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The Story So Far – Managing Digital: Audience, Data and Dollars

January 7, 2011

Although all digital news organisations live in a brutally competitive environment, some companies do much better than others because their managers respond more deftly to opportunities.

The Huffington Post’s growth in audience and influence is an example of a sustained idea and management attention. The conviction of the founders, Arianna Huffington and Ken Lerer, was that much of U.S. society had lost trust in authority and in journalism.

What HuffPost’s founders didn’t know at the beginning was how rapidly social media were going to grow. After all, in 2005, YouTube was just getting started and Facebook was still confined to colleges and universities. HuffPost’s management quickly realised that the social media trend fit with their original convictions.

Huffington Post also developed an ability to respond quickly to the data that it was getting on traffic and usage—something that is a crucial component of success in digital journalism.

Forbes Chief Product Officer Lewis DVorkin writes a blog about the company’s evolving business practices, often noting the integration of previously independent departments, functions and platforms at the company. DVorkin sees this integration as essential to Forbes’ digital growth. “The Web and social media turned everything upside down. Knowledgeable content creators, audience members and marketers, too, now possess tools to independently produce and distribute text.”

Forbes also encourages its largest advertisers to contribute content directly to the magazine and the site as part of their advertising buy. The companies are given tools to publish content—text, video and photos—on their own page on the site. This might startle journalists who expect strict separation between the editorial and business sides, but DVorkin sees this effort as a logical way to bring in advertisers who know they can create digital content elsewhere. The advertisers’ material is not edited by Forbes and appears online and in the magazine as “Forbes AdVoice.”

Giving advertisers direct access to an audience without previously approving the message is a big departure for media companies.

Managing digital journalism properties often means stepping away from roles and job descriptions that were found in traditional operations. An explicit rendition of AOL’s strategy can be found in a 57-page internal PowerPoint called “The AOL Way,” which was leaked to Business Insider in February 2011.

The company’s rule of thumb is that the cost of acquiring a story should be no more than half the amount of ad revenue expected to come from that story. An editor who wants to pay for a premium freelancer must also estimate the size of the audience for the assignment—in other words, the editor must cost-justify every story. And editors are told to always keep expenses in mind. The cost of content can run from $25 for a freelance article that needs 7,000 page views to break even, to a $5,000 video that will require a half-million streams to recover its costs.

“We are heavily invested in analytics as this is the way to empower our editors and journalists,” Neel Chopdekar, vice president at AOL Media, said in an interview shortly before “The AOL Way” was made public. He calls this “bionic journalism—the best of man and machine.”

Digital executives also must constantly decide when to deploy staff to work on new or experimental products that don’t meet the new productivity tests, if only to be sure they don’t miss out on something that might turn into the next Twitter.
Managers of digital operations must also deal with journalists who are able to establish a following on the basis of their own talents rather than the prestige or reach of the news organisation. This phenomenon isn’t entirely new, of course, but in digital journalism, audiences can follow stars with great ease, and conceivably journalists with big individual followings could begin to keep, and try to make money from, data about their readers, rather than leaving that to their employers.

The brutally competitive nature of digital journalism extends to advertising sales, and many traditional media companies have a hard time justifying a large commitment to the effort simply because the returns, at least initially, can be so small.
These companies face an ongoing dilemma. If they didn’t make an effort to sell digital advertising, they wouldn’t lose much income—for now. But…

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