It's the inevitable come-down from over-inflating digital media start-ups in the post great recession era.
The business is mostly a terrible one with mediocre margins, vast competition and audiences that are fickle. There is also no real moat, other than extremely deep pockets (which can help sustain a journalistic advantage through ups and downs in the business). Content like that is almost like food when it comes to dealing with consumers. With very modest margins, tons of competition and fickle consumers, digital media start-ups aren't too different from restaurants in their likely-to-die rate.
Venture capitalists love to invest into them because they all picture themselves as media barrons. You see the rich person getting into news / media syndrome as a trend that carries throughout time. They all want to do it: Jeff Bezos, Warren Buffett, Steve Jobs (he was fascinated with Murdoch & news in general), Patrick Soon-Shiong, Chris Hughes, Peter Barbey, Laurene Powell Jobs, Viktor Vekselberg, Carlos Slim, Michael Bloomberg, Sheldon Adelson, John Henry, Sidney Harmon, Joe Mansueto, Mortimer Zuckerman and on and on the list goes.
For every rich person that does get into it, there are a dozen more that flirt with doing so.
Rich people constantly trying to get into news / media, is the equivalent of average people trying to start restaurants, with predictable results.
Absolutely this. Rich people have routinely purchased or put up news outlets to promote their agendas for ages.
The difference these days is that content can be copied and distributed at zero cost, and that content (and money-making advertising) can also be targeted, monitored, and tuned. It’s a propagandist’s dream.
The problem is that people still only have 24 hours in a day. Most of it is spent sleeping and working. There’s only so much information people will actively consume, which gives way to passive binge consumption of the likes of Netflix and Reddit. The latter has so much user-created or recirculated material that a potentially valuable set of eyeballs to a publisher could instead be spending their free time mindlessly clicking through a series of amusing sloth gifs.
All of this leads to a race to the bottom amidst diminishing returns, both for the publisher and the reader. The Washington Post, for example, is flooded with redundancy for the sake of anti-Trump catharsis clicks.
There is one silver lining for the owners behind the media glut: people have less spending money than they used to for entertainment, so free or cheap stimulation from the likes of non-or-bypassable paywalled news sources or Netflix does give publishers something resembling a captive audience.
Splitting off from that comment, is the matter of reasonable valuations.
Allow me to propose that something like Buzzfeed, with $300 million in expected 2017 sales, is really worth more like $400 to $500 million, less than two times sales. Why? Its future growth rate is likely to diminish going forward with scale (ie its fastest growth days are almost guaranteed to be behind it). Its present growth rate is already down toward 10%-20%. Entities like the NY Times set the ceiling on what Buzzfeed can ever likely hope to be (in terms of business size), and that would be an extraordinary outcome. The NYT is worth $2.8 billion, with $1.5 billion in sales (so less than 2x sales), and has always struggled to have even OK net income margins of 10%.
Buzzfeed was perhaps once worth a reasonably high multiple on sales, back when it had $20 million in sales and a high growth rate. All of these companies have similarly rapidly run out of growth steam: HuffingtonPost, Business Insider, Gawker, Mashable, and so on.
What's a low to medium growth, low max ceiling, low margin, high competition, no-moat business worth? An appropriately low multiple, that's what. Anything else is playing with fire, where you see a $1.5 billion valuation turn into $200 million in a liquidation sale.
The dotcom bubble had a version of this. The Industry Standard was actually highly valued (similar to Mashable's prior $250m valuation) for a brief time back then.
So what's the argument for Buzzfeed being worth a future $5-$10 billion or more (such that a venture capitalist would value it at $1.5 billion in a round)? There's only one argument: another rich person wanting power, narrative control, media influence, and to just generally play in that rich person's sandbox, which is a story that gets repeated over and over again whether it's a traditional tycoon or just a rich venture capitalist. Rich people play in the news & media world like they do in art, swapping the assets around at prices seemingly disconnected from reality, dumping them when times are tough, paying hilariously overpriced rates for them when things are booming.
Because the broader economy has been doing well, and that hides problems. Like Warren Buffet said, it's only when the tide goes out that you see who is swimming naked.
There's still a surge of companies trying out advertising models, willing to throw away money to see what works. Once everyone has figured out how to do it efficiently the landscape will change and that day can't come too soon for me.
This is anecdotal but I feel it's much more common than we talk about: when I was in ad tech, I saw first hand how advertisers would spend money on impressions for the sole purpose of being able to report to their higher-ups how many impressions and click they got. Particularly for brands where conversion attribution was difficult to impossible.
The media agencies spending on be half of the brand also have virtually no reason to NOT spend ad dollars on fraudulent clicks and impressions - again, they're just trying to get paid.
And of course the publisher doesn't care if the impressions are fraudulent.
Basically, there is a very large rigged economy in ad spending that both sides perpetuate for their own good.
There's definitely some truth in that. For all sorts of promotional spending (think things like tradeshows as well) there is a whole system that depends on the belief that spending money on whatever activity is a good idea. "Events are a waste of marketing dollars. We shouldn't ever sponsor them." said no event manager at a company ever.
I remember the first time I actually got raw logs of where my ad agency’s impressions were ultimately going. It was just so blindingly obvious that it was all a waste.
I came to the same conclusion you did. You’d have to go several layers up into the client’s org to find anyone with incentive to do anything but tell the most optimistic story they could.
That old agency is still around, surprisingly. My best guess is that whoever is actually holding people accountable for the money spent just has a number in mind that sounds reasonable, and has no expectation of seeing evidence that it’s well spent.
Yes - but in order for something to be rigged it has to be rigged "against" someone, and I believe that someone is the consumer. Advertisers and publishers benefit, but the consumers see intrusively targeted, annoying ads everywhere they go. Ad blockers have re-balanced the equation in favor of consumers (at the expense of publishers), but publishers are resorting to video because it's easier to force someone's attention the more passive they are, even though that defeats the entire value proposition of digital marketing for many places, which is higher user engagement/tracking...
Maybe the most profitable and effective way to do advertising is still direct sales, but call me old-fashioned.
Savvy marketers aren't measuring clicks, they're measuring conversions and they tie their marketing spend to sales leads and to revenue generated. Ads that generate clicks but no sales don't last long.
You're coming at this from a SaaS point of view. Imagine if you're a rather large brand like Fedex. You can't tie your digital ads directly to a conversion because the conversion happens offline. But their advertising department is supposed to make it seem like they're spending money and driving "brand awareness". So getting fake clicks, fake ad video views -- all of that can get reported up so they can make themselves seem successful.
I'm actually coming at it from an enterprise sales side.
And sure it's harder to measure a branding campaign in any medium (though people certainly still do it). You don't necessarily care about clicks at all in that scenario. Brands have been figuring out ways to measure the effectiveness of campaigns on offline sales since long before the internet.
