The Internet Broke Up The Press, Crypto Will Empower Its Writers
When the Internet emerged in the early nineties, pundits claimed it would be the end of print media. Then, in the early 2000s, when it appeared newspapers had successfully leaped the chasm, a handful of companies found an untapped profit margin. In hindsight, however, many are calling digital advertising the original sin of the Internet.
In the following, we’ll hash out the brief history of the Internet’s love affair with advertising, the unforeseen issues behind this relationship, and, finally, some crypto alternatives that promise an altogether different future.
The Internet Is Built On Advertising
Consider this: Google made $136.6 billion in total revenue in 2018. Of this amount, $116 billion was generated exclusively from advertising. This was either through its AdSense network, AdWords solution or from Google News.
Google News, essentially a news aggregator, offers a “premium advertising offering” according to their help center through which the Internet company raked in $4.7 billion last year. Of the three advertising arms, this tool has come under heavy fire since its beta launch in 2005, especially with European publications.
The Agence France Presse sued Google in 2005 to the tune of $17.5 million for infringing on the publication’s copyrights. In 2014, when the Spanish Newspaper Publisher’s Association lobbied to have Google pay for links to Spanish press collected in Google News, Google stopped including all Spanish publications altogether. From the start, Google News has had an issue with both attribution and monopolistic tendencies.
This behavior has been highly effective, however. When compared to the legacy media industry, Google News, a mere potpourri of the latest headlines, nearly eclipses the profit margin of the entire American journalism sector.
While $4.7 billion appears no more than a drop in the river for Google, it is only $400 million short of the total profit the entire American journalism sector made in 2018. The New York Times, The Denver Post, The Wall Street Journal, and every other U.S. media outlet, all generated a total of $5.1 billion from digital advertising. While each of these publications is posting native ads on their sites, if a reader is arriving via Google News, Google will have the first slice of profit.
A final point to be made is the way that aggregators are shaping the reading experience. In a 2016 article from Tech Crunch, an analyst from research firm Outsell said that “though Google is driving some traffic to newspapers, it’s also taking a significant share away. A full 44 percent of visitors to Google News scan headlines without accessing newspapers’ individual sites.”
Concluding, newspapers are under attack on multiple fronts. Although they may supply the hard-hitting and critically-important news, they enjoy only a sliver of the bounty due to the current business verticals. With readers skimming headlines on Google News, this sliver may be reduced entirely to zero.
In the words of Terrance C.Z. Egger, CEO of the Philadelphia Inquirer PBC, “the current dynamics in the relationships between the platforms and our industry are devastating.”
Advertising Is Built On Impressions
No matter where you stand on the importance of a thriving journalism sector, this issue spreads throughout all content creation platforms. This is mostly due to the reach of Google’s advertising arm, but companies like Facebook and Amazon are closing down the gap. Soon, the modern era will be the first with three companies that control all the advertising business.
There is still competition between these three, but without a reexamination of the incentives in place, the current trend will only accelerate rather than reach for new aims. As this market continues to optimize for a single metric, advertising margins, the Internet will denigrate into something far darker than imagined. Clickbait titles, algorithmically-enhanced YouTube content, Twitter bots, and vitriolic tribalism are only the tip of the iceberg.
The current model champions content that triggers the baser emotions of anger, fear, and sadness, for example, as these have been proven to generate more engagement on social media platforms.
In the case of a single doctor contracting Ebola while working abroad, all of New York City was thrown into hysteria following apocalyptic narratives slung out by local media. The emotional response was extreme, as tweets on the subject reached 6,000 per second. Few realized, however, that the doctor’s condition was never contagious and posed no threat to the public.
Such sensationalist reporting on the side of media is only a symptom of a much larger pressure. Newspapers who refuse to keep pace, inevitably collapse.
Another culprit of this growing problem is the metrics with which we are using to measure “successful” content. Tweets with thousands of likes are programmed to arrive in front of the highest number of viewers. Content that triggers Twitter’s trending content algorithm enjoys an added boost. And as the arbiters of trending subjects are rarely human, a viral tweet is judged more on how fast it spreads rather than any truth it imports.
If the greater objective is aligned to stimulate the virality of a post, then understanding the details of an Ebola break out in New York City falls to the side. For content agencies with an additional incentive to sell a product, replacing truth with virality has created a highly-competitive black market for fraudulent marketing tactics.
At first glance, these tactics could be the practice of buying likes, commentary or hiring an army of Twitter bots to promote a brand’s content artificially. The lack of transparency on this front has been documented time and time again.
AdAge wrote in 2016 following a 58-page report from the Association of National Advertisers (ANA), that:
“Whether acting as an agency or principal, vast changes in technology, the complex digital supply chain, and the proliferation of media outlets provided agencies with additional opportunities to increase their profit margins beyond agency fees. [This] has led to disconcerting conflicts of interest and a lack of transparency.”
