Friday, May 17, 2013

Gotham Media: “Content and Commerce – Media Online”

Gotham Media had another of its great Digital Breakfast seminars on April 17.  This one was: “Content and Commerce – Media Online” – certainly topics that keep a lot of people occupied these days.

This was the official description of the event:

“Online media remains a business without a universal business model. Various models - subscriptions, display ads, product placement, pre-rolls - have worked well for some but not for others. Many media outlets are now trying to incorporate advertisers directly into their editorial stream - turning advertisers into content producers. This so-called native advertising or content marketing is further blurring the lines between content and commerce. The results have sometimes caused confusion among publishers and consumers alike. This panel of content and advertising experts will examine the resulting tension between paid and editorial content.”

The panelists were:

Rick Kurnit (Moderator/RK) - Frankfurt Kurnit Klein & Selz

Glenn Hall (GH) - Managing Editor,; Fmr. SVP and Editor-in-Chief,; Fmr. Chief Innovation Officer, The Orange County Register; Fmr. Managing Editor (Washington) Bloomberg News

Eason Jordan (EJ) - General Manager, NowThisNews; Fmr. Exec in Charge of Newsgathering, CNN

Robert Rasmussen (RR) - Chief Creative Officer, Story Worldwide

Rebecca Sanhueza (RS) - Vice President & Deputy General Counsel, Director of Business Affairs, TV and Video at Time Inc.

Rick Kurnit (RK) started the discussion about the blurring of content and commerce among media companies online by pointing that traditional publishers have been entering the world of advertising, seemingly quite successfully.  The evidence is that the 19th largest ad agency in 2012 was Meredith, with the 20th place being taken by Conde Nast.
The questions he posed to the panel, based on this and similar changes in the business, were:

1. What's next in the movement to finance content through brand support?
2. Response to Andrew Sullivan, launched a subscription-only website, being aghast at brands sponsoring stories?
3. Will major content creators survive? If so, what will be the role of advertisers?  Will it be based on original content or content aggregation?

Glenn Hall (GH) pointed out that the original business model of media depended on scarcity, generated by monopolies and exclusivity.  Now there is an abundance and ubiquity of media.
Looking at the basics of the business from the perspective of the media companies:

·       What are we selling - content or advertising?
·       Niche markets could work for publishers at small scale
·       Could media companies re-create exclusivity via pay walls - can the economics support all of the operations of a publisher, especially, if, for example, smaller advertisers may not be interested

From the perspective of the advertisers, they may perceive that advertising is not creating as much value in content, especially in addressing their priorities:

·       They want to get their message out
·       They are looking for scale

One approach that many publishers and advertisers are taking lately is sponsored content, about which Glenn said:

·       It’s not new – ads have always subsidized content
·       Question is still open as to how to create value for both advertisers and consumers
·       Publishers are trying to match content with advertising as they were doing anyway with advertisers – their gun control article’s sponsorship link was clicked more than the sponsor’s brand messages

Regardless of the approach, it’s important to have transparency

Eason Jordan (EJ): is positioned as the video news destination for the social mobile generation.  In contrast, the average viewer on CNN is 63 years old.

The business model is primarily syndication and ad revenue.  There is, however, no preroll ads because the consumer experience comes first, and preroll violates that approach.  His feeling: you can't force feed consumers advertising.

Re: the question about Andrew Sullivan, EJ felt that Andrew Sullivan is not against sponsored content entirely, but feels that it has to be appropriately flagged.

By the same token, he felt that the recent Atlantic piece (advertorial?) about Scientology was not appropriate for that media brand.

He is also looking to his audience as the final arbiter and distributor of his content.  Regarding social advertising – If the content is not worth sharing, then it shouldn't be shown to the NowThisNews audience in the first place.

Robert Rasmussen (RR) took a marketer’s approach to the question of content, commerce and brands.  He felt that Nike provided inspirational content to differentiate products.  The result was a two-way relationship between the brands and consumers: "Brands do something for consumers and consumers do something for brands"

With regard to news and media, he felt that consumers today want to be their own curators of news, rather than depending on media companies, as they have in the past.  At the same time, brands want to create content  but they don't necessarily have the legitimacy.

In addition, to create content, brands also need a point of view.  Brand stories have to be consistent with the value that they provide to consumers, including actions they take outside of the content they provide, as well as providing content.

He thinks that is makes sense for entertainment properties (presumably, movies, television shows, etc.) to merge with advertising, in addition to – or perhaps instead of – news brands.  He does not, however, think that such a merger is likely to happen, due to his view that entertainment doesn't respect advertising

Scott Kurnit (SK) feels that everyone wants to obfuscate the line between content and advertising.  Regardless, the effort by advertisers to view advertising as content will backfire.  He expects that the backlash will be so severe that the effort will self-regulate itself because people will shy away from it.

He said that it should be clear that business now is commerce – he is tapping a trend he called “crowd sourced social commerce” through businesses such as  This approach is located in the middle of the demand funnel – that interested consumers will share information with their friends.  He views it as the new version of Home Shopping Network for today – that the content is  clearly commerce.

He cited another ecommerce platform, Swizzle, through which consumers can invite advertisers into their email.  As he put it, Swizzle is:  not blending content and commerce, but  probably more importantly, not "trying to trick the consumer"

Rebecca Sanhueza (RS) concluded the initial discussion by reiterating key principles for publishers:

·       Transparency is key
·       Have to avoid approaches that could be viewed an effort to obfuscate and blur lines
·       Publishers have always served both advertisers and consumers, so the potential conflict between their interests is nothing new

When the question was asked as to whether magazine publishing in general, and Time Inc. in particular, would survive, Scott Kurnit made the following points:

·       Time Inc. won’t survive since it is not really serving advertisers and it cannot otherwise support the cost of its content
·       Ads suck, by definition since annoyingly interruptive
·       Magazine publishers have not been able to make ads work on the web
·       Publishers have therefore moved to gimmicks such as content marketing in order to trick consumers

RS countered that consumers want ads as part of the magazine, so that part of the business, at least, seemed solid.  She did concede, however, the Web and mobile experiences might be different with regard to the advertising expectations.

GH pointed out that media companies that Hall that have credibility with their audiences can partner with advertisers.  For example, people who serve as the voice of the content can include credible advertiser messages without necessarily sacrificing credibility, an approach which is certain common on radio.

RK pointed out that branded entertainment is a large business.  For example, fashion advertising is generally viewed as content – it tells consumers what's in style.   Furthermore, brands can get credibility as a trusted contented provider – the examples cited were Dove and Nike.

GH agreed that trusted content providers can create similar trust in the right brands for their audiences.  He cited a story about the 2012 Aurora, CO, shootings, in which an ex-Navy SEAL, in providing self-defense tips, suggested carrying a high-luminosity flashlight to blind potential gunmen – certainly a good match for brand and content.

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