Click fraud is an issue for the industry, but it's a small one. It's simply not true that "most clicks" are fraud. And, in any event, digital ad spend continues to grow. So if Buzzfeed and Vice are in a slump it's not because advertisers are shying away from digital.
Have you noticed how many brick and mortar stores ask for your email or phone number at the register during a purchase? They absolutely can tie offline purchases to online activity with that information (not to mention your credit card).
Some can, some can't. Ad networks such as Facebook actually don't let much information escape, getting even basic demographics on who saw one's Facebook ads can be hard, getting identifiable information is, to the best of my knowledge, not available around impressions.
I think you'd benefit from researching a bit more around what major brands do from a measurement standpoint. With the benefit of that much data, you can do some fairly accurate econometric/media mix modeling and get a solid read on lift for core metrics that they've invested a lot in to understand their impact on the bottom line.
There is absolutely garbage inventory mixed in, and lots of solutions to try to minimize the impact of that, but to assume that these major brands don't know how this all works is naive.
Further, just as an example, both Google and FB have very solid options for importing offline conversions which are relatively easy to map back to an audience ID of some sort.
As a contrived example: it's easy to geotarget digital ads. So focus them on just Chicago and see if sales originating in Chicago go up or down vs other cities.
It has happened. The digital media companies haven't all closed, though some have most recently gothemist and dnainfo, but many have been hollowed out with fewer reporters putting out many more much worse articles (often re-written press releases at best).
Advertisers can pretty accurately track and price campaigns; if clicks are inflated 50% by fraud, it comes out in what they pay. Even if not in this round, then in the next. Adwords advertisers can modify their campaigns extremely frequently, but even display ads are generally sold at most on 3 month contracts. If, as DSP buying ads for a campaign, you don't hit your CPA target, then you don't get new campaigns. Now legit publishers definitely get screwed, but that's kind of ironic since the entire idea of adsense is to screw good publishers by allowing advertisers to target customers wherever it's cheapest.
tl;dr It doesn't matter that much to advertisers because fraud washes out in the pricing.
There is a perception in right wing circles that this is also related to trumpism, after all this crash is happening with the stock market at an all time high. A lot of these publications are at the 'progressive' end of the spectrum and they may have misread the market, even for their core readers.
Specifically the media (and in particular digital media's) response seems to have been one of all out activism against him may be working against them. People don't explicitly want to be told what to believe. Or listen to people drone on for over a year about the same stories (rightly or wrongly - but at some point it ceases to be news).
Perhaps one of the reasons that a lot of the struggling media outlets are on the progressive end of the spectrum is that they mostly need to be profitable through advertising whereas the conservative side can be run at a loss while their backers recoup their investments through deregulation and tax cuts. If someone could figure out a similar way to profit from Democratic government, that could solve most of the funding problems for those progressive media outlets.
> they mostly need to be profitable through advertising whereas the conservative side can be run at a loss while their backers recoup their investments through deregulation and tax cuts
This is insane. Show me one conservative-leaning media startup that was saved (or turned profitable!) through "deregulation and tax cuts" without reliance on other streams of revenue.
Unless you somehow mean that a better, faster-growing economy via deregulation and tax cuts results in better business outcomes overall, regardless of political leanings, which I would agree with enthusiastically.
Arms distance. It's not the startup being profitable, it's Breitbart being funded by people who make more money off the influence Breitbart has on national discourse than they spend on Breitbart.
> Show me one conservative-leaning media startup that was saved (or turned profitable!) through "deregulation and tax cuts" without reliance on other streams of revenue
Notice the complete lack of advertising. It's unlikely that either of these two has much of a revenue stream beyond being funded by the Koch brothers. But Koch industries has made billions being one of the largest polluters in the world. Relaxing EPA guidelines on pollution is a huge business for them. So there's no need for either of those two media outlets to ever make a dime on its own, it just has to provide assistance for Republican politicians who are friendly to their environmental agenda.
I don’t know why you’re getting downvoted. I made a conscious effort to not consume media sources which engage in blatant and one-sided activism. I just want the facts, and all the facts, not just the subset that fits a narrative. And I don’t need the commentary at all. In investigative journalism I want them to tear into both sides of the political spectrum equally, not suppress/ignore one side. I struggle to name a single media outlet that would do that, so I mostly just read tech blogs these days. And then only the subset that don’t insist on shoving their politics down my throat. The Verge is out.
0xbear up-voted, I made a conscious effort to consume media sources which engage in blatant and one-sided anarchism, fact's are only relative to experience there is no narrative. no comment?! political spectrum?! Why would you even bring politics into computer classes?
> People don't explicitly want to be told what to believe.
The idea that "telling people what to believe" is a phenomenon unique to one side of the political spectrum is absurd. What's been the most watched cable news network in recent years?
"People don't want to be told they're wrong" is a more realistic claim, but a very different one.
But this is happening to non-political media too, so the idea that it's politically driven at all is probably dreamy-eyed wish-fulfillment.
>The idea that "telling people what to believe" is a phenomenon unique to one side of the political spectrum is absurd. What's been the most watched cable news network in recent years?
This is true, but there's an asymmetry here, and it's best summed up by Conquest's Second Law: any organisation not explicitly right-wing will become left-wing. So in the US nowadays we have right-wing media outlets, which are right-wing, and we have everything else, which is left-wing.
Breitbart is right-wing, and Salon is left-wing, and that's fine -- people go to those sites explicitly because they want news from that perspective. It's what the readers want, and it's what they provide. But GQ is a magazine, dating back to the 1930s, ostensibly about men's fashion and suits and watches and cars and things... so why is it filled with left-wing political content and Trump bashing? It doesn't seem to be a sensible business decision, it just seems to be driven by the personal opinions of the editors.
That, I think, is what the OP means about people not being told what to believe. They don't mind it when explicitly political outlets push a political point of view, but when neutral territory (like GQ or football or Entertainment Weekly) gets politicised then that really turns off at least half the population.
The content produced by millions of unpaid people like this comment is way more interesting than the boilerplate content produced by paid people written to conform to a particular zine's "style". The very idea of "lets pay a bunch of people to write about shit that everybody already knows about" is absurd.
For this reason, my primary source of Internet reading is HN upvoted stories & comments. I will often read the top HN comment on an article before reading the article.
"Buzzfeed writers have to generate at least 1 article per day. There is no minimum limit on words on the article, and the topic can be anything (within reason)."
Once I knew this, the prevalence of low-quality Buzzfeed links all over the web suddenly made sense.
That's how it is for the average writer in digital media. Small daily articles keep the lights on and fund bigger investigative articles and feature content.
I've been in some newsrooms where this becomes a slippery slope... they're saying the small daily articles are just there to fund the rest, but those get sensationalized headlines, misleading social images... but it's okay because it's just paying for the real journalism... which somehow just never seems to get prioritized.
One per day? I had someone at one of Vox's regional properties tell me they had to do 12 a day (combination of local and national)!
