There’s a Digital Media Crash, But No One Will Say It
talkingpointsmemo.com
talkingpointsmemo.com
"Buzzfeed writers have to generate at least 1 article per day. There is no minimum limit on words on the article, and the topic can be anything (within reason)."
Once I knew this, the prevalence of low-quality Buzzfeed links all over the web suddenly made sense.
One per day seems pretty light. TV reporters in medium and small markets are usually required to turn out two a day (one package, one VOSOT). Radio reporters sometimes five or six or more, depending on market size and whether they're unionized.
I'm pretty sure I've already put more thought into this comment than they put into most of their articles.
The underlying data are available, the vocabulary is distinctly limited, and the reporting was already highly pro-forma. Mad-libbing a few variants of language and selecting the best of the lot does work fairly well.
That actually raises the underlying question: why publish narrative copy at all in cases such as this, rather than data tables or charts? News and journalism are curiously allergic to data or presenting it in a usable fashion -- I've seen tables essentially written out over several paragraphs that could have been expressed in a few grid squares.
Source: https://www.urbandictionary.com/define.php?term=vosot
Others are actually quite good. At least Buzzfeed are balancing this and funding real journalism with the fake crap.
This from someone who'd been a very harsh critic. Some of their coverage of the TPP, ISDS, and international lawsuits in particular struck me as excellent.
Unfortunately, that means the 'best' way to become popular in the media business is to throw quality out of the window and try and write as much shallow, junk as possible to cash in on the latest news trends and social media fads.
What's true is that no representative group of readers who have said what that hypothetical publisher claims they said exist.
But publishers make the claim that they would say that all the time.
I recently was assigned a project to convert all our technical manuals into 100-second Youtube feature highlights. You pay me, I will do what you ask, so it's done...but the analytics don't look good. Not even bots are watching those videos.
> Another way of putting that is that the future that VCs and other investors were investing hundreds of millions of dollars in probably doesn’t exist.
It doesn't need to exist for most or even an above-average VC. If those hundreds of millions were invested by 100 investors at $1M in each of 100 companies, and 99 tanked but 1 unicorn made a 100x return, they would continue to behave in that way.
In a larger way, this is an indictment/logical endpoint of the 'free' business model. You still get what you pay for. Imo, it's too bad micropayments haven't taken off, but i'm glad there is some traction in paid models. Perhaps things really need to get shitty with free content (ahem, autoplay video) before there is a correction towards quality content. Of course, that presents it's own problems since those too poor/cheap to pay for content will remain in the ad infested content mills.
As if things weren't bad enough already. I can imagine they could get worse, but I think we're close to the bottom (knock on wood).
Maybe the author has a point, but this article is incoherent. There is no sources and the entirety is predicated on baseless assumptions and some analogy.
No sources or even attempt to prove any claims:
- There are too many publishers
- There is a fixed amount of 'revenue seats'
- Google/fb/etc take a portion of that fixed revenue
- etc.
I don't even know what 'too many publishers' really means, but there is undoubtedly not a fixed amount of revenue (double digit growth every year in digital ad spend), and google/fb only increase that total amount of ad revenue by acting as a ssp/dsp/exchange.
He is just making a blog observation, which can be best read in the context of the rest of his site/blog, which have been talking about similar issues for years. Much of his evidence is scattered through tiny posts, which blog readers are assumed to have been following. It’s not supposed to be a deep carefully cited research article.
There are links scattered throughout, but part of the point of this post is that no one is really talking about this issue at least at the depth it deserves, so understandably it's light on references. In this case, I'd treat a lot of this as an original source.
There are thousands of 'publishers' like this - I don't believe he's qualified to claim the industry is broken. He can't see anything from a macro perspective.
Given that he has a wiki page https://en.wikipedia.org/wiki/Josh_Marshall, it's pretty obvious that you're not interested in doing the slightest bit of research into the subject that you're criticizing.
> “The idea of publications totally based on advertising is, I think, an illusion. Some can do it, but I don’t think it’s ever going to be a sustainable model for most publications.”
Like TV and radio never even existed.
I personally never believed in new media's limitless newconomy rise to the stars. Nobody wanted to pay for newspapers anymore but web journalism was going to be different?
Internet advertising is growing up.
That doesn't mean they are wrong. Frankly it fits in neatly with the theory that such data is not data that ad companies want to know, so therefore, they don't.
There is an overwhelming consensus by a huge number of very well informed and intelligent people pointing to the advertising business model as it exists now and saying, "This is not sustainable." I'm not saying they're right, I'm not qualified to say that, but the response from the ad industry is by and large to stick their fingers in their ears and hum loudly and that should make any potential investor worry.
