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Compiled by John Kelly
Monday October 24, 2016
Gannett Approaches Possible Billion Dollar Deal to Buy Tronc – and Layoffs, too
Early in the month, I reported an “imminent” sale of Tronc, publisher of a trove of newspapers including big-city broadsheets
like The Los Angeles Times, Chicago Tribune and Baltimore Sun, to Gannett, publisher of USA Today as well as a vast
array of regional newspapers around the country.
Given the always-to-be-expected unexpected delays in getting a deal done, “soon” would have been a better choice of
words. “Soon” is still the best word, but now, we can attach a few specific considerations to the timing.
Next week appears to mark a witching hour, in which a trio of portentous elements and significant dates converges to create
a massive and transformative shift in the fortunes of the daily news business.
Watchers with interest in the coming deal have been looking for the announcement that the U.S.’s largest newspaper
company would finally snap up the company formerly known as Tribune Publishing, in what would be a $1 billion deal, Tronc
debt included.
First: Keep your eye on Thursday, Oct. 27. That’s the date of Gannett’s third-quarter earnings call. Such reports, led by CEO
Bob Dickey and CFO Alison Engel, are usually routine events. For newspaper companies, though, they’ve become difficult
of late, as the cratering of print advertising has driven down financial performance. That will likely be the case Thursday as
well for Dickey, as Gannett, along with the rest of industry, continues to see 5-8% losses in print ad revenues. Executives
look for other lights to shine on the balance sheet, and for many it’s been possible at least to cite digital growth. Financial
analysts on the call will expect Dickey to answer the Tronc question with a yes or no.
Second, Gannett is on the brink of announcing another downsizing. Given its tough financials – and with the added
pressures brought up by a share price that’s dropped more than 35% since Gannett began its pursuit of Tronc in the spring
– the company is moving to make “significant” headcount reductions, several confidential sources have affirmed. While
Gannett continues to focus on non-newsroom consolidations of everything from back-office functions to printing and
production, these cuts will also include journalists, as past cuts have. Only a relatively few Gannett executives see the whole
picture of reduction here, but the new cut will be as high as 10% of newsroom cost at some properties, I’m told.
As one savvy, one-time Gannett insider observed, “The end-of-year timing of the cuts is a age-old method by Gannett of
clearing the books for a more lucrative balance sheet in the coming year. Gannett, for years, has made a conservative
analysis of the coming year and often cut in the fourth quarter rather than the first, as some media companies do. That is the
system in which Dickey and his long-time trusted ally John Zidich [now president of domestic publishing] developed as
managers in the company. Maybe it’s prompted by the need to put something in the reserves in the continuing quest for
Tronc. Another factor could be that this is the first time Gannett has not had TV stations (now with the spun-off TEGNA) to
boost up revenues in a big political year.”
The third and last element is blowing in from Chicago, where the deal, multiple sources say, has been held up by an endless
pile of paperwork. Though both parties have agreed upon a deal, with price specified, probably in the $18.50-$19 range,
their hold-up is paper, ironically, in an industry that continues to choke on it.
“Final” due diligence has been going on through the month, with contract (payables and receivables calculations) review and
other financial and legal necessities. Those needed Ferro signatures have been slow in coming. So, Gannett has been left
to decode the meaning of “yes,” though still believing the deal is indeed getting done. Will it get “done” done?
Is then Oct. 27 a deadline? Well, yes and no. Gannett could well – and may have – issued an ultimatum to the fickle Ferro:
Get the deal done by then, or we’ll walk away. That wouldn’t be unreasonable given both the torturous negotiations and how
business is usually done in M & A. Yet, gamesman Ferro might also well interpret that as a sign of Gannett weakness, and
use it as leverage to pry more money out of the company.
In this most unusual of newspaper transactions, Michael Ferro remains the wild card. Multiple pressures lead to his final
signature, though they have been in place for months. His Merrick Ventures partners want the deal done, and the threat of
big Tronc investor Oaktree Investments-led lawsuit hangs, like a cleaver, over Ferro’s neck. Just as Gannett has remained
patient over the months, redrawing from its earlier hostile P.R. tactics, Oaktree, a major player in the Tribune drama for
years, has been waiting on the sidelines. Much better for it to take the money – with a big payout on its investment – then
find it spending lots of money, and time, in the courts, litigating what it believes to be Ferro’s self-dealing over time and
failure to represent his shareholders, as securities law requires.
What seemed like a straightforward move to acquire more scale – CEO Dickey’s major goal since he’s led the newspaper
company split off from mother newspaper/broadcast/digital Gannett two years ago – has now turned into something of a
high-wire act. He’s had to increase the price offered for Tronc’s papers by about 50%, since his first offer of $12.25. That
price itself seemed a sizable premium over what the company’s shares were going for – six months ago. That’s meant more
difficulty obtaining of debt financing, and more scrutiny of how his scale strategy is likely to play out, given accelerating
declines in the newspaper industry.
