Third Wave Escapism

How we celebrated our 5th anniversary

5y Third Wave

A couple of weeks ago, we had our fifth anniversary as a company. So how to celebrate that? A party, a press event, a publication? One thing we’ve learned in the last years is to trust our guts and do what feels right. And what we wanted to do more than anything else is take our friends and get away for a bit.

We rented an amazing house, about 2.5 hours outside of Berlin in the so-called mecklenburgische Schweiz, invited 20 of our friends, packed our trunks full of food and drinks and escaped for the weekend. We knew we did the right thing when the most common feedback after the weekend was: “I really needed this.”

Giving our hard-working friends a breather was the most rewarding thing we could do to celebrate. And in reflecting about this, I think it actually tells me a lot more about the kinda company Igor and I want to have and continue building.

I let the photos by Nicola explain the rest.

5y Third Wave

5y Third Wave

5y Third Wave

5y Third Wave

5y Third Wave

5y Third Wave

5y Third Wave

5y Third Wave

5y Third Wave

5y Third Wave

5y Third Wave

German Media: Merkel Syndrom

Exploring the idea that the German media landscape has the Merkel Syndrom: Powerful, yet refusing to lead; profitable, yet only on defense.

NBC Universal invests 200 Million into Vox Media and 250 Million into Buzzfeed (still unconfirmed, but it’s a done deal). Valuing Vox at about 1 Billion and Buzzfeed at 1.5 Billion. The combined value of those two companies is now 2.5 Billion. Which is more than the Market Cap of The New York Times.

We’ve been asked by a client, who has been invited to attend the Blattkritik at Der Spiegel, to comment on the current issue, give examples of great journalistic work – especially in reporting about the technology market, as well as provide a general assessment of the current state of affairs in the media business. A Blattkritik is basically a sit down with the editorial team to discuss what could’ve been better in the previous issue. They invite previous contributors and outside experts to those meetings to get a broader perspective on their work. The client asked us to help them shape some of the topic points they can take to that meeting.

It turned out to be somewhat of a conundrum for us. While we do read German media, we have currently no subscription to a German daily or weekly. Neither Johannes nor I have picked up Der Spiegel in a while unless someone recommended us a specific article. In those cases, we end up reading only that specific article without paying much attention to the rest of the magazine. The question is: why?

We have currently two subscriptions at the office: The Economist and Bloomberg Businessweek. We read them both as carbon copy, despite the fact that our subscription give us access to all of the digital properties of both publications. Johannes is sometimes using The Economist’s feature where one can create a personalized podcast. Basically an audio version of the print magazine. Both The Economist and Bloomberg Businessweek provide a perspective on global affairs. They have overlapping audiences, but cater to them differently. While both magazines pride themselves being opinionated, probably no publication currently can claim to have such a clear voice as much as The Economist.

The question remains: why are two founders of a business consultancy based in Berlin, with a majority of clients in Germany not reading a German outlet, specifically the weekly with the largest circulation? And whenever we would need to pick one, we would still not end up picking Der Spiegel. Both of us agreed that it would either be Die Zeit or the weekend edition of Süddeutsche Zeitung (which Johannes used to subscribe to).

There are a couple of observation that I wanted to document in that context:

German Media in the era of Merkel

If there is one characteristic that can be applied to the German chancellor, it is the lack of leadership, the tendency only to act as a reaction. All opportunism, no courage. With approval ratings high, that behavior can not be easily discarded. It’s a reflection of Germany and it feels often times as if it applies to the German media as well.

On the business model side, we see very few things happening and the ones that do are mostly small, incremental changes that are based on the best cases that usually have been developed outside of Germany a while ago. Slow adaptation isn’t wrong per se, but the current pace surely can not compensate for the decline in print circulation.

But that alone isn’t the qualifier why German media doesn’t capture our attention as much as international outlets. It’s the content.

One aspect about The Economist and Bloomberg that came up in our conversation is that they attempt, at every step of the way, to help their readers navigate a complex, interwoven, networked world while German media, and specifically Der Siegel, often end up attempting to simplify complexity. Those are substantially different attempts to see the world and the former is one that is at the core of what Third Wave as a company attempts to do. We can not, we will not succeed figuring out some of the most drastic problems that humanity has faced with the Merkel way of leadership and with a media landscape that follows suit. An informed citizenry with the ability to deliberate and in a democratic process is what we need and neither our political parties nor many of this nation’s journalists seem to be capable of providing this.

