The Future of News Publishing

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The Future of News Publishing A Third Wave Report – April 2013

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Third Wave GmbH 4/2013

In spring 2013, we conducted a workshop for a large newspaper. They had needed an outside perspective on the state of publishing, social media, digital etc. So we used that opportunity to put all our favorite cases and insights from the media industry into this one deck. It has been fascinating to observe how publishers all over the world have started to implement a lot of the ideas, we’ve mentioned here.

More then one year later, we’re still coming back to this presentation constantly. This is why we have decided to release it to the public.

Enjoy,

Third Wave

PS: We have started a podcast (in German) that covers a lot of the topics mentioned in this deck.

Introduction

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http://thirdwaveberlin.de/podcast/


Content

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The Digital Consumer & The Digital Company The two key insights for future success in publishing (and beyond) 1The State of Digital, Social Media and Mobile Marketing Overview, data, challenges, opportunities, etc.2Future Publishing Business Models • Not one Big Idea, but a few small ones • The Publisher/Agency model • Brands as Publisher

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Hi, we are Third Wave.As a consultancy and think tank, we translate technological developments into new strategies for the digital context.

Our Services:

More about Third Wave: A profile by German newspaper Berliner Morgenpost

Business ModelsWorkshops, development, evaluation

Social Business Design Corporate Social Media, Enterprise 2.0

Competitor Evaluation Products, processes, brands

Change ManagementTeam structures, process optimization

BusinessCommunication StrategiesWeb, Social Media, mobile, CRM, analytics

Social Media StrategiesPlatform & content, team setup, KPI

Evaluation Analysis & feedback for ideas & concepts

Training Community- & Social Media Management

CommunicationEvaluation Analysis, optimization, extension

DevelopmentWorkshops, concept, integration of Social

Benchmarking Best practices, competitors, markets

Trend ResearchOverview, scouting, reports

Product

http://www.morgenpost.de/berlin-aktuell/startups/article125165637/Third-Wave-Die-Pfadfinder-in-den-sozialen-Netzen.html

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Our Clients

Working with Third Wave always leads to growth. Professionally and personally.

Third Wave combine a deep understanding for culture, society, the economy and technology with a pragmatic, straightforward approach.

Sven Weisbrich, CEO, Universal McCann Germany

Robert Stulle, Partner, edenspiekermann

Extremely competent, super straightforward, refreshingly pragmatic. Every project should be as much fun.

Patricia Strehlke, Head of Marketing Communications, 3A Composites

From startups, to Mittelstand companies, to agencies, to non-profits, to big corporations. B2C and B2B. In Germany and other European countries.

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1.1 The Digital Consumer


Understanding the digital consumer is the first key to the future of publishing.

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Digital Life: Today & Tomorrow

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http://www.youtube.com/watch?v=iG8KaWxr2gs

http://www.youtube.com/watch?v=iG8KaWxr2gs


“Imagine you are sitting at a street cafe in Paris. You have a copy of Sartre's Being and Nothingness, a copy of Le Monde, the newspaper, and next to you, as is often the case in Paris, is a cute dog. You read philosophy, you read the news, you pet the dog. You don't become stupid when you are petting the dog, you are just being human! And when you read the philosophy you are still worldly. And when you read the paper you are still intellectual. You talk to your friends at the cafe: sometimes about the dog, sometimes about philosophy, sometimes about the news, and, yes, sometimes about what you are eating for breakfast. Humans are complex and have emotional needs, intellectual needs, social needs...” –Jonah Peretti, BuzzFeed

The Paris Café

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Mixed Topics

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Facebook, Twitter, Tumblr …

Streams

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Serendipity means a "happy accident" or "pleasant surprise"; specifically, the accident of finding something good or useful while not specifically searching for it.

Serendipity as our Guide

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Newspapers used to own this

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The Problem: Share of Time

15 Illustration by Jason Lee for Wired


We own multiple gadgets with all kinds of screen sizes.

We use them all, sometimes at the same time.

Context is the key.

Connection, too.

We need to optimize our content for the context of the consumption.

Multiple Devices

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Multiscreen Patterns by precious

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1.2 The Digital Company


Becoming a digital company is the second key to the future of publishing.

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Starbucks is a coffee company witha Chief Digital Officer.