One per day seems pretty light. TV reporters in medium and small markets are usually required to turn out two a day (one package, one VOSOT). Radio reporters sometimes five or six or more, depending on market size and whether they're unionized.
You may laugh, but it seems scarily plausible to develop a machine algorithm that generates 12 articles, have a human go through to pick the 3 least-ridiculous ones and do some light editing, and push it out to the news.
Motley Fool seems to be the leaders in this -- if you search google news for any stock you're interested in then you'll find that Motley Fool seems to be cranking out largely-boilerplate articles about it; sometimes they seem to have had some human intervention, other times they seem to be fully computer-generated.
Routine financial news, sports... Anything that can be largely churned out in boilerplate fashion based on some standard facts. This has been done for a while now and it will only increase as long as there's a business model for quickly published, largely undifferentiated, rote stories. It's a low-cost, high-volume game.
I was seeing credible copy produced for financial reporting in the late 1990s.
The underlying data are available, the vocabulary is distinctly limited, and the reporting was already highly pro-forma. Mad-libbing a few variants of language and selecting the best of the lot does work fairly well.
That actually raises the underlying question: why publish narrative copy at all in cases such as this, rather than data tables or charts? News and journalism are curiously allergic to data or presenting it in a usable fashion -- I've seen tables essentially written out over several paragraphs that could have been expressed in a few grid squares.
"vosot
A TV news term, an acronym that stands for 'voiceover/sound on tape.' This is a story in which the news anchor reads copy while video plays, and then a short soundbite plays while the anchor stops reading, and then the anchor reads the end of the story. Also spelled vo/sot or vo/b for 'voiceover/bite.'"
Although Buzzfeed and the similar ilk are all terrible, you cannot blame them for doing what they do. They are all merely a symptom of the burgeoning idiocracy they pander to.
Others are actually quite good. At least Buzzfeed are balancing this and funding real journalism with the fake crap.
This from someone who'd been a very harsh critic. Some of their coverage of the TPP, ISDS, and international lawsuits in particular struck me as excellent.
It makes sense because a lot of social media sites and search engines seem to reward 'quantity' more than quality, with those who post content on a regular basis doing better than those who don't.
Unfortunately, that means the 'best' way to become popular in the media business is to throw quality out of the window and try and write as much shallow, junk as possible to cash in on the latest news trends and social media fads.
> there is basically no publisher in existence involved in any sort of news or political news coverage who says to themselves, my readers are demanding more of their news on video as opposed to text. Not a single one. The move to video is driven entirely by advertiser demand.
What's true is that no representative group of readers who have said what that hypothetical publisher claims they said exist.
But publishers make the claim that they would say that all the time.
I recently was assigned a project to convert all our technical manuals into 100-second Youtube feature highlights. You pay me, I will do what you ask, so it's done...but the analytics don't look good. Not even bots are watching those videos.
> Another way of putting that is that the future that VCs and other investors were investing hundreds of millions of dollars in probably doesn’t exist.
It doesn't need to exist for most or even an above-average VC. If those hundreds of millions were invested by 100 investors at $1M in each of 100 companies, and 99 tanked but 1 unicorn made a 100x return, they would continue to behave in that way.
Ad-driven revenue models are just not reliable long term for media publications anymore. All these sites dying or having issues were built on the old world model created by newspapers 200 years ago. These models aren't even working for the big TV networks. Their news is now basically 20 minutes of old people new stories (stuff about Jesus, medicare, health care breakthroughs) book-ended by ads for prescription drugs and adult diapers. Their only viewers are 60+, and aging.
The new model is, actually, the oldest model: Sponsorships. Remember how things like the Jack Benny Show were sponsored by Jell-O and Lucky Strikes? That model actually works again. It's strange, but it's really is a bit liberating (I work for a sponsored pub). We actually have the funds and time to do extremely expansive pieces on deep topics we choose.
Having fewer people to keep happy means having fewer editorial bonds to advertisers. In a pub with dozens or even hundreds of advertisers, all in the market on which you're reporting, it's tough to not piss them off by reporting on bad news about them. This happens all the time. ALL THE TIME. "You ran that story about our listeria outbreak, now we're not advertising Chipotle on your site anymore!" In the video game world, bad games with ads get good reviews, or ads are pulled. Movies are the same way. Many publications cover the very stuff they advertise, so it's a tricky situation.
You'd think sponsorships would be the same way, but they really aren't. Instead, sponsors get to post their own content alongside the real good stuff. Paid-for-content, as it were, which isn't even always bad, it's just stuff these companies want to get out there where people will read it, rather than sitting unread on their corporate blogs.
I am now convinced the sponsorship model is the way out of this. It might not work as well outside of a confined vertical, however. One thing is for sure, sponsors love being able to tell their side of the story to our readers, and I feel like the readers just skip stuff they find too marketingy in favor of our really good, deep content anyway, so it's kind of a win-win.
The other thing I like about sponsorships is it brings the colluding onto the table instead leaving it hidden. In the past, I've worked at places where they've been adamant about separation of church and state: advertising and editorial are divided and do not talk, collude, or work together at all. You couldn't take more than a $15 lunch for free, could take no free trips or hotel rooms, and couldn't keep neat tchochkes or product samples.
Meanwhile, these same places would ALWAYS put their foots on your neck, subtly, to influence content. They'd even send the lead sales guy and the head of editorial out to do joint meetings which were only designed to sell ads. If someone bought a large ad and you wrote a bad story about them, it could be reworked, or even killed entirely.
Sponsorships, however, are known to be collusion, right? Now that I am at a sponsored publication, I can take trips, dinners, hotel rooms. It's great! I'm still making a great effort not to be compromised, but now I can do that in Spain for a week at a conference. Makes a huge difference, frankly. I'm much better at covering a show far away if I am in the show hotel instead of the cheapest place my failing pub could afford to set me up, 20 miles away on the side of the highway.
Journalists know how to be fair and balanced. It's kinda their whole bag. The policies publications put in place to dictate this stuff are the first to be ignored when things get thin and business goes sour. It's why some sites sell their entire skin to McGriddle: that's sales getting creative with the design team, because they can't get close to editorial. Not officially, anyway. Frankly, stuff like that is to be praised. It's innovative and likely kept some edit staff from being laid off or influenced.
There are plenty of extremely profitable and growing ad-supported digital media businesses. It's just not the Vices and the Buzzfeeds of the world.
Spending a ton of money up front to generate a huge volume of largely undifferentiated visitors and then selling their ad impressions at very low CPMs is not a winning strategy. And building it on top of the whims of Facebook's algorithm was worse.
Skift is another (and if you've been following digital media for a while you may recognize its founder Rafat Ali)
These are B2B examples. Consumer media is a lot harder because you have to figure out a way to carve out a niche audience that is attractive to advertisers, but I think it's possible. And I think success is a lot more likely if you bootstrap something rather than load up on VC and debt in a moonshot.