The likelihood that significant new job cuts will coincide with his buying, and perhaps “overpaying,” for Tronc, only makes the
optics harder. His case: The new cuts, like all the previous ones, are essential, given lost revenues and the need to maintain
profitability levels in the investor marketplace. The Tronc deal, he’ll say, if and as it finalizes, simply is another smart
strategic step in further reducing costs – that consolidation of newspaper operating costs from Florida to
Chicago/Milwaukee. He’ll talk about how the addition of Chicago and L.A. markets finally makes Gannett a real player in the
national digital ad business, as its USA Today Network branding aims to get more traction.
That L.A. gambit – a core of Michael Ferro’s highly publicized strategies earlier in the year, strategies that have assumed a
low profile over the summer, as I’m told digital consolidation efforts have slowed within the company – has become more
core to Gannett, as well, it appears. While earlier on, it seemed like Gannett might mitigate its deal risk by reselling the L.A.
Times, and perhaps the San Diego Union-Tribune, its national ad ambitions now seem to indicate otherwise. One wild card
there to watch, as a deal finalizes. Might Patrick Soon-Shiong, the L.A. billionaire and long-time Times wannabe acquirer,
wangle a buy of the Times – and keep the Times in Gannett’s editorial and ad networks. That possibility remains today, or
on one of the difficult tomorrows to come.
Bob Dickey will tell the markets next week that at even this astronomical price, the deal will pay out. That payout has got to
include at least a three-year scenario, and, few in the industry would like to write in ink a forecast for the actual shape, size
and nature of the regional newspaper industry come 2020. http://www.politico.com/media/story/2016/10/gannett-set-to-announce-a-billion-dollar-deal-to-buy-tronc-and-layoffs-too-
004819
3 Waves of Cyberattacks Brought Down Twitter, Spotify, Pinterest, NYT and Other Sites
Update: There were three waves of cyberattacks today, but as of 7 p.m., they appear to have been resolved.
It all started Friday morning, when a slew of digital publishers and other ecommerce players were hit by a cyberattack,
causing their sites in some parts of the U.S. to go out in a problem that lingered into the early evening. According to
DownDetector—check out its map above—the East Coast and Southern California were hit hardest while Western Europe
also saw outages.
Twitter was inaccessible to many users for hours, while Spotify, Pinterest, Shopify and SoundCloud also had major outages.
Additionally, Etsy, Reddit, Airbnb, The New York Times and The Boston Globe were down due to the ongoing outages, per
TechCrunch.
Hacker News is running an updated list of which sites are currently crashing. At different points throughout the day, such
websites were fully live again, but then some of them—most notably, Twitter—went dark once more.
The development seemed particularly bad for publishers that rely on ad impressions for revenue—Twitter, Pinterest, NYT—
but the damage was even worse for internet retailers Shopify and Etsy, which likely lost sales. It will be interesting to see
whether industry analysts weigh in on what financial damage was done to the affected players.
The outages were apparently being caused by a distributed denial-of-service—or DDoS—attack on web-domain provider
Dyn. Late Friday morning, the Ottawa-based company posted information related to the attacks, including this message:
"Our engineers continue to investigate and mitigate several attacks aimed against the Dyn Managed DNS infrastructure." http://www.adweek.com/news/technology/major-cyber-attack-hurting-twitter-spotify-etsy-shopify-and-other-sites-174214
Take Flight: USA TODAY Network Debuts VR Show USA TODAY Network debuted a first-of-its kind weekly virtual reality news show Thursday, inviting viewers to soar in 360-degrees at a hot-air balloon festival in New Mexico and to join high-liners above Arizona's canyons. Called “VRtually There” and co-produced with YouTube, the show's initial content is targeted towards action, along the lines of what's been shown on the USA TODAY YouTube channel in 360°, including flying with the Blue Angels and getting into the pit during the Indianapolis 500 race. In the new show's debut, viewers also can jump into the cockpit of an F-18 and take off. "VRtually" will be available on USA TODAY’s mobile app (iOS | Android), as well as its VR Stories app (iOS | Android), and YouTube, which has exclusivity for the first 60 days from each episode’s release. It will also work for desktop computer users and with phone-based VR viewer Google Cardboard and upcoming Google Daydream headset viewer. The production is one of several breaking ground in VR, a category that has its roots in gaming but that's branching out into other content, including news. These offer a 360-degree look at the world — up, down, left and right — with a swipe on mobile phones. More immersive experiences use headsets like the Samsung Gear, which connects to Galaxy phones, or Facebook's Oculus Rift, a specialized headset tethered to a powerful computer. Most folks watch 360° on Facebook and YouTube's mobile 360° channel without a viewer, which “is cool,” says Niko Chauls, director of applied technology for Gannett, the parent company of the USA TODAY Network, the publisher of this report. Add the viewer and “it’s a mind blowing, dazzling experience.” USA TODAY is not alone in exploring VR for news purposes. The Huffington Post and VR studio RYOT also have a ten-part “The Big Picture: News in Virtual Reality,” planned for the Hulu VR app in November, to be viewed on the new Google Daydream and the Samsung Gear VR virtual reality viewers. This year, VR drew closer to the mainstream as Facebook opened up the ability to view VR videos in the News Feed, and YouTube launched a dedicated 360° channel. The YouTube channel includes videos from media partners Showtime, Fox, GoPro, Sony, Warner Bros. and Red Bull. Toyota has signed as the first sponsor for "VRtually There" with a "cubemercial," a 360° ad produced for Toyota's Camry car that whisks the reviewer to Australia's wilderness. “VRtually There” is produced by journalists at the 110 members of the Network, including USA TODAY and sister publications like the Arizona Republic, Des Moines Register and Indianapolis Star. New episodes will post Thursdays at 2 p.m. ET, with three segments lasting around 5 minutes.
