren’t.

One last word on paywalls

Since I’ll be working for John Paton, I no longer need to argue against paywalls. He seems to be on the same page.

And frankly, it’s a boring subject and I’m tired of it. If a paywall works for you, go for it. But I don’t think it will if you are thinking about the long run.

You see, the companies I’ve worked for have always implied that being against a paywall was somehow being against making more money.

Quite the opposite. I’m not against paywalls because I care about open communities and networks on the web. I do care, but I just think paywalls are a bad business decision.

Paywalls just don’t recognize the the social and economic changes that the web has caused. Even if it has been said a million times that “distribution has been democratized”, or that “we are no longer in a world of scarcity but abundance”, it just doesn’t seem to sink in.

Publishers still think they can somehow manipulate the markets. Having the power to influence people for so long has now made it impossible for many publishers to see that they no longer hold the keys. The transfer of control has occured and is in the hands of the people. The mob rules Rome.

For most people that read this blog, I’m just preaching to the choir, but one last analogy to perhaps make it clear and then on to more productive things like the Citizens Agenda Project with The Guardian, Digital First Media and NYU.

One of the best arguments I’ve heard for paywalls is the fact that “no one else does what we do.” They can’t get this anywhere else, so they will pay.

Well, that may or may not be true, but let’s say it is, since in many local news communities the local newspaper is the only one sending a reporter to the City Council meeting and writing about it.

That’s a great service.

But imagine if this were television.

You have only five channels and you are the only one doing local news. Your market share is 20%.

In comes Cable TV and suddenly there are 100 channels. You are still the only one that does local news. Even so, you found out your share dropped, you average price for an ad is dropping. All of this even though you are gaining in total number of viewers. Yes, they are spending less time on your channel than they used to.

Suddenly, there are millions channels. A few of them do something similar to you, though not as well. You get the picture.

The quality of what you do hasn’t changed. You are still the only one doing it. But the value of any single channel for any single individual has declined. It’s probably not in your best interest to be one of the only ones charging for what you do.

Add to that fact that growth is still exploding and you might be adding friction to what share you will eventually have if things ever settle.

So if you put up a metered paywall, you may find that you retain most of your traffic in the short term and even make more money in the short term.

But you may look back years from now and wonder what you could have been.

This isn’t something that only pertains to the news industry. Learn from Microsoft. Their control of the desktop and office apps made them late to the internet party, too.

Incumbents don’t disrupt. But if they react quickly enough they can stay in the ever changing game. if they insist on clinging to the old rules, they will certainly go extinct.

Declining print revenue not the only problem for news

You may have heard the conversion funnel metaphor applied to online advertising and marketing.

As you move from the wide end of the funnel to the narrow end a lead becomes more qualified and more valuable.

The conversion rate of a well targeted search ad is more likely higher than that of a random banner on a web page.

So we use context, behavioral targeting and other methods to try and decipher a person’s intentions and get the right ad in front of the right person. This raises the value for the advertiser and often raises the cost of the ad as well . . . but wait.

Some of the highest cost ads are the display ads on local news sites. By and large these ads are not highly targeted. Even if a site belongs to a network that does behavioral targeting, those ads are generally sold at a lower CPM than the “untargeted” ads that are sold at the local level. There are exceptions, of course.

The reason is that these ads aren’t being sold based upon value, but based upon existing legacy (print) relationships and perceived value due to the strong brands newspapers have in their local communities.

The times they are a changin.

Groupon style deals, pay-per-click search ads (an old standby by now), behavioral networks all move the market level of ads down to the real value zone. No more smoke and mirrors.

I feel like the bad guy to have to point these things out, but if you think transferring  your revenue from legacy areas to digital is your only concern, you need to think again.

When someone compared “print dollars to digital dimes” they didn’t just mean that less money was being spent online. The cost to market is so much less you’d better have some hefty scale ready if they actual do hand you a dollar.

To add to the challenge is the ever growing inventory available.

“But that inventory isn’t quality,” you say.

You’re not paying attention. With behavioral targeting of ads, the value and quality isn’t necessarily dependent on the ad location.

It’s the context of the user that is important, not the context of the web page.

All that matters is the conversion, and getting the customer to that point is getting cheaper and cheaper.

So much so, that I anticipate a day when annoying ads are a thing of the past. The perfectly targeted ad is actually information that I want.

I might even pay to get it. ; )

Innovation key to sustainability in journalism

It’s all still settling in, but my experience last week in Berlin has caused my outlook on the future of journalism to go from one of great concern to one of great promise.

I was honored to take part in what we have come to call Hacktoberfest, a five day hackathon sponsored by the Knight Mozilla News Technology Partnership or MoJo (Mozilla Journalism).

Twenty developers and journalists joined a bunch of Mozilla folks and members from five participating news organizations (Boston Globe, The Guardian, Zeit Online, Al Jazeera English and BBC).

What transpired was an incredible “mosh pit of brains.” I may be misquoting someone on that, but you get the idea. (also not to be confused with a Bad Brain Mosh Pit)

I learned a lot.  I learned about Wiener Sausages and German beer, for sure, but also about the sausage making necessary for news innovation. The collaboration which ensued turned good ideas into great ones and even spawned completely new projects out of common desires and needs. It was the fellowship of the thing.

But it wasn’t just academic discussion about futuristic dreams. We addressed questions like “how can we fix the broken comments model on news sites and the web in general?” And, “How can we pay for investigative journalism when sites rely on a page-view model?”

In fact, sustainability and business model ideas permeated the discussions that surrounded the hacking. All of those ideas seemed to accept that innovation was a key part of building a successful news business, both now and in the future. It’s hard to believe we still need to beat that drum in 2011, but we do. More of the same will not cut it, even if it is more profitable in the short term.

