I started writing and blogging since I was 17. I remembered starting with blogger, writing about my daily happenings. This was back in 2006. I remembered being part of the Nuffnang bloggers, where I get 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 Huff Post, AOL, NYTimes, Straits Times etc. Because they have the access of information, people rely on them for news and accuracy. Advertisers are willing to pay them for advertisement because they have the pageviews. With money and resources, they are able to hire journalists which 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 conglomerate faces increasing competition globally. Everyone is fighting for pageviews, and all of the sudden, advertisers had 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 website was born: curated news site, aiming to publish curated news which are worth sharing. The premise is simple: Internet is flooded with content, be it news worthy or non newsworthy content. These news site focuses featuring content with eye grabbing titles and posts which can “travel” and go viral on social media sites. Examples of these site are buzzfeed, upworthy, viralnova etc.
For these site, typically there are no authors, as a pool of curators collectively publish articles which are “share-worthy”, unlike traditional media outlets where each articles are researched and written thoroughly by journalists and editted by editors.
This genre of site is specifically engineered (technically and content wise) and optimized so that each posts get shared around the internet, and as a result, they experienced phenomenal growth in terms of pageviews, shifting the advertising dollars from traditional media outlet into their own pockets.
Traditional media outlets look for ways to compete with these new genre of sites, but they couldnt 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?
Traditionally, media outlets are fueled 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” by millions of new websites, traditional news outlets are slowly experimenting with new business models:
- Content Marketing / Sponsored Posts – Brands pay experienced journalist to promote a product in their editorial work.
- Paywall – Similar to a subscription model, where if you want to view the full story, you have to pay a monthly subscription.
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 it can be hard to balance between the need of the client vs 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 are able to find the information elsewhere. Theoritically, 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 for his site. Yes you may sue him for copyright, but typically the effort and cost of the lawsuit outweigh 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 of 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 advertising. 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 ad 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 Web sites were using ad-blocking software, which automatically removes most ads from a Web page. The figures were highest in gaming and technology Web sites, which tend to have a large concentration of savvy users.
Take a look at this website:
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 are published, sometimes the quantity and quality of them.
Increasingly, there’s a demand for quality and journalistic news, which are all diluted by tonnes of articles circulating the internet now, most of which are filled with images of cat, or top 10 things you should know today.
Gone are the days of CPM and banner ads
For the 70%+ internet audiences whom have not used ad blockers, they are served with ad impressions. In the older days when ads was first introduced, brand advertisers work directly with media outlets through direct advertising sales. Brands pay media outlet X amount of dollars for X amount of ad impressions.
As the pageviews of the internet scaled up and more media outlet pops up, the leverage was shifted towards brands. Again, the rate of growth for advertisers is lower than the rate of growth of websites and avenues for advertisers to reach their audience. Ad networks which serves as middleman consolidate and distribute advertising budget from brands to different media outlets, and they take a cut out of it. Media outlets need them because they don have direct access to brands/clients, as brands/clients love because these middleman help optimize their marketing budget for the best ROI.
This greatly decreases the CPM (cost per impression) for banner ads as media outlet need to compete on pricing against other media outlets.
Assuming a particular media outlet gets a CPM deal/account with a brand/client, banner ads are also not as effective as it used to be. According to Hubspot, here are some shocking truth about banner ads:
- You are more likely to complete NAVY SEAL training than click a banner ad. (Source: Solve Media)
- Only 8% of internet users account for 85% of clicks on display ads (and some of them aren’t even humans!). (Source: comScore)
- You are more likely to get a full house while playing poker than click on a banner ad. (Source: Solve Media)
- The average person is served over 1,700 banner ads per month. Do you remember any? (Source: comScore)
- You are more likely to summit Mount Everest than click a banner ad. (Source: Solve Media)
- The average clickthrough rate of display ads is 0.1%. (Source: DoubleClick)
- You are more likely to birth twins than click a banner ad. (Source: Solve Media)
- About 50% of clicks on mobile ads are accidental. (Source: GoldSpot Media)
- You are more likely to get into MIT than click a banner ad. (Source: Solve Media)
- You are more likely to survive a plane crash than click on a banner ad. (Source: Solve Media)
So yes, even if traditional media outlets are able to sign on clients, advertising model relying on ads are not as effective as it used to be, and they are not commanding the premium it used to command. Several factors affect this: namely ad networks which takes a huge cut, and click through rates are at its 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 getting 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 outlet 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.
So here’s a quick summary, the rise of internet provided a fair playing field for everyone to start building their audience, pageviews get diluted, new genre of curated sites are born and optimized for pageviews, internet access became wider, video rises as a new medium for content. All of these compete with media outlet for pageviews. At the same time, they could not find a way to go over ad blocking technologies. So, situation is dire, and traditional media outlets are looking for new revenue models.
But do you know about all these? According to a new study from Pew Research, chances are not, you are unaware of this.
Lack of quality writers
One last factor contributing to the critical situation of news outlet is this: it is now hard to look for 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 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 this 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 (hello Terence!), “there’s so much content and stories to write, but there’s only so few of us.” Another journalist (hello Kaylene!) recently also shared with me that of all her coursemates majoring in journalism, >90% of them ended up in a separate career. There were less than 100 in her particular cohort.
So what’s gonna happen now?
My guess is, media outlet 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 verticals is a different ballgame all together. Diversifying will scatter your 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 their new redesign, which did exactly that:
Pandodaily is also testing out sponsored posts on their “read more” section:
Thought Catalog, has also integrated its ads in the reader’s native behaviour:
The increasing need for content strategy
To optimize for click throughs and fulfill the needs of brands/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 etc etc. All of these are encompassed in the editorial content strategy, and increasingly, there’s gonna be a growing need for content strategist.
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.
Very fascinating. 🙂