Video advertising: future models, previous mistakes

No doubt you’ll have seen the latest Facebook controversy (no, not that one): the social network didn’t let news publishers know about a bug that discounted people who watched less than three seconds of video, thereby artificially increasing the statistics around how long people were consuming videos on average. As a result, some people are claiming that Facebook effectively created the pivot to video that saw newspapers and magazines shed tons of editorial roles in favour of video teams, to cater for this new audience demand for video content. Some are even suing Zuckerberg’s brainchild over it.

Due to all the broken promises and missed expectations that came with news publishers’ rush into video, it’s easy to forget that the reasons behind the drive to produce more digital video were sound: consumers are viewing ever more video online across OTT services like Netflix, user-generated-content platforms like YouTube, and livestreaming sites like Twitch. Even if the figures around view time were skewed, the trend is undeniable – one of the worst affected companies, Mic, even claims that the inflated metrics weren’t even a consideration in their own change towards digital video.

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What Jamal Khashoggi’s death tells us about attitudes to journalism

It seems increasingly likely that Jamal Khashoggi met his death in the Saudi embassy in Istanbul. It also seems likely that what brought about the journalist’s torture and murder was his antipathetic coverage of the Saudi regime. And it seems likely that the Saudi regime felt empowered to act with impunity because of the pusillanimity of the international community.

Since 1990, more than 2,500 accredited journalists have been killed around the world for carrying out their work. Some of these cases are high profile: Khashoggi, Daphne Caruana Galicia in Malta, Marie Colvin in Syria,  Terry Lloyd in Iraq, Martin O’Hagan in Northern Ireland, and on, and on. All are tragedies. But the vast majority go below the radar. And even those high profile cases have rarely been met with appropriate sanctions.

When did journalists’ lives become so insignificant? Sadly, it is not a new phenomenon. Reuters keeps an “In Memoriam” book, which commemorates those journalists

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The challenges facing Thomson Reuters spin-off


The numbers look daunting

One of the biggest and longest-running media deals of the year finally closed earlier this month. Thomson Reuters has spun its successful Financial & Risk business out into a new company, backed by Blackstone and rebranded as Refinitiv. They’ve been making quite a lot of noise about it (including, excruciatingly, in a rap.) In doing so, the business has joined the likes of Acuris and Ascential in replacing a valuable and well-known brand with something vaguely techy-sounding but completely meaningless – both to the market and in English. While the new business contains many hugely talented people and some excellent brands (including the likes of Lipper and WorldCheck), dispensing with the TR name could leave it with a serious brand recognition problem in a highly competitive market.

From the point of view of what’s left of Thomson Reuters, the decision is perplexing. Anyone who’s been following B2B media over the last few years will know that the real long-term growth is in high-value subscription-based information and data products. While Thomson Reuters will retain

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Ethical consumerism and the power of the millennial pound

According to the headlines (and backed up by recent studies) millennials are killing industries: the divorce industry, the diamond industry, and the oil industry, to name a few. For young consumers, it is appears that ethics trumps other concerns when looking for brands to support. This impacts where they invest, what they watch and where they work, with 14% of millennials saying they would not want to work in the oil and gas industry, the highest of any sector.

Kneel. Diamond.

Nike’s Colin Kaepernick campaign saw a 3% dip in its share price, which would initially appear to be a red flag for the brand. However, a closer look reveals

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Can UK newspapers regain their bite in the face of falling circulations?

Newspapers’ influence is often measured by the number of people its articles reach. You see it in everything from the prominence given to circulation figures, or the raw addressable audience that is afforded by the platforms on which they exist. But the purpose of the fourth estate has to been to hold power in check – and arguably it has been failing in that mission over the past two years. Journalism is reaching more people than ever before, but it’s having less impact than ever.

It’s an issue that’s felt more acutely in local media. The director of local news group the Bureau Local Megan Lucera said: “We’re not hearing stories on the ground. Issues were not being raised at a national level. It came down to a wider identity crisis for news… and local journalism has taken a particular hit.”