They have one of the strongest brands in social media.

They have created their own apps ecosystem with payment solutions.

They keep experimenting and iterating to innovate.

Starbucks is a coffee company that is also a tech company.

Starbucks

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Adam Brotman Chief Digital Officer


Technology has become an integral part of our daily lives.

Whoever will use it better to serve their customers will win.

Technological understanding must not be outsourced. It‘s a key asset.

It‘s not only about having an IT department.

Hiring the right people is essential.

Technology will touch everything

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Gartner Research

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“Marketing has always been an art and a science, but the growth in underlying technology (marketing analytics, for example) requires marketers to have access to technology talent.”


Webby Awards for Best Newspaper in 2005, 2006, and 2007. Digital Innovation of the Year 2008, 2009. Digital Journalist of the Year 2008, 2009.

Second largest online newspaper with51 million uniques per month (2011).

2006 first profitable year, mostly from advertisement and recruiting.

Explicitly “Digital First” since 2011.

Known for its engagement with readers.

Offers an API (with OAuth) to make content available to other publishers.

Failed with their Facebook social sharing.

The Guardian

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Director of Tow Centre for Digital Journalism at Columbia J School. Former guardian news & media director of digital content.

Emily Bell

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“Be of the web, not just on it.”


Big Data. Capture everything.

Cloud. Have everything online.

Analytics. Evaluate everything.

Real-time. Everything faster.

Payment. Everything but cash.

Mobile. Everything everywhere.

The Technology Trends

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“Burberry is now as much a media-content company as we are a design company.” –Christopher Bailey, CCO

Burberry as a digital media-company

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2.1 The State of Digital Marketing


2 Ways to look at Digital Marketing

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Online accounted for 19.5% of global advertising expenditure in 2012 and is predicted to rise to more than 21% this year.

Digital advertising spend reached $99bn worldwide in 2012, a 16.2% increase year-on-year.

This figure is predicted to grow by 14.6% to $113.5bn in 2013.

Digital Ad Spending 2012

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Source: GroupM study, March 2013


Investment in print media continues to lose share while digital media investment continues to gain.

Print accounts for 14 percent of the media day, but still attracts about 24% of investment, down from 48 percent when internet advertising investment measurement began in 1995.

The decline of print advertising reflects falling circulations in the old world, but its share of the world's media day has been surprisingly stable, and even increased in 2011, thanks to China.

Print Ad Spending

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Source: GroupM study, March 2013


Digital Ad Spending

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Source: eMarketer, ComScoreDataMine


Digital Ad Spending

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Digital Ad Spending

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Digital Ad Spending

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Überschrift

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It‘s all about Analytics.

Realtime Optimization.

Prediction Algorithms.

Digital Marketing – Trends

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Content farms

Algorithm changes

Personalization

Google+ and the rankings

Experts vs. Friends – GraphSearch

Mobile

The State of Search

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Native Advertising

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Overall spending on mobile advertising in the US, including display, search and messaging-based ads served to mobile phones and tablets, will rise 180% this year to top $4 billion.

Native ads strong in Mobile

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Conversations instead of campaigns

Most effective when integrated

Less silos – more departments involved

Getting closer to the core business

Becoming part of the product (development)

Digital Marketing – The Big Picture

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Speed

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2.2 The State of Social Media Marketing


Social Media 2013

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618 million daily active users on average in December 2012.

2.5 billion content shares a day on Facebook. 2.7 billion likes a day on Facebook.

250 million photos are uploaded to Facebook every day.

More than 250 million people are playing games on Facebook every month.

Facebook Statistics

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U.S. desktop users spend an average of around 6 hours every month on Facebook; mobile users spent an average of 11 hours.

The number of mobile monthly active users of Facebook has risen by more than 177% over two years, hitting 680 million at the end of December 2012.

Ad revenue attributed to Facebook mobile products rose from 14% in the third quarter of last year to 23% in the fourth quarter.

Mobile ad revenue on Facebook is expected to reach $1 billion this year.

Facebook Mobile Statistics

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The new business model: access to fans.

Quality of Content is King.

The new Newsstream: more visual.

Getting stronger on Mobile.

Facebook Home.

Facebook Fatigue & Fasting.

The State of Facebook

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Twitter Statistics

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The Public Conversation.