Just popping in to say I read Utility Dive frequently. I had no idea anyone involved with it was on HN. I'm not an industry professional, just somebody who's really interested in energy issues.
Indeed. I feel like niche audiences with small operations is the only way to make profit in this business any more. Digital media is now a 'lifestyle business.'
The "pivot to video" would explain why every third article I click from outside my usual haunts has an auto-play video at the top that follows me as I scroll down the page.
I've reached my limit; I've started blocking video CDNs with my adblocker. If there's a video I really want to watch, I'll use a different browser.
Setting media.autoplay.enabled to false in about:config will also keep audio and animated gifs from autoplaying. For me, it's the biggest quality of life improvment in web browsing since the advent of reader mode.
Is there a chance that any of this plays out in favor of small advertisers? Seems like not, if current ad pricing is in part subsidized by VCs funding money-losing media platforms and hoping to "make up for it in volume" as is explained here. Will a "crash" result in less competition and therefore even higher rates for Adwords/Facebook for small businesses?
Everyone not in the ad industry loves to make claims about how its going to fall apart, but no one I've seen has the expertise and data needed to back up their claims.
Maybe the author has a point, but this article is incoherent. There is no sources and the entirety is predicated on baseless assumptions and some analogy.
No sources or even attempt to prove any claims:
- There are too many publishers
- There is a fixed amount of 'revenue seats'
- Google/fb/etc take a portion of that fixed revenue
- etc.
I don't even know what 'too many publishers' really means, but there is undoubtedly not a fixed amount of revenue (double digit growth every year in digital ad spend), and google/fb only increase that total amount of ad revenue by acting as a ssp/dsp/exchange.
The author is a career journalist/digital publisher with lots of professional contacts in the industry. He has spent lots of time investigating digital media business models and the financial health of digital media companies. His own company has transitioned from being mostly ad supported to being mostly directly reader supported in the past few years.
He is just making a blog observation, which can be best read in the context of the rest of his site/blog, which have been talking about similar issues for years. Much of his evidence is scattered through tiny posts, which blog readers are assumed to have been following. It’s not supposed to be a deep carefully cited research article.
Eh I guess without any context then its not a very useful blog post. I'd still like to see some links or an attempt at verifying some claims. Even a byline with his industry experience would help.
It's posted on TPM on the "Editor's Blog" and the byline says "Josh Marshall is editor and publisher of TalkingPointsMemo.com." what else do you need on his credentials?
There are links scattered throughout, but part of the point of this post is that no one is really talking about this issue at least at the depth it deserves, so understandably it's light on references. In this case, I'd treat a lot of this as an original source.
Thats completely meaningless. I've got that byline on 4 different websites. There is one link in the entire post. So because it deserves depth, he does the opposite?
There are thousands of 'publishers' like this - I don't believe he's qualified to claim the industry is broken. He can't see anything from a macro perspective.
He's a Polk Award-winning journalist, he has a History PhD from Brown, and he has written for many other publications over at least the last 20 years.
Given that he has a wiki page https://en.wikipedia.org/wiki/Josh_Marshall, it's pretty obvious that you're not interested in doing the slightest bit of research into the
subject that you're criticizing.
I'll add it to my reading list, thanks. Although this is the most overused fucking trope in digital media:
> “The idea of publications totally based on advertising is, I think, an illusion. Some can do it, but I don’t think it’s ever going to be a sustainable model for most publications.”
TV and radio ads are sold by a limited amount of players at a local, regional, and national level. The ability to target smaller groups of consumers online that are more likely to be interested in the displayed ads is analogous to local/regional ads on some level.
Last I checked TV has taken a beating from Netflix and other streaming platforms.
I personally never believed in new media's limitless newconomy rise to the stars. Nobody wanted to pay for newspapers anymore but web journalism was going to be different?
> Everyone not in the ad industry loves to make claims about how its going to fall apart, but no one I've seen has the expertise and data needed to back up their claims.
That doesn't mean they are wrong. Frankly it fits in neatly with the theory that such data is not data that ad companies want to know, so therefore, they don't.
There is an overwhelming consensus by a huge number of very well informed and intelligent people pointing to the advertising business model as it exists now and saying, "This is not sustainable." I'm not saying they're right, I'm not qualified to say that, but the response from the ad industry is by and large to stick their fingers in their ears and hum loudly and that should make any potential investor worry.
> There is a fixed amount of 'revenue seats'
> Google/fb/etc take a portion of that fixed revenue
If you need citations for these, your burden of proof is a bit too extreme.
Unless advertisers have an infinite amount of money, there will be a finite amount of ad revenue. At some point, there's a floor to how much ad revenue you can capture while still having enough money to maintain a journalistic organization, creating a fixed number of 'revenue seats'.
A portion of that money will by default go to the largest players in the market, Google and Facebook.
The real question is how much advertisers need online display. Most don't need much. Honestly, online display has more meaningful competition from print (yes), radio, and TV because it's more geared to branding.
For direct response, generally speaking online ads are more cost effective. For the most part, you don't need to place direct response ads on publishers' websites. You can just put them on FB or Google search.
I would say that it's a simple issue of aesthetics and performance. Banner ads look like total garbage. Video ads on Youtube videos tend to be less appealing than video ads on a big screen TV. Tiny thumbnail video ads on news websites are visual pollution at best and a total annoyance at worst.
My point below that is that those large publishers increase the amount of revenue available. So they take a percent, but the entire pie would be smaller without them.
With double digit growth, supply isn't fixed and its a common idea that supply (from an advertiser perspective) is effectively unlimited.
Josh Marshall is well qualified on this subject, and is walking the walk with TPM by pushing it towards a subscription model, and away from too much dependency on ad revenue. (He has previously published insightful posts on the dangers of relying on Google and FB, and their capricious business practices).
In a larger way, this is an indictment/logical endpoint of the 'free' business model. You still get what you pay for. Imo, it's too bad micropayments haven't taken off, but i'm glad there is some traction in paid models. Perhaps things really need to get shitty with free content (ahem, autoplay video) before there is a correction towards quality content. Of course, that presents it's own problems since those too poor/cheap to pay for content will remain in the ad infested content mills.
I pay for the digital NYT for one specific section of it and if I could just pay for that part I would, but there's not an option to do that and the rate for the whole NYT subscription is cheap anyway.
I browse the rest of the NYT maybe a few times a week, but I largely just read the one section I like multiple times a day.
There's just a lot of competition amongst these big digital media organizations, most of which have many employees. And the article's author is right that they've been largely supported by VC money.
I think there is still room for good digital content that you can charge for (e.g. Stratechery), but creators will need to focus on a niche that customers find compelling enough to want to pay for (and I don't think finding one is that hard). (I'd also immediately pay for Matt Levine's Money Stuff column if he ever went independent.)
But most should be done with very small operations and staffs. The great thing about it is that digital content has such favorable marginal cost dynamics.