“Our in-house VR content production is unique to the industry, allows us to showcase our great journalism across the NETWORK and allows us to expose our vast audience to this innovative storytelling,” said Joanne Lipman, USA TODAY NETWORK’s chief content officer, in a statement. With companies like Google, Samsung, Facebook, HTC, Sony and Microsoft investing in virtual reality, it made sense for Gannett to be there as well, notes Kevin Gentzel, chief revenue officer for Gannett. "That's a big tailwind," showing that VR is real, he adds. While the show is weekly now, Chauls wants to increase to a daily broadcast. The hurdle is production. The show is shot on multiple cameras which have to be "stitched" together in software, and that can take a lot of time. New automated software from companies like Google promise to greatly cut down on the time it takes to stitch, he adds. "This is the time to build the audience, get them used to the medium and what’s possible," he says. http://www.usatoday.com/story/tech/2016/10/20/usa-today-network-debuts-first-vr-news-show/92412428/
Uncommon Sense: Making Innovation Success Predictable For as long as I or my colleagues can remember, innovation has been a top priority—and a top frustration—for leaders. The
fundamental problem is, most of the vast amount of customer data companies gather about innovation is structured to show
correlations rather than causations—what happened when X happened, rather than what happened because of X. And of
course, it’s based on customers’ responses to what’s on offer—not to something that hasn’t been presented to them yet!
After decades of watching great companies do poorly at innovation, we’ve come to the conclusion that the focus on
correlation—and on knowing more and more about customers—is taking firms in the wrong direction. What they really need
to home in on when thinking about new products is the progress that the customer is trying to make in a given
circumstance—what the customer hopes to accomplish. This is what we’ve come to call the job to be done.
We all have many jobs to be done in our lives. Some are little (pass the time while waiting in line). Some are big (find a more
fulfilling career). When we buy a product, we essentially “hire” it to help us do a job. If it does the job well, the next time we’re
confronted with the same job, we tend to hire that product again. And if it does a crummy job, we “fire” it and look for an
alternative.
Successful innovations help consumers solve problems—to make the progress they need to, while addressing any anxieties
or inertia that might be holding them back. But we need to be clear: “Job to be done” is not an all-purpose catchphrase. Jobs
are complex and multifaceted; they require precise definition. Here are some principles to keep in mind:
“Job” is shorthand for what an individual really seeks to accomplish in a given circumstance.
The circumstance in which the customer finds him- or herself is more important than customer characteristics, product
attributes, new technologies, or trends.
Good innovations solve problems that formerly had only inadequate solutions—or no solution.
Jobs are rarely simply about function—they have powerful social and emotional dimensions.
Identifying and understanding the job to be done are only the first steps in creating products that customers want—
especially ones they will pay premium prices for. It’s also essential to create the right set of experiences for the purchase
and use of the product and then integrate those experiences into a company’s processes.
The other piece of the puzzle has to do with processes—how the company integrates across functions to support the job to
be done. Processes are often hard to see, but they matter profoundly. They tell people inside the company, “This is what
matters most to us.” Focusing processes on the job to be done provides clear guidance to everyone on the team.
Consider, as an example, the proven power of thinking in terms of the “job” consumers face in the most unlikely of locations
… the litter box. For Church & Dwight’s Arm & Hammer cat litter team, the question was: If price were no issue, could we
make litter box odors completely disappear? Because, let’s face it, that’s the job a consumer wants their cat litter to perform.