Owning the Platform.

Again, all about Mobile.

Teens switching from Facebook to Twitter.

The State of Twitter

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Up & Coming Social Platforms

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Tumblr

Over 100 million user blogs have been created.

Over 44.6 billion posts have been published.

82.7 million posts each day.

Pinterest

48 million users worldwide.

83 per cent are women.

Pinterest generates over 4x as much revenue per click (attributable to first touch) as Twitter and 27% more revenue per click than Facebook.


Customer Service

Co-Creation, Crowdfunding

Community

More than Marketing Platforms

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Virality is an effect, not a format.

Understanding the nature of Memes.

Adapting to Memes is key.

Smart Seeding helps but won‘t guarantee success.

Viral/Spreadable Media

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20% came from Facebook.

6% came from Twitter.

69% of social referrals came from dark social.

Sharing is significantly bigger outside of “measurable” social networks.

Dark Social

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“The only real way to optimize for social spread is in the nature of the content itself.”

Alexis Madrigal

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Senior Editor for Technology at The Atlantic

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2.3 The State of Mobile Marketing


1 billion smartphones will be shipped globally this year.

Everything is in flux.

Mobile is at its infancy.

Whatever the landscape, technical possibilities and ad budgets look right now will have little resembles with what will happen in 2 years.

Look at trends, make an advised decision, iterate fast.

How to think about mobile.

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12% of all media consumption time is being spent on mobile devices. On average, that’ 158 minutes per day. (USA)

Most people look at their phone about 150 times a day.

80-85% of the time being spent on mobile devices is being spent with apps, 20% in browsers – the app has won against the mobile web. For now.

Stats on mobile: User behavior

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1. Time Wasters

2. Core Utilities

3. Episodic Utilities

4. Notification Apps

4 types of mobile apps

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Source: Cdixon


Social Networks.

Games.

Time Wasters

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Apps that you have on the home screen.

1.Camera

2. Phone / Contacts

3. Calendar

It’s very hard to replace core utilities. Apps that succeed – like Instagram – are extremely successful.

Core Utilities

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Very useful applications that are used in a very specific context. Often not on the home screen.

1. Hipmunk / Kayak to look for flights and / or book hotels

2. OpenTable to make a reservation at a restaurant

3. Uber / Hailo to call a shuttle service / taxi

Episodic Utilities

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Emerging category. Apps here can be from all three previously mentioned categories or completely new ones.

Through clever use of notifications, apps can bring themselves back into the users life without being intrusive.

Important: Context. The better an app understands when to send the notification, the more likely it is that the user will appreciate it.

Apps that do it well: Foursquare, Quora, Timehop, Day One

Notification Apps

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Worldwide Mobile Advertising Revenue to Reach $11.4 Billion in 2013

59 percent of mobile users are as comfortable with mobile advertising as they are with TV and online ads. (USA)

Smartphones and Tablets Represent Nearly One-Fourth of All Paid Clicks

Stats on mobile: Ad spending

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Global Mobile Traffic Growing Rapidly to 10% of Internet Traffic

Mobile Monetization growing rapidly

Desktop Internet proved Ad $ follow eyeballs, it just takes time

Mobile Monetization – Good News

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Source: Internet Trends by Mary Meeker, KPCB


Mobile’s effective CPMs are 5 times lower than the desktop ($3.50 versus $0.75).

ARPU (Average Revenue per User) 1.7-5x Lower on Mobile than Desktop

Google: Mobile growth helping boost clicks but reducing cost per click thus constraining revenue growth

Facebook: Mobile growth helping drive users but constraining ARPU thus constraining revenue growth.

Mobile Monetization – Bad News

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While Mobile has still a long way to go, it is increasingly becoming a bottleneck for social, sharing and the spread of information on the web.

That creates the problem of having to deal with mobile right now without it being as monetizable as classic digital & search.

Mobile & Social converging

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Smartphone vs. Tablet

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Notebook vs. Tablet

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Tablets will outsell notebooks in 2013, for the first time ever.


Smartphone vs. Tablet

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Smartphones are being used for tasks while Tablets for consuming richer content and leisure experiences.


Case: Flipboard

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Aggregates social and classic media content

Lets the user explore topics instead of specific outlets

Focused on exploration

Since Flipboard 2.0 allows users not only to be consumers, but also publishers through the newly introduced collections feature.