If you need citations for these, your burden of proof is a bit too extreme.
Unless advertisers have an infinite amount of money, there will be a finite amount of ad revenue. At some point, there's a floor to how much ad revenue you can capture while still having enough money to maintain a journalistic organization, creating a fixed number of 'revenue seats'.
A portion of that money will by default go to the largest players in the market, Google and Facebook.
For direct response, generally speaking online ads are more cost effective. For the most part, you don't need to place direct response ads on publishers' websites. You can just put them on FB or Google search.
I would say that it's a simple issue of aesthetics and performance. Banner ads look like total garbage. Video ads on Youtube videos tend to be less appealing than video ads on a big screen TV. Tiny thumbnail video ads on news websites are visual pollution at best and a total annoyance at worst.
With double digit growth, supply isn't fixed and its a common idea that supply (from an advertiser perspective) is effectively unlimited.
Maybe the market is deciding? Mashable sold for $50 Million which is no chump change but way less than last year.
>>- There is a fixed amount of 'revenue seats'
Isn't it? Does it grow every time one launches their own blog or Buzzfeed?
- Google/fb/etc take a portion of that fixed revenue
https://duckduckgo.com/?q=google+facebook+revenue+ad+dollars...
The business is mostly a terrible one with mediocre margins, vast competition and audiences that are fickle. There is also no real moat, other than extremely deep pockets (which can help sustain a journalistic advantage through ups and downs in the business). Content like that is almost like food when it comes to dealing with consumers. With very modest margins, tons of competition and fickle consumers, digital media start-ups aren't too different from restaurants in their likely-to-die rate.
Venture capitalists love to invest into them because they all picture themselves as media barrons. You see the rich person getting into news / media syndrome as a trend that carries throughout time. They all want to do it: Jeff Bezos, Warren Buffett, Steve Jobs (he was fascinated with Murdoch & news in general), Patrick Soon-Shiong, Chris Hughes, Peter Barbey, Laurene Powell Jobs, Viktor Vekselberg, Carlos Slim, Michael Bloomberg, Sheldon Adelson, John Henry, Sidney Harmon, Joe Mansueto, Mortimer Zuckerman and on and on the list goes.
For every rich person that does get into it, there are a dozen more that flirt with doing so.
Rich people constantly trying to get into news / media, is the equivalent of average people trying to start restaurants, with predictable results.
The difference these days is that content can be copied and distributed at zero cost, and that content (and money-making advertising) can also be targeted, monitored, and tuned. It’s a propagandist’s dream.
The problem is that people still only have 24 hours in a day. Most of it is spent sleeping and working. There’s only so much information people will actively consume, which gives way to passive binge consumption of the likes of Netflix and Reddit. The latter has so much user-created or recirculated material that a potentially valuable set of eyeballs to a publisher could instead be spending their free time mindlessly clicking through a series of amusing sloth gifs.
All of this leads to a race to the bottom amidst diminishing returns, both for the publisher and the reader. The Washington Post, for example, is flooded with redundancy for the sake of anti-Trump catharsis clicks.
There is one silver lining for the owners behind the media glut: people have less spending money than they used to for entertainment, so free or cheap stimulation from the likes of non-or-bypassable paywalled news sources or Netflix does give publishers something resembling a captive audience.
Allow me to propose that something like Buzzfeed, with $300 million in expected 2017 sales, is really worth more like $400 to $500 million, less than two times sales. Why? Its future growth rate is likely to diminish going forward with scale (ie its fastest growth days are almost guaranteed to be behind it). Its present growth rate is already down toward 10%-20%. Entities like the NY Times set the ceiling on what Buzzfeed can ever likely hope to be (in terms of business size), and that would be an extraordinary outcome. The NYT is worth $2.8 billion, with $1.5 billion in sales (so less than 2x sales), and has always struggled to have even OK net income margins of 10%.
Buzzfeed was perhaps once worth a reasonably high multiple on sales, back when it had $20 million in sales and a high growth rate. All of these companies have similarly rapidly run out of growth steam: HuffingtonPost, Business Insider, Gawker, Mashable, and so on.
What's a low to medium growth, low max ceiling, low margin, high competition, no-moat business worth? An appropriately low multiple, that's what. Anything else is playing with fire, where you see a $1.5 billion valuation turn into $200 million in a liquidation sale.
The dotcom bubble had a version of this. The Industry Standard was actually highly valued (similar to Mashable's prior $250m valuation) for a brief time back then.
