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.

The Future of News Publishing – A Report

We’re releasing a deck from 2013 about the news publishing industry to the public.

In spring 2013, we conducted a workshop for a large newspaper. They needed an outside perspective on the state of publishing, social media, digital etc. So we used that opportunity to put all our favorite cases and insights from the media industry into this one deck. It has been fascinating to observe how publishers all over the world have started to implement a lot of the ideas, we’ve mentioned here.

More than one year later, we’re still coming back to this presentation constantly. It has also served as the basis for the start of our podcast (in German). The deck is nowhere near a complete snapshot of the industry, but it covers the most important points for us at that time. This is why we have decided to release it to the public.

TW Podcast 2: Buzzfeed

[Post in German] Wir erklären wie Buzzfeed Native Advertising verwendet und was die Plattform so besonders macht.

Nachdem wir uns in Ausgabe 1 des TW Podcasts mit Native Advertising beschäftigt haben, schauen wir uns nun die Diskussion um dieses und ähnliche Werbeformate in der Medienbranche an. Dabei schauen wir uns insbesondere Buzzfeed an und erklären, wie Native Advertising dort funktioniert und was die Plattform so besonders macht.

Der Third Wave Podcast ist inzwischen auch als Feed sowie in iTunes und angeschlossenen Podcastverzeichnissen verfügbar.

Who is being shallow? How you should be thinking about Buzzfeed

The discussions around the latest financing round for Buzzfeed revealed, once again, that the company is still being misjudged. Here is why they’re the future of publishing.

In his latest column, David Carr writes about the uncertain future of spun-out print newspapers. At the same time, Andressen Horrowitz announces that they have invested 50 Million into Buzzfeed through a post that Chris Dixon, a partner in the firm, published on his private blog. They value the new-media firm at 850 Million dollars. If you have read any news about this, you’ve probably encountered the comparison to the price that Jeff Bezos paid for The Washington Post and how Buzzfeed’s value exceeds it by 600 Million.

The media landscape has been unraveling since the early 90s. No news here. News is, though, that so few journalist are able to report the fact that after all those years there is now a new breed of media companies that provide a plausible alternative to how media and news publishing companies have operated so far.

Technology is the backbone

For a venture capitalist, there is nominally little difference between Buzzfeed and Facebook or Twitter. They are investing into the technology capabilities of those companies, not into their editorial staff.

BuzzFeed has technology at its core. Its 100+ person tech team has created world-class systems for analytics, advertising, and content management. Engineers are 1st class citizens

There is a clear distinction here between Buzzfeed (or a Vox Media) and its predecessors. While traditional news organizations only involve themselves as much with technology as they feel necessary to accomplish their main objective (journalism), new media companies like Buzzfeed build technology that provides an abundance in scaling opportunities. That in turn makes them both profitable and susceptible to the interest of VCs and allows them, for now, to maintain an editorial stuff of 200, invest significant resources into investigative journalism and long-form reporting.

But there is more

As a media outlet, Buzzfeed is competing for the same advertising dollars as other media outlets, but they aren’t doing so with the same products. In his talk at the Guardian Media Summit a year ago, Jonah Peretti, Buzzfeed’s CEO, said that he considers display ads to be a historic mistake that soon will be corrected. While so many of us certainly can relate to the statement, I’m sure someone at Google and Yahoo will refer to how much money this “mistake” is making them. Fact is, Buzzfeed would never attempt to compromise the experience for the user by adding ads to its site. In fact, you don’t see any display advertising on the website whatsoever. Instead of charging advertisers money for displaying ads that nobody wants to see, Buzzfeed is charging advertisers for helping them to create content that both solve the communication need of the advertiser as well as ensuring that it creates value for the recipient. For Buzzfeed this means a better user experience and the luxury not to compete in a plummeting display ad market. Advertisers get a significantly better engagement on their marketing message. This way, Buzzfeed is both a media outlet as well as the advertising agency.

To round this up:

  • Buzzfeed created a technology that allows them to build the product that users want
  • Buzzfeed offers advertisers native advertising products by allowing them to use the same tech that their editorial stuff is using to create stories thus making the advertiser happy and themselves very profitable
  • This in turn allows them to produce the kind of content that is being asked for right now

buzzfeed explained

After years in which we have seen the validity of traditional media-business models erode, companies like Buzzfeed and Vox Media at least provide a viable alternative. One doesn’t have to agree fully with any of those approaches. Looking closely, one can find sufficient reason to be doubtful about the path those new companies are taking.

The core learning, on which so many in the traditional media landscape are focusing when debating Buzzfeed, is certainly not that one has to adopt listicals with funny cat photos or a subversively viral approach to formulating headlines. Those cursory observations are preventing an old industry from learning exactly what it needs to learn from those newcomers.

This is an exciting time to be involved in publishing, journalism and media. Here at Third Wave, we strongly disagree with the notion there is a lack of good content. In fact, the opposite is the case. The difference is that great content is out there, it’s just hard to find and even harder to finance. That too is not due to lack of financial resources. In the Netherlands, De Correspondent have raised 1.7 Million in a crowdfunding campaign to launch a new media entity, in Germany a less exciting project managed to raise over a Million. There are also smaller success stories such as Deca. Those projects prove that there is both money and willingness to pay for good content. Crowdfunding it itself isn’t a business model, nor should it ever be considered one. It might work for certain projects, but it won’t be enough to provide a scalable business model that will ensure the continued existence of the fourth estate.

