03.27.14
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Journalism: Mining niches to support the mission

Jay Rosen ties together some of the trends happening right now in digital journalism, such as the launch of deep dive digital news sites. These sites are heading 180 degrees in the opposite direction of the generalist bundles like the newspaper and news channels.

When people entirely new to it ask me what’s the best way to get going in journalism — if you are starting as an outsider, with no credentials or experience — I always give the same advice, and I know other people give this advice too. It’s obvious enough. Start a niche news service on a subject some people care a lot about.

Niches can definitely be a winning strategy. In many ways, niche sites focused on revenue rich verticals have been working for much of the past decade – tech, sports, food, fashion. I think there are opportunities for traditional news organisations to build these types of verticals into a revenue stream rich enough to create a new form of support for public service journalism. This is part of my current strategy, looking for these verticals.

However, I want to add a caveat to Jay’s post, or amplify a caveat in his post. He writes:

These are a few of the simple virtues and basic lessons that a good niche blogger acquires by building a service from scratch. You don’t need permission to do it. Initial investment: less than $1000 for design, hosting. It’s a free country, a free press. And at first, you will probably be doing it for free.

I used to think that the radically lower cost of digital media would help traditional news organisations and indeed individual journalists outrun disruption. I was wrong. Cutting costs was part of the disruption not a strategy to survive it. The lower costs mean that there are lower barriers to entry to new competitors. To create a sustainable business in digital media, you don’t simply need to be cheap. You don’t simply need to grow your audience quickly. You also need to know from day one what your revenue strategy will be. If you don’t want to be doing your journalism for free forever, you need both an editorial plan and a business plan.

03.20.14
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Paid content, data and knowing your audience

I remember back in the day a number of news websites, the New York Times and the Washington Post included, added registration to their sites. It was long before commenting was common, but the strategy was all about capturing some information, some data, to know more about their audiences.

The Financial Times understands this, which is one of the reasons that it is killing it, and the FT’s CEO John Ridding explains to Poynter how their paid content strategy has helped them capture more data and how that data is helping them deliver more to their audiences.

I don’t think we really understood the power of the data and the audience understanding that came with the subscription model. We’ve been able to build a system of understanding our readers.

They do now, and it is allowing them to add new features that adds value for their readers. If you add value for readers, then they understand the value of paying for content. For traditional media, as my friend Steve Yelvington says, we need to find new ways to add value, and data from subscription services is a powerful way to do that.

03.17.14
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Russian journalism students, the FSB and a warm First Amendment welcome

The First Amendent at the Manitowoc Herald-Times-Reporter
I’ve left some of the details purposefully vague for reasons that I hope are obvious.

A couple of years ago, I was in Russia working with a newspaper for the Media Development Investment Fund. While there, the publisher of the newspaper asked me to speak to her daughter’s university journalism class. I love talking to students about journalism so I quickly said yes.

A few hours before I was supposed to speak, the publisher took a phone call. Russians have this singular ability to express displeasure without needing words: “Rrooohhh, wwrrrooohhh, wwrrooohhh,” was all I heard her say in her husky alto.

She got off the phone and had a quick chat with my Russian colleague, who then turned to me and said, “The FSB has noticed you are here.” The FSB is the Russian Federal Security Service, the successor to the KGB. The students had been talking about me on vKontakte, one of Russia’s most popular social networks, and the FSB had noticed and called the dean of the journalism school. My colleague continued, “They say, ‘Who is this Guardian guy? Why you no tell us?'”

My colleague tried to calm me and told me not to worry. “Don’t worry. Last time Danish guy only detained for two days,” she said. I wasn’t comforted. I didn’t really care about being detained, well much, but it was Suw’s mother’s 70th birthday party the following Sunday, the day after I was due home, and I was more worried about missing that than the FSB, which I was pretty sure wouldn’t really care that much about me. However, in an abundance of caution, I let Suw know what was happening, and told her to put the American embassy in Moscow on speed dial.

The publisher made a phone call to someone she thought had connections to the FSB, someone who could smooth things over. It must have worked because a few hours later, I was at the university speaking to a packed room of students in the international journalism programme.

I gave the presentation that I had intended to give about the changing world of journalism and the opportunities open for young journalists, and then I opened up the floor to questions. A few questions in, one student asked, “If you had to choose between writing a story critical of the government and going to jail, which would you choose?”

I quickly scanned the room, with the tune “One of these things does not belong” going through my head. Was there an FSB agent lurking somewhere in the shadows? No one jumped out, literally or figuratively, but I still took a moment to carefully think over what I was about to say. I replied that, thankfully, I had never had to make that decision, and that in fact, in Britain, if you didn’t criticise the government, you would be pilloried by your peers.

