Olson’s Observations

Publish once. That has been my mantra for a while now but I find myself saying it to publishers more and more lately. What does it mean? It means that publishers should publish their content once and then let feeds carry it to many different places.

From what I see publishers still seem to be spending a lot of time on things that feeds could take care of automatically. That’s a shame not to mention it’s inefficient and a waste of time and money.

E-mail is a good example of a place where feeds can do the heavy lifting but a lot of publishers have yet to take advantage of that fact. If a publisher already produces feeds of their content then there is no need to spend a lot of time on creating e-mails. The publisher can simply allow the feed to produce and send e-mails with FeedBurner E-mail Subscriptions or another feed-to-e-mail service. FeedBurner will then add the e-mail stats to the other stats so that the publisher can analyze their audience in a more complete manner.

Widgets are another great example of a place where feeds can be the content delivery mechanism. Take my resyndicate page for example - any of those widgets can be used to resyndicate my content and they are all powered by the feed. I publish once (to my blog) and my feed carries my content to subscribers both via newsreaders and via e-mail, to widgets that appear on different sites across the web and to a host of services that list my blog.

What’s also great about allowing the feed to do the work is that the statistics start to become a lot more complete. If the feed powers everything (but the site) then metrics can be provided that will encompass the feed consumption via feed reader, via e-mail, via widget, etc. Combine that with site analytics and the total content picture, a.k.a audience engagement, starts to become a lot clearer.

I am sure there will be many more places the feed can take content as time goes on so I hope publishers will continue to realize the power of feeds and use them as the content delivery mechanism more often. In the end of the day feeds will allow publishers to save time and money and they’ll also lead to more complete analytics that will get publishers closer to an overall view of audience engagement.

I attended the Future of Online Advertising conference in NYC this past Thursday and one of the topics was advertising pricing models on the web. We’ve all heard the debate before. Should CPM, CPC, CPA, CP whatever be the pricing model? What model is the most efficient? Luckily Kim Malone of Google tackled the subject in her presentation and I think what she said made a lot of sense (and no, it’s not because I work for Google now - thought I should throw in the disclaimer).

She looked at the three main online ad models of CPM, CPC and CPA and discussed how they all make sense depending on what it is the advertiser is looking to accomplish. Kim looked at the pricing models as a funnel where CPM was at the top of the funnel (reach a ton of people to build brand) and CPA was at the end of the funnel (reach the folks looking to buy the product/service now). The basic idea was this:

CPM should be used if the advertiser is simply trying to make people aware of their products and services (i.e. build their brand). CPC should be used if people are aware of the product/service and the advertiser is looking for people to take some sort of action (visit the website, fill out a survey, etc.). CPA should be used if the advertiser is only interested in creating conversions (sales) and is not very interested in extending awareness of their brand.

That is an over simplification of course but you get the idea. All of the pricing models work together to help advertisers achieve what they need to achieve so the arguments over whether or not CPM makes sense and if CPA is the new CPC are simply non-issues. The ad pricing model really all depends on what the advertiser is trying to accomplish at a given time (and on what the media type is - i.e. CPM tends to work best in feeds as feeds are a brand building media).

I have been playing around with Joost, the new TV-over-the-internet platform formally known as the Venice Project (next they’ll be going by a weird logo I think and no name), for a while now. I was psyched to start using it mainly since I no longer have cable TV (yes, it’s by choice). I have enjoyed my Joost experience so far and as they get more content deals done I think they will continue to pick up users pretty quickly.

Let’s cut to the case. Joost was invite only for its’ whole life and it still is but they recently gave all their beta testers unlimited invites so if you’d like an invite please shoot me a note (eric [at] ericjohnolson.com) and I’ll get one to you. After you check out the platform I’d love to hear what you think of it so make sure to comment on this post.

For all of those who haven’t read or heard of the Sam Zell (the new owner of Tribune Corp.) comment on Google and newspapers here is the quote:

“If all of the newspapers in America did not allow Google to steal their content, how profitable would Google be?”

You can read the full Washington Post article if you’d like as well to get more of a background on the situation.

As you can imagine Zell’s comment generated a lot of negative reaction from a lot of smart people like Jason Calcanis. I was almost quick to dismiss Zell as well. Sure, he now owns the Tribune Company but he’s a media and newspaper newbie. What does he know? Well, I wonder if he may know more than we all think he does.