And yet, despite decades of cat litter improvements, odor was still a dominant complaint among cat owners. This consumer
dissatisfaction led to numerous undesirable quality-of-life consequences, from the functional (“Cleaning the litter box is the
worst job in the house … worse than cleaning the toilets”) to the emotional (“I just feel like a bad homemaker if my house
smells”) to the social (“Sometimes I feel embarrassed when I have guests over”).
“Consumers were passionate in their dissatisfaction and said so,” noted Bryan Harpine, director of global new products.
“This sentiment prompted 70% of cat owners to user odor-mitigating accessories.”
Consumers had a clear job to accomplish. They had cobbled together multiple sub-optimal solutions to address the
requirements of their job spec, but, at the end of the day, these consumers were still struggling to make forward progress
against the job. Enter Arm & Hammer and their team of experts, who spent four years getting the substrate right and
formulating the necessary blend of additives as well as developing the coating technology to get to an effective product.
From there, the team engaged in a range of activities—from extensive consumer research to substantiate the ‘seven-day
odor-free home’ claim, to retailer buy-in efforts, to point of sale and packaging updates—to ensure the best possible
outcome for this new product focused directly at cat owners’ job in the litter box.
“The launch was a tremendous success, with first-year retail sales approaching $100 million and better than 50% growth in
year two. Reflecting on this launch,” Harpine summarized, “not only did we achieve a lot, we learned some important things.
First, once you’ve done transformation the first time, you are much more open to seeing it and doing it again. It’s as if the
blinders come off, and this ties directly to a second lesson: the value of asking ‘impossible questions.’ This all began with
this seemingly impossible notion of ‘If cost were no issue, could we create a litter that would actually eliminate odor
completely?’ If we don’t ask that question, none of this success happens. Third [is] the power of a compelling story. Fourth,
when innovation becomes a company-wide mission, the power to create and realize is exponentially greater than when
innovation happens in functional silos. It’s when you align diverse skillsets at all levels with a huge goal that you create a
powerful catalytic effect that lifts everyone’s game. Everyone wins—the retailer, the manufacturer and the consumer.”
Innovation can be far more predictable—and far more profitable—if you start by identifying jobs that customers are
struggling to get done. Without that lens, you’re doomed to some degree to hit-or-miss innovation—to a great extent, that is,
to luck. With it, you can leave relying on luck to your competitors. http://www.nielsen.com/us/en/insights/news/2016/uncommon-sense-making-innovation-success-predictable.html
Stores are Still Preferred for Buying Furniture Due to Bulk, Expense The home furnishings category encompasses home decor and products like bedding, flatware and curtains, all of which are
relatively inexpensive to ship, and larger products like furniture, mattresses and rugs, which often require delivery
surcharges and which consumers prefer to see in person before buying, as explored in a new eMarketer report, “Furniture
and Home Goods Retailers and Digital Commerce 2016: Trends and Benchmarks” (eMarketer PRO customers only).
Consumers in the US prefer to buy most products in-store, according to May 2016 research from Salesforce. Nearly seven
in 10 US internet users polled said they preferred to purchase their home goods in a brick-and-mortar store.
Home goods also had the highest percentage when it came to ecommerce sites (e.g., Amazon.com) as well—16% of
respondents cited it as their preferred channel for purchasing, though not for retail or brand sites.
Furniture was a product category with one of the lowest levels of digital buying among US digital shoppers—14%—
according to November 2015 polling by internet security platform Imperva Incapsula. With a tendency to be bulkier and
higher in price compared with many other categories, mattresses and entertainment systems may still seem like riskier
products to buy online.
However, in earlier stages along the path to purchase, these bigger, more expensive items are more likely to be researched
online. A study conducted in August 2015 by Tenthwave Digital and The Organic Agency found that brand websites were
the leading source for learning about large-size, high-cost products by a hefty margin (40.2%), likely because these sites are
perceived to have the most accurate and detailed specs with the additional benefit of being able to research without any
high-pressure sales tactics.
When digital buyers do decide to buy something from this sector, though, mobile plays a fairly significant role. In Q1 2016
comScore data, a little more than one-fifth of US digital sales in the furniture, appliances and equipment category, as well as
home and garden, were conducted on mobile devices. https://www.emarketer.com/Article/Stores-Still-Preferred-Buying-Furniture-Due-Bulk-Expense/1014613?ECID=SOC1001
Print Advertising Woes are Getting Worse
The first half of 2016 was financially bleak for newspaper organizations; the second may be even worse.
The same day The Wall Street Journal reported a deep global decline in print advertising, McClatchy led off the third quarter
earnings season Wednesday, posting a $9.8 million net loss on revenues of $234.7 million.
McClatchy was able to grow digital advertising a healthy 4.9 percent for the period compared to 2015, but print advertising
was off 17.2 percent year-to-year.
