Trust, reach and business models: the things you learn when launching a media startup
When in doubt, ask an expert.
Startup founders often have a very acute take on what could be the solutions to enduring problems in the media. Put that on the account of having put their whole lives in the balance to create a product that can solve a very tangible problem, or simply for having spent months on end digging deep into the factsheets, reports, research and algorithms.
We talked to startup co-founder and CEO Mads Holmen from Bibblio.org, a B2B recommendation service based on genuine user satisfaction and engagement, to get his take on the challenges facing digital media today, the roles of algorithms and business models, and how these fed his team’s work and the launch of his startup.
GEN: What are the challenges facing the media and publishing industries that gave you a direction with your startup?
Mads Holmen: The failing digital ad market and value chain represents one of the biggest challenges for media and publishing industries across the globe. “The world of digital advertising is a nightmarish joke,” The New York Times CEO Mark Thompson said at Cannes Lions last month. Together, Facebook and Google now control some 50% of the online ad market globally, a position set to earn them a combined $106bn in 2017, and by some reports they’re hoovering up 99% of all growth in the sector. At the same time consumers of media and publishing feel bombarded by an awful ad experience and increasingly block ads and lose trust in content businesses and their brands. The vicious spiral is complete.
Thankfully, even publishers who rely heavily on advertising income are coming around to the idea that cramming as many ads as possible into your site isn’t a great idea. Jack Marshall, over at The Wall Street Journal, spoke to publishers who are now adopting a “less is more” approach when it comes to the ads. Stripping out the most annoying ad formats can increase consumer engagement and actually increase ad revenue. This, however, requires a major change in thinking about UX and how you use your site’s real estate and rebuild the relationship to users.
Publishers are also getting more and more success from direct payment by subscribers or members, in many cases offsetting the difficult ad market and in some cases proving more successful. Subscriptions and other premium offerings are gaining increasing traction across the industry. What’s interesting here is that moving away from ads requires putting the user back at the centre of decision making again, not advertisers. Bob Gilbreath, ex-marketing boss and CEO of Ahalogy, recently said: “A funny thing happens once you completely focus your business around making paying customers happy; your product starts to get better”.
Algorithms lead many conversations when discussing audience engagement and reach, but also discovery. What is your take on them?
Algorithms aren’t new, but their impact have been transformed by the nature and sheer quantity of data now available, as well as the resource that companies like Facebook and Google can put behind their development. The real game changer has been the advent of the data feedback loop from users, a reality with all digital media. Software can now learn on its own, powered by unprecedented computational power and vast data sets of real human behaviour. Imagine a book that gets better and better suited to its audience every time it’s read, gradually personalising to fit everyone’s preferred narrative and design.
Publishers need to join the data feedback game like their lives depend on it. Provide people and newsrooms with information about their actions in real time, then give them a chance to change those actions, and use that information to improve the offering. Not getting on this train means fighting blind against competitors with advanced radar and night vision. All companies in the attention economy are ultimately data companies, no exception. As an operational principle BuzzFeed only invests in activities or channels where they can get quality feedback data back the other way.
What of the effects on business models?
With feedback data available, media and publishing companies can really focus their efforts on making their users happy and tailor their content and offering to those that are willing to pay a premium. We’ve been chasing clicks and page views for too long already.
There’s an opportunity for most publishers to deliver better value to their audiences and convert that value into real revenue. As people, we have limited time and we live in a world where there is too much content — we could never hope to consume even a fraction of what’s online. To make users happy, publishing is changing from printing and distribution to filtering and curation. People are willing to pay well for this as a service, and subscription is growing.
The future of all content based commerce is based on continued engagement and attention.
That means more creative and flexible business models that monetise beyond traditional ways; conferences, workshops, merchandising, partnerships and other parallel channels. The book of the future needs to be what the feature film has been to Disney for 50 years — the centre of a revenue-generating entertainment and cultural universe.
What were the elements that fed your reflexion while building your start-up?
Nowadays, direct traffic to the front door of publishing sites is dwarfed by visits to content pages directly from social and search. Often +80% of visitors never see your homepage.
A direct visit to a content page only gives publishers a brief opportunity to get the visitors’ attention. Will your visitor return to their feed or other tasks, or can you get them to stay on your site and engage with that second and third article? Ben Thompson, founder of Stratechery, explained the importance of the second post in an interview with Vox: “The most important article on your blog is the second article someone reads. Say someone follows a link and they read an article and think, ‘Wow, that’s pretty good.’ (…) and they read another article, if that next article is also really good, then you’ve established something meaningful, and you have an inkling of a relationship with that reader.”
If you want your visitors clicking through to that crucial second page, you need to engage them with quality, relevant recommendations to the rest of your content. This is what we do.
We want to bring trust back to content recommendation, so we avoid paid-for-content at the bottom of your page, and the associated brand damage. Publishing is a long game where customers might be loyal for 20–40 years. Yes, there are sites that want to be associated with revelations such as “Tiger Woods’ Daughter Was a Cute Kid, But What She Looks Like Now is Insane”. But for everyone else, there is a better way. Those clicks also lead your visitors away from your own content. No second article at all, and no more relationship with that visitor. I’ll leave the brand damage to your own judgement.
What happens then when trust takes precedent in the relationship to the reader?
Trust has to be built over time, but the payoff is clear. When you make earning trust your priority your audience is more likely to return your site and rely on your content. Trust turns your visitors into regulars, and then subscribers. It also allows you to recommend them other things that might generate revenue. In the attention economy the trusted gatekeeper wins.
When your audience really trusts you to give them a great experience the will also engage with you more. A great example of this is subscription platform The Correspondent, whose members helped journalists investigate whether Shell already knew about their own role in global warming decades ago. De Correspondent are ad-free, 56,000 members strong and growing. Politico recently announced that 50% of their revenue come from 20.000 high paying subscribers getting a tailored product.