It could also be the big business of influencers spamming sponsored content in your Instagram feed. Between 2018 and 2019, Wired reported that the number of posts with hashtags of “#ad,” “#sponsored,” or “#spon” jumped by more than a million. This is only counting the posts that decided to include these notifications, of course.
The scope of this issue has many derivatives, of which most are beyond the breadth of this blog post. For more information on the downward spiral that the current web stack engenders, Redef has an excellent curation of related topics.
As a final point, the cutthroat nature of scouring for clicks also has an effect on the way applications and websites are built. Instead of optimizing for information and usability, many products are being launched with the sole intent of keeping users plugged into the screen. The longer the screen time, the greater the advertising revenue. The side effects of such behavior are also very well-documented and are indicative of contemporary mental illnesses like depression.
As this phenomenon continues to get coverage, a solution is also being devised. The focal point of these movements is to break apart large tech corporations and return control to the average user. Sounds simple enough, right?
Impressions Are Built On Human Nature
The potential for cryptocurrencies and blockchain technology appear never-ending. In 2017, when bitcoin nearly reached $20,000, financiers, technologists, and futurists alike believed an anonymous programmer had finally solved the Internet’s greatest problems.
Quickly, a number of eager entrepreneurs took to breaking down the advertising mechanism and rebuilding it with native tokens held by users.
Instead of paying for a subscription to The New York Times, readers could hypothetically pay $0.03 to read an article via a micropayment. In the world of crypto, every tweet, post, and upvote now had the potential to carry real monetary value. With an immutable ledger, blockchain also provided a one-size-fits-all solution to transparency and accountability.
Early attempts like Steemit, a Reddit-like crypto project with native STEEM dollars, appeared promising. But, as we have outlined in the past, human nature eventually took over, and the platform can now be gamed relatively easily. Word Of Mouth (WOM) protocol, a similar initiative tackling the marketing issues related to the current advertising model, also provides an interesting alternative.
Instead of the hierarchical dissemination of wealth with Google and Facebook at the top and content creators below, the WOM protocol opens this up so that every individual who encounters a piece of content or novel product is incentivized to aptly value its quality. This model creates a more authentic experience for users, marketers, buyers, , and sellers all the way through the business model.
Block.One recently announced a blockchain-based social media platform built on EOS too. At the release in June 2019, the CEO of Block.One Brendan Blumer said:
“Our content. Our data. Our attention. These are all incredibly valuable things. But right now, it’s the platform, not the user, that reaps the reward. By design, they run by auctioning our information to advertisers, pocketing the profit, and flooding our feeds with hidden agendas dictated by the highest bidder. Voice changes that.”
Aptly called Voice, Blumer’s platform would allegedly reduce the control of algorithms to decide which conversations were trending and allow users to stake Voice tokens to have their opinions heard. Although the former co-founder of Steemit, Dan Larimer, is now the CTO of Voice, the project has yet to launch, and the details remain fuzzy on the execution.
Finally, and most recently, is the slow, conspicuous rise of a Twitter counterpart called Twetch. Built on the BSV blockchain, a fork of Bitcoin, Twetch has been challenging to understand. From vague tweets and posts cast by initial users, it appears that the platform is attempting to monetize aspects of Twitter for the profit of individual users.
Other reports indicate that bots and troll accounts would be eliminated as it reportedly costs money to open an account. Posts made on Twetch are inscribed on the BSV blockchain as well as being reposted on Twitter and thus can never be removed by a third party or the author.
Digitizing Human Nature
Google’s advertising empire has been shortchanging the journalism business ever since it began exploiting this profit margin. This has led to the collapse of many local newspapers and cut into quality, investigative journalism that keeps our society informed. Not only that but with advertising at the heart of the matter, online impressions and discussions veer towards the toxic, extreme, and fraudulent. The more extreme a take, the more attention it will earn.
Unlike what the Internet hoped to become in the 1990s, the 2010s are exposing how a technical lapse is being captured elsewhere. By omitting a native online currency, the early designers set the table for next-generation entrepreneurs to monetize. These earlier steps were critical for development, but these days it appears long due that society unpacks where this technology is heading.
While not the only answer, crypto does provide an alternative. By creating a higher barrier to entry for trolls and bot accounts, monetizing every step of the Internet experience may help break up companies’ stranglehold on content creators. This holds true for marketers looking for more accurate metrics to measure traction too.
All of these pieces fit together neatly. Now it’s time for a bit of patience and to pick up where the likes of Twitter, Facebook, Steemit, and others have left off. The Internet turned the human experience digital, now crypto has the potential to fine-tune that phenomenon for the greater good.
The Internet Broke Up The Press, Crypto Will Empower Its Writers was originally published on ufostart.com
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