This, certainly, is not a unique problem of Der Spiegel, it happens across the board. But being the market leader usually means that one would attempt to hold and / or expand that position. Now, I want to be honest, from a business perspective it probably makes sense to cater to only what the audience wants to hear. Der Spiegel doesn’t seem to pick topics based on their significants, it picks topics based on what they want to say to their large (yet shrinking) audience. This seems to mostly work out fine for them. Courage, experimentation, diving into complexity and challenging the national conversation can be both exhaustive and expensive. As so many before, market leaders tend to lose their edge and their lust for their new and rely on a strategy that is mostly about defense.

Articles & Talks – Q2/2015

Our article in the Tinius Trust Annual Report 2014 and a couple of talks

Time flies when you’re deep in client work. So here are a couple of things that happened recently.

Tinius Trust Annual Report

Tinius Trust Annual Report 2014

When the Tinius Trust asked us to write an article for their annual report, we used the opportunity to flash out a more detailed description of our framework for media companies, adding examples for all the parts. What we didn’t expect was that they would take our text and apply some great editorial design and even add beautiful illustrations.

artikel im tinius trust report

You can read our article here: A framework for building media companies in the digital world

You can download the full report with articles from experts like Tanya Cordrey, Kevin Delaney and Ernst-Jan Pfauth here: PDF

Republica 2015

Igor and I both gave talks (in German) at this years’ republica conference here in Berlin. You can watch them on YouTube.

johannes at republica 2015

Johannes: Mensch, Macht, Maschine – Wer bestimmt wie wir morgen arbeiten?

igor at republica 2015

Igor: Ein Plädoyer für eine Non-Profit Medienlandschaft

And a couple more talks in the last months…

Please get in contact if you’re interested in booking us to speak at your event.

Our Client Alucobond

Patricia Stubbe from our client company 3A Composites and the Alucobond brand has written an article for the German website pressesprecher on working with us and doing social media in a b2b context: Social Media im B2B-Bereich

Filtrate 13/2015 – Facebook and the Publishers

Facebook wants to host original content by publishers like the NY Times and Buzzfeed. We’ve been following the story the whole week and have collected the most interesting tidbits and insights.

Filtrate is a blogging format inspired by Matt Webb and Michael Sippey: “Start a new draft post on Monday, dump things in it over the week, rewrite and cull along the way, what’s left gets published on Friday.”

1.

It has been on the horizon since last autumn and this week, the NY Times officially anounced it: Facebook May Host News Sites’ Content

In recent months, Facebook has been quietly holding talks with at least half a dozen media companies about hosting their content inside Facebook rather than making users tap a link to go to an external site.

The official reason for Facebook to do this: speed and user experience:

Facebook has said publicly that it wants to make the experience of consuming content online more seamless. News articles on Facebook are currently linked to the publisher’s own website, and open in a web browser, typically taking about eight seconds to load. Facebook thinks that this is too much time, especially on a mobile device, and that when it comes to catching the roving eyeballs of readers, milliseconds matter.

Yeah, right…

2.

Joshua Benton from Niemanlab about Facebook’s true motivation:

Facebook controls a huge share of the traffic publishers get — 40 percent or more in many cases. Combine that with the appification of people’s online life — the retreat from the open web toward a few social-media icons on your phone’s home screen — and you start to get at the motivations here. Facebook has fallen into the role of audience gatekeeper for many publishers, and it’s offering (!) to optimize that relationship.

And the current publishers dilema:

The game for traditional publishers now is all about short-term/long-term tradeoffs. Of course, in the long run, you want to control the customer and advertiser relationships. But today, in 2015, Facebook controls a large share of your audience and has user data you have no hope of matching.

3.

John Battelle gets much more criticial and poses a couple of questions that publishers should ask themselves before hosting their content on Facebook.