More in hope than expectation…

However, it’s also true at a national level. Two stories that broke about the purpose of journalism this week brought that dichotomy into stark focus. The first – the left-leaning Observer publishing an op-ed from the UK prime minster Theresa May – was

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Diversity in recruitment: why AI might not be the answer

For a few years now, AI has been proffered as the future of cost-effective and efficient recruitment, allowing users to screen millions of CVs in a matter of seconds. More interestingly, there are claims that it allows users to pinpoint the biases which exist in their overarching hiring process or even within the job listing itself. Studies of recruitment diversity have shown that more masculine words can dissuade female candidates from applying, and it is true AI could detect and replace this language with something more gender neutral. So could AI be a silver bullet for killing off hiring prejudices?

Garbage in, garbage out.

Recent attention has centred on the potential for unconscious algorithmic bias. That is, if you have biased data – no matter how much of it – the output is going to be biased. For example, a reliance on postcodes and schools will inevitably intersect with race and class. And if machine learning draws inferences from an already homogenous group of people,

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The battle for Sky reveals television’s content concerns

This week the long-running saga of who will take ownership of Sky has reached a definitive conclusion, with US-based Comcast splurging billions for control of the London-listed pay-TV provider. The battle for the company had been waged for long months between Comcast and Twentieth Century Fox, both of which saw in Sky opportunities to fortify their foothold in a highly competitive market.

So why would the two compete and, ultimately, why would Comcast buy Sky? £17.28 a share (plus £30.6bn in equity) is a huge amount of money for what is effectively a pay-TV company that exists primarily in a saturated market, so what does its purchase add to the business, and how will it change the market?

It had been argued that Comcast was the better fit in terms of synergies, with both companies simultaneously offering both content packages and internet/communications infrastructure – but it appears to have been the former that convinced Comcast execs to up their bid for Sky. That in turn led Fox to ‘throw in the towel’ and admit defeat, its ambitions to own the European pay-TV market abandoned.

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WaPo’s Platform-as-a-Service strategy is brilliant – and irreplicable

The Washington Post is a unique media company for a number of reasons. Its close affiliation with Amazon provides it with strong ecommerce potential; its subscription potential was bundled with Amazon Prime long before rebundling was a glint in other media companies’ eyes; and it has always bucked the trends surrounding digital video.

PaaS the buck.

Perhaps more importantly, it is making a significant run at Platform-as-a-Service revenue – and might be the single best-placed media company to do so.

If you’ve ever used Google Drive to collaboratively edit a document, you’ve experienced a PaaS. Chances are that you’ve also recognised the benefits of doing so. But the potential of PaaS is truly realised at a macro level: licensing a platform for developing and publishing apps without also needing to build the infrastructure behind it is freeing for media businesses and allows easier entrance to the market for start-ups.

For companies engaged in the production of journalism (or its backwoods cousin, ‘content’), that can be a god-send. The tricky process of building a back-end is enormously expensive at the best of times – let alone in a year in which the vast majority of legacy publishers are trying to scale back costs through consolidation and the sharing of talent and tech.

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Is brand differentiation enough to save publications?

This week saw credible rumours of the closure of the Glamour magazine brand in the US. For those that knew it (or had at least seen its marketing material) Glamour was the luxury lifestyle brand, perfectly pitched at people who needed expertly curated product recommendations and interviews with today’s most relevant celebrities. This, of course, was also the pitch for many of its contemporaries and, regardless of which title was your particular favourite, that led to issues surrounding differentiation in a shrinking marketplace. Its decision to transition from a print-led to a digital-only title is, in part, to escape that shrinking space, but the danger is that online lifestyle content is an even more crowded space.

Last week also saw the effective closure of The Outline. The Outline was a two-year old digital culture publisher that had a strong brand, a memorable visual identity and had seemingly been doing well, having raised $5.51 million in VC funding in May of this year, putting it

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What is the future of branded content?