A couple of weeks back there was a headline about a site surreptitiously using visitor's hardware to mine some form of crypto. People were upset, but it made me wonder.. why isn't this a viable business model?
Crypto mining in lieu of advertisers would realign interest between content producer and content consumer - the person who reads your articles begins to be your customer again, instead of the companies advertising to the people reading your content. The only conflict of interest is wanting consumers to spend as much time as possible on your site, but I think that is a big step up compared to the plethora of conflicts imposed by relying on advertising as a business model.
This is of course ignoring the technicalities of working out a crypto where the economics work here. But assuming that would be possible (which is certainly a big assumption), this seems like an interesting concept that could solve the monetization issue facing so many things today in one fell swoop.
It’s been discussed repeatedly right here on HN. Unlike you, it strikes me as one of the dumbest things I’ve heard in a while, and I can support that assessment from multiple angles. But one person’s dumb idea is another’s successful business model, and I’ve been wrong plenty of times in the past. Like a sibling commentor, though, I catch you doing it and your domain will never again resolve to a valid IP on any machine that I own.
If I find any site doing this, I'm going to throw it into my local dns resolver to point to 127.0.0.1 faster than I can script it.
Why? Because when I'm on battery and any site decides their crypto currency ad scheme is ok to run and blow through my laptop battery, I'll likely wonder if I can bill them for the machine resources they have used.
Well for one, the trend is hugely toward people consuming media on mobile devices, where resources like processor power and battery life are much more limited and unsuited to effective crypto mining than even a standard PC is.
He seems to entirely overlook native advertising. I know of a couple of decent sized businesses ($50mm+ annual revenue) that depend almost entirely on native advertising, because Google/Facebook ads in their niches are highly competitive, and tend to not be ROI positive. Certain niches on Google and Facebook are dominated by startups that are willing and able to lose investor money on negative ROI ads in pursuit of growth. They drive the bids up, and this creates a situation where existing companies and startups that are not flush with investor cash must look elsewhere for advertising that is profitable.
Further, Google and Facebook have an insane number of rules about how and what companies can advertise, and therefore there are billions of ad dollars that do not and will not ever enter into their coffers. These are not just in scammy niches either...you’d be amazed at many of the ads that get rejected by Facebook and Google. This pushes additional billions in ad money outside of their ecosystems.
As long as investors are willing to fund losing ad campaigns, and Google and Facebook keep increasing the number and breadth of rules that result in an ever increasing volume of ad rejections, there will be publishers and alternative ad networks that can enjoy vast amounts of revenue that gets pushed to the fringes by these forces. They just have to position themselves properly.
I think reddit is going to be the new model of digital media. They launched recently profiles, which means users who have been fairly anon will have the opportunity to start branding themselves as thought leaders in each respective subreddit. It's already happened with breaking news. Twitter might be faster, but there is less moderation and filter for fake news vs. crowd moderation (not perfect). I wouldn't be surprised if they start their own editorial team for news or a publishing platform and let the crowd moderate what's fake/real. The only thing stopping them is trolls/shills, but that might be solved with the profiles. They just need to convince users to come out of the shadows.
I have never understood, not from the very early 90s and the very early days of the graphical web and online advertising, WHY anyone ever accepted the proposal from advertisers that they pay either based on clicks or based on completed sales or things like that. It is insane. It is based on a fundamental lack of understanding of what advertisement IS and where its value lies.
Advertisers have, in my opinion, been getting a free ride for decades. They get brand recognition for free. They get goodwill for free. They get customers who know they even exist for free. They get knowledge of their product in front of customers for free. They don't pay a cent for any of it. And content providers just let this happen, in exchange for being paid based on driving clicks.
Do you think television networks would have said "sure, OK" if advertisers proposed they only pay for TV spots based on how many people showed up at the store and said they saw the ad and it was what specifically made them go to the store? Do you think radio stations would have bent over and said 'sure, sounds like a cool idea' to advertisers wanting to only pay based on how many customers came in and knew their jingle? Would newspapers have accepted only getting paid based on how many people said they saw the ad in the paper?
OF COURSE NOT. Because every single one of those customers who 'glided over it' or 'didn't see it' or didn't 'act' on it was influenced by it. And it is wrong to give that away for free. When an ad appears on a website a user is visiting of their own free will and desire, the simple mechanics of how the human brain works creates a vague positive impression for the brand advertised even when no one clicks at all. Advertisers know this. It's how they sell themselves to businesses. And they rely on content providing sites being either blissfully or willfully ignorant of this fact.
I can't help but chuckle at the timing, though. Print publications shut down text in deference to video because advertisers want it right at the same time the only video platform that is viable or ever likely to be barring a very large lawsuit for anticompetitive practices, YouTube, running at gigantic losses for more than a decade guaranteeing competition is impossible, has decided it is disgusted by the prospect of large numbers of people making a reasonable living from producing video content. They want to reform themselves in a more traditional more centralized model where a small number of tightly controlled producers of content will get rich, and the rest will either die off or be starved. Eric Schmidt touched on the idea that he sees Google's role in forcibly controlling (he would call it 'guiding') human culture as very important. He is rich, therefore he is Better and it is right for him to take the reigns and protect the seething masses from themselves. The same old mentality Old Money has operated on for centuries coming to the nouveau riche and technorati.
A mass migration of advertisers to YouTube will make Googles continued claims of a desperate lack of interested advertisers seem more and more strained as time goes on...
I have come to believe that scale encourages mediocrity. The financial incentive in scaling is to produce more output, as fast as possible, even if the quality of output is low.
They make money by virtue of number of users rather than quality of the product.
This explains why FB sucks so bad and still makes a lot of money.
I am interested in the problems of the entire ad bubble, including Google/Facebook as well as the rest of the digital media. Google and Facebook for example drive up house prices in Silicon Valley.
101 comments
[ 3.1 ms ] story [ 172 ms ] threadThe business is mostly a terrible one with mediocre margins, vast competition and audiences that are fickle. There is also no real moat, other than extremely deep pockets (which can help sustain a journalistic advantage through ups and downs in the business). Content like that is almost like food when it comes to dealing with consumers. With very modest margins, tons of competition and fickle consumers, digital media start-ups aren't too different from restaurants in their likely-to-die rate.
Venture capitalists love to invest into them because they all picture themselves as media barrons. You see the rich person getting into news / media syndrome as a trend that carries throughout time. They all want to do it: Jeff Bezos, Warren Buffett, Steve Jobs (he was fascinated with Murdoch & news in general), Patrick Soon-Shiong, Chris Hughes, Peter Barbey, Laurene Powell Jobs, Viktor Vekselberg, Carlos Slim, Michael Bloomberg, Sheldon Adelson, John Henry, Sidney Harmon, Joe Mansueto, Mortimer Zuckerman and on and on the list goes.
For every rich person that does get into it, there are a dozen more that flirt with doing so.