So what's the argument for Buzzfeed being worth a future $5-$10 billion or more (such that a venture capitalist would value it at $1.5 billion in a round)? There's only one argument: another rich person wanting power, narrative control, media influence, and to just generally play in that rich person's sandbox, which is a story that gets repeated over and over again whether it's a traditional tycoon or just a rich venture capitalist. Rich people play in the news & media world like they do in art, swapping the assets around at prices seemingly disconnected from reality, dumping them when times are tough, paying hilariously overpriced rates for them when things are booming.
The media agencies spending on be half of the brand also have virtually no reason to NOT spend ad dollars on fraudulent clicks and impressions - again, they're just trying to get paid.
And of course the publisher doesn't care if the impressions are fraudulent.
Basically, there is a very large rigged economy in ad spending that both sides perpetuate for their own good.
I came to the same conclusion you did. You’d have to go several layers up into the client’s org to find anyone with incentive to do anything but tell the most optimistic story they could.
That old agency is still around, surprisingly. My best guess is that whoever is actually holding people accountable for the money spent just has a number in mind that sounds reasonable, and has no expectation of seeing evidence that it’s well spent.
Maybe the most profitable and effective way to do advertising is still direct sales, but call me old-fashioned.
No, they probably spend their marketing budget on "online marketing" because they were told it's necessary
Savvy marketers aren't measuring clicks, they're measuring conversions and they tie their marketing spend to sales leads and to revenue generated. Ads that generate clicks but no sales don't last long.
And sure it's harder to measure a branding campaign in any medium (though people certainly still do it). You don't necessarily care about clicks at all in that scenario. Brands have been figuring out ways to measure the effectiveness of campaigns on offline sales since long before the internet.
Click fraud is an issue for the industry, but it's a small one. It's simply not true that "most clicks" are fraud. And, in any event, digital ad spend continues to grow. So if Buzzfeed and Vice are in a slump it's not because advertisers are shying away from digital.
There is absolutely garbage inventory mixed in, and lots of solutions to try to minimize the impact of that, but to assume that these major brands don't know how this all works is naive.
Further, just as an example, both Google and FB have very solid options for importing offline conversions which are relatively easy to map back to an audience ID of some sort.
tl;dr It doesn't matter that much to advertisers because fraud washes out in the pricing.
Crypto mining in lieu of advertisers would realign interest between content producer and content consumer - the person who reads your articles begins to be your customer again, instead of the companies advertising to the people reading your content. The only conflict of interest is wanting consumers to spend as much time as possible on your site, but I think that is a big step up compared to the plethora of conflicts imposed by relying on advertising as a business model.
This is of course ignoring the technicalities of working out a crypto where the economics work here. But assuming that would be possible (which is certainly a big assumption), this seems like an interesting concept that could solve the monetization issue facing so many things today in one fell swoop.
If I find any site doing this, I'm going to throw it into my local dns resolver to point to 127.0.0.1 faster than I can script it.
Why? Because when I'm on battery and any site decides their crypto currency ad scheme is ok to run and blow through my laptop battery, I'll likely wonder if I can bill them for the machine resources they have used.
Spending a ton of money up front to generate a huge volume of largely undifferentiated visitors and then selling their ad impressions at very low CPMs is not a winning strategy. And building it on top of the whims of Facebook's algorithm was worse.
Skift is another (and if you've been following digital media for a while you may recognize its founder Rafat Ali)
These are B2B examples. Consumer media is a lot harder because you have to figure out a way to carve out a niche audience that is attractive to advertisers, but I think it's possible. And I think success is a lot more likely if you bootstrap something rather than load up on VC and debt in a moonshot.
Further, Google and Facebook have an insane number of rules about how and what companies can advertise, and therefore there are billions of ad dollars that do not and will not ever enter into their coffers. These are not just in scammy niches either...you’d be amazed at many of the ads that get rejected by Facebook and Google. This pushes additional billions in ad money outside of their ecosystems.
As long as investors are willing to fund losing ad campaigns, and Google and Facebook keep increasing the number and breadth of rules that result in an ever increasing volume of ad rejections, there will be publishers and alternative ad networks that can enjoy vast amounts of revenue that gets pushed to the fringes by these forces. They just have to position themselves properly.
The new model is, actually, the oldest model: Sponsorships. Remember how things like the Jack Benny Show were sponsored by Jell-O and Lucky Strikes? That model actually works again. It's strange, but it's really is a bit liberating (I work for a sponsored pub). We actually have the funds and time to do extremely expansive pieces on deep topics we choose.