The Journal's report focused on the largest U.S. and U.K. organizations, citing an estimate from the Group M ad-buying firm
that global print advertising will be off 8.7 percent for all of 2016. (That includes papers in developing countries where print
remains relatively healthy).
The Journal also cited analyst John Janedis of Jeffries, predicting that The New York Times Company's print advertising will
be down 17 percent year-to-year when it reports quarterly results November 2. Janedis estimates that print and digital
advertising will be down 7 percent at Gannett and 12.5 percent at the Journal's parent News Corp.
Newsroom reductions are in process at The Guardian and Daily Mail in the U.K. as well as at the Times and Journal,
according to the Journal's story.
At McClatchy, audience revenues were up 1.9 percent year-to-year for the quarter, led by digital subscription revenues
growing 10.7 percent.
At the end of August, McClatchy launched a new digital advertising agency (Excelerate) and has growing relationships with
Nucleus and Local Media Consortium, two more digital ad businesses.
But all that digital growth on a base of business than remains smaller than print does not yet outweigh revenue declines at
McClatchy's 29 print newspapers.
There seems to be no single explanation for why print ad losses are accelerating — and hitting both regional papers and the
somewhat different base of the Journal and the Times.
The shift of a share of print budgets to various digital marketing formats continues year to year with new opportunities in
video and podcasts emerging in 2016.
Some stalwart print advertisers — retail stores and financial institutions — are facing digital disruption in their own industries
and squeezing ad budgets. Pre-printed inserts held relatively steady for many years but has also started to erode during the
last several.
Pharmaceutical advertising, still heavy on TV and present in magazines, seems to have disappeared entirely from
newspapers. And the political ad wave that boosts local broadcasters again has largely passed newspapers by.
The math also makes results look worse over time — even where the dollar volume of losses stay the same, it would
register as a higher percentage loss on the shrinking base.
The bad financial news comes the same week as contrasting studies on what is happening to the industry. Penny Abernathy
and her associates at the University of North Carolina released a long-term study Monday showing how closings and
consolidations leave the U.S. with more and more "news deserts" where little accountability journalism takes place any
more.
Meanwhile, Politico columnist Jack Shafer penned a hotly-contested piece Tuesday, arguing that newspapers might have
been better off had they doubled down on improving print instead of shifting resources to digital. (The work of University of
Texas academic H. Iris Chyi, which Shafer cited, was based on historical data now several years old).
As newspaper companies report results over the next several weeks, more optimistic takes on 2017 may emerge. But for
right now the outlook for next year remains more net revenue declines and more newsroom staff cutbacks.
http://www.poynter.org/2016/print-advertising-woes-are-getting-worse/435402/
AT&T, Time Warner Make it Official: Merge into New Media Behemoth
More than 30 years after federal regulators broke up AT&T's monopoly of the nation's communications network, AT&T is
expanding its footprint once again, acquiring Time Warner for more than $80 billion, the companies confirmed late Saturday.
The deal, which was approved unanimously by the boards of both companies, is a stock-and-cash transaction valuing Time
Warner at $107.50 per share.
It marks the most significant consolidation of the telecommunications marketplace since Comcast's acquisition of NBC
Universal, creating a second media behemoth combining AT&T's millions of wireless and wired communications subscribers
with Time Warner's deep programming assets, including the Turner Broadcasting networks, HBO and the Warner Bros.
movie and TV programming studio.
The deal, which is expected to face rigorous regulatory scrutiny, is not expected to close until late 2017. http://www.mediapost.com/publications/article/287421/att-time-warner-make-it-official-merge-into-new.html
Google Drives In-Store Foot Traffic Through Online Affiliate Location Extensions
Google introduced Thursday affiliate location extensions in AdWords to help manufacturers drive customers to retail
locations that sell their products through online ads.
Affiliate location extensions can help consumers searching for electronics, for example, find the nearest retail chains where
they can buy the product. Promoting retail locations in search ads will make them more actionable and will give consumers
relevant local information to drive store visits and sales, according to Google.
When someone does a "near me" search on google.com for a curved screen TV, for example, the ad serves up with the
affiliate location extension. The person searching for the product sees the nearest store in the search results that sells it,
either as an address or on a map. One tap on the screen of the mobile device give the consumer direction on how to get to
the store location.
Google plans to roll out the service to U.S. advertisers within the next two weeks.
To set up extensions in AdWords, choose the new “Affiliate location extensions” option in the Ad extensions tab, select the
retail chains where your products are sold, and Google will take care of the rest.
There is no need to link to a Google My Business account. Some advertisers may also be eligible for store visits data to help
measure the impact of campaigns on offline store activity, according to Google.
Google has been on a quest to connect consumers viewing online ads to in-store sales and foot traffic. On Wednesday
Google introduced the ability to apply business data in DoubleClick Search to marketing campaigns.