Things went pretty smoothly after that, but near the end, one of the students asked, “Would you care to comment on the press situation in Russia?” I looked at my colleague before responding, “No,” with a bit of a laugh. The room, fortunately, laughed with me. The student persisted, and I relented. I collected my thoughts, and then I said, “I am an American, who has worked in the US and the UK. For the past seven years, I’ve worked mostly in the UK. I miss the First Amendment every single day.”

Which is to say that the press enjoys incredible freedom in Britain, but the First Amendment provides another level of protection, both for the press and freedom of speech. (Of course, there are the issues of the insane libel and privacy laws in the UK, but that’s not nearly as pithy.) The First Amendment not only grants journalists in the US freedoms, but it also gives us a sense of responsibility about those freedoms. I sometimes got the sense in the UK that some journalists couldn’t tell the difference between freedom of the press and a libertine press, a press devoid of any sense of principle or moral purpose. The tabloids and the mid-market Mail have an electric monk morality, being able to hold two entirely contradictory moral positions simultaneously. They wring their hands about the moral degradation of the country while simultaneously, in an act of total self-denial, basing their businesses largely on selling soft porn. I am sure tabloid hacks will call me a puritanical American, but the tabloids love to point out hypocrisy unless it involves their own activities.

As I said a few weeks back, I have come back to the US to take up an executive editor position overseeing a couple of newspapers. The picture above is from the stairs leading up to the newsroom of the Herald-Times-Reporter in Manitowoc Wisconsin, one of my two newspapers. When I saw the First Amendment written on the wall, it was a great welcome, back to the US and back into a newsroom.

02.13.14
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Gannett puts a digital guy in charge of a newsroom, me

A little more a than a year ago, I was doing data journalism and consulting for Czech TV, and Kvapilová Pavlína, the head of online at the time, said to me incredulously, “Why aren’t you in a newsroom?” It was a good question. For the last four years, I’ve had a great time working with news organisations all over the world to seize the opportunities of digital media, but I missed working in a newsroom.

I won’t miss it any longer. Today, I started my new job as the regional executive editor overseeing two Gannett-owned newspapers in Wisconsin.

I met with journalists at one of the papers, and the first question that most of them asked was why someone with my background would come to Sheboygan and Manitowoc, Wisconsin, to work with their newspapers. The decision was a mix of professional and personal reasons that I’ll be explaining over the next few days, but the key professional reason was that to get the opportunities I really want – the opportunities to drive not just digital innovation but also the editorial direction of a news organisation – I needed experience managing newsrooms.

Last October, Rick Edmonds of Poynter asked “How many top newspaper editors are from digital backgrounds? Still darn few”. Jim Brady of Digital First Media gave this explanation:

It’s more than being slow. It remains hard to find people who understand digital and who have run newsrooms.

This isn’t a criticism of Jim, who I count as a friend, but it is difficult to deny that this is one of those brilliant professional Catch-22s. You don’t have the experience so you can’t get the experience. The industry has rarely promoted newsroom leaders from the digital side. Over the past five years, I have seen more broadcast and print editors take over online leadership roles than I have digital editors take over multi-platform roles. In effect, we have had a digital ceiling. That might change for the next generation of digital leaders, but or mid-career digital journalists like myself, that’s been the reality.

I’ve been a digital journalist since 1996, and I’ve held ground-breaking positions for the BBC and The Guardian. I’ve helped launch innovative multi-platform programmes for the BBC, and Suw and I were part of the launch team for India’s Firstpost. However, up until today, I hadn’t run a newsroom. Now, I’ll be running two. Lowell Johnson, the GM for the two newsrooms, and Mike Knuth, the Executive Editor of the Green Bay Press Gazette and former executive editor and GM of the two papers, deserve a lot of credit in seeing an opportunity to bring me on board and convincing me that this was the right next step in my career.

I was inspired to make this move by friends such Brett Spencer at the BBC and Alison Gow with Trinity Mirror, who came from digital backgrounds but took on overall leadership roles in their respective media. It’s opened up great new opportunities for them, and I am thrilled by the opportunity that is before me.

After years of writing about how I think local editors should engage with their communities and about rethinking the role of the newspaper in the 21st Century, I finally get to put my ideas, and myself, to the test. I have long been hungry for this challenge.

