Tony Haile: there’s no hero business model that’s going to save everyone (not even Scroll)
Tony Haile was a sandal wearing geek before he became a polar explorer. After many years in the cold, he swapped the fur lined boots for a pair of brogues and found himself at the head of Chartbeat. What’s he going to do next? He’s creating a platform called Scroll to, well, save the news industry. The aim is to dull the noise of popups and ads in order to improve user experience and drive brand loyalty. We managed to track him down and ask him a few questions about his new venture, why anyone would pay for a premium adblocker, and the huge difference between normal news consumers and media addicts.
GEN: What lessons from Chartbeat on how people engage with content have driven you to believe that Scroll will work?
Tony Haile: Chartbeat was an incredible experience: for seven years I led a company that had the richest data set on anonymous user behaviour around content in the world. The biggest lesson for me from my time at Chartbeat was possibly just how little normal consumers behave like the media addicts in our industry. We addicts hit paywalls all the time, most users never see one. We’ll dive into story after story while the majority of users of almost any site will visit only one story in a given week. What is consistent across everything I’ve seen is that the user’s experience on the page has a direct impact on consumption. When the page loads faster, consumers read more; when the page is cleaner or ad-free, consumers read more.
Most attempts to build a new business model for news have been created by people like us — the media addicts — for people who behave like us. They’ve held content up as a unique and differentiated snowflake to which consumers will pay for access. And that is true — for 2 percent of your audience. If we want to create a business model for news that reaches the other 98 percent, we have to deal with how people are and not how we want them to be. These consumers are often predominantly mobile, socially driven, and aren’t going to change how they discover content by going through a new app. They often don’t know which site they are on, but they know the kind of experience they want no matter where they are. They don’t have a strong enough brand affinity for any one site, but sense that something is broken on the web. A world where the business model of content relies on distracting people from that content doesn’t make a whole lot of sense. There could be a better way.
We’re building Scroll to seek that better way. We know that for the 98 percent, it’s experience not access that matters. That means there could be two differently priced ways for publishers to capture direct consumer revenue: a medium-priced network approach around experience for their casual fans and a high-priced single site approach around access for their super fans. Consumers can get the user experience they want: fast, clean, and ad-free on the sites they love and publishers get a revenue model that aligns with making that experience for users better.
Why would anyone pay for Scroll if they can have an ad blocker for free? And what’s the incentive to get Scroll on top of other newspaper subscriptions?
Scroll is targeting a broader audience of casual fans rather than the super fans that subscribe to newspapers online. Every single one of our partners in the US has a subscription or membership plan for super fans that Scroll complements.
When it comes to ad blockers, the starting point is to think of them not as a problem but as a consumer signal. Apple saw Kazaa and Limewire as a consumer signal when the music industry thought of them as a problem. The challenge then becomes not how to beat them but how to make them better. The biggest opportunity is on mobile. 83 percent of people in the US, UK, Germany, and France want to remove all ads on mobile, yet the ad blocking rate is only 1 percent. Why? Because mobile traffic is often in apps where ad blockers don’t work. But Scroll does. Working together with publishers means Scroll can work where ad blockers can’t. A Scroll subscriber will never see a publisher roadblock asking them to whitelist; they’ll never come to a site with broken CSS, or have to wait through 15 seconds of blank time where the pre-roll used to be. If we can do that then I hope the publishing industry can see the same success that the music industry did when they moved people from free unsanctioned experiences to better paid ones.
What is the value for publishers?
Simple. Publishers make more money by delivering a better user experience to their users than they would have from advertising to them. What’s more, that better experience leads to consumers reading more on their site, driving them down the funnel, and increasing their propensity to become a super fan subscriber to a publisher’s high-end subscriptions. It gives publishers two complementary channels of direct consumer revenue that work in harmony.
How is revenue distributed with Scroll?
In the US, Scroll will charge $4.99 per month with $3.50 being distributed to publishers. That’s 40 percent more than the aggregate revenue per user premium media make from digital advertising today. The revenue is distributed in a model designed to always beat the amount a publisher would have made from advertising and at its core are measurements of attention and loyalty. Essentially, the more attention and loyalty you capture from your audience the more money you make.
How do you plan on collaborating with Facebook? What is the incentive for Facebook to work with Scroll?
Facebook has been hugely supportive of Scroll for two reasons:
1) Facebook wants the experience in its app to always improve and Scroll makes that happen. For Scroll users who consume news content within the Facebook app, their experience will be faster and better.
2) For all the bad press they get, the Facebook team genuinely care about news. Scroll is a business model for news that doesn’t compete with Facebook like advertising does. Anything that enables both [companies] to thrive is something Facebook wants to encourage.
In this piece on Nieman Lab, Jarrod Dicker writes ‘The role of commercial strategy in media organizations needs to be an innovation-led, engineering-embedded environment’. If you were to lead a publication, what would you do to improve or fix the business model?
Jarrod Dicker is one of the smartest folks in media and I can’t wait to see how his new company Po.et changes the game. The main thing I would add to Jarrod’s comment is that if a publication was to focus on one thing in an increasingly direct consumer revenue world, it would be building brand affinity. That has a far stronger impact on driving revenue than dynamic targeting or adding tote bags and free iPads to a subscriber package.
Do you consider subscriptions to be the way to go for news publications?
I consider subscriptions to be a way for news publications. The trick is it’s not going to be any one way. There’s no hero business model that’s going to save everyone — not even Scroll. Publications need to work out how to make multiple revenue streams happen at once and subscriptions or membership for super fans should definitely be part of that mix. The hard part is making all the different revenue streams align. Right now we often have a top of the funnel ad-driven revenue model that can create an interruptive experience, which is in tension with a bottom of the funnel subscription model that needs high engagement.
Do you think that there are acceptable types of advertising, such as native ads that don’t necessarily disturb the user experience?
I don’t think people have a problem with ads. I think they have a problem with friction. That’s why, if you’re a publisher creating great custom in-house native, then we’re enabling that in Scroll. However, if you’re slapping clickbait crap thrown over the wall from an agency on your pages and making it look like your content then you’re hurting your brand’s relationship with your audience, which is the future source of all your revenue.
News organisations track reader activity in order to serve their readers as well as their advertisers. But where is the line? At which point does a news organisation compromise their reader’s trust by tracking them too much?
If the new world for publishers is about putting users first then that also applies to their data. At the core of this isn’t some mythical line about the right level of data and the wrong level of data, it is about making the consumer informed and in control of what data they share. I think GDPR is a good thing and the W3C also has good guidelines around how you can ask for permission and avoid user data ending up in the wrong hands. The publishing and ad tech worlds would be a better place if they spent less time fighting these things and more time working out how to lead.
How can advertisers and publishers fight against fake traffic?
Stop buying it.