If there is an aspect of the business to surface in reporting, the marketer can create a new business table for it in
DoubleClick Search. If the marketer is promoting an airline and wants to see the data for a specific airport that consumers
are searching for, the user can create a business data table continuing "airport" and then apply the business data to the
campaign. The region and country also can be added. http://www.mediapost.com/publications/article/287323/?mc_cid=e1dc264fd7&mc_eid=43c6a6c187
FT Finds Success with Ad Blocking Experiment
The Financial Times found that almost 40 percent of readers whitelisted the site when asked to do so during a 30-day
experiment to counter the use of ad blocking technology on FT.com.
This result came despite the fact that readers were not prevented from accessing content.
Whitelisted means they added the Financial Times to the list of sites within their adblocker allowed to show ads — they can
still use an ad-blocker generally, but FT.com ads come through.
“Through open dialogue with FT readers we are emphasizing the importance of advertising as a revenue stream for quality,
independent journalism,” said Dominic Good, global advertising sales and strategy director, in a statement. “These results
show that FT readers accept advertising as part of the reader/publisher value exchange, and they trust us to create the best
possible advertising experience with our partners.”
The FT is expanding and investing in new advertising formats with the recent acquisition of Alpha Grid, and the appointment
of former FT journalist Ravi Mattu as editorial director of FT2, the FT’s content marketing studio. Last year the FT launched
its widely followed digital advertising metric “cost per hour,” which increases advertising viewability and effectiveness by
measuring not just whether an ad is seen or not, but for how long.
http://talkingbiznews.com/1/ft-finds-success-with-ad-blocking-
experiment/?utm_source=Daily+Digest&utm_campaign=f4ec9f618c-
RSS_EMAIL_CAMPAIGN_DAILY&utm_medium=email&utm_term=0_584b7c39bd-f4ec9f618c-83830985
'They Have the Advantage': What Snapchat's New Deal Means for Media
Snapchat wants to be like TV, and publishers need to adapt.
That’s the message from the news that Snapchat no longer wants to share ad revenue with its Discover media partners,
according to a report from Recode. Instead, the company will pay licensing fees for the content and keep all the ad revenue
— the approach TV networks take.
Snapchat’s new terms will have a seismic impact on media companies that have dedicated significant resources to
Discover. While a licensing fee means guaranteed income, it also means a ceiling on how much money publishers can
make on Discover. Bigger media companies that don’t need Snapchat’s money — just its audience — will be fine. Smaller
publishers, however, might soon extinguish their Snapchat teams, or at least use Snapchat’s offer as a bargaining chip to
wrestle money from other platforms. What’s clear is the shift to a licensing model will have knock-on effects in the constantly
shifting, sometimes strained relationship between media companies and their new platform overlords.
Like any preemptive platform shift, there’s no shortage of media grousing. Snapchat has long been considered by media
companies as the most inflexible of the social platforms. It’s made Discover an exclusive club that only a few dozen
companies get to be a part of — and these partners had to commit to marketing their Discover channels and bringing in a
certain amount of ad revenue in order to join. One media company that’s not on Discover was asked to bring in $50 million
in ad revenue in the second year as part of any deal to join the platform, a source said.
“A lot of people continue to pull their hair out trying to work with [Snapchat],” said an executive at Snapchat Discover partner.
“They have the advantage. Snapchat is literally the only remaining curated media platform that has this huge audience.”
It’s unclear how much Snapchat is willing to pay to license entire Discover channels, especially as the talks have just begun
recently, sources said. That said, partners expect Snapchat to pay based on another old TV tradition: performance.
“ESPN gets $7 per subscriber, while smaller channels get mere cents per subscriber,” said a Discover partner. “Snapchat
will also be doing that based on who you are and what you can bring them.”
Snapchat has never publicly broken out how many of its 150 million daily users visit Snapchat Discover. In a presentation to
Discover partners at the end of June, the company said the median Discover channel had 1 million daily viewers. The top 10
percent of channels were averaging 3.5 million viewers at that time.
But that’s not to say the shift to a licensing model is bad for media companies. In fact, the set fees — so long as their high
enough — could lead to a domino effect with other platforms like Facebook, which is already paying $50 million to nearly
140 media companies and video creators, including The New York Times and BuzzFeed.
“Now we can go to another platform and say, ‘This is the deal they’re offering, you have to give us something. The half-a-
million bucks I’m using to create videos for Facebook? I might use that to create Snapchat content because I’m at least
getting something back that’s measurable and consistent,’” said a publishing executive making content for Snapchat
Discover and Facebook.
Snapchat is also willing to pay for original content made for Discover. It’s already struck deals with NBCUniversal and
Viacom to make shows and continues to court other Hollywood producers, studios and networks to make short-form shows.