Building brand success

Branded content – native advertising, paid-for content, advertorial, creative solutions, call it what you will – has been around for over a century. Contently point to Theodore MacManus’s famous story on “The Penalty of Leadership” for Cadillac in 1915 as one of the early examples of the art. But there is no denying that there has been a recent rush to exploit the form, as media companies have sought to diversify their revenues and fight back against declining revenues from traditional advertising.

Now, pretty much every large digital or print publisher has their creative solutions team beavering away and finding synergies between their audiences and client brands. Many have

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Where are media companies investing their tech dollars?

Media has always been a tech-driven business, exploiting, over centuries, the development of papyrus, paper, printing, radio, TV and the World Wide Web. The key to each of these revolutionary technologies is that they made the distribution of content fundamentally easier. 

While content is the bedrock on which media companies are built, the adage that ‘context is king’ is undeniably true. It doesn’t matter if you’ve invested in an award-winning team of journalists, or that you’ve spent millions on a world-altering piece of data journalism if nobody sees it and it doesn’t benefit your bottom line. The problem is that when there is so much content, so widely distributed, it’s tough to find your audience. 

Media companies have been investing huge amounts in building or licensing proprietary tech solutions in order to counter those pitfalls. News UK, for instance, is approaching the end of a trial of a new tech solution designed to reduce subscriber churn as it tacitly admits it cannot grow subscriber numbers forever, while Schibsted is investing in a new techstack across its many titles which allows for greater personalisation and the surfacing of content relevant to its audience.

Who’s looking at you, kid.

The same technology that can be used to tailor content to individual users can also be used to deliver more targeted advertising, which is seen as one way to avoid the race-to-the-bottom nature of most digital display advertising.

Additionally, as the push for more ecommerce revenue continues in the face of squeezed display ad spend, publishers are finding they have to invest significantly in the tech and skills behind such transactions. Writing for Digiday, Max Willens points out that where ecommerce retailers are unwilling or unable to share data on transactions, it’s often up to the publishers themselves to make up that deficiency:

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Why apps are becoming central to consumer publishers’ strategies

Media companies – consumer-facing publishers in particular – are reportedly looking to reddit for inspiration. An article on Quartz about the self-described “front page of the internet” states that points out that reddit has consistently been ahead of the curve when it comes to its strategy around user engagement and personalisation, and that it’s seeing success that other media companies can only dream of as a result:

“As a quantifiable metric for the supremacy of the site’s popularity, the amount of time the average user spends on Reddit per day is greater than any other social media site in the top 50. Clocking in at just under 15 minutes per user per day, it goes far beyond Facebook’s 10 minutes and 37 seconds and Twitter’s 6-and-a-bit minutes.”

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NewTV, but same old challenges

Small but perfectly formed

The entrepreneurs behind the imaginatively-named NewTV, Jeffrey Katzenberg and Meg Whitman, will be feeling encouraged by their recent round of investment having closed at $1bn. The service promises entertainment providers an avenue onto the world’s billions of smartphones, being specifically designed for mobile use with short-form series of 10-minute episodes. And it seems they have Hollywood and Wall Street convinced, according to Variety:

“Backers include a who’s who of Hollywood studios: Disney, 21st Century Fox, NBCUniversal, Sony Pictures Entertainment, Viacom, AT&T’s WarnerMedia (formerly Time Warner Inc.), Lionsgate, MGM, ITV and Entertainment One. Tech investors include Chinese internet giant Alibaba Group; strategic investors include VC firm Madrone Capital Partners, which led the round, along with Goldman Sachs, JPMorgan Chase & Co. and John Malone’s Liberty Global. The funding officially closed July 31.”

Encouraging, sure. But will it really be enough for to penetrate an already saturated market where similar offerings have since failed? Securing $1 billion from such famous brands is no mean feat but

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Travel: A safe harbour for business information companies?

We have written before about how niche media businesses are bucking the downward trends. It seems to be an approach that is working for consumer as well as

Broadening the mind and growing the top line

B2B businesses. More evidence of this comes with the recent publication of Centaur’s latest interim report, which confirms that its Travel & Meetings portfolio reported revenues of £5.7m (2016: £5.0m), up 14 percent year on year, led by its Business Travel iQ business information brand.