Having fewer people to keep happy means having fewer editorial bonds to advertisers. In a pub with dozens or even hundreds of advertisers, all in the market on which you're reporting, it's tough to not piss them off by reporting on bad news about them. This happens all the time. ALL THE TIME. "You ran that story about our listeria outbreak, now we're not advertising Chipotle on your site anymore!" In the video game world, bad games with ads get good reviews, or ads are pulled. Movies are the same way. Many publications cover the very stuff they advertise, so it's a tricky situation.
You'd think sponsorships would be the same way, but they really aren't. Instead, sponsors get to post their own content alongside the real good stuff. Paid-for-content, as it were, which isn't even always bad, it's just stuff these companies want to get out there where people will read it, rather than sitting unread on their corporate blogs.
I am now convinced the sponsorship model is the way out of this. It might not work as well outside of a confined vertical, however. One thing is for sure, sponsors love being able to tell their side of the story to our readers, and I feel like the readers just skip stuff they find too marketingy in favor of our really good, deep content anyway, so it's kind of a win-win.
The other thing I like about sponsorships is it brings the colluding onto the table instead leaving it hidden. In the past, I've worked at places where they've been adamant about separation of church and state: advertising and editorial are divided and do not talk, collude, or work together at all. You couldn't take more than a $15 lunch for free, could take no free trips or hotel rooms, and couldn't keep neat tchochkes or product samples.
Meanwhile, these same places would ALWAYS put their foots on your neck, subtly, to influence content. They'd even send the lead sales guy and the head of editorial out to do joint meetings which were only designed to sell ads. If someone bought a large ad and you wrote a bad story about them, it could be reworked, or even killed entirely.
Sponsorships, however, are known to be collusion, right? Now that I am at a sponsored publication, I can take trips, dinners, hotel rooms. It's great! I'm still making a great effort not to be compromised, but now I can do that in Spain for a week at a conference. Makes a huge difference, frankly. I'm much better at covering a show far away if I am in the show hotel instead of the cheapest place my failing pub could afford to set me up, 20 miles away on the side of the highway.
Journalists know how to be fair and balanced. It's kinda their whole bag. The policies publications put in place to dictate this stuff are the first to be ignored when things get thin and business goes sour. It's why some sites sell their entire skin to McGriddle: that's sales getting creative with the design team, because they can't get close to editorial. Not officially, anyway. Frankly, stuff like that is to be praised. It's innovative and likely kept some edit staff from being laid off or influenced.
In the advertiser model, the editorial team gets slapped around all the time when revenues sag. Once the layoffs start, editorial integrity usually goes out the window. Sadly, if it doesn't, the pub usually dies.
The nature of the business creates this death spiral where sites churn more and more bad content, faster and faster in favor of getting the most possible eyeballs on the most possible ads. The content becomes an after thought. The more controversial and wrong it is, the more people read it, kinda like how Howard Stern had lots of listeners who hated him for years. Steal from Reddit, add 3 lines, post.
I once met a guy from Engadget who said he was in the Guinness Book of World Records as the world's fastest blogger. He could do 15 stories an hour. And he bragged about this, openly, like it was a badge of honor. Given some of the content on these buzzfeed-like sites, I could do 30 crap stories in 10 minutes, but who the fuck would want to? They'd all be wrong and have kitten pictures in them to grab hits.
I guess this is a long way of saying this: Digital media actually made journalism shitter for a while, but maybe this culling will fix things by making outlets figure out better, more innovative business models, allowing new, better voices to come to light. It's the easiest time ever to start your own outlet. Making money, however... that's always been the hard part.
I browse the rest of the NYT maybe a few times a week, but I largely just read the one section I like multiple times a day.
There's just a lot of competition amongst these big digital media organizations, most of which have many employees. And the article's author is right that they've been largely supported by VC money.
I think there is still room for good digital content that you can charge for (e.g. Stratechery), but creators will need to focus on a niche that customers find compelling enough to want to pay for (and I don't think finding one is that hard). (I'd also immediately pay for Matt Levine's Money Stuff column if he ever went independent.)
But most should be done with very small operations and staffs. The great thing about it is that digital content has such favorable marginal cost dynamics.
I've reached my limit; I've started blocking video CDNs with my adblocker. If there's a video I really want to watch, I'll use a different browser.
Setting media.autoplay.enabled to false in about:config will also keep audio and animated gifs from autoplaying. For me, it's the biggest quality of life improvment in web browsing since the advent of reader mode.
https://chrome.google.com/webstore/detail/disable-html5-auto...
The author has stopped maintaining the plugin though because Google is supposedly addressing the issue at the browser level.
Edit: This seems to be the recommended fix for Chrome ...
Set ...
chrome://flags/#autoplay-policy
to ...
"Document user activation is required."
