I started writing and blogging since I was 17. I remembered starting with Blogger (Google’s Blogspot), writing about my daily happenings. This was back in 2006. I remembered being part of the Nuffnang bloggers, where I got paid for serving their ads on my website.
Fast forward to today, content has evolved faster than ever before. Most of us are not in the content industry. For those of you with a tinge of curiosity about what’s happening in the news and content industry, here’s what I have noticed in the past 6 months.
Decline of journalism; evolution of media outlets
Traditionally, content is produced by people with access to information. This gives rise to media powerhouses such as The Huffington Post, AOL, NYTimes, Straits Times et cetera. Because they have the access to information, the public rely on them for news and information accuracy. Advertisers are willing to pay them for advertisement because they have the pageviews and eyeballs. With money and resources, they are able to hire journalists which then forms a strong editorial team, with the focus of reporting indepth news and ensuring the accuracy of information.
As the world wide web opens up, internet access became common for everyone. Spread of information became democratized and anyone with access to the internet can be an influencer to spread a particular news. This is magnified by the explosive growth of social media networks such as Facebook and Twitter.
While the growth of the Internet pageviews increases, the growth of “influencers” and individual blogs far exceed the increase in total pageviews of the Internet. These individual niche blogs chips away some pageviews. Traditional media conglomerates face increasing competition globally.
Everyone is fighting for pageviews, and all of a sudden, advertisers have more options and avenues to reach their potential target market.
At the same time, because there are more and more content producers, a new genre of websites has cropped up: curated news sites, aiming to publish curated news which are worth sharing. The premise is simple: Internet is flooded with content, whether it is newsworthy or non-newsworthy content. These news sites focus on featuring content with eye grabbing titles and posts, which can “travel” and go viral on social media sites. Examples of these new media sites are buzzfeed, upworthy, viralnova et cetera.
For these sites, typically there are no authors, and a pool of curators collectively publish articles, which are “share-worthy”. This is different from traditional media outlets where each articles are researched and written thoroughly by journalists and edited by editors.
This genre of sites is specifically engineered (technically and content wise) and optimized so that each post gets shared around the internet, and as a result, they experience phenomenal growth in terms of pageviews, shifting the advertising dollars from traditional media outlets into their own pockets.
Traditional media outlets look for ways to compete with these new genre of sites, but they have not been able to match their growth. Fast Company declared Upworthy as the fastest growing media site of all time. Buzzfeed is also killing it. (Read: Does Buzzfeed know the secret?)
Business Model for Media Outlets
As we all know it, media outlets are fuelled by banner ads and sponsored posts. They rely on advertising. The more pageviews you have, the higher premium you can command. However, as pageviews get “eaten up” by millions of new websites, traditional news outlets are slowly experimenting with new business models:
There are several arguments against the effectiveness of these two models.
The argument against content marketing is this: Media outlets are supposed to be independent, and a sponsored review, though promised to be unbiased, sometimes can be hard to balance between the need of the client versus the journalist’s personal opinion.
The argument against paywall is this: it puts media outlets in a bad position because unless your content is really exclusive, chances are, your readers will find the information elsewhere. Theoretically, someone could just pay a minimal subscription fee to your site, and then copy the whole content to his site for free, thereby getting all the traffic to his site. Yes, you may sue him for copyright, but typically the effort and cost of the lawsuit outweighs the outcome and the returns, and people tend to forgo this option.
As pageviews get diluted by new media sites, traditional media outlets are now threading between the fine line between quality journalism versus the quantity of articles. At the same time they are trying to keep the business running, they are experimenting with new business models, and have yet to found one that can replace the advertising model.
In other words, experiments are failing, and situation is dire.
Ad blockers are innovating faster than the business model of media outlets
To make things worse, anti-advertising technologies such as ad blockers are innovating at a faster rate than the business model of media outlets. A recent report from the Web service PageFair said that on average 22.7 percent of visitors to 220 websites are using ad-blocking software, which automatically removes most ads from a web page. The figures were highest in gaming and technology websites, which tend to have a large concentration of savvy users.
Take a look at this website:
Look at the number of ads they have? It shows how websites are maxing out each opportunity to monetize all the eyeballs on their articles. With ad block, here’s what you see:
Installing the browser add on took me less than 10 seconds. And as simple as that, you are taking away the main revenue stream from a media outlet.
So you see, as the revenue stream goes down, it’s only natural for media outlets to cut down costs, thereby compromising the speed of news pieces that are published and even the quantity and quality.
Increasingly, there’s a demand for quality and journalistic news, which gets diluted by tonnes of articles circulating the Internet now, most of which are filled with images of cats, or the top 10 things you should know today.
Gone are the days of CPM and banner ads
For the other 70%+ Internet audiences who do not have ad blockers installed, are served with ad impressions. In older days, when ads were first introduced, brand advertisers worked directly with media outlets through direct advertising sales. Brands paid media outlets X amount of dollars for X amount of ad impressions.
As the pageviews of the internet scaled and more media outlet popped up, the leverage shifted towards brands. Again, the rate of growth for advertisers was lower than the rate of growth of websites and avenues for advertisers to reach their audience.