Every user is now a micro-publisher.


Case: Quartz News

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Quartz News, a business publication The Atlantic Group

Digital only. Tablet first. Smartphone second. Web third. Email service.

Content matches the technological setup. Fast, quotable, always visual.

In the 1st month after launch: 840.000 unique visitors

Comparison: The Economist had in the same month 8.3 million

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3 Future Publishing Business Models


Paywalls work.

But only if you have a global Brand.

Make them porous for Social.

What about Paywalls?

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Stop thinking like a Newspaper Publisher!

The most important Insights for the Future of Newspaper Publishers

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3.1 Future of Publishing Business Models: Not one big idea, but a lot of small ones

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No single new idea will replace the old business.

There will never be a single big revenue source again.

Stop looking for the one Big Idea.

Start small. Iterate. Grow.

Not one Big Idea but many small ones.

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Source: Nieman Journalism Lab


“What we all see — newspaper publisher or news agency — is that the bundle is eroding, losing its power. The more we see the bundle losing market share and reaching the end of its lifecycle, the more we have to work on smaller, fragmented products that, not each by each, but overall, can compensate. That’s the strategy.”

Meinolf Ellers

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Managing Director, dpa-infocom


Merchants face the same challenge, understanding digital marketing activities like search engine optimization, social media and content marketing.

Newspapers have more experience with digital content and distribution than most local merchants.

Make money by helping local merchants with their advertising (in addition to any ads those merchants buy on publisher websites or in the paper).

Some publishers in the US already see up to 10 percent of their overall digital revenue coming from marketing services.

Small Product: Marketing Services

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Using the full capacity of printing and distribution resources.

Instead of having printing machines run idle, offer them to other publishers or even local vendors.

Morning News in the US makes about 5 percent of its revenues from in-sourcing (with fair margins).

Small Product: In-sourcing and distribution

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“We are taking a ‘push’ approach to content, and that means going to people with content where they live.” –Even Smith, Chief Editor and CEO, Texas Tribune

Organizing events for the readership.

Revenue via sponsorship and admission fees.

About 20 percent of the revenue at the Texas Tribune right now.

Small Product: Events

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“I knew I needed multiple revenue streams to support our business, and syndication of our original content — in a world of rapidly diminishing international reporting — seemed like a no-brainer to me especially given our pricing flexibility.” –Phil Balboni, CEO GlobalPost

GlobalPost now gets about 12 percent of its overall revenue from syndication.

It shares its correspondents’ posts with about 30 newspaper, broadcast and other news sites in the U.S. and worldwide.

Small Product: Syndication

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“In the digital world, news companies need to think of themselves as creators, aggregators, and syndicators, doing what they do best, licensing with zest and linking to the rest.”

Ken Doctor

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Leading News Industry Analyst and Author of Newsonomics


Digital technology gives the ability to create hundreds and thousands of products at small incremental costs.

Like Ebooks.

Advertisers can take part as sponsors.

Guardian Shorts.

The Atlantic Ebooks.

Small Product: Ebooks

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The long-tail of unused material.

German Ganske group is offering unused photo material from their travel guide as stock photography.

The material from their travel guides is also available as a database for mapping and driving apps.

Other publishers make their calendar and event data available via APIs.

Small Product: Data and Material

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3.2 Future of Publishing Business Models: Publisher / Agency Model

As in Publisher-Slash-Agency…The Slash-Publisher

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VICE – Key facts

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Founded in 1994

Print ciculation: 900.000 in over 30 markets

1.6 Mio subscribes on Youtube

Production of video content generates most of the revenue

One of the first adopters of the publisher / agency model

Commitment: Content is King


Focus: Virtue

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Founded in 2006

Purpose: Instead of focusing on campaigns, Virtue helps clients build content that people who interact with Vice want to see

800 full-time employees, 3500 contributors, 15 mio worldwide viewers monthly

Early adopter of the “brands as publishers” model

Clients: Intel, Mini, Warner Brothers, Adidas, Vodafone, Red Bull


Focus: Virtue

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“The insight I had seven years ago is that inside every great brand is an idea and that idea used to be solely translated to commercials or print ads. We take that idea and turn that into content.” –Spencer Baim, Chief Strategic Officer at VICE

The company has about 60 established shows.