Back to Rick Edmonds at Poynter, he wrote, “With the ice broken, I would look for Gannett, Advance and Digital First to add to that cadre as top editorial jobs come open. And I am eager to see what changes this first generation of digitally tilting editors can produce.”

Watch this space. This job will definitely keep me busy, but I’ll be writing here and elsewhere about I navigate this new phase of my career. It’s going to be a wild ride sometimes, but damn it’s going to be a lot of fun.

02.06.14
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Digital disruption: Bigger audiences but lower revenues

This is the paradox of journalism in the digital age: Journalism organisations reach more people than was ever possible in the analogue age, but those larger audiences have not translated into higher revenues. Some of this has been almost constant pressure of digital ad revenues since the beginning of the financial crisis, driven by an oversupply of ad space. Digital media offer a dizzying array of choices for consumers and advertisers.

From the standpoint of journalism, like all industries facing the Innovator’s Dilemma, we scoffed at scrappy upstarts but not only editorial ones but more importantly commercial competitors for ad revenue that we didn’t even see as being in our business.

For an interesting view of this, take a look at this piece from The Conversation in Australia, a site that publishes comment on current issues by academics in Oz and the UK. Franco Papandrea writes:

The industry clearly underestimated the threat posed by the development of online competition. Although several newspapers moved early to establish an online presence, the initiatives were largely pursued to complement traditional activities rather than strategic actions to reposition their operations and bolster their competitiveness in the rapidly changing environment.

More recently, once the magnitude of the threat became evident, newspapers have scrambled to restructure in an effort to contain its impact. Their efforts so far have been concentrated in two broad areas: restructuring of publishing operations to re-align production costs with lower revenues; and seeking to convert their online readerships to earnings.

The increasing range of news and advertising services accessible on the internet is changing the relative comparative advantages of established media. The adjustment process is having a significant impact on established structures. The impact on newspapers has had both positive and negative implications.

He says we shouldn’t write off the incumbents, and he’s right. But in an age of disruption, incumbents strengths can quickly become their Achille’s heel as the market shifts.

01.27.14
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Big news stories: A threat or opportunity for paid content strategies?

January was a very stormy month here in the UK. We live just outside of London, and it has been quite soggy with our local park being flooded to some extent for much of the past month. People were swept out to sea as they tried to snap photos of the fierce waves. Photos and videos flooded news websites and the social web. People love weather stories, but as we saw during the storms, they rely less on traditional media to tell and share those stories.

David Higgerson, the digital publishing director for the regional websites within Trinity Mirror, is right when he catalogues the hyper-competitive environment that local journalism, especially, but journalism in general faces in a world where cameras are everywhere and distribution via social media is lightning fast and engaging.

But imagine, just for a moment, if we’d had paywalls around our sites – be they full, pay-or-sod-off paywalls or pay-as-you-go model. What do you think would have happened? Would people, up to their ankles in water and without power be digging out their debit cards to log on via their mobiles? Would worried relatives elsewhere in the country link your website to their Paypal account to keep up to speed with your live blog?

No, of course they wouldn’t. They’d have gone to Twitter, where police forces share information by the minutes. Followed new pages on Facebook, where the Environment Agency was actively driving users when appearing on broadcast media. They could have searched Google and found any one of the traditional national newspaper brands now hoovering up any agency copy they can find. Or checked out the BBC, which is superb at cross promotion. Or discovered hyperlocal sites run for passion or for money … and never again thought twice about us.

David is right, and paywalls are not the easy solutions that most journalists dream of as much as we might wish it were so. David closes by saying, “We have the potential to create great content, we just need to find the revenue model.” That is it in a nutshell. To quote advice given to a friend about his journalism start-up: “You know you can create value. But can you capture it?”

While local newspapers have much greater competition for attention and audiences, their real challenge has been competition for revenue. At the moment, we have two business models that have had some success: High volume predominantly ad supported, and a mix of ad and reader revenue. National or formerly national newspapers with international strategies, (think The Daily Mail and The Guardian), are pursuing an advertising-based business model based on scaling their audiences aggressively. But the pure scale model really isn’t an option for local journalism. Digital advertising operates and delivers meaningful returns with millions, probably tens or hundreds of millions of uniques. Most local sites on their own don’t operate at that scale. Some groups are looking at network plays amongst their sites, like Advance’s MLive network in Michigan in the US (disclaimer, I worked for MLive in another lifetime between 1997 and 1998). However, that isn’t an option for all local groups.