Snapchat’s looked at budgets ranging from $40,000 to $70,000 per episode and has the ability to go bigger, sources
previously said.
By aggregating the entire Snapchat Discover audience — not just focusing on individual shows and channels — Snapchat
can very likely command higher premiums on ads. With CPMs already between $40 and $50, that’s steady income for a
company that’s planning to go public next year.
“There is much more money to be made when you can aggregate all of those views,” said the TV network executive. “It’s
just a better value proposition when you license — the TV business knows this.”
And, now, so does Snapchat. http://digiday.com/publishers/advantage-snapchats-new-deal-means-media/
Evolution of Media: Paid To Earned To Shared
Mobile continues to change (and challenge) the landscape of traditional advertising. Since the first newspaper advertisement
appeared in 1704, “Paid Media,” where an advertiser pays a publisher to access that publisher’s audience, has been a
primary way for brands to promote themselves.
On the other hand, “Earned Media,” where brands reach an audience more organically, through media coverage and
influencers sharing content, has been the less expensive means of gaining awareness.
This combination of Paid and Earned Media have been two anchor points of marketing strategy for decades. However, both
models are currently under fire.
The rise of ad blockers, bot fraud, muted video, and simple banner blindness, where consumers naturally ignore ads, all
point to a decline in the effectiveness of Paid Media. Earned Media is also losing its impact as consumers have increasingly
turned to aggregate feeds to obtain their news, scrolling through thousands of headlines and rarely clicking through to read
full articles.
They have become skeptical of influencer promotions.
How can brands create awareness as these two pillars of marketing become less effective? As the mobile-social revolution
continues, where every consumers is now a publisher with instant reach to hundreds of their peers, brands are turning to
their own audience to create and share content with their brand message included. This is Shared Media.
Marketing through word-of-mouth from trusted sources has been around since the beginning of time. Spreading useful or fun
information to peers still remains what audiences like to do and, with mobile’s ubiquity and social and messaging platforms
gobbling up consumer time, the opportunity to share is anytime, anywhere and with reach around the world.
Consumers are sharing at incredible rates and, for brands, the opportunity is to join these conversations, not interrupt it. So
what exactly does Shared Media look like? It could be sponsored brand filter on Snapchat or a video shot and shared with
friends through Facebook or Twitter or messaging.
Nielsen found that 83% of respondents trust recommendations from their friends and family. Given the high degree of
confidence audiences place in the opinion of their peers, brands are turning their focus to where there are no barriers of trust
to overcome.
At the same time, advertisers are capitalizing on the “need to share” phenomenon.
Although consumers like to share what they believe their peers will like, they also don’t want their conversations to be
interrupted. For brands to succeed in Shared Media, they must identify nonintrusive ways to connect with their audience.
They need to find ways to engage and empower users to share their stories.
Shared Media provides brand authenticity that savvy audiences - especially millennials - crave. Audiences feel empowered
when they are given control over how and where to share a brand’s message. Brands have massive audiences that they
can reach in various ways, through their social channels, websites, apps, chat bots, on their packaging and at their live
events or retail presence.
When they tap that audience and engage their best customers by providing easy tools to share with their brand assets and
even perks and incentives, consumers respond in amazing ways.
Brands continue to throw marketing dollars at Paid Media and, at best, reach audiences without truly connecting with them.
Earned Media is often ignored and, per Ad Age, even when influencers share content, the impact is limited.
The next logical step is to focus on what provides authenticity, by making it easy for brand ambassadors to engage their
peers. Shared Media is the natural evolution from Paid and Earned Media. Just as the preferred screen has transitioned
from TV to mobile, brands also need to revisit their position on paid advertising and activate their current audience to amplify
their message.
When they do, the results are like nothing seen before in mobile marketing.
http://www.mediapost.com/publications/article/287309/evolution-of-media-paid-to-earned-to-
shared.html?utm_source=newsletter&utm_medium=email&utm_content=headline&utm_campaign=97446
Denver Post Parent Wants to Buy More Monster.com Shares, Slash Jobs
MediaNews Group, the parent company of the Denver Post, says it wants to buy more shares of Monster.com and thwart a
buyout offer for the company.
Denver-based MediaNews Group, which now owns 11.5 percent of Monster.com stock, said it wants to buy up to 9 million
more shares at $3.70 per share to give it a 21.5 percent ownership stake.
MediaNews Group, the parent company of the Denver Post, says it wants to buy more shares of Monster.com and thwart a
buyout offer for the company.
MediaNews Group is involved in a skirmish with Monster.com executives, who want to sell the company to Randstad North
America Inc. for $429 million, or $3.40 per share.
That's too low a price, MediaNews Group claims. It wants shareholders to approve and install seven new MediaNews
Group-picked Monster board members and a new CEO, "to create significantly more shareholder value."
