News & Views

To the list of great ethical debates of our time – cloning, capital punishment, pre-emptive strikes – we can now add … ad-blocking? At least if the general uproar over Apple’s decision to enable software that blocks online ads in the latest version of its operating system is anything to go by. Fortune frets that this state of affairs may be ‘morally wrong,’ (http://for.tn/1LKqUAx) while the slightly more hyperbolic The Verge equates it with ‘hell’ and the ‘death of the web’ (http://bit.ly/1NzuvWC).

That’s an awful lot of fire and brimstone for the hundreds of millions of people who have already downloaded ad blockers to enjoy a less intrusive web browsing experience. The basic arguments remain the same: ad blocking opponents worry it will deprive content providers, online-only media outlets in particular, of a crucial source of revenue; to the tune of $21 billion this year, according to one recent study (http://bit.ly/1DHGnnd). The publisher of consistently excellent online journal The Awl estimates ad blockers could zap up to 85 percent of its earnings (http://bit.ly/1FPqUgO). On the other side are fed-up consumers who find online ads disruptive or even invasive, and are quite happy to nip them in the bud given the option.

What’s different this time around is that Apple’s move brings what was primarily a PC phenomenon squarely into the mobile environment. Some also see it as a cynical ploy to hit Google – which makes most of its money with targeted ads – where it hurts. The controversy has already produced a few casualties; the developer of one popular ad blocker recently pulled it from Apple’s app store after having a change of heart about its possible impact on publishers.

This is a tough one. On the one hand, publishers and content producers have an unquestionable right to be compensated for their work, just like everyone else – and every click counts in an era when many previous sources of revenue (like print ads) are drying up. But it’s also hard to assert that people should be forced to endure marketing that in many cases has grown more aggressive — think blinking banners, full-page hijacks, and autoplaying videos — in its efforts to claim attention. There are also completely justifiable concerns about the tracking and data collection around web ads, which these days act more like programs than the passive billboards of yore.

Beyond the moral question, it’s important to look at what the rise of ad blocking means — and we’d hazard a couple of guesses:

*Leaner times for mid to small-sized publishers — and perhaps Google, at least until they figure out a way around it (and they will)

*More content migrating to and being accessed through apps rather than standard web browsers. Publishers and advertisers alike will be motivated to make this shift, as apps like Facebook are essentially ‘walled gardens’ in which ad blockers presumably won’t be allowed to play

*More marketing taking the form of ‘native advertising’ — that is, paid-for content, such as a sponsored article on an issue of interest to readers of a particular news website, that’s integrated into the platform around it and is therefore not typically targeted by ad blockers (at least not yet)

Some might see native advertising as a sort of wolf in sheep’s clothing. And of course, we’re biased. But as long as it’s clear when content is sponsored or supported (and who’s supporting it), we’d humbly present native ads as a compromise that might be the best way to address the ad-blocking dilemma. Publishers and creators can earn a living, and audiences won’t have to suffer through seizure-inducing pixel-fests because more advertisers are forced to come up with content that’s (hopefully) tailored, engaging, and editorially sound. Perfect, no. But better than pop-ups — surely.


After a decade or so of being unloved, print media is suddenly looking like hot property. If Japanese financial publisher Nikkei’s move to scoop up the Financial Times for $1.3 billion wasn’t enough, now former FT owner Pearson is set to jettison its 50 percent stake in the Economist Group, publisher of the venerable self-titled magazine. Given the hefty premium the Nikkei shelled out — over 35 times the FT’s estimated operating income, according to Ken Doctor in Nieman Lab (http://bit.ly/1IlV6V7), way beyond media industry norms — the Economist sale is bound to attract a lot of interest, probably from more than a few companies that were prepared to give old-school publications up for dead.

So — is this the beginning of a newspaper/magazine bidding frenzy? Can we expect private equity funds to start squabbling over other well-established broadsheets that may (or may not) be up for grabs, like the Los Angeles Times? Maybe not. For one thing, it’s probably no coincidence that the current buzz surrounds two of the few ‘legacy’ publications with successful digital strategies — over half the FT’s revenues come from digital, and the Economist’s ‘Espresso’ daily briefing app has been downloaded over 800,000 times since its launch late last year. The FT and the Economist are powerful names; two of the very few publications globally with broadly affluent and sophisticated audiences, sterling reputations, healthy independent streaks and genuinely international credibility. Viewed in that light, the Nikkei’s purchase looks like a bargain.