That means either reader revenue or alternate revenue streams, and the latter are showing some promised. Some local news groups are trialling digital services businesses, and it was one bright area for local media in the US last year. The Dallas Morning News has bought a number of digital ad and marketing companies to help it build meaningful digital revenue. (Notable as well is that they dropped their paywall recently.) A Newspaper Association of America report showed last year showed a 91 percent increase in marketing service revenue. It’s good to see that kind of growth somewhere in the business.

Paid content models used to be a binary choice, hence the name paywall. However, paid content strategies have evolved, and I don’t simply mean moving to the metered model as opposed to the hard paywall strategies. Modern paid content strategies have grown more nimble, more flexible. During big stories like storms, news groups like the New York Times and the Wall Street Journal have opened up their sites. This can be a great marketing opportunity to highlight the richness of your content, even in this new media environment. Paid content strategies also should provide publishers with a richer stream of data so that they can deliver better experiences and better products both for audiences and for advertisers.

David is spot on about being clear-headed about the competitive challenges, and he is also right that the real test now is finding the revenue model for local journalism. For the revenue to come, the products will have to change as well. If we’re not competitive with social media or more to the point working with social media to provide audiences with the best verified content, then we need to step up our game. Ever the optimist, I’d like to think that there is an opportunity for local news organisations to curate and verify this local information. To me, this is about smartly staying at the centre of a new local information and conversation eco-system. The bottom line is that whether it is storms or other breaking news, we have to compete for audiences. If we can do that, I think we’ll remain relevant to audiences and advertisers.

01.24.14
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Strategy is not just for Christmas

I’ve spent a lot of my time over the last decade helping businesses to put together strategies for the use of social media, both internally for collaboration and externally for community building and marketing. I know that for some companies, my strategy was a document that they continued to refer to for literally years after we put it together. (I caught up with one ex-client three years after I delivered his strategy, and he said he and his team will still referring to it and still found it useful!)

But many strategy documents come with built-in obsolescence. If you’re not very careful, social media strategies can age fast, because of the rapidity of change within social media. But it’s not just the tools that change, it’s the demographics. Facebook is ageing, Twitter getting younger, and the 55+ demographic is growing faster online than any other. Your target audience could be shift platforms whilst you’re busy implementing a strategy that’s now out of date, and how would you know?

That being the case, I was very interested to stumble on Thomas Martin’s blog post about “agile strategy development”, in which he calls for the Agile methodology to be applied to company strategies.

Similar to software development, the complexity of strategy development is increasing. Globalisation, faster innovation cycles, stronger competition are only some of the factors that make it harder and harder to devise stable, long-lived and eventually successful strategies. Agile strategic planning addresses this by keeping the strategy fluid.

[…]

Agile strategy development shares the following characteristics with agile software development:

•  Continuous monitoring of the external environment during the Analyze activity.
•  Regular review and – as required – updating of strategic objectives and plans during the Define and Plan activities.
•  Frequent feedback from Execution on the effectiveness of the implementation.

Although Martin suggests that such an approach requires “less external input” from consultants, I’d argue that what it requires is actually a longer-term relationship with a good consultant who has a familiarity with your business but also enough distance to help you see the bigger picture.

I succeed as a consultant because I can see a company’s problems from a very different vantage point to them, not only because of my own deep experience with social media, but also because I’ve worked with so many companies that I can see common errors in thinking and execution that would otherwise be missed.

To get the best result from social media you need an informed strategy, a regular review process, and dependable advice that both ensures that you are on track whilst also bringing in a fresh perspective and valuable expertise. An agile approach to strategy makes a lot of sense to me, and it’s something companies should seriously consider. If you’re going to spend time and money on strategic thinking, it’s essential that you keep that strategy fresh, relevant and up-to-date.

01.15.14
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News organisations must engage with RTB advertising

Journalists tend to focus on the shifts in media consumption as they try to make sense of the disruption in their industry, but they have often overlook the shifts in adverting beyond the precipitous drop in newspaper advertising since 2005. That collapse, more than 60 percent since 2005 in the US, has been driven not just by the decades-long decline in circulation but also that there are simply cheaper and more efficient ways for advertisers to reach audiences than passive banner or print advertising. The collapse in newspaper ads has driven some news groups into bankruptcy, driven many small dailies to become weekly publications and has driven news groups to shift the balance in revenue from advertising to reader revenue.

Frédéric Filloux has a great look forward to 2014 with his normally insightful advice on how digital media will survive to see 2015. I completely agree with him that the glut of online advertising is driving prices downward. I part company with him about RTB – real-time bidding. RTB, aka programmatic or algorithmic buying, can seem dauntingly complicated on its face, but after you cut through the acronym-intense eco-system, it is really quite straightforward. RTB is simply an automated way that advertisers can place ads on sites based on the audience they want to reach and the price they are willing to pay. RTB platforms mine the rich data-stream being collected about you.