Once its own board members are in place, MediaNews Group says it plans to slash jobs and "reduce its revenue declines
and increase profitability, despite the numerous headwinds facing the company."
"We believe the main issues facing Monster are its lack of competent management, its poor strategy to address the shift in
the business, and its completely inadequate oversight by a board that doesn't have the experience, skills or desire to turn
the business around," MediaNews Group said in a statement.
Regarding cutting jobs, MediaNews Group said, "with regards to operating expenses, Monster still has close to 3,700
employees, with over 1,000 in sales and over 61 offices in 23 countries. We simply do not accept the notion that the
company has done everything it can to reduce operating expense."
Last month, the Denver Business Journal reported: "One of the board members that MediaNews Group is proposing is
Heath Freeman, who is director of Alden Global Capital LLC, which owns Digital First Media, which in turn owns the Denver
Post. Freeman is a secretive man, according to a recent profile in Denver's 5280 Magazine, which details the severe cuts
that have been made to the Denver Post's editorial staff. One Denver Post reporter calls him 'the number one most-hated
dude in the industry.'"
http://www.bizjournals.com/denver/news/2016/10/21/medianews-group-wants-to-buy-more-monster-com.html
Barron’s Editor Announces Newsroom Layoffs with Accidental Reply-All
Layoffs have become a regrettably common occurrence in the news industry. But today, an inter-office email went out at The
Wall Street Journal that set a new standard for human resources failure.
After Wall Street Journal Editor-in-Chief Gerry Baker announced a round of buyouts Friday, a note went out to employees
disclosing layoffs were also coming to employees at Barron's next week:
Almar, John, Mike,
The email Gerry Baker just sent about wsj buyouts says that dj is offering 1.5x the standard buyout package.
Are we planning to go to the employees we are laying off at Barron's next week and offer them 1x the standard package.
That could create some problems. Please advise.
Thanks and best,
Ed
The email, from Barron's editor Ed Finn, was "a mistake," he told Politico's Hadas Gold. The email was intended to clear up
which package would go to "several Barron's folks" who are getting cut next week. http://www.poynter.org/2016/barrons-editor-announces-newsroom-layoffs-with-accidental-reply-all-
fail/435684/?utm_source=All+Poynter+Subscribers&utm_campaign=58e815d772-
Afternoon_Headlines12_5_2014&utm_medium=email&utm_term=0_5372046825-58e815d772-257914957
‘Substantial’ Buyouts Hit The Wall Street Journal
As part of the restructuring of its parent company, Dow Jones, The Wall Street Journal is looking for employees to take a
"substantial" number of buyouts, according to a memo from Wall Street Journal editor Gerry Baker.
We are seeking a substantial number of employees to elect this benefit, but we reserve the right to reject a volunteer based
on business considerations. Employees will be required to sign a separation agreement and release of claims in a form
provided by the Company in exchange for the accompanying severance benefits.
The Wall Street Journal underwent staff reductions in 2015, when fewer than 30 people were laid off. Those cuts came after
a round of buyouts that presaged an earlier reorganization with digital orientation as its stated goal.
The last day to volunteer for buyouts is Oct. 31, according an information sheet accompanying the memo. Employees in the
United States are eligible to receive 1.5 times their severance, which is based on years of service with the company, up to
18 months of salary.
Here's the full memo:
As I told you earlier this week, we have begun an extensive review of operations as part of a broader transformation
program. There will be, unfortunately, an impact on news department staff in this process. In order to limit the number of
involuntary layoffs, we will be offering all news employees around the world — management and non-management — the
option to elect to take an enhanced voluntary severance benefit. The terms are described in the attached FAQ.
We are seeking a substantial number of employees to elect this benefit, but we reserve the right to reject a volunteer based
on business considerations. Employees will be required to sign a separation agreement and release of claims in a form
provided by the Company in exchange for the accompanying severance benefits.
Any employee interested in volunteering must send an email to HR from your company email account to
[email protected] by 11:59 pm ESTon October 31, 2016 stating as follows: “I [NAME] elect to be considered for
the WSJ News Department voluntary severance benefit.”
Any questions about the program can be directed to Christine Glancey or Matt Murray.
I regret of course the need for such a move and I appreciate deeply the dedication all of you continue to show through
challenging times.Thanks to your hard work, the news department continues to produce world-class journalism every day
and I'm confident this process is the right one to set us on the right footing for renewed growth in the years ahead.
Gerard Baker
Editor in Chief The Wall Street Journal
http://www.poynter.org/2016/wall-street-journal-is-offering-a-substantial-number-of-
buyouts/435664/?utm_source=All+Poynter+Subscribers&utm_campaign=58e815d772-
Afternoon_Headlines12_5_2014&utm_medium=email&utm_term=0_5372046825-58e815d772-257914957