Author Archives: gfreishtat

The news of the last few weeks indicates serious acceleration of the changes afoot in the online publishing world.   On September 14th Yahoo, AOL, and Microsoft announced a deal to start selling ad’s across each others inventory.  (http://allthingsd.com/20110914/all-for-one-yahoo-aol-microsoft-band-together-for-ad-plan/).   Today, Yahoo announced a deal to share content with ABC News ( http://mediadecoder.blogs.nytimes.com/2011/10/03/abc-news-and-yahoo-news-announce-deal-to-share-content/).

While large publishers have been cutting deals to share content for years (MSN, Yahoo, and AOL included), this series of announcement seams different.  In the past, content has been a bargaining chip for traffic — that is, you can use my content if you provide loads of links and send unique visitors back to my site and I will do the same for you.  Of course, this gaming of content/traffic is a net no gain proposition for both parties because for every unique received by one party, there is a unique, page views, and length of engagement lost by the other party.    The publishing ecosystem has been suffering from this “traffic treadmill”  over the past decade since Google created the “link economy” and made Billions of profits from controlling the economics of this ecosystem.   Publishes did bad deals for the perceived greater good of higher Page Rank and inflated UV’s.  Google never wanted any publisher to have enough content (and ads) to satisfy consumers or those consumers would not need Google as much.  Likewise, until now, Publishers were reluctant to send out their content or take in others content without some UV or Page Rank component.  That is now changing and its all good for Publishers in the long run.

The ABC/Yahoo deal feels different.  Seams like both companies have realized that actually  having greater quantity and quality of content to offer to their respective audiences is more valuable than sending traffic back and forth. Surely both ABC and Yahoo hope that consumers come to their site and not the others — but, this deal lets them win in either case (I am presuming the deal economics here that we are not privy to).  This change portends well for the online publishing industry.  Media fundamentals like frequency, duration, and loyalty of visitors seam to be rising in importance over  gaming links and traffic to support an ecosystem that benefits Google more that anyone else.

Similarly, the ad sharing deal between Yahoo, AOL, and Microsoft also demonstrates the trend toward real collaboration of online Publishers (really this deal is about access to content to put those ads on) and the realization that the Media business is not about sending people away from your site but rather maximizing how you monetize those consumers on your site and — sometimes — how to make money from consumers on other sites without necessarily focusing on getting that consumer to your site.

This is the future of online publishing.   Yes, its always better to have as many consumers (UV’s) on your site as possible.  But, once they are there, they will expect and require more content than any one site can produce to keep them there, increase engagement, and maximize monetization.  Likewise, there are consumers that are not on your site – nor can you economically get them there — who still want your content (or perhaps ads).  Publishers should not fight this reality – they should embrace it.  Monetizing content and ads off your site  is required to make the new economics of online publishing really work for someone other than Google and Facebook (who collectively take over 50 cents of every dollar spent online).  So long as all online publishers are fighting over the 45 cents not consumed by Search and Social — it will be a very difficult business.

All of this portends well for the very large publishers able to cut these content/ad deals.  However, to truly transform the economics of online publishing and Ungoogle the Web,  publishers need way more than two or three big content deals and need to able to fire them up/down really fast (minutes not months)  to satisfy consumer expectation.  Consumers know that the “back” button is perceived as  ”discover” button as they can always go back to Google to find more content on any topic.   To truly compete, publishers must have access to millions of candidate articles/videos/ect to keep consumers on their site and reclaim the type of engagement that made offline publishers so appealing to advertisers and so profitable.  This applies to both large publishers such as Yahoo/ABC/Microsoft and smaller publisher with more niche audiences.

Of course – this reality presents a big problem.  Cutting these content or ad sharing deal is expensive and difficult.  Business development folks need to get on airplanes (if you are big enough to have business development folks), lawyers need to be paid to create contracts, technology platforms need to be integrated, billing and accounting systems put in place, and each partnership must be managed and reconciled each month.  And this is true for each deal.    The current reality is that the cost of doing all these deals does not make sense.  The deals cost more than the value they provide.  This is why Google has been the “universal joint of content discovery” for so long.

We are changing that.    Our Content Logistix platform makes doing these deals as easy as “friending someone on Facebook” and our Digital Curation Platform makes managing content as easy as drag and drop or clicking a check box.  One platform that manages hundreds of content/ad deals — whether publishers are bringing content/ads in to satisfy those on their site or sending content/ads out to monetize those consumers that chose other sites.