  • Do you have full and unfettered access to reader data? Will Facebook have access to your customer data?
  • Do you have full and unfettered control over your advertising relationships and data? Will Facebook have access to that data?
  • Do you have certainty over the levers of circulation marketing, including the price of reader acquisition and engagement?
  • Do you have control over your core product, so you can craft your reader’s experience as an expression of your brand?
  • Do you have any proof that publishers using another company’s proprietary platform have ever created a lasting and sustainable business? He sums up his perspective like this: I can’t really think of any publisher who thrived on someone else’s platform, for the reasons I laid out above. Sure, a lot of apps have done well, but in the main they were either hit businesses (gaming) or free services that kept their customer and revenue models well away from Apple or Google’s grasp (everybody else ever).

4.

But Battelle also see some differences between publishers like the NY Times and companies like Buzzfeed.

Which brings us to BuzzFeed, which has taken a delightfully inverse approach to platform economics — that is to say, it embraces the distribution of its content independent of its home base. Of course, it can do so because its core revenue model is native advertising content, which is distributed in the same fashion as original editorial content. This model suits BuzzFeed very, very well.

So for Buzzfeed this deal with Facebook makes a lot of sense because their business model is in the content and the audience it reaches as Felix Salmon describes:

BuzzFeed has built its business model around its ability to ensure that any piece of content, whether it’s a cat listicle or an ad or a news story, reaches as much of its intended target audience as possible.

Which means that Buzzfeed – unlike the NY Times – isn’t dependent on its brand and that lets them benefit much more from deals that will get them bigger audiences for the price of less brand perception.

5.

This is the appropriate time to dig up the great essay The Next Internet Is TV by John Herman on The Awl from the beginning of February.

The prospect of Facebook, for example, as a primary host for news organizations, not just an outsized source of traffic, is depressing even if you like Facebook. A new generation of artists and creative people ceding the still-fresh dream of direct compensation and independence to mediated advertising arrangements with accidentally enormous middlemen apps that have no special interest in publishing beyond value extraction through advertising is the early internet utopian’s worst-case scenario.

His hypothesis: Publisher on the web will end up where TV producers have been for a long time: filling up channels with content.

And so one more obvious theoretical question for this particular view of the future that seems to be quite popular right now, in which we have circled back to TV via the internet or apps or social media or even TV itself: Wasn’t the internet supposed to be BETTER, somehow, in all its broken decentralized chaos and glory? The TV industry, which is mediated at every possible point, is a brutal interface for culture and commerce.

6.

John Herman chimend in again this week with a more specific take on Facebook hosting publisher’s content..

Their presence in News Feed will seem slightly easier and more natural than the presence of their competitors, whose manipulative headlines—which have been carefully optimized to convince you to leave Facebook to go to another site—will read an awful lot like spam.

Could one side-effect of this move by Facebook be that we will see the end of headlines like “You won’t believe what happened next,” finally?

There is a helpful symmetry here, if you’ll grant it. Online publishers, with more readers than ever, are looking desperately for the next thing; Facebook, with more people using its core product than ever, is doing the same. The difference, of course, is that publishers’ next thing already belongs to someone else. Their future belongs to Facebook’s past.

It’s a bit ironic that publishers desperately want to be part of Facebook’s newsfeed while Facebook is looking intensively for the next big thing after the newsfeed.

7.

Robinson Meyer of The Atlantic reminds us that Facebook had encouraged publishers before to heavily invest in a FB technology.

Facebook selects a couple news organizations and asks them to invest heavily in a native tool that gives news stories—news stories!—an unprecedentedly high-ranking in users’ feed. They do, and for a few months, they see increased traffic in the millions. And then, one day, Facebook’s engineering team realizes that this new tool is cutting engagement and winds it down.

The whole endavour was known as the “social reader” back then and for a short time, it brought early adopters like the Washington Post a couple of million more impressions. Until Facebook decided that users didn’t like the feautre and suddenly turned it off one morning and with it all that traffic.

8.

Wednesday night, Facebook introduced a couple of new things at their developer conference F8. The stuff around the Messenger are less relevant for publishers than the advertising-related anouncements. Digiday summed it up like this:

Facebook is gradually positioning itself to become the data, media-consumption and sharing backbone for the entire digital media industry.

9.

As part of Wednesday’s update, Facebook is also expanding LiveRail’s ad management capabilities to mobile display advertising, meaning publishers can use the technology to sell both video and display ads on their mobile apps.

…writes re/code. LiveRail is the ad server that Facebook is running.