There is a wonderful, long interview – published on Medium, of course – between Felix Salmon and Jonah Peretti (CEO of Buzzfeed). It’s personal. It provides context to understand why Peretti is able, so far, to navigate first The Huffington Post and now Buzzfeed to being such huge success in the media world.

Be of the net, not just on it.

–Emily Bell, Director of Tow Centre for Digital Journalism at Columbia J School

Buzzfeed certainly is.

Jonah Peretti at Changing Media Summit 2013

Notes, insights and learning from Jonah Peretti’s keynote at Guardian’s Changing Media Summit 2013.

peretti Buzzfeed’s Jonah Peretti on how ideas travel on the social web – video

Well, that came in handy. While Johannes and I are spending this weekend on researching as much as possible about the publishing industry, we stumbled upon this fantastic keynote by Jonah Peretti at Guardian’s Changing Media Summit. If you are not familiar with the name, Jonah is the CEO of Buzzfeed and is hailed – quite possibly rightly so – as the wunderkind of the publishing industry. Buzzfeed is not his first success. He was instrumental to the rise of the famous Huffington Post before that.

We took some notes and thought that some of you might find them useful as well. So here it is, the video and our rather unfiltered notes (mostly just sentences he said).

A little side anecdote as to the creation of this blog post: I created the initial notes by writing them down in iA Writer, transferring them into Draft and sharing them with Johannes. There, Johannes added his notes and I had the chance to approve them. Draft is an amazing tool for collaborative writing. It’s a bit like github for writing.

Notes, Insights & Learnings

  • Over 40+ Mio unique visitors per month
  • Primarily from social
  • Mostly 18-34
  • Over 40% from mobile
  • Shift from Portals -> Search -> Social
  • HuffPo was grown rapidly through search, BuzzFeed through social.
  • “Bored-At-Work”-Network = Collectively larger than the audience BBC or CNN reaches
  • Literally hundreds of millions of people
  • Weren’t initially aware that they are part of a network
  • If your mobile doesn’t work on mobile, it doesn’t spread
  • Mobile and Social have converged.
  • Make something that ordinary people want to share
  • “Biggest misconception is that you need to focus on quality for things to go viral.”
  • Quality helps, but it’s not necessary
  • Idea matters, but as important is the mechanism for spreading the idea
  • You should spend an equal amount of time on how to spread an idea as you spend time on the idea itself.
  • BuzzFeed combines Art & Science, which is the creativity/the idea and the data-driven approach to spreading it.
  • R = ßz (the equation for epidemiology = how effective diseases spread)
  • Viral Rank = measures the “social production rate” of media and is measurement metric that exists in real-time
  • Maximization of Content Spread = we starve content that isn’t getting traction, and fuel the content that is taking off
  • BuzzFeed also uses machine learning to predict social hits so they know
  • Twitter has a half-life of about an hour
  • Facebook has a half-life of about a day
  • Pinterest has a half-life of about a week
  • “Our technology is made for social.” Measuring the social lift.
  • BuzzFeed uses dashboards to help editors train their intuition of what might work.
  • We behave very differently depending on the context. Content spreads differently on different platforms.
  • Google is very informational (about the information), Facebook is about connecting people (through information?), Facebook is much more emotional
  • “Humor is inherently social.” When you meet people and somebody jokes, nobody remembers the joke the next day, only that they laughed hard
  • BuzzFeed has buttons for emotions. *I think it actually helps them to channel their emotion and become more aware, thus more willing to share. “If I LOLed so hard, I should send it to my friends.”
  • Once people are reacting, they are much more likely to share -> make simple to react
  • Good news for journalism: “Aggregation worked for search, but Scoops & Quality Reporting work for Social” -> Google can’t tell the difference between the rewrite and the original scoop, but on Twitter people can tell which one is the original. They will retweet the original scoop.
  • Publishing is now a Paris Café (!!!) – You can read the Le Mond, you can pet a dog, because its cute and you can flirt with somebody. Buzzfeed tries to serve all our emotional needs.
  • Lets embrace ALL the things that make us human.
  • “Edit was first, but now the big shift to social is coming to advertising”
  • At Buzzfeed, 100% of revenue is social content marketing
  • No banner ads on BuzzFeed.
  • Brands are held to a higher bar where they must have content that people actually want to click on and read
  • It all works through the same CMS
  • Editors never touch brand content, but brands have to learn how to work as publishers / editors
  • Brands get a dashboard that shows how much earned media they are getting
  • Social can make ads great again. In the Mad Men era advertising didn’t need to cram ads into a banner, they had a whole page
  • Social can hold advertising to a new bar
  • It’s better to think long-term
  • Have a heart, having emotional is important
  • Identity: People share stuff because it’s about them
  • Something that everybody like a little gets shared less than something that only a small percentage like a lot.
  • If you can publish into the zeitgeist, you can publish into what people are talking about and you can capture the moment …
  • Nostalgia is also very social
  • Porn only works for search, not for social.
  • “The banner ad was a historical accident and we are moving past it.”
  • EQ is as important as IQ.