Rich people constantly trying to get into news / media, is the equivalent of average people trying to start restaurants, with predictable results.
The difference these days is that content can be copied and distributed at zero cost, and that content (and money-making advertising) can also be targeted, monitored, and tuned. It’s a propagandist’s dream.
The problem is that people still only have 24 hours in a day. Most of it is spent sleeping and working. There’s only so much information people will actively consume, which gives way to passive binge consumption of the likes of Netflix and Reddit. The latter has so much user-created or recirculated material that a potentially valuable set of eyeballs to a publisher could instead be spending their free time mindlessly clicking through a series of amusing sloth gifs.
All of this leads to a race to the bottom amidst diminishing returns, both for the publisher and the reader. The Washington Post, for example, is flooded with redundancy for the sake of anti-Trump catharsis clicks.
There is one silver lining for the owners behind the media glut: people have less spending money than they used to for entertainment, so free or cheap stimulation from the likes of non-or-bypassable paywalled news sources or Netflix does give publishers something resembling a captive audience.
Allow me to propose that something like Buzzfeed, with $300 million in expected 2017 sales, is really worth more like $400 to $500 million, less than two times sales. Why? Its future growth rate is likely to diminish going forward with scale (ie its fastest growth days are almost guaranteed to be behind it). Its present growth rate is already down toward 10%-20%. Entities like the NY Times set the ceiling on what Buzzfeed can ever likely hope to be (in terms of business size), and that would be an extraordinary outcome. The NYT is worth $2.8 billion, with $1.5 billion in sales (so less than 2x sales), and has always struggled to have even OK net income margins of 10%.
Buzzfeed was perhaps once worth a reasonably high multiple on sales, back when it had $20 million in sales and a high growth rate. All of these companies have similarly rapidly run out of growth steam: HuffingtonPost, Business Insider, Gawker, Mashable, and so on.
What's a low to medium growth, low max ceiling, low margin, high competition, no-moat business worth? An appropriately low multiple, that's what. Anything else is playing with fire, where you see a $1.5 billion valuation turn into $200 million in a liquidation sale.
The dotcom bubble had a version of this. The Industry Standard was actually highly valued (similar to Mashable's prior $250m valuation) for a brief time back then.
So what's the argument for Buzzfeed being worth a future $5-$10 billion or more (such that a venture capitalist would value it at $1.5 billion in a round)? There's only one argument: another rich person wanting power, narrative control, media influence, and to just generally play in that rich person's sandbox, which is a story that gets repeated over and over again whether it's a traditional tycoon or just a rich venture capitalist. Rich people play in the news & media world like they do in art, swapping the assets around at prices seemingly disconnected from reality, dumping them when times are tough, paying hilariously overpriced rates for them when things are booming.
The media agencies spending on be half of the brand also have virtually no reason to NOT spend ad dollars on fraudulent clicks and impressions - again, they're just trying to get paid.
And of course the publisher doesn't care if the impressions are fraudulent.
Basically, there is a very large rigged economy in ad spending that both sides perpetuate for their own good.
I came to the same conclusion you did. You’d have to go several layers up into the client’s org to find anyone with incentive to do anything but tell the most optimistic story they could.
That old agency is still around, surprisingly. My best guess is that whoever is actually holding people accountable for the money spent just has a number in mind that sounds reasonable, and has no expectation of seeing evidence that it’s well spent.
Maybe the most profitable and effective way to do advertising is still direct sales, but call me old-fashioned.
No, they probably spend their marketing budget on "online marketing" because they were told it's necessary
Savvy marketers aren't measuring clicks, they're measuring conversions and they tie their marketing spend to sales leads and to revenue generated. Ads that generate clicks but no sales don't last long.
And sure it's harder to measure a branding campaign in any medium (though people certainly still do it). You don't necessarily care about clicks at all in that scenario. Brands have been figuring out ways to measure the effectiveness of campaigns on offline sales since long before the internet.
Click fraud is an issue for the industry, but it's a small one. It's simply not true that "most clicks" are fraud. And, in any event, digital ad spend continues to grow. So if Buzzfeed and Vice are in a slump it's not because advertisers are shying away from digital.
There is absolutely garbage inventory mixed in, and lots of solutions to try to minimize the impact of that, but to assume that these major brands don't know how this all works is naive.
Further, just as an example, both Google and FB have very solid options for importing offline conversions which are relatively easy to map back to an audience ID of some sort.
tl;dr It doesn't matter that much to advertisers because fraud washes out in the pricing.
Specifically the media (and in particular digital media's) response seems to have been one of all out activism against him may be working against them. People don't explicitly want to be told what to believe. Or listen to people drone on for over a year about the same stories (rightly or wrongly - but at some point it ceases to be news).
This is insane. Show me one conservative-leaning media startup that was saved (or turned profitable!) through "deregulation and tax cuts" without reliance on other streams of revenue.
Unless you somehow mean that a better, faster-growing economy via deregulation and tax cuts results in better business outcomes overall, regardless of political leanings, which I would agree with enthusiastically.
How about two:
https://franklincenterhq.org
https://www.watchdog.org
Notice the complete lack of advertising. It's unlikely that either of these two has much of a revenue stream beyond being funded by the Koch brothers. But Koch industries has made billions being one of the largest polluters in the world. Relaxing EPA guidelines on pollution is a huge business for them. So there's no need for either of those two media outlets to ever make a dime on its own, it just has to provide assistance for Republican politicians who are friendly to their environmental agenda.
The idea that "telling people what to believe" is a phenomenon unique to one side of the political spectrum is absurd. What's been the most watched cable news network in recent years?
"People don't want to be told they're wrong" is a more realistic claim, but a very different one.
But this is happening to non-political media too, so the idea that it's politically driven at all is probably dreamy-eyed wish-fulfillment.
This is true, but there's an asymmetry here, and it's best summed up by Conquest's Second Law: any organisation not explicitly right-wing will become left-wing. So in the US nowadays we have right-wing media outlets, which are right-wing, and we have everything else, which is left-wing.
Breitbart is right-wing, and Salon is left-wing, and that's fine -- people go to those sites explicitly because they want news from that perspective. It's what the readers want, and it's what they provide. But GQ is a magazine, dating back to the 1930s, ostensibly about men's fashion and suits and watches and cars and things... so why is it filled with left-wing political content and Trump bashing? It doesn't seem to be a sensible business decision, it just seems to be driven by the personal opinions of the editors.
That, I think, is what the OP means about people not being told what to believe. They don't mind it when explicitly political outlets push a political point of view, but when neutral territory (like GQ or football or Entertainment Weekly) gets politicised then that really turns off at least half the population.
"Buzzfeed writers have to generate at least 1 article per day. There is no minimum limit on words on the article, and the topic can be anything (within reason)."
Once I knew this, the prevalence of low-quality Buzzfeed links all over the web suddenly made sense.