What’s significant in this announcement is that LiveRail will now use its anonymized user data to help publishers serve better targeted advertising on platforms that aren’t Facebook. So instead of relying on things like Internet cookies to help publishers target a Web visitor, publishers using LiveRail will be able to add Facebook’s user data into the mix to get a better idea of who’s watching the ad.

This is huge. And Google should be very afraid. Facebook is really starting to eat into their core business.

LiveRail and its ingestion of Facebook data “makes Facebook an important operating system of the digital ecosystem, certainly being able to rival Google and its DoubleClick infrastructure,” said Dave Morgan, CEO of Simulmedia, a targeted television advertising company. “This puts their lead in some areas under pressure. Certainly in the digital video area, Google should be worried.”

But it also means that Facebook is not focussed on what’s happning on their own platform. They also want to make their data useable to advertisers on other platforms, outside the Facebook ecosystem, sorry, “family of apps.”

The move speaks to Facebook’s desire to be a major advertising partner for publishers, brands and agencies outside its own properties.

That balance might actually make some more publishers consider their offering to host content.

10.

11.

Alexis Lloyd and Matt Boggie from the NY Times R&D Lab gave a great talk at FutureEverything that summed up a lot of the current trends in (digital) publishing.

Introducing a Digital Framework for Media Companies

We have collected our insights on the media landscape into a new model.

This is a revised version of the framework that we released on March, 19. Check the change notes at the end of the article.

Since releasing our Future of News Publishing report last year and since actually putting it together about two years ago, we have been observing the news publishing industry continually. Collecting weak signals, we were trying to spot the behaviors that seem to be helping publishers not only to survive but to move forward. Taking a step back, we saw similar patterns emerging again and again. So it was time to put them into a framework.

The purpose of this framework is to put the most important aspects of a publishing company in the digital world into a model1. It’s not a how-to guide for building a news publishing product. It’s a mental model how to think about and develop core parts of the business.

The Key Components

audience product business infrastructure

The model itself is simple. It’s a triangle that connects the three main areas of a media company from our (current) perspective and puts the audience in the middle.

1. Audience

Every media company needs to start with and evolve around its audience: the readers, viewers, listeners, commentators, community etc.

2. Product

This is not only all the content that is written, produced, recorded, filmed or created in any way. The editorial strategy and the “voice” (as in tonality) are part of this, too. It’s also the talent: the writers, the journalists, the photographers, the film crews, the fact checkers and researchers. Also the formats: articles, slideshows, listicles, quizzes, clips, interviews, op-eds etc.

We also include the frontend here – how the audience perceives the content: websites, apps, email newsletters, magazines, newspapers, PDFs, ebook readers, etc – the user experience. From our observation, it’s almost impossible to create a digital media product while distinguishing to strongly between the content and its delivery.

3. Business

All the ways that the company makes money. We’ve touched on a lot of the new possibilities and business models for media businesses to make money in the Future of News Publishing report. From advertising and sales to events to consulting and much more.

4. Infrastructure

These are the server, tools and systems that keep the company running. But it’s also where the content is created: the content management systems, the databases, the communications channels, the analytics dashboard, the tools and gadgets for reporting, writing, recording, maintaining and distributing.

The Key Insights

So far, nothing new. Most media businesses have always consisted of these aspects. So what’s the difference in a digital world? Here are the two main insights:

1. Collaboration

All three areas of the company and their connected departments must be not only constantly in contact but actually collaborating. The days when the product development was cut off from the newsroom and journalists never spent a thought on where their salary came from are gone.

Much has been said and written about the wall between the journalism side and the business side of news publishing entities also known as the divide between church and state. And we’re most certainly endorsing a transparent approach to native advertising and the likes. But in a time when fresh ideas are in desperate need, we think that too much is lost by people from the different departments not thinking and working together.

We think that one of the best ways to set up a media business for the digital world is to not separate the three aspects into different departments but to hire people who feel comfortable in two or more areas. The best way to avoid silos is to have them breached by individuals who have clear goals that span more than one area.

All three areas also need to be perpetually connected to the audience. Product needs to know what they are interested in, what’s their take on things and what’s helping them in their day/work/life. Business needs to know where the audience’s money is going, what they are willing to spend and how they value the content. Infrastructure needs to continuously update its understanding of the audience’s consumption behavior, their favorite tools and devices and how they prefer to pay.