It is a natural evolution of the data-driven targeted advertising system that we’ve seen develop since the late 1990s. To quote Alan Mutter, this is why media economics have shifted from reach to each. It’s not about advertisers casting their message as far and wide as possible but by precisely targeting their message to audiences they think are most open to their message. RTB can target age, income, geography and other demographic factors.

Again, for journalists who aren’t on the business side, it’s important to understand that RTB is mostly used for selling remnant advertising. What’s remnant? Your sales team sells as much of their ad space as possible – direct sales – but they may not be able to sell all of your pages. Unsold pages are remnant, and these unsold pages have traditionally been sold on ad networks. RTB is really just an evolution of the ad network model. News groups have become wary of ad networks because the returns are so abysmally low compared to advertising they sell on their own, and news groups and Filloux are worried that RTB, with its auction model, will simply put even more downward pressure on ad prices. Filloux says:

Thanks to Real-Time Bidding (RTB), publishers actually fuel the price deflation by auctioning their leftover inventory on various marketplaces. In doing so, they generate some revenue – at the expense of the format’s per unit value (in such auctions, expect no more than 5-10% of nominal prices). In addition this process mechanically applies negative pressure to premium placements because the advertisers will opportunistically purchase a guaranteed and targeted audience wherever available.

He is right to a point, but we’re already seeing smart engagement around RTB. RTB, and indeed all digital advertising, is about data, and just as news groups like the Financial Times realised that owning their customer data is key to their business, news groups are realising that if they power their own RTB exchanges with their own data, it can be a competitive advantage. Condé Nast launched a premium RTB exchange two years ago, and last year, they appointed an RTB senior director, Alanna Gombert. She said that that their RTB rates are similar to their direct sales rate card. She talks about premium RTB, and that is consistent with the magazine group’s premium content.

While news groups operate in a different space than a magazine publisher like Condé Nast, they still have the opportunity to create private RTB exchanges to leverage their data. This is especially true for large newspaper groups with rich user data that they have gained with their paid content strategies. Paid content is as much about user data as it is about shifting the revenue mix. Filloux doesn’t say that news groups shouldn’t engage with RTB, but I think they must engage with it. Data driven advertising is not only a reality that cannot be ignored, it can also be an opportunity. Fortunately, news groups got the memo. As Digiday wrote yesterday, the New York Times and the Washington Post have already appointed RTB chiefs. Own your future; don’t fear it.

01.10.14
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Too much ‘I’, too little team thinking at legacy media for innovation?

It’s not news that digital technology is driving rapidly changing consumer behaviour, and while it took some time for that shift to affect the economics of the media, the disruption is now in full swing. While the metered paywall has given a number of legacy media companies breathing room, to use the bump in reader revenue as a base to build on rather than a temporary reprieve from the dust heap of history will take focused, innovative thinking.

I’ve been involved in journalism innovation since 1996, when I took my first job as an internet news editor. I’ve held pioneering positions at major news organisations such as the BBC and The Guardian. Both of those organisations can be innovative in ways that have proven difficult for other media organisations because they aren’t purely commercial. How do other news organisations keep pace with their audience and just as importantly create new revenue opportunities?

Charles Warner, part of the Forbes network teaches Media Management Program at The New School, was recently asked how to drive innovation at an “old-line media company, and he thinks it is down to the individualistic culture at legacy media organisations.

Finally, success in legacy media companies (newspapers, magazines, TV, and radio) is driven by individual success – stardom – not by collaborative team success. The internecine, hand-to-hand combat inside legacy media companies is about who gets the credit for a hit or success, not about innovation or team success.

I’ve seen this first hand, and I used to say to colleagues, “Our real competition isn’t down the hall but across town” at one of the other newspapers, broadcasters or now one of the digital news and media startups.

This isn’t unique to media companies. Office politics is pretty universal. One of the benefits of having done consulting both inside and outside the media industry is that I have realised that positive corporate culture is rare and needs a lot of work. In media, you’ve got a lot of creative people, and journalism is populated with professional sceptics who question everything, including management’s latest change strategy.

However, that doesn’t excuse just how frankly, effed up the culture is at a lot of news and media companies. In the past, when owning a media company was a licence to mint money, we could afford these poisonous, dysfunctional cultures. We can’t anymore, and besides, it’s a lot more satisfying to succeed as a team than fight amongst ourselves on the decks of sinking ships.