As Publisher, VICE charges high CPM’s.

As Agency, it creates custom, expensive content.


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Monocle

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3.3 Future of Publishing Business Models: Brands as Publishers

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Brands as Publishers – Content Marketing

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The basic idea: brands need to do something valuable to get something valuable in return.

Real content instead of advertising.

Very few brands understand this.

Probably nobody does it as well as Red Bull.

The world has shifted. Owned media is the focus. Paid media will not disappear, but advertisers will shift their budgets away from it.


Brands as Publishers – Red Bull

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Content Marketing Maturity Model

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Red Bull

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Most other brands

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Brands as Publishers – Content Marketing

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“…only 38% of brands have a content marketing strategy at all, even though 55% of clients surveyed are planning one, almost 90% said that content marketing would become more important over the next 12 months and 73% agree that "brands are becoming publishers".” –eConsultancy

Instead of doing all the convincing for brands, Paid Media will be reduced to point people to long-term, Owned Media engagement by the brands themselves.


Brands as Publishers – Bad News

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“Publishers aren’t the only ones with the opportunity to monetize their content through advertising or sponsorships. Brands are encroaching upon this territory too.” –NewsCred, Brands as Publishers Whitepaper


Brands as Publishers – Approach

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Advancements in curation technology, semantic analysis and NLP (natural language processing) are enabling brands to create smarter, faster and more targeted content strategies.

Instead of building up huge editorial teams, some brands rely on outsourcing and technology. This is both a challenge and opportunity for publishers.


Brands as Publishers – Pepsi

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In Pepsi Pulse, a multimedia entertainment platform hosted at Pepsi.com, the company blended new technology with a decades-long commitment to supporting musicians.

Pepsi partnered with NewsCred to license and curate content. Using NewsCred’s semantic technology and API, they were able to customize the site to a number of hyperlocal markets and launch it in just 3 weeks.

87% growth in traffic in just 1 month!


Brands as Publishers – NewsCred

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NewsCred connects publishers and brands with the world’s best journalism.

NewsCred licenses, curates and syndicates full-text news articles, images and videos from over 900 of the world’s highest quality sources—ranging from original work by award-winning columnists to captivating editorials from publishers like The Economist, The Guardian, Forbes, Bloomberg and many more.

Combination of a experienced editorial team and a powerful semantic technology that filters and customizes thousands of articles every day.


Conversation over dictation.

Platform over distribution.

Services over product.

Iteration over perfection.

Engagement over consumption.

Überschrift

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Brands as Publishers – Rules of Engagement


Überschrift

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Brands as Publishers – Bad News

By following those rules and using modern technology, brands will soon be able to provide enough content that will make it hard for classic publishers to maintain their superiority in content development and audience.

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3.4 Best Practice in Future of Publishing: Buzzfeed


Buzzfeed – Key figures

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Founded in 2006.

225 employees, 80 Editorial.

40 Mio. unique visitors per month, primarily through social.

Over 40% through mobile.

100% of revenue is social content marketing – there are no banner ads on Buzzfeed.


Buzzfeed – Verticals

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Launched multiple verticals

Venturing into serious journalism, hired known reports

Converging humor and serious reporting even inside the verticals, not only across the platform


Buzzfeed – Insights

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Main target group: Bored-at-Work Network which is larger than the audience of BBC or CNN.

Maximization of Content Spread = Buzzfeed starves content that isn’t getting traction, and fuel the content that is taking off.

BuzzFeed also uses machine learning to predict social hits so they know.

BuzzFeed uses dashboards to help editors train their intuition of what might work.


Buzzfeed – Insights

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Buzzfeed operates like the Paris Café – people are looking at photos of cute kittens and scoops in the political landscape on Buzzfeed

Buzzfeed has buttons for emotions – make it easier for people to determine how they feel about the content that they are seeing

“Once people reacted, they are much more likely to spread to share.”–Jonah Peretti, CEO of Buzzfeed


Buzzfeed – Insights Business

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Editors never touch brand content, but brands have to learn how to work as publishers / editors.

Brands are held to a higher bar where they must have content that people actually want to click on and read.

It all works through the same CMS.

Brands get a dashboard that shows how much earned media they are getting.

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