Some of this means being in a continuous conversation with the audience. For other insights, it means looking a studies, reports and conducting individual research. A lot of it means just prototyping and testing.

2. Iteration

iteration of product, business, infrastructure

The complexity and rapid progression of the digital world makes it hard to just plan, implement and then run with a finished product. One of the core principles of the digital context is to have a small idea, test it, improve it, test it again, improve it again and so on. It’s all about perpetual iteration.

This insight is the biggest change of how media companies are working in the digital world. It’s also the part that current media companies and even a lot of the ones “born digital” struggle with.

Some media companies iterate their content. They try out new formats, writing styles, video story lines etc. Others are experimenting with new business models like opening up an event space, releasing special purpose apps or starting an agency business. But only very few media companies iterate in their infrastructure development like continuously working on making their websites work better and optimizing the CMS and the publishing process.

We think that to be successful as a publisher in the future, a company needs to iterate in all three areas of our model all the time. And it shouldn’t keep the iteration loops inside each area. Every iteration in one area should be shared with the other areas to inspire the iterations there. The result is a constant renewal of the whole company.

constant iteration

An example: A company comes up with a new idea for a content format. It will prototype it and test the idea with its audience. The audience feedback might also inform new ideas for business models that might go along with this format. If the company doesn’t have an in-house design-and-development team, this prototyping would be difficult and expensive. But if the project team consists of members who are connected to all three areas, they can iterate towards a viable new outcome rapidly.

That’s why we see a lot of good initial ideas fail. The technological development is outsourced and only involved until the launch. And we think that it is impossible to create a successful digital media product without iterating it constantly.

What’s next?

That is the basic concept of our framework for digital media companies. So what can you do with it right now?

  • Use it to analyze different media companies and see how they cover the different areas…or not.
  • Check the viability of your own (media) company and discover blind spots that you hadn’t thought about in this context yet.
  • Investigate the core digital paradigm of constant iteration and ask yourself what that means for your company and team structures, your processes, your project planning and your business model(s).

This introduction to the framework has only been one step for us. Next up is collecting lots of feedback and, of course, iterating the model. And we are writing more in-depth articles about all the different aspects of the framework.

If you have questions about or feedback for the framework, please get in contact.

Added on June, 24 2015

We’ve written an extended version of this articles with a lot more examples for the Tinius Trust Annual Report. Check it out over here: A framework for building media companies in the digital world

Change Notes v1.1 – March, 24 2015

It is a core principle of this model that the three areas are very closely connected and thus certainlty overlap in a lot of places. We took a first shot sorting aspects into the different areas. But Florian Steglich gave us some great feedback on how to rearrange a couple of things. Here’s his redrawing of our model.

  • We changed Content to Product and added all the frontend/user experience elements to this area.
  • We changed Product to Infrastructure.

Here is an in-between version that Johannes drew in a hotel room in Barcelona for his talk at the IAM 2015 conference. It said “technology” where it now says “infrastructure.” We changed it to infrastructure because we think that technology is an essential part of all three areas.


  1. We’re not talking about digital companies per se as in companies, which have a digital product. When we talk about the “digital world,” we mean a world that is heavily influenced by the characteristics of “the digital.” A media company might only sell a print product. But it still has to deal with “digital aspects” like growing complexity, shorter attention span, internal communications based on email and much more. In the digital world, every company is also a tech company. 

Die Abhängigkeit von Social Media Plattformen macht Verleger irrelevant

The following post is about the dependency of publishers on social media platforms in German, because it picks up on a post at Wired Germany.

In seiner letzten Kolumne für Wired Deutschland hat Johnny Häusler Zeitungsverlegern empfohlen die eigene Webseite abzuschalten und einfach dahin gehen wo die Leser sind.

Im Moment gibt es zwar noch ein paar (ältere) Leser, die täglich eine URL eintippen und die Startseite eines News-Portals oder Magazins nach den für sie interessanten Nachrichten, Fotostrecken oder Videoberichten durchsuchen. Doch die Zeiten, in denen Menschen dorthin gehen, wo die News sind, sind längst vorbei. Weshalb die Nachrichten dorthin gehen müssen, wo die Menschen sind.

Ich habe auf Twitter widersprochen, wir hatte eine nette Unterhaltung und einige andere haben sich mit in die Diskussion eingeschaltet.