One per day seems pretty light. TV reporters in medium and small markets are usually required to turn out two a day (one package, one VOSOT). Radio reporters sometimes five or six or more, depending on market size and whether they're unionized.
I'm pretty sure I've already put more thought into this comment than they put into most of their articles.
The underlying data are available, the vocabulary is distinctly limited, and the reporting was already highly pro-forma. Mad-libbing a few variants of language and selecting the best of the lot does work fairly well.
That actually raises the underlying question: why publish narrative copy at all in cases such as this, rather than data tables or charts? News and journalism are curiously allergic to data or presenting it in a usable fashion -- I've seen tables essentially written out over several paragraphs that could have been expressed in a few grid squares.
Source: https://www.urbandictionary.com/define.php?term=vosot
Others are actually quite good. At least Buzzfeed are balancing this and funding real journalism with the fake crap.
This from someone who'd been a very harsh critic. Some of their coverage of the TPP, ISDS, and international lawsuits in particular struck me as excellent.
Unfortunately, that means the 'best' way to become popular in the media business is to throw quality out of the window and try and write as much shallow, junk as possible to cash in on the latest news trends and social media fads.
What's true is that no representative group of readers who have said what that hypothetical publisher claims they said exist.
But publishers make the claim that they would say that all the time.
I recently was assigned a project to convert all our technical manuals into 100-second Youtube feature highlights. You pay me, I will do what you ask, so it's done...but the analytics don't look good. Not even bots are watching those videos.
> Another way of putting that is that the future that VCs and other investors were investing hundreds of millions of dollars in probably doesn’t exist.
It doesn't need to exist for most or even an above-average VC. If those hundreds of millions were invested by 100 investors at $1M in each of 100 companies, and 99 tanked but 1 unicorn made a 100x return, they would continue to behave in that way.
The new model is, actually, the oldest model: Sponsorships. Remember how things like the Jack Benny Show were sponsored by Jell-O and Lucky Strikes? That model actually works again. It's strange, but it's really is a bit liberating (I work for a sponsored pub). We actually have the funds and time to do extremely expansive pieces on deep topics we choose.
Having fewer people to keep happy means having fewer editorial bonds to advertisers. In a pub with dozens or even hundreds of advertisers, all in the market on which you're reporting, it's tough to not piss them off by reporting on bad news about them. This happens all the time. ALL THE TIME. "You ran that story about our listeria outbreak, now we're not advertising Chipotle on your site anymore!" In the video game world, bad games with ads get good reviews, or ads are pulled. Movies are the same way. Many publications cover the very stuff they advertise, so it's a tricky situation.
You'd think sponsorships would be the same way, but they really aren't. Instead, sponsors get to post their own content alongside the real good stuff. Paid-for-content, as it were, which isn't even always bad, it's just stuff these companies want to get out there where people will read it, rather than sitting unread on their corporate blogs.
I am now convinced the sponsorship model is the way out of this. It might not work as well outside of a confined vertical, however. One thing is for sure, sponsors love being able to tell their side of the story to our readers, and I feel like the readers just skip stuff they find too marketingy in favor of our really good, deep content anyway, so it's kind of a win-win.
The other thing I like about sponsorships is it brings the colluding onto the table instead leaving it hidden. In the past, I've worked at places where they've been adamant about separation of church and state: advertising and editorial are divided and do not talk, collude, or work together at all. You couldn't take more than a $15 lunch for free, could take no free trips or hotel rooms, and couldn't keep neat tchochkes or product samples.
Meanwhile, these same places would ALWAYS put their foots on your neck, subtly, to influence content. They'd even send the lead sales guy and the head of editorial out to do joint meetings which were only designed to sell ads. If someone bought a large ad and you wrote a bad story about them, it could be reworked, or even killed entirely.
Sponsorships, however, are known to be collusion, right? Now that I am at a sponsored publication, I can take trips, dinners, hotel rooms. It's great! I'm still making a great effort not to be compromised, but now I can do that in Spain for a week at a conference. Makes a huge difference, frankly. I'm much better at covering a show far away if I am in the show hotel instead of the cheapest place my failing pub could afford to set me up, 20 miles away on the side of the highway.
Journalists know how to be fair and balanced. It's kinda their whole bag. The policies publications put in place to dictate this stuff are the first to be ignored when things get thin and business goes sour. It's why some sites sell their entire skin to McGriddle: that's sales getting creative with the design team, because they can't get close to editorial. Not officially, anyway. Frankly, stuff like that is to be praised. It's innovative and likely kept some edit staff from being laid off or influenced.
In the advertiser m...
Spending a ton of money up front to generate a huge volume of largely undifferentiated visitors and then selling their ad impressions at very low CPMs is not a winning strategy. And building it on top of the whims of Facebook's algorithm was worse.
Skift is another (and if you've been following digital media for a while you may recognize its founder Rafat Ali)
These are B2B examples. Consumer media is a lot harder because you have to figure out a way to carve out a niche audience that is attractive to advertisers, but I think it's possible. And I think success is a lot more likely if you bootstrap something rather than load up on VC and debt in a moonshot.
--too many guys with laptops means way too many sites /blogs
--Google and Facebook are gobbling all growth in ads. That new ad dollar is being increasingly spent on Goog and FB.
I've reached my limit; I've started blocking video CDNs with my adblocker. If there's a video I really want to watch, I'll use a different browser.
Setting media.autoplay.enabled to false in about:config will also keep audio and animated gifs from autoplaying. For me, it's the biggest quality of life improvment in web browsing since the advent of reader mode.
https://chrome.google.com/webstore/detail/disable-html5-auto...
The author has stopped maintaining the plugin though because Google is supposedly addressing the issue at the browser level.
Edit: This seems to be the recommended fix for Chrome ...
Set ...
chrome://flags/#autoplay-policy
to ...
"Document user activation is required."
Maybe the author has a point, but this article is incoherent. There is no sources and the entirety is predicated on baseless assumptions and some analogy.
No sources or even attempt to prove any claims:
- There are too many publishers
- There is a fixed amount of 'revenue seats'
- Google/fb/etc take a portion of that fixed revenue
- etc.
I don't even know what 'too many publishers' really means, but there is undoubtedly not a fixed amount of revenue (double digit growth every year in digital ad spend), and google/fb only increase that total amount of ad revenue by acting as a ssp/dsp/exchange.
He is just making a blog observation, which can be best read in the context of the rest of his site/blog, which have been talking about similar issues for years. Much of his evidence is scattered through tiny posts, which blog readers are assumed to have been following. It’s not supposed to be a deep carefully cited research article.
There are links scattered throughout, but part of the point of this post is that no one is really talking about this issue at least at the depth it deserves, so understandably it's light on references. In this case, I'd treat a lot of this as an original source.
There are thousands of 'publishers' like this - I don't believe he's qualified to claim the industry is broken. He can't see anything from a macro perspective.