The most recognizable feature of the Berlin skyline is The Fernsehturm, or television tower. It was built in the late sixties to symbolize the the power of the German Democratic Republic. As I wandered the streets beneath it, I couldn’t help but think that this metaphor for Communist Berlin had a lesson for news industry.

It can either use its resources to convince the world from high up that it is strong, necessary and omnipresent, or it can join the democratic revolution of news happening on the ground. Because, for better or worse, it’s happening. The metro has left the station.

I’m reminded of a scene in Citizen Kane that serves as a lesson for what stagnation can do to a company, and that there are those who would rather just let things wind down naturally.

You’re right,” says Charles Foster Kane,  “I did lose a million dollars last year. I expect to lose a million dollars this year. I expect to lose a million dollars next year. You know, Mr. Thatcher, at the rate of a million dollars a year, I’ll have to close this place in  . . . 60 years.”

Unfortunately most newspapers don’t have that luxury.

But that shouldn’t make them short-sighted. It’s a cold but undeniable truth that news companies have two paths.

One is to slowly decline, maintaining as many of the employees that rely on the print product for as long as possible.

The other is to make a bet on the future, which may hasten the termination of some employees but will enable those companies to garner a stake in the future of both journalism and marketing on the web.

I choose the latter.

It’s not margins that will save these companies but innovation.

Introducing FollowThis

Quick Pitch

Challenge: A user would like to follow a specific story for updates and related items.

Typical Use Case

1. A user arrives at a story that they are interested in. They’d like to keep up with it, or at least some aspects of it.

2. The user clicks the FollowThis button (or bookmarklet). An overlay appears which will offer some site-specific options, like whether they’d like to follow on this site only or across the web, and the frequency of the notifications.

3. The user provides their email (if not already logged in) and submits.

4. The user will receive a verification email to ensure we aren’t spamming random email addresses.

5. From then on, the user will receive email notifications if that specific story is changed and updates containing links to related articles and videos. They will be able to modify or unsubscribe to the updates at any time.

Implementation

Click to visit the IPTC site and view the rNews Domain Model

The system will store metadata about articles in a specific ontology in an RDF database. Most likely this will be rNews, since it shows great promise in getting adopted and will lend itself well to inter-operation between this and other systems. The system will make SPARQL queries available through a REST API that will return new and related items based on the user’s subscription metadata.

When a user chooses to follow the story, the subscription is stored along with entities that comprise the topics that story covered. These are more specific than the level we would get with tags. For example, the subscription might follow stories that deal with Java the island, but not the programming language, or coffee.

We’ll need feedback from the users as to whether they want to dive down into these sub-topics at the point of follow or whether it would better be left to refine at a later point or some amount of both options. Perhaps and “advanced follow” link. Feedback from users will be key toward polishing the interface.

We’d also like to work collaboratively with the Editors and Producers of the sites. A good amount of metadata can be set up upon initial launch but natural language processing isn’t always as good as humans at some more complex entity relationships. We’d like to have editors aid in the production of this metadata, as well as users, without the process becoming a burden.

Any news organization using the software will be highly encouraged to start adding Semantics like hNews or rNews to their presentation layer. While we will make the software work without it, it will be much more effective if we start with a solid base of metadata.

Since hNews currently has a much higher adoption, an hNews to rNews converter will be one of the first components needed. We will release this to the community as a separate standalone library since it could be helpful for other applications.

Many organizations already have the required metadata within their existing editorial backends, it’s just that they aren’t presenting it to the browser. Implementing one of these specs is not more than a few day long project.

Secondly, and also optional, we’d like to encourage collaboration across news organizations. In other words, a user choosing to follow a story would also be submitting that story to a commons of semantically categorized news articles that other sites could present as notifications to their users. Sites could provide RDF dumps to each other to create a distributed wire system, in a similar fashion to the way that Usenet newsgroups work.

An added benefit to this collaboration would be driving inbound traffic from other collaborating organizations and also offering the end users the ability to choose to follow the topics from one specific site or from the web at large.

Challenges

Most traditional news organizations don’t usually think in terms of collaborating with their competition the way the tech industry does. This is why we make some of the features are optional with the hope of later showing how value can be gained from unorthodox strategies like sending users and content to competitors.

Another issue would be the inability of the organization to provide the metadata needed for these relationships. Natural language processing can be used to extract entities, like Open Calais does. This would be a challenge to build ourselves and it isn’t clear that there is already an open source alternative. More research into some of these related open source projects will be necessary. NLTK to RDF seems to have potential.

Why should a business adopt FollowThis?

The most precious resource a news organization has is an interested reader. Keeping that user engaged should be the primary goal. FollowThis allows your users to stay on top of the stories they are most interested in, by notifying them of updates or related items. By keeping these users engaged, the user benefits and the organization gets its content to the right audience, and drives more traffic. Aggregators like Google News have begun to personalize their offerings. News organizations must do the same and do so while they have their users at the “point of sale.” The metadata that powers the service is already available in the CMS of most organizations, but is being under-utilized. A by-product of this project for any news organization would be a database that could easily be used  for other areas, like ad targeting. Implementing FollowThis will make for happier users and a healthier business.

About Me

My name is Matt Terenzio and I’ve been building websites for news organizations for almost ten years. I’m interested in pursuing how we can use some of the existing and emerging metadata stored in these organizations to help the organizations themselves and help their users get a better news experience. Contact me on Twitter @mterenzio or mterenzio at gmail Keep an eye on FollowThis