Journalistische Relevanz sollte nicht anhand der Zahl der Klicks gemessen werden. Daher ist es umso zweifelhafter wenn Beispiele wie Snapchat Discovery als gute Möglichkeiten angebracht werden, um für Verlage neue Zielgruppen zu erschließen. Genau wie für Facebook, sind Verlage für Snapchat nichts anderes als Produzenten des Contents, den ihre Nutzer auf ihrer Plattform sehen werden. Die Produzenten bekommen ein immenses Regularium vorgelegt, nachdem sie ihren Content produzieren sollen. In einigen Fällen mischt sich Snapchats Editorial Team (denkt mal darüber nach warum sie eins haben und weiter aufbauen) sogar in die Produktion des Contents für die eigene Plattform ein. Das ist, laut dem WSJ, auch der Grund, warum sich Buzzfeed trotz vorheriger Ankündigung gegen eine Beteiligung an dem neuen Programm entschieden hat. Im Gegenzug dürfen Verleger den Distributionskanal – in dem Fall Snapchat – nutzen.

Jeder gegen Jeden: Nutzungszeit

Für Snapchat, geht es um die Steigerung ihrer Relevanz durch Erhöhung von Nutzungszeiten ihrer App. Höhere Nutzungszeiten bedeutet zwangsläufig, dass ihre Nutzer andere Apps oder mobile Webseiten nicht nutzen. Im digitalen Zeitalter, jedoch vor allem auf Smartphones, geht es nicht um die Konkurrenz im gleichen Marktsegment. Alle konkurrieren gegen einander um die Zeit, die der Nutzer mit seinem Telefon verbringt. Snapchats größter Konkurrent in der Hinsicht ist Facebook und die von Facebook gekauften Whatsapp und Instagram.

Die Erhöhung der Nutzungszeit ist allerdings kein Selbstzweck sondern eine Metrik, mit der Snapchat von Werbetreibenden höhere Erträge generieren kann. Während Snapchat Discovery zunächst primär Partner aus der Medien und Verlagsindustrie hat, um sowohl die Verhaltensmuster zu testen als auch um lukrative Inhalte zu haben, sollen in Zukunft natürlich auf der gleichen Ebene auch Inhalte von klassischen Werbetreibenden erscheinen.

Aus Sicht der Nutzer von Snapchat ist das ein Mehrwert. Doch diesen Mehrwert verbinden diese Nutzer vor allem mit Snapchat, nicht mit den Produzenten von Inhalten. Der Inhalt wird dort konsumiert, wo der Nutzer ist. Die Plattform ist noch sehr jung, signifikante Auswertungen wird es noch nicht geben. Meine Vermutung ist: die meisten Nutzer werden sich nicht daran sehr lange daran erinnern können, wer der Absender des Inhaltes war, den sie womöglich gemocht haben. Sie werden sich vor allem daran erinnern, dass sie diesen auf Snapchat Discovery gesehen haben.

Ähnliche Methodiken wendet Facebook an. Darüber habe ich in der Vergangenheit bereits geschrieben.

Verlegen ist mehr als Inhalte produzieren

Beide Unternehmen versuchen das Ökosystem (Bought-, Owned-, Earned-Media) aufzulösen. Die Owned-Media – für ein Medienhaus: TV, Zeitung, Webseite – sollen immer mehr in die Kontrolle der US-Plattformen abwandern. Facebook hat es bereits geschafft die Abhängigkeit der Medienhäuser von ihnen fast unzerstörbar zu machen, indem sie der mit Abstand größte Treiber für Referrer-Traffic geworden sind. Jetzt wollen sie die Nutzer nicht mehr irgendwohin schicken, sondern sie immer mehr auf der eigenen Plattform behalten. Aus Gründen, die ich weiter oben bereits beleuchtet habe.