Publisher to publisher content/ad deals are required to make online publishing more profitable for large and small publishers alike.  We want to help.

Gregg Freishtat,

CEO Vertical Acuity

This is an interesting change of heart for the “King  of Automation” -

 Megan Garber / Nieman Journalism Lab:

Reading about P&G’s online content strategy  (http://adage.com/article/mediaworks/p-g-adds-custom-content-lineup-federated-program/229042/) and got to thinking about Brands, online content, and how the changes afoot in digital media will blur the line between “Brands” and “Publishers”.

Used to be pretty simple – big Brands like P&G would look to publishers who had attractive audiences to carry their ads so they could drive sales.   This was a three constituent system:  Brand, Publisher, and Consumer.  While the Brands really wanted to get directly to the consumer, the Publishers had the largest collection of consumers (audience) and could demand premiums (CPM’s) for advertising.

Brands are starting to figure out that they can speak directly to their target audience if they create, acquire, or curate content that is interesting.  By doing this, Brands become publishers themselves and their “content” is in a sense advertising.  The difference is that this becomes a two constituent model and is potentially far more cost effective for the Brands.  The flip side of this coin is that Brands can also get their “content” out to audiences in new ways.  Rather than P&G buying ad space to promote Crest tooth past on Web MD, they now can create content about good dental hygiene or perhaps foods that really stain your teeth and promote the consumption of that content on sites across the Web.  Is this “content” or “advertising?  Is P&G a “Brand/Advertiser” or “Publisher”?  — Yes.

The lines defining traditional advertising models from publishing models are disappearing.  All that is required to support this changing ecosystem is a platform that makes it simple to acquire the right content and/or to promote the consumption of this content at scale across the Web.

Great analysis.

The internet has been dislocating traditional business models and industries for the past two decades. While news is unique because of its social value, the dislocation of the business model of news is not. The Travel, Music, and Book industry have undergone similar dislocations. I still travel, read, and listen as much as I ever did — its just someone new that is profiting from my activities. I suspect the news industry is on a similar course. HuffPo & Flipboard are not the answer but their new models and technologies do portend for new and different methods of creating and distributing news.

Being in the technology industry, I see new platforms, technologies, and infrastructure as playing a vital role (e.g. Itunes or Kindle) in re-inventing an industry which is not going away. The model will change – the players and brands may change, but consumers’ desire for credible, authentic, and trust worthy sources of news will grow – not diminish – as the quantity of content continues to grow on the Net. I think the power of “brands” will become more and more important; even if those brands do more curation of others content than creation of their own. For the business of news to be profitable online, the old model of creating everything in house must change — and fast.

Gregg Freishtat
CEO, Vertical Acuity

A few weeks ago The Columbia Journalism School published an excellent study on digital journalism (http://cjr.org/the_business_of_digital_journalism/).  At 130 pages, it is perfect for a long plane ride.  If you don’t have time for that, I strongly recommend reading chapter 2 – “The Trouble with Traffic”.   It is an outstanding analysis of how the fragmentation of consumers attention — caused by Google, SEO, and supply and demand of content — has dislocated the economics of online publishing.

The hyper focus on driving “uniques” and decade long love affair with driving traffic numbers through SEO has caused more problems for publishers that it has solved.   This is true because the nature of the “unique” visit from Google is simply not as valuable as a visitor who is truly engaged in your brand and is real fan of the site.  Fly-by visitors just don’t produce the revenues required to build an enduring online business.  Engagement and traditional media metrics of frequency, duration, and loyalty are the foundation for success in any online publishing business.   Having the best possible  content and a great consumer experience are far more important that driving uniques.  The following case study is illustrative of the current situation:

Based upon this math, a 5% increase in fans (direct load, book marked, repeat visitors, etc) is worth more than a 25% increase in uniques.  I am not sure if CRO’s, Audience Development folks, or ad guys are ready to make this leap — but it is a reality and a change that is coming much faster than most think.  Just like Google emerged to change the landscape a decade ago, then Facebook 5 years ago, new content discovery infrastructure is emerging which will fundamentally change how consumers find and engage with content and Brands.