After watching the Frontline documentary series News War I was compelled to write a piece on the state of the newspaper business which I am sure some of you read (I know it was super long so I don’t blame you if you didn’t slog through it - basic gist: public ownership of newspapers might not be the way to go if we want to retain the hard news we all need). Soon after writing that post I read the Valleywag piece defending Sam Zell and was reminded of the quotes I used from Google CEO Eric Schmidt the most pertinent of the quotes being:

“We’re [Google] in fact critically dependent upon the success of these newspapers so anything that screws up their economics, that causes them to get rid of reporters, is a really bad thing. The fact of the matter is that the consumption of news is up but the way in which people consume news has changed and its affected newspapers, in a business sense, pretty negatively.” (from Frontline’s News War program)

After reading that I am sure you’re thinking Zell might not be as crazy as everyone made him out to be. The Google CEO himself has publicly stated that Google is dependent on newspapers and the content they create afterall. But where is the connection?

Most people immediately thought of Google News when Zell’s comment popped up and were quick to point out that Google News is a pro bono venture (i.e. they don’t put ad sense around it) and, on top of that, doesn’t show the full content of the articles. That is true but there is more to the story than just Google News. Google makes money from contextual ads, as most people know, but it seems that a lot of folks forgot where those ads are placed - that is they are places around content.

Search results are one place Google puts their ads and a lot of times the top search results for current (and not current) news are newspaper articles which makes sense seeing that newspapers are a trusted and quality source (yes, I know they have had issues but fact checking works most of the time - I hope). Without those articles the Google results may not be as useful. However, I think the big money lies in the derivative works and conversations started by major newspaper coverage.

The blogosphere is a great example of this. A lot of media in the blogosphere is generated in response to or in order to talk about news that was originally reported by newspapers (heck, this post is a prime example). So what? Well, a lot of those blogs run ad sense ads which make Google money. If the bloggers, myself included, don’t have the newspapers to do the original reporting then they won’t be able to write as much and generate as much ad revenue for both themselves and for Google.

In the end of the day Google is an ad provider that works mainly with content driven sites. Because of that fact Google is dependent on the original reporting done by the newspapers. If all newspapers suddenly took their content away, or even worse, stopped producing their original reporting, things would be much different for Google and for all of us (until of course someone else picked up the ball on original reporting which would no doubt happen).

I have recently been working my way through the Frontline special entitled “News War” which chronicles the changing face of today’s newsmedia. The series tackles some intense subjects including whether or not a reporter has a right to withhold their sources from the government, the role of newspapers in terms of reporting on issues that could compromise national security and the effect of new media on the traditional media.

Covering all of those things in this post would of course mean a very lengthy post so I would like to focus on one of the main issues News War brought to the surface and that is the simple question of who will pay for the news in the future.

Before we delve into the subject at hand I think it is pertinent to discuss the changing meaning of the word news in our society. It seems that most of us have started to view news as something that is more in line with entertainment rather than something that is supposed to inform us about the world in which we live.

We are making choices to view more entertainment rather than news which is, of course, leading to more news organizations trying to entertain us to keep ratings up and ad dollars coming in rather than reporting on what we really need to know. They are a business after all and they need to keep increasing profits each year.

What’s interesting to note is that there was a time when news organizations were not looked at as profit centers. In fact, they were looked at as more of a public interest organization. The FCC even has a rule (section 315 of the FCC code) that states that media companies need to have a news service that serves the public interest (i.e. tells them what they need to hear). As News War points out this notion of news as a public interest org changed when CBS saw how profitable 60 Minutes had become and decided the news could be a big money maker.

As news organizations became a larger and larger part of the profits of their parent companies the parent companies, as any business would, started to make the news service parts of their organizations provide more entertainment which means more dollars flowing to the bottom line. In a sense, they wanted the news organizations to provide the public what they wanted rather than what they needed.

After discovering all of this I began to wonder if we need a news organization that is not a business. I then ventured further into the News War documentary where I began to learn some interesting facts about the news business that I wasn’t aware of and hadn’t given much thought to.

I assumed that newspapers were not doing well and that the companies that owned them needed to make cuts and report more entertainment just to keep them going. However, a stat from News War refutes that. Apparently the typical newspaper achieves around a 20% operating margin which is roughly double what a typical fortune 500 company will do. However, since the LA Times is publicly held through the Tribune Company, they needed to continue to earn more an more money each year or else their shareholders will see a loss in value (it should also be noted that newspapers, even though they make a lot of money - LA Times makes about $1 billion per year with $200mm of that being profit - are still on a downward slope in terms of overall earnings which means shareholders are upset).

Of course a lot of the loss in the growth of newspapers comes from the loss of their classified ads business to the internet. At the peak of classified ad sales in newspapers the average newspaper would see about 70% of their pretax profits come from classifieds (source: News War). With more and more of these classifieds heading onto the net (which provides a far better user experience than the newspaper) the newspapers have had a hard time staying afloat without cutting real news out of their papers and their staff.

As most of the long time readers know I am a big proponent of running organizations as for profit entities since I believe for profit entities are more motivated to find efficiencies which ultimately help them perform better (whether it means making more of a product or helping more people). In the case of the news I am not so sure that is the best approach given what I have written above and what I have read.