Was bedeutet das für Verlage? Vor allem die mit journalistischen Ambitionen? Die Marginalisierung ihrer Relevanz. Für Journalismus hat auch vor dem Internet niemand bezahlt. Die Profitabilität von Verlagshäusern beruhte auf ihrer Kontrolle von Produktionsinstrumenten (Druckereien) und den Distributionswegen. Beides ist durch das Internet marginalisiert worden. Russell Davies, einer der Mitbegründer vom Newspaper Club, sagte:

We Have Broken Your Businesses, Now We Want Your Machines

Plattformen wie Snapchat und Facebook wollen nicht die Druckerpressen sondern die Leser und je mehr sich Verlagshäuser auf die Beschaffung der Leserschaft einzig und alleine aus dem Traffic / Metriken, den diese Plattformen ihnen zu Verfügung stellen verlassen, desto schneller werden sie das letzte verlieren was sie derzeit noch haben: die Bedeutung ihrer Marken und die Autorität die einen Content-Produzenten von einem Verleger unterscheidet.

Work Note: New Meetup fatnine

We’re starting a new meetup on Friday mornings every couple of weeks.

It’s been quite a while since we had our last meetup back in Kreuzberg. And it feels like a good time to start a new one. Distrikt Coffee is a beautiful new cafe in our neighbourhood (on Bergstraße between Torstraße and Invalidenstraße) with excellent coffee and tea and tons of space. 

So from next Friday on, we will be there every couple of weeks from 9 to 10am. Anyone is welcome to come by and join the conversation. There won’t be any prepared talks, pitches, specific topics, hashtags or Facebook events. Just coffee/tea and conversations. 

To follow the tradition of the old meetup, we’re calling this one Friday At Nine (fatnine). We have set up a newsletter to send out new dates and reminders for the meetup. Sign up here. 

The first meetup will be this Friday (the 6th) at 9am. We’re looking forward to having a chat with you. 

Two notes about Distrikt Coffee: They serve Ozone espresso beans and Companion teas, both excellent choices. Their kitchen opens at 9:30am. Before that time, they only have pastries. 

Other meetup names that didn’t make the cut: Luddite LinkedIn, Slackline (from Slack offline), Distrikt NEIN, Breakfast First Release Later, Dark Social, You Had Me At 8:30 and Break Fast & Make Things…

Metrics matter

The decline of the view-based-metric model has not been exaggerated. The quest to find an alternative is difficult. An overview.

The ad-budget crunch is felt across the media / publishing industry. While there are differences between markets, the overall trend is the same: publishers struggle generating enough revenue from the classic ad-based business models.

AdBlock and robots

One aspect of the overall situation is the growing number of AdBlock users. Now the company behind AdBlock Plus is even providing administrators with a solution to install their product across a whole network.

On the other side of the aisle, advertisers have to deal with the fact that a significant number of views on their display advertising is generated by robots and not potential customers. The Financial Times reported about a Mercedes-Benz campaign that had up to 57% of fraudulent impressions.

In a sample of 365,000 ad impressions brokered by Rocket Fuel over three weeks, Telemetry found that 57 per cent were “viewed” by automated computer programs rather than real people.

Current state of affairs

What is required is an industry wide acceptance and adoption of a new metric. Without a clear alternative in place, the view-based metric is creating the following problems:

  • For a few years already, there is a significant inflation in the value of display ads.
  • Ad space becoming cheaper forces publishers without alternative business models / revenue streams to accept ever worsening deals from advertisers and placing more ads on their digital properties.
  • This leads to even more devaluation of display ads.
  • On top of that, this trend aggravates the user experiences and frustrates the editorial side of the business. It destroys both the brand loyalty of the readers and the trustworthiness of the publication.
  • Furthermore, the waining cash reserves slash the chance of those businesses adopting new business models, because that would require substantial investments.

For some, native advertising seems like a natural way to alleviate those pains, but only a few publishers have adopted those into their core product yet. Compared with overall ad budgets, Native is nothing more than a niche in the business and doesn’t provide conclusive data and insights for the industry to adopt at scale. Additionally, most native-ad products are, as of now, far to expensive for most advertisers.

Engagement to the rescue

A new, industry-wide metric is required to stop the devaluation of advertising as a viable (main) business model.

Some publishers are lobbying for an engagement based metric model. Most prominently: the Financial Times, The Economist, Medium and Upworthy (which is radically transforming its business).

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Medium has been outspoken about their commitment to engagement-based models. Some authors are no longer being paid on the basis of how many times their articles have been seen, but how long people spent reading them.