This focus on uniques has not been so bad for everyone.  Indeed, according the study, Google and other search advertising players, soak up almost HALF of all online advertising dollars.  So, the rest of the entire publishing ecosystem is left to split up the other half.   To make matters worse, Facebook now accounts for 1/4 of all digital advertising views.  (Page 34 of Study).  No wonder the online publishing ecosystem is in a period of dislocation.   The producers and owners of content have ceded control over how consumers find what they want to consumer.   Consumers used to have to pick up a paper or tune to a channel making publishers the gate keeper of discovery- no more.

If publishers continue to rely on others to be the consumers “point of discovery” than they will continue to fight over the scraps of the digital advertising economy.  Publishers who figure out how to be the point of the discovery themselves and start eating into the market share of Google and Facebook will emerge as the leaders in the new world of digital content.  Consumers don’t want to go to 15 sites to find 15 things.  They are lazy and love to rely on brands to do the work for them.  Publishers can regain the throne of discovery if they figure out how to get those 15 things consumers want inside their four walls (and hiring more writers is not the answer).

Growing loyal fans and limiting “fly by’s” means publishers will need far more content than they could ever produce organically.  Google managed to acquire half of the digital economy without producing ANY content.  So…publishers will need to think differently about how to acquire, borrow, rent, or license content and create experiences compelling enough to keep consumers on their site, engaged with their brand.  In this way, they can reduce the consumers need or desire to use Google and Facebook as the universal joint of content discovery.

Just Sayin.

Gregg Freishtat

Was reading the following piece on blaming SEO for the current dislocation in the publishing ecosystem and it got me thinking….

“When All Else Fails, Journalism Blames … SEO?” - http://www.pointtopoint.com/2011/05/when-all-else-fails-journalism-blames-seo

SEO and Page rank had a really good run.  These technologies not only propelled main stream Internet usage but also created the entire SEO industry (and a little enterprise called Google).    Page rank in particular was ingenious at the time of its creation.   Search had been around for quite some time without any real innovation since the early days of Alta Vista and Lycos.  Boolean search and crawling the web can only go so far.   The idea of how sites linked to one another and how pages were interconnected was revolutionary.  Indeed for the past 10 years Google (Page Rank) has dramatically enhanced the quality of finding stuff online.   In the spirit of the classic “innovators dilemma” – what was perfect 10 years ago falls well short today….

Page Rank no longer correlates with the value of a page.  How many sites or links pointing to a piece of content has no correlation to the value or import of that content.  Its not just that 100′s of companies are “gaming” the system but its the reality that the mere existence of links to or from a page is no longer important at all.  Rather, the consumption of any particular page is what matters.  Facebook & Twitter (and little old Vertical Acuity)  are indeed helping to Ungoogle the web ad unwind the import of SEO and Page Rank.

When someone shares a link/page by posting to Facebook or Twitter – this is far better correlated to the value of a page that Page Rank or SEO.  This is an inescapable truth.  When consumers actually like what you published so much they recommend it to others, that speaks to the value of what you have created.  While search will remain an important part of the internet ecosystem for a long long time, it will not be the “universal joint of content discovery” that it has been for the last decade.  Social media and other models that measure “attention” and “consumption” of content will take on this new central role in content discovery.  That is, unless the publishers of the world figure out that they themselves can become a discovery engine and take on more and more important roles regarding how their consumers discovery content online — both content they have produced and other content they have curated specifically for their audience.

The key  to having content discovered is actually creating and curating great content and ensuring great consumer experiences.  Having a great brand also helps allot.   If publishers produce content and experiences that consumers love, they will be shared, tweeted, “liked”, +1′d, etc.  The new trend is that getting your content widely consumed will be tied to actually creating great content — not cutting link deals, hiring SEO experts, or worrying about Page rank.  This is a good change that will benefit everyone in the ecosystem – consumers find and consume better content, publishers focus on and profit from great content, advertisers understand where and how to promote their wares on quality sites with genuine engagement rather than “one hit wonders” produced from Google result launch pages.

One repercussion of this impending shift in content discovery is that publishers will need to create experiences and collections of content far beyond their current means and current execution.  If consumers are to be weaned off Google as the central point of discovery, publishers need to not only produce great content but also curate content from where ever is required to create “likable” and “shareable” experiences.  This will be the new currency of content discovery.

At Vertical Acuity, we produce the infrastructure to facilitate this change in how things are discovered and monetized online.

Very good piece on Tablets and the great dislocation of Media companies by Rishadt  ”The Tablet Worsens Magazine Companies Headache”  (http://rishadt.wordpress.com/2011/04/23/tablet-may-be-a-magazine-companies-worst-nightmare/).