Given that he has a wiki page https://en.wikipedia.org/wiki/Josh_Marshall, it's pretty obvious that you're not interested in doing the slightest bit of research into the subject that you're criticizing.
> “The idea of publications totally based on advertising is, I think, an illusion. Some can do it, but I don’t think it’s ever going to be a sustainable model for most publications.”
Like TV and radio never even existed.
I personally never believed in new media's limitless newconomy rise to the stars. Nobody wanted to pay for newspapers anymore but web journalism was going to be different?
Internet advertising is growing up.
That doesn't mean they are wrong. Frankly it fits in neatly with the theory that such data is not data that ad companies want to know, so therefore, they don't.
There is an overwhelming consensus by a huge number of very well informed and intelligent people pointing to the advertising business model as it exists now and saying, "This is not sustainable." I'm not saying they're right, I'm not qualified to say that, but the response from the ad industry is by and large to stick their fingers in their ears and hum loudly and that should make any potential investor worry.
If you need citations for these, your burden of proof is a bit too extreme.
Unless advertisers have an infinite amount of money, there will be a finite amount of ad revenue. At some point, there's a floor to how much ad revenue you can capture while still having enough money to maintain a journalistic organization, creating a fixed number of 'revenue seats'.
A portion of that money will by default go to the largest players in the market, Google and Facebook.
For direct response, generally speaking online ads are more cost effective. For the most part, you don't need to place direct response ads on publishers' websites. You can just put them on FB or Google search.
I would say that it's a simple issue of aesthetics and performance. Banner ads look like total garbage. Video ads on Youtube videos tend to be less appealing than video ads on a big screen TV. Tiny thumbnail video ads on news websites are visual pollution at best and a total annoyance at worst.
With double digit growth, supply isn't fixed and its a common idea that supply (from an advertiser perspective) is effectively unlimited.
Maybe the market is deciding? Mashable sold for $50 Million which is no chump change but way less than last year.
>>- There is a fixed amount of 'revenue seats'
Isn't it? Does it grow every time one launches their own blog or Buzzfeed?
- Google/fb/etc take a portion of that fixed revenue
https://duckduckgo.com/?q=google+facebook+revenue+ad+dollars...
I just picture the TV in Idiocracy with the video ads all around it.
Is that what we really want to move to?
In a larger way, this is an indictment/logical endpoint of the 'free' business model. You still get what you pay for. Imo, it's too bad micropayments haven't taken off, but i'm glad there is some traction in paid models. Perhaps things really need to get shitty with free content (ahem, autoplay video) before there is a correction towards quality content. Of course, that presents it's own problems since those too poor/cheap to pay for content will remain in the ad infested content mills.
As if things weren't bad enough already. I can imagine they could get worse, but I think we're close to the bottom (knock on wood).
I browse the rest of the NYT maybe a few times a week, but I largely just read the one section I like multiple times a day.
There's just a lot of competition amongst these big digital media organizations, most of which have many employees. And the article's author is right that they've been largely supported by VC money.
I think there is still room for good digital content that you can charge for (e.g. Stratechery), but creators will need to focus on a niche that customers find compelling enough to want to pay for (and I don't think finding one is that hard). (I'd also immediately pay for Matt Levine's Money Stuff column if he ever went independent.)
But most should be done with very small operations and staffs. The great thing about it is that digital content has such favorable marginal cost dynamics.
Crypto mining in lieu of advertisers would realign interest between content producer and content consumer - the person who reads your articles begins to be your customer again, instead of the companies advertising to the people reading your content. The only conflict of interest is wanting consumers to spend as much time as possible on your site, but I think that is a big step up compared to the plethora of conflicts imposed by relying on advertising as a business model.
This is of course ignoring the technicalities of working out a crypto where the economics work here. But assuming that would be possible (which is certainly a big assumption), this seems like an interesting concept that could solve the monetization issue facing so many things today in one fell swoop.
If I find any site doing this, I'm going to throw it into my local dns resolver to point to 127.0.0.1 faster than I can script it.
Why? Because when I'm on battery and any site decides their crypto currency ad scheme is ok to run and blow through my laptop battery, I'll likely wonder if I can bill them for the machine resources they have used.
Further, Google and Facebook have an insane number of rules about how and what companies can advertise, and therefore there are billions of ad dollars that do not and will not ever enter into their coffers. These are not just in scammy niches either...you’d be amazed at many of the ads that get rejected by Facebook and Google. This pushes additional billions in ad money outside of their ecosystems.
As long as investors are willing to fund losing ad campaigns, and Google and Facebook keep increasing the number and breadth of rules that result in an ever increasing volume of ad rejections, there will be publishers and alternative ad networks that can enjoy vast amounts of revenue that gets pushed to the fringes by these forces. They just have to position themselves properly.
Advertisers have, in my opinion, been getting a free ride for decades. They get brand recognition for free. They get goodwill for free. They get customers who know they even exist for free. They get knowledge of their product in front of customers for free. They don't pay a cent for any of it. And content providers just let this happen, in exchange for being paid based on driving clicks.
Do you think television networks would have said "sure, OK" if advertisers proposed they only pay for TV spots based on how many people showed up at the store and said they saw the ad and it was what specifically made them go to the store? Do you think radio stations would have bent over and said 'sure, sounds like a cool idea' to advertisers wanting to only pay based on how many customers came in and knew their jingle? Would newspapers have accepted only getting paid based on how many people said they saw the ad in the paper?
OF COURSE NOT. Because every single one of those customers who 'glided over it' or 'didn't see it' or didn't 'act' on it was influenced by it. And it is wrong to give that away for free. When an ad appears on a website a user is visiting of their own free will and desire, the simple mechanics of how the human brain works creates a vague positive impression for the brand advertised even when no one clicks at all. Advertisers know this. It's how they sell themselves to businesses. And they rely on content providing sites being either blissfully or willfully ignorant of this fact.
I can't help but chuckle at the timing, though. Print publications shut down text in deference to video because advertisers want it right at the same time the only video platform that is viable or ever likely to be barring a very large lawsuit for anticompetitive practices, YouTube, running at gigantic losses for more than a decade guaranteeing competition is impossible, has decided it is disgusted by the prospect of large numbers of people making a reasonable living from producing video content. They want to reform themselves in a more traditional more centralized model where a small number of tightly controlled producers of content will get rich, and the rest will either die off or be starved. Eric Schmidt touched on the idea that he sees Google's role in forcibly controlling (he would call it 'guiding') human culture as very important. He is rich, therefore he is Better and it is right for him to take the reigns and protect the seething masses from themselves. The same old mentality Old Money has operated on for centuries coming to the nouveau riche and technorati.
A mass migration of advertisers to YouTube will make Googles continued claims of a desperate lack of interested advertisers seem more and more strained as time goes on...
They make money by virtue of number of users rather than quality of the product.
This explains why FB sucks so bad and still makes a lot of money.
This dogmatic and unqualified belief must be revised by the technology industry.