Ad networks, which serve as concessionaires, consolidate and distribute advertising budget from brands to different media outlets, and take a cut of it. Media outlets need them because they do not have direct access to brands or clients. Brands and clients love ad networks because these middlemen help them optimize their marketing budget for the best advertising ROI.
This greatly decreases the CPM (cost per impression) for banner ads as media outlets need to compete on pricing against other media outlets. The less you charge, the more likely you get ads served on your website.
Assuming a particular media outlet gets a CPM deal or account with an advertising client, banner ads are also not as effective as they used to be. According to Hubspot, here are some shocking insights about banner ads:
So yes, even if traditional media outlets are able to sign on clients, advertising model relying on ads is not as effective as it used to be, and it is not commanding the premium it used to command. Several factors affect this: namely ad networks which take a huge cut, and click through rates are at their all time low.
Rise of videos
At the same time, a new medium to deliver message is slowly gaining its position as a strong contender for eyeballs in the internet: Videos. With the Internet infrastructure getting more established, broadband became more stable, coupled with increasing mobile penetration as well as the increasing demand for creative content, time was ripe for video to take the front stage.
Facebook (Instagram), Twitter (Vine), Google (YouTube) and several other giants such as CollegeHumor, Metacafe and many more are slowly getting the attention of advertisers. Instagram and Vine gave rise to a new group of internet celebrities who are creative enough with their videos, gaining their own massive pool of followers.
Websites that curate funny videos and images such as 9Gag, Likes.com, Break.com and many more, are slowly chipping away the advertising dollars of big brands. This poses another threat to media outlets as they compete directly with news outlets for pageviews and eyeballs.
The most recent iteration of the Ipsos MediaCT’s Longitudinal Media Experience tracking study, conducted in Q2 2013, said consumers now spend 22% of their time on the Internet watching video, up from 15% in Q2 2012. In addition to the increase in viewing time, consumers showed a dramatic increase in the amount of time-shifted content they watch and in the amount of video they watch on the go.
Similarly, these websites are specifically engineered to optimized social sharing and pageviews.
Situation is dire and traditional media outlets are looking for new revenue models
So here’s a quick summary, the rise of internet provided a fair playing field for everyone to start building their audience; pageviews got diluted; new genre of curated sites optimized for pageviews was born; internet reach increased; and videos rose as a new medium for content. All, compete with media outlets for pageviews. At the same time, they cannot find a way to go over ad blocking technologies.
But were you aware about all these? According to a new study from Pew Research, chances are ‘No’.
Lack of quality writers
One last factor contributing to the critical situation of news outlet is this: it is now hard to find good writers and journalists. A survey ranking journalist as the fifth-worst job to have in 2012 has grabbed a lot of attention. The report, by CareerCast, says being a reporter at a newspaper, magazine or TV show is worse than waiting tables and only a tiny bit less lousy than working on an oil rig. This is due to the combination of high stress and scarce career opportunities.
This has led to the increasing demand of writers not balanced by the supply of writers. How often do you hear your peers being a writer?
To make matters worse, the demand for good quality writers is not properly reflected by the industry average pay.
I remember having a conversation with a fellow journalist, there’s so much content and stories to write, but there are only so few of us. Another journalist recently also shared with me that of all her coursemates majoring in journalism, more than 90% of them ended up in a different career. There were less than 100 in her particular cohort.
So what’s gonna happen now?
My guess is, media outlets which manage to innovate their business model to be less dependent on advertising (banner ads) will be able to last longer. We are already seeing several media outlets doing that, venturing into other verticals such as events, products, magazines, videos, podcasts, ecommerce etc. Of course, there’s a fine line there too: the more you venture into other verticals, you need to be able to scale up in head counts too, and each different vertical is a different ballgame all together. Diversifying will scatter the focus.
For media outlets focusing on advertising, the key is to make the ads more “native” and include it into the reader’s behaviour. Similar to Twitter and Facebook which introduced their mobile ads in between posts, I have yet to see websites incorporating ads in between posts. Techcrunch just released its new redesign, which did exactly that:
See how the ads are slotted in between posts?
Pandodaily is also testing out sponsored posts on its “read more” section:
Notice how the fifth and sixth posts are sponsored?
Thought Catalog, has also integrated its ads in the reader’s native behaviour:
Notice how the third slot (left to right) is an advertorial slot instead of a normal 3 x 2 post layout?
The increasing need for content strategy
To optimize for click throughs and fulfill the needs of brands and clients, editorial content has to be planned and strategized. Several factors come into play too: what is the Google trend now, what are people talking about, what will people be talking and searching about, title optimization, where will people be searching for the content they are looking for et cetera. All of these are encompassed in the editorial content strategy, and increasingly, there’s gonna be a growing need for content strategists.
Media outlets are trying hard to see what works and trying to get as much revenue from advertising as possible, before all of them are consumed by ad blockers. They are also exploring new revenue models.
And yes, things are not looking good. And yes, this is what’s happening right now in the content and news industry.
Of course, with the challenges, opportunities arise, making way to even better innovations in the content industry.
*Disclaimer: The views expressed are of the Author’s and e27 may not necessarily subscribe to them.