As my Ipad continues to get more and more crowded with apps/icons, I am reminded of opening a brand new computer in the mid 1990′s only to find  ”desktop”  pre-populated with icon’s for everything from ISP’s hoping I will chose them to games and other productivity applications all vying for my attention  in the hopes I would make a purchase of the “full application” or subscription.  The IPad has reproduced this phenomenon; and, as Rishadt notes, creates increased competition for any magazine or other app that makes money by garnering our attention.

Perhaps the best line of this commentary is:   “The future does not fit the containers of the past.”  I love this – it sums up everything most folks are missing about the future of digital media.   I thinking can be applied to most media or publisher Web Sites.  The Web has developed over the past decade with “site” and “traffic” perspective that assumes that sites need to go out and attract unique visitors to make money from their content.  The site mentality (“container of the past”) simply won’t be the basis of the next shift in content discovery online and the changes in the online media world.  Rishadt aptly notes that publishers will have to license their content far more broadly to succeed – we agree.

“Advertisers want audiences not spaces.”  - Another gem.   The media business is about creating a brand and figuring out how to monetize audience.  This business of getting “everyone” to “my site” and then monetizing them with ads “on site” just won’t scale once content can freely “route” by and between sites.  (with permission of content owners and payment when required.)  If a publisher has a great deal with an advertiser for their audience/content, that audience/content still have value to the advertiser even if the actual impression occurs off the specific site of the publisher.  Just need the infrastructure to make this simple, track everything, and leave both the advertiser and publisher with granular controls and complete transparency - no worries – we got that.

All in all –  great points about the future of online content.

Good post by Fred Wilson on advances in Web (and non-web) metrics:

http://www.avc.com/a_vc/2011/04/comscore-total-universe-report.html

And my comments:

Definitely a big step in the right direction. This is just the first step in moving away from a “site mentality” in the metrics world. The notion of a site have non-porous site walls is going away entirely — making traditional metrics of limited use. Mobile, web tv, and tablets are just one aspect of this change.

In just the past week we have seen the launch of news.me, Trove, and Bo.lt. This on top of the big adoption of FlipBoard, Zite, Pulse and the like. These next generation (some more than others) aggregation services point to a world where content is not always consumerd on the “site” from which it originated. Indeed, new infrastructure will enable content to route to where ever it is in demand — legally and with compensation flowing to content owners from those profiting from its use.

This presents some new and unique challenges for a world built on “site metrics”. Google has made some inroads to solving this syndication issues with it canonical technology but much work remains for the Metrics industry to prepare for the new world where content “routes” by and between devices and sites. comScore’s approach is clearing heading in the right direction.

Gregg Freishtat
CEO, Vertical Acuity

Another interesting article on aggregators and the re-emergence of their business model….

http://gigaom.com/2011/04/19/are-apps-like-flipboard-the-future-of-media/?go_commented=1#comment-618482

And my comments:

This post is spot on. Many publishers are behaving just like the record labels did when the internet dislocation hit their industry. FlipBoard is compelling because consumers do not want to go to 20 places to find 20 things that interest them (Google model). However, the tricky part is yet to come from Flipboard and other aggregators. Traditional publishers have a hard time splitting up the revenue from their very expensive content and really don’t want FlipBoard to compete for the attention of their consumers. FlipBoard wants to be “friends” with publishers much Google was their friend (right before Google reach 48% of all online advertising).

The answer for publishers is pretty clear — they need to BE the FlipBoard’s and Huff Po’s of the world. They need to embrace emerging technology and allow consumers to discover content from around the web THROUGH their brand or site. Publishers can never produce enough of their own content to satisfy consumers new expectations — that genie is just not going back in the bottle.

Publishers must curate the third party content they cannot afford to produce into their site. They cannot afford to keep sending their consumers away to find it (much like Washington Post’s announcement of Trove.com today) and cannot afford to produce it. Likewise, they must start letting their content be consumed on other sites and get paid for it — that their business — produce great content and monetize it from “audience” -either on their site or elsewhere. To make this possible, publishers require granular control over their brand and content and an inexpensive way to allow their content to “route” intelligently.

These new technologies and infrastructures are being created to empower publishers to become the “lens” through which consumers discover content. When consumers think of the Washington Post with the same delight they have from using Flipboard, the publishers will have won….

Gregg Freishtat
CEO, Vertical Acuity