They make money by virtue of number of users rather than quality of the product.
This explains why FB sucks so bad and still makes a lot of money.
I just picture the TV in Idiocracy with the video ads all around it.
Is that what we really want to move to?
Specifically the media (and in particular digital media's) response seems to have been one of all out activism against him may be working against them. People don't explicitly want to be told what to believe. Or listen to people drone on for over a year about the same stories (rightly or wrongly - but at some point it ceases to be news).
This is insane. Show me one conservative-leaning media startup that was saved (or turned profitable!) through "deregulation and tax cuts" without reliance on other streams of revenue.
Unless you somehow mean that a better, faster-growing economy via deregulation and tax cuts results in better business outcomes overall, regardless of political leanings, which I would agree with enthusiastically.
How about two:
Notice the complete lack of advertising. It's unlikely that either of these two has much of a revenue stream beyond being funded by the Koch brothers. But Koch industries has made billions being one of the largest polluters in the world. Relaxing EPA guidelines on pollution is a huge business for them. So there's no need for either of those two media outlets to ever make a dime on its own, it just has to provide assistance for Republican politicians who are friendly to their environmental agenda.
The idea that "telling people what to believe" is a phenomenon unique to one side of the political spectrum is absurd. What's been the most watched cable news network in recent years?
"People don't want to be told they're wrong" is a more realistic claim, but a very different one.
But this is happening to non-political media too, so the idea that it's politically driven at all is probably dreamy-eyed wish-fulfillment.
This is true, but there's an asymmetry here, and it's best summed up by Conquest's Second Law: any organisation not explicitly right-wing will become left-wing. So in the US nowadays we have right-wing media outlets, which are right-wing, and we have everything else, which is left-wing.
Breitbart is right-wing, and Salon is left-wing, and that's fine -- people go to those sites explicitly because they want news from that perspective. It's what the readers want, and it's what they provide. But GQ is a magazine, dating back to the 1930s, ostensibly about men's fashion and suits and watches and cars and things... so why is it filled with left-wing political content and Trump bashing? It doesn't seem to be a sensible business decision, it just seems to be driven by the personal opinions of the editors.
That, I think, is what the OP means about people not being told what to believe. They don't mind it when explicitly political outlets push a political point of view, but when neutral territory (like GQ or football or Entertainment Weekly) gets politicised then that really turns off at least half the population.
--too many guys with laptops means way too many sites /blogs
--Google and Facebook are gobbling all growth in ads. That new ad dollar is being increasingly spent on Goog and FB.
This dogmatic and unqualified belief must be revised by the technology industry.
Advertisers have, in my opinion, been getting a free ride for decades. They get brand recognition for free. They get goodwill for free. They get customers who know they even exist for free. They get knowledge of their product in front of customers for free. They don't pay a cent for any of it. And content providers just let this happen, in exchange for being paid based on driving clicks.
Do you think television networks would have said "sure, OK" if advertisers proposed they only pay for TV spots based on how many people showed up at the store and said they saw the ad and it was what specifically made them go to the store? Do you think radio stations would have bent over and said 'sure, sounds like a cool idea' to advertisers wanting to only pay based on how many customers came in and knew their jingle? Would newspapers have accepted only getting paid based on how many people said they saw the ad in the paper?
OF COURSE NOT. Because every single one of those customers who 'glided over it' or 'didn't see it' or didn't 'act' on it was influenced by it. And it is wrong to give that away for free. When an ad appears on a website a user is visiting of their own free will and desire, the simple mechanics of how the human brain works creates a vague positive impression for the brand advertised even when no one clicks at all. Advertisers know this. It's how they sell themselves to businesses. And they rely on content providing sites being either blissfully or willfully ignorant of this fact.
I can't help but chuckle at the timing, though. Print publications shut down text in deference to video because advertisers want it right at the same time the only video platform that is viable or ever likely to be barring a very large lawsuit for anticompetitive practices, YouTube, running at gigantic losses for more than a decade guaranteeing competition is impossible, has decided it is disgusted by the prospect of large numbers of people making a reasonable living from producing video content. They want to reform themselves in a more traditional more centralized model where a small number of tightly controlled producers of content will get rich, and the rest will either die off or be starved. Eric Schmidt touched on the idea that he sees Google's role in forcibly controlling (he would call it 'guiding') human culture as very important. He is rich, therefore he is Better and it is right for him to take the reigns and protect the seething masses from themselves. The same old mentality Old Money has operated on for centuries coming to the nouveau riche and technorati.
A mass migration of advertisers to YouTube will make Googles continued claims of a desperate lack of interested advertisers seem more and more strained as time goes on...