Also mining the travel sector, Skift has been one of the biggest success stories in the business information sector over the past few years – its success stands in contrast to other media startups which rely on VC funding. In fact, its founder Rafat Ali has spoken many times about why going ‘narrow and deep‘ in high-value niches is the biggest opportunities for media companies.

So why does this sector seem to be returning dividends for publishers?

Well, travel is one of those rare verticals that seems to thrive no matter what. For one thing, the travel and holiday industry seems to be resilient – despite

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3 Key Trends for Media Companies from Ofcom’s Communications Market Report

The Ofcom Communications Market Report is a pretty good bellwether of changing consumer habits. And, like boats reacting to the tide, those changing habits dictate how media companies will act over the next few years, as they change their priorities to benefit from shifting audience attention.

Here are three key takeaways from the latest report that shine a light on where media companies will lie over the next few years.

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The next challenge for the Guardian: managing expectations

The UK’s newspaper industry has hit a major milestone – but it’s not a particularly positive one. For the fourth consecutive month in a row every single one of the UK’s leading print titles has seen print declines, with the majority of those titles seeing double-digital YOY falls in circulation. Even The Sun, with a circulation that is somewhat bolstered by bulk copies, saw a 7.6 percent drop in its circulation to 1.45 million copies, meaning that not a single paid-for newspaper in the UK now has a circulation over 1.5 million.

It’s the latest piece of bad news for the industry, though an expected one: Nobody expects print circulations to suddenly leap back up to pre-internet levels, or even to remain static. The danger, however, is that print revenue from advertising won’t have the slow tail-off that circulations are having. The analyst Clay Shirky has predicted a second cliff for print revenue once circulations pass a psychologically important milestone and advertisers stop seeing print as a valuable medium in terms of ROI. Given how important print revenue is for those titles – making up the lion’s share of even the titles with huge digital audiences like the Daily Mail – that would be disastrous. Consequently, time might be running out for some of those papers who haven’t made enough of a transition to new revenue strands. 

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Amazon, ecommerce, and opportunities for publishers

and you might be

This week The Washington Post announced its ambitious plans for broadcasting on Twitch. In acknowledgement of Twitch’s primary audience, one of its two new shows will feature hosts from the Post playing video games alongside politicians, an idea that has ‘Steve Buscemi in 30 Rock‘ written all over it. The other show is set to be an irregularly scheduled live news show – and we’ve spoken about the challenges around digital news video before.

So far much of the coverage of the deal has been around the implications for other publishers looking to reach new audiences on livestreaming platforms, or about what this says about The Washington Post’s commitment to finding new audiences despite its paywall. But something that has been lost in the noise is that Twitch offers its creators both ecommerce and advertising revenue – and its owner, Amazon, stands to benefit from both. Considering that Jeff Bezos, Amazon founder, also owns the Post,

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Consensus before Censorship – why the Copyright Directive was rejected

An impossible code

Having only recently recovered from the GDPR frenzy which gripped the continent in May, some media companies will be feeling relieved that the European Parliament last week sent controversial copyright reforms back to the drawing board. The proposed legislation included Article 11, which would require online platforms – search engines, news aggregators, etc. – to pay publications if they link to them. Article 13 meanwhile would have made copyright enforcement the responsibility of online service providers, and asked them to use content recognition technology to censor material at the point of upload.

Over the past few years, we’ve witnessed an increasing inclination from the EU and its member states to privatise tasks which many believe should be undertaken by the police and courts of the respective state. As with the censorship of online hate speech, the ongoing debate has centred around just who ought to be arbiter of these laws – i.e. humans or machines. The trouble is that

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When ‘doing the right thing’ works for publisher business models

Minority report: back in the news

Last year MTV News was one of many outlets that pivoted to video production at the behest of Facebook. You can throw a rock and hit a piece of analysis of the reasons why, but the important thing to take away from that is that in doing so it laid off a number of reporters who were focusing on LGBTQ and BAME issues. Almost exactly a year later, the tide has turned, and MTV News is once again hiring people to cover those issues – scant comfort to those reporters it initially laid off.