The news is truly a public trust. They need to be there to provide us, as citizens of the world, news of what is happening in our world so we can be informed and make good decisions. In fact, I would say that the newsmedia are an important part of the very foundation of the United States since they are the conduits between the world, the government and all of us. They can get us insight and hard news that, for the most part, we couldn’t get ourselves. Of course all news organizations have their biases but the loss of them to media that is fully entertainment would be a bad sign for this country.

Another interesting point that came up in News War was the fact that the majority of original reporting done in this country is done by newspapers. In fact, Eric Schmidt (Google CEO - not that I even need to note that!) says the following in an interview done for the News War documentary:

“There’s no question that we [Google] depend critically on reporters reporting new facts, new stories, new ideas. Who’s going to write it if it’s not the reporters?”

He then goes on to say:

“We’re [Google] in fact critically dependent upon the success of these newspapers so anything that screws up their economics, that causes them to get rid of reporters, is a really bad thing. The fact of the matter is that the consumption of news is up but the way in which people consume news has changed and its affected newspapers, in a business sense, pretty negatively.”

The fact is that most web organizations like Yahoo! News and Google News simply link to newspaper articles. Bloggers are definitely reporting on a lot of new things, generating some original reporting and becoming a larger part of the media world but the vast majority of original reporting and hard news comes from the newspapers which are in serious trouble (blogs also do a great job of promoting and continuing the discussion of hard news originally reported by newspapers which is very important in a free society like ours).

Of course the web will save, or at least help, a lot of these newspapers if they play their cards right but ad spending on the web still has a long way to go to reach the numbers of print ad spending. Perhaps hyperlocalism will help in the meantime. I do believe that hyperlocal data and reporting can be a big profit center and so do a lot of big papers who have started to work on hyperlocal additions to their websites. Even the Washington Post is looking into hyperlocal news on the web. However, world news still needs to be reported on and it seems we still need something other than profit to drive news organizations in order preserve hard news so I am still left with the question of who will pay for the news or, to put it another way, who should own the newspapers? (Side note: Hyperlocal news and info is a whole other post that I may get to soon.)

Perhaps the answer to newspaper ownership is private ownership either through a non-profit foundation or a family. The non-profit structure of a foundation obviously limits the burden forced on papers by profit expectations and family owners can decide to be OK with flat growth or only 5 - 9% profit instead of 20% in order to keep the news organization’s ability to produce hard news intact. In fact, there are large papers that fall into these categories today.

The St. Petersburg Times is a for-profit organization but their owner, the Poynter Institute, is not meaning they aren’t stuck with the profit issues of other papers. The New York Times and Washington Post are also in a better situation being that they are both family owned papers who continually produce hard news that we need to read.

Being part of the media business and, quite frankly, simply a citizen of this country meant that all of this really hit home. Thinking of a world in which hard news is hard to find really worries me and I hope that we’ll be able to find a way to preserve and pay for solid news. As always, I would love to hear some of your thoughts in the comments.

Photo Credit: Photo by Orrin (aka theliar) on Flickr.

I talk to publishers all day long about ways to allow others to promote their content but I never went ahead and set up something formal on Olson’s Observations… until now (sorry for the dramatics). I created a page today called resyndicate (see the top right hand side of the site) which gives users/readers three different ways to utilize the content from Olson’s Observations on their sites or anywhere else they choose (of course the only thing I ask for is attribution).

The three options I made available are: Headline Animator, SpringWidgets and BuzzBoost. These are all FeedBurner features that are super easy for publishers to implement and for others to use. Publishers can now even track the use of Headline Animator which makes that service more compelling.

Please check out my resyndicate page to get a feel for each of the options that are available. Why not even snag the code for any one of them and try it out on your own site. I’d love to hear any feedback you have about any or all of the resyndication techniques as well so please either e-mail me or leave comments if you feel so inclined. You can also set up a page of your own and, if you do, please post about it in the comments. I’d love to see more folks start doing this.

I was invited to try Criteo’s AutoRoll today which is still in beta. Normally I try to keep my site clear of a lot of widgets but this one was pretty compelling so I hopped into the system and put one together. The basic gist of the AutoRoll is that it will display links to the blogs my readers (i.e. you) read most so that all of you can see what the rest of your fellow readers are reading.

It reminded me a lot of MyBlogLog but the fact that it suggests other content that may be interesting to all of you made it more worth while to me. You can now find Criteo’s AutoRoll widget under the “VC Deals” section on the far right side bar. I am calling it the “Reader Roll.” As always, please let me know if this addition to the site is useful and feel free to chime in via the comments on what you think of the AutoRoll concept.