For example, some people are now paid not by clicks, but by the total time spent reading in their collection—another experiment that could change as we learn what effects it has on the types of stories it helps produce, and how people find and read them. – Evan Hansen, Editorial Director at Medium

The engagement based metric would also reduces the strong dependency of most publishers on various social platforms and most of all on Facebook as sources for traffic. While receiving referrals will remain important, publishers will have the ability to optimize not only for click-bait, but for quality. Editorial teams will be able to focus again on the actual story.

If you let it, Facebook will take it all

As things are today, news publishing, especially in the US, is very much dependent on services controlled by technology companies. When Google closed down Google News in Spain, the traffic of the publishers who lobbied against the tech giant collapsed. This is a symbolic way of how the publishing industry is trying to cope with their current state. Instead of developing alternatives that would decrease their dependency, the strategic focus is far too often on blaming the tech industry.

Facebook has an unprecedented control over the digital distribution and spread of news, but the social network is far from satisfied being in control of how people discover news. In its everlasting quest to become the internet itself, Mark Zuckerberg’s company has started switching to a model that will reduce publishers to sheer content producers. This can be seen with their push into video. Videos hosted on Facebook perform far better than the ones who are only linked to / embedded.

“What the Shift to Video Means,” theoretically, is that much of the benefit publishers have derived from Facebook over the last three years, which required only occasional and modest adherence to Facebook’s explicit and implicit guidance, will disappear for organizations that are not interested in ceasing to be publishers to become “creators,” or in replicating their operations on another company’s platform just because it’s the momentarily dominant channel on hundreds of millions of new machines with poorly understood potential.

It makes a huge difference, especially on mobile, where Facebook dominance is now even stronger than on the web. On mobile videos hosted on Facebook will start playing (muted) automatically. What sounds like a small difference will create a distorted outcome for businesses that are operating with a view-based metric. Facebook is planing to adopt the same approach to non-video-based content as well. Publishers will be facing the decision of hosting their articles on Facebook itself, thus making it more likely for the content to be seen, but less likely that it will create any lasting value for themselves. A classic case of the middleman becoming rich and powerful enough to take over the whole stack.

Diversified business models are becoming non-optional for the publishing industry. There are alternatives to switching to different metrics or native advertising, but it is now clear that a continuation of the current state can only be considered wishful thinking.

In the end, it all comes down to Campbell’s law.

The more any quantitative social indicator (or even some qualitative indicator) is used for social decision-making, the more subject it will be to corruption pressures and the more apt it will be to distort and corrupt the social processes it is intended to monitor.

Work Note: Christmas Cards

A little making-of of our Christmas cards.

Third Wave Christmas Card

Sometime last autumn we decided that we wanted to send out Christmas cards for the first time. The question was how we can make it something a little special. So we thought “Why not print them ourselves?”

Sabrina Sundermann is the owner of a print shop here in Berlin in Prenzlauer Berg called Small Caps. She has a wonderful collection of printing presses that she not only uses to produce all the cards and posters your can buy at here shop and in shops around Berlin. She also offers workshops on those printing presses.

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On a Thursday afternoon in November, we met Sabrina at her shop to let her teach us how we can print our Christmas cards. First, she showed us how the serveral presses work and we decided for the Golding Pearl. Then it was time to get going and put together the quote we wanted to have on the front of our card.

After much brainstorming, Igor and I had decided to go with a quote from scifi author Ramez Naam:

To understand a thing is to gain the power to change it.

In the last months, this quote has become a bit of a company motto for us. It decribes the very heart of what motivates us in our consulting work.

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Putting together a sentence in movable type is very fiddly work for untrained fingers like ours. It’s definitely not for the impatient (like a certain person in our company).

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After putting the letters together and fixing the quote in a frame, we then had to do a test print to see if the quote was placed correctly on the card. It took quite a bit of test prints and adjusting the position until we got it right. When something that you usually do in seconds on a screen takes half an hour when done by hand, you gain a lot of respect for book printing before the computer.

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Sometime that evening we also realized that with the mentioned quote on the front and our URL on the back of the card, we weren’t creating a specific Christmas card. Yeah, I know, we’re smart like that. So we printed 100 cards instead of just 40, because we can use them for all kinds of occasions.

Two weeks before Christmas, we finally found the time to sit down, write our thanks and best wishes inside the cards and sent them out to our clients and partners. The whole process from printing the cards to writing our messages by hand was quite a rewarding act. Good ol’ print never ceases to amaze us.

Photos by Nicola Holtkamp