But that shift back to socially-worthy coverage tells us more about the focus of the media industry than simply ‘we were duped by Facebook’. For one thing, any new spotlight shone on issues like those are  more vital than ever in Trump’s America, where civil liberties can be stripped away at any time, and should be applauded. Even in the UK, the polarisation of the news media has led to tacit xenophobia, transphobia and more on the front pages of many of the right-wing papers.

But as publications look to avoid the perils of ‘mile-wide, inch-deep’ reporting that has proven unsuccessful in generating revenue online, increased coverage of those issues has a strong business case as well. Let’s take a look at why:

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Orderly Brexit required: egos need to be parked

For a moment, there was clarity. And then, it was gone.

A very serious contender

A few weeks ago, we noted that the challenge for business is not Brexit, but uncertainty. At that time, we called for business leaders to make their positions clear. In due course, the heads of Airbus, BMW, and many other businesses stepped up. To be fair, they were probably responding to the comments by the outgoing head of the CBI, which prompted our blog, rather than to us. But we like to dream.

Let’s be clear: the deal proposed by Theresa May last Friday would have been at best partially good for our clients rather than wholly brilliant. After all, services were excluded from the customs arrangement she had suggested, and our clients are largely in the services sector (digital media, entertainment, SaaS, training, etc). While they may have faced tariffs, depending on later individual trade agreements, this was sweetened by the beginnings of a framework for modified free movement of EU citizens to work, which is critical to their sectors. Meanwhile, the proposal on free movement of physical goods would have kept supply chains and food supplies moving. That is a good balance to strike. The May proposals were

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A demand for Drake: What is the value of a single song on Spotify?

If you’re not a fan of Drake… well, bad luck, because you can’t get away from him. In an overly-zealous attempt to promote his new album, Scorpion, Spotify chose to include Drake in every single one of its discover playlists over the launch period. This sparked a backlash from music fans, the likes of which haven’t been seen since iTunes snuck a copy of U2’s Songs of Innocence into its users libraries, with Spotify users demanding refunds for the sudden omnipresence of Drake in their lives.

As the BBC pointed out, Spotify’s promotion of Scorpion was undeniably over-egged, with songs from the Canadian-born musician appearing on playlists titled ‘Best of British’ and every genre known to man. As a result some subscribers to the paid-for Spotify Premium, which boasts a lack of ads as a feature, considered that they were being served advertisements for a single artist with the relentlessness of the T-1000.

While the controversy is perhaps overblown – unlike the Songs of Innocence debacle, which necessitated bespoke software to be developed to remove the album from users’ libraries – it actually reveals quite a lot about Spotify’s business model and, in turn, the business models of the artists whose oeuvre appears on the platform.

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GDPR and adblocking – the unholy alliance

Regulation and technological advances threaten many industries: just ask high street bookmakers. But the simultaneous combination of GDPR and the promotion of ad-blocking technologies by the likes of Google and Microsoft is worrying for digital media businesses.

A helping hand

Most free (and many paid-for) content models have long relied on an implied consent from their users: “you get this stuff for free, if we are able to send relevant advertising your way based on your browsing behaviour.” However, the ability to track browsing wasn’t really made explicit until GDPR, which requires consent for publishers to use many of the tools that had developed to serve those ads. Notably, GDPR has required digital businesses to explain to consumers how cookies work (see our cookie policy here!): paranoia about privacy is on the rise, and it is likely that many more consumers will follow those mandatory “manage your ad preferences” buttons.

At the same time, ad-blocking has never truly gone away as an issue for publishers. It often gets swept aside by seemingly larger issues like the Duopoly or rampant fraud, but it’s always there in the background, eating into publishers’ digital revenue potential.

It’s come back into view over the past few days after Microsoft announced that its mobile Edge browser for iOS and Android would have an ad-blocker installed by default, perhaps anticipating that post-GDPR audiences will be more savvy about their digital rights. The Verge reports that the feature – currently in beta – is set to be made available more widely and, crucially, won’t require any extra downloads to be used. Microsoft are making it as easy as humanly possible for their users to block ads, using the existing infrastructure of Adblock Plus – and that’s got publishers worried.

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The changing economics of news video

With the news that Facebook is betting upon news video to help grow its Watch platform, there has been a fundamental shift in the economics of video news production. Where once entertainment content was used to attract customers and audiences, against whom the broadcasters could sell adverts, the nature of video content has become somewhat flattened and undifferentiated.

Opportunity knocks for you, Mr Zuckerberg

That’s due to any number of things – unbundling, the rise of on-demand digital video on YouTube, Twitch and Facebook, and the overall conflation of ‘news’ and ‘entertainment’ that has come with homegrown news and analysis on those platforms.

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UK economy: Brexit not the problem – uncertainty is

Six letters, nil points

The outgoing President of the CBI has caused a small storm by saying that parts of British industry could become “extinct” unless a proper Brexit deal – including membership of the customs union, the CBI’s preferred approach – is negotiated.

This has attracted the usual binary comments in the media: the ‘we told you so’ from the Remain camp, and the tedious charges of treason from Leave supporters.

But Paul Drechsler’s interview was actually quite nuanced. There was very little that people of either viewpoint could disagree with: he contended that the debates had been ruled by politics rather than economics; that the uncertainty in government was having a knock-on effect to business, making it difficult to make investment decisions; and that the UK’s economy is growing slower than most of its competitors as a result.

These are pretty much incontestable observations. Growth in the British economy is

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What consumer media can learn from booming B2B

It’s the content, stupid

Readers of Digiday may have noticed an interview with Martin, talking about media’s shift towards subscription-based services. Many of the arguments in there will be familiar to regular readers of this blog. It confirms a recent trend we’ve been following – as Google and Facebook continue to hoover up the vast majority of online advertising spend, media companies are increasingly looking to online subscriptions to grow revenues.

Of course, one area of media that worked this out a long time ago is B2B media. High-value subscription-based business information is a sector we expect to continue growing, and the amount of high-level M&A activity in the sector would appear to confirm that. Earlier this year Blackstone agreed to take a majority stake in Thomson Reuters’ Financial & Risk business for over £17bn. IHS Markit followed up a successful merger by agreeing to buy Ipreo in a $1.86bn deal. Our client, Argus Media, was last year acquired by

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Four facts we learned about the future of the gaming industry from E3 2018

Every year, the Electronic Entertainment Expo (E3) churns out enough news, analysis and memes to keep the content-hungry gaming press happy for at least the next quarter. 2018’s conference was no different, with strong showings for games like Cyberpunk 2077, Devil May Cry V, Super Smash Bros. Ultimate and tons more.

But underpinning all those flashy reveal trailers and lengthy gameplay demos are some trends that demonstrate where game devs and publishers believe the future of the industry lies. Not just in the genres they think are going to be popular, but in where the money to support multi-million dollar game development is likely to come. Here are a few of those trends:

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E3 – Has Microsoft Done Enough?

With PlayStation and Nintendo holding most of the cards when it comes to popular video game exclusives, people have not only been questioning the worth of owning an Xbox, but whether there was any point in Microsoft making another one.  So, all eyes were on Microsoft’s E3 conference last night.  Some considered it a do or die

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Paul Dacre: a complex legacy

Those of you who are regular readers of our blogs may well have picked up that we are exactly the kind of hand-wringing, politically-correct, liberal-minded multiculturalists that the Daily Mail despises.

So long, and thanks for all the Brexit

So the decision of Paul Dacre to step down as Editor of the Daily Mail might be seen as a cause for celebration to people like us. Certainly, anything that tones down the constant divisive tub-thumping would be welcome: the country is as divided as it has ever been, and needs less hateful rhetoric.

But you might also know that we constantly

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