The Nikkei-FT deal also seemingly vindicates a couple of strategies that raised questions in the past. One is the FT’s reluctance to work through middlemen, no matter how big or powerful, for the sake of a larger audience, demonstrated by its decision to ditch its iOS app for one of its own making. The other is Pearson not rushing to offload the paper at the earliest opportunity. It’s a simple enough calculation that paid off: in this world, there are (and always will be) only so many FTs and Economists to go around.

It’s also a nice reminder that bidding excitement, and heady valuations, aren’t limited to the current crop of digital-first, platform-neutral, social-media driven publishers (Buzzfeed, Vice, Gawker, etc.) that tend to dominate industry discussions. Relentless dedication to quality, combined with a certain degree of exclusivity, also creates massive value. It’s a formula the luxury industry knows very well, but many in the media sector seemed to have forgotten — until now.


As investors in China’s stock markets are fast discovering, it’s tricky to put, or predict, a price on a lot of things, and the same applies to content. Companies that produce content as part of their marketing or branding strategies regularly attempt to measure its value or impact in a quantifiable fashion, like contributions to the bottom line or customer numbers. The ever-helpful experts at Contently have come up with a scorecard that aims to make that easier: http://bit.ly/1H9fiaJ

To sum up, the scorecard suggests assigning content ‘points’ based on how prominently it features the company and the importance of the media outlet(s) it makes its way into. Thus an op-ed written by a senior executive that runs in the Financial Times, say, would score far higher than a press release picked up by an obscure industry journal.

This seems sensible enough, especially if, as the author states, content marketing and traditional PR are pretty much the same thing. But we’d argue they’re not — and that a ‘score’ assigned to content based on these metrics may fail to reflect its value, for a few reasons:

*Media mentions are the holy grail of most PR campaigns, but that doesn’t have to be the case with content. Star billing in the likes of a Bloomberg TV piece is always nice, of course, but the whole point of the web and social media is that companies no longer need to rely on media outlets to publish, distribute, or connect with an audience. Compelling, informative content (not blatant sales pitches!) will travel.

*If you’re creating content yourself, you can include, exclude, praise or blame whoever you like. However that shouldn’t be seen as a license to bar all references to the competition. Including balanced information on competitors in a thought piece or interview suggests confidence, and that the content represents a broader statement rather than the (probably biased) views of a single organisation.

*As Contently acknowledges, assigning a value to a media outlet is difficult because it depends almost entirely on context. For companies in specialised sectors building credibility with a limited number of influential experts is probably much more important than connecting with the mass market reached by the likes of CNN.

*Content campaigns are primarily about building a recognisable persona in the marketplace, and loyalty with existing and prospective audiences or clientele. These processes touch on the intellect and emotions, and can’t be wrapped up overnight since they require a sustained voice. Excessive concentration on numbers in the early stages can therefore be counterproductive — and demoralising — since they might convince a company to abandon a content program before it has any real shot at making an impact.

All that said, we’re in full agreement with the need for any content marketing drive to have clearly defined goals, and to be measured against them. But these goals will most often have to be worked out on a case-by-case basis, and standard formulas will be difficult to apply.


There’s rarely a dull moment in the news industry, and recent developments have been both worrying and inspiring. Bad news first — the rapid demise of Circa News (http://bit.ly/1Ie92Rr), once seen as a leading light of mobile media, has underlined once again just how difficult it can be to combine an old business with a new medium and achieve any sort of financial success. Circa’s app broke down news stories from various sources into bite-sized summaries that could be easily digested by users on the go. However this approach requires a healthy amount of talented human editing, which makes it relatively expensive to maintain and scale. As Julia Greenberg’s excellent post-mortem in Wired (http://wrd.cm/1di5lgs) points out, that and the increasingly fierce fight for audiences and advertisers — still, after all these years, the industry’s only real sources of revenue — ultimately did Circa in. To this list we’re inclined to add Circa’s focus on text;  many consumers of news on the run prefer it in multimedia format, hence why more venerable organisations (the BBC, Reuters) and upstarts (Buzzfeed, Snapchat) alike have been experimenting with short-form video news. Which, of course, is also hideously expensive to produce, especially on anything approaching a 24-hour cycle.

On a more upbeat note, our hometown of Hong Kong got its first new independent English-language news outlet of note in quite some time this week with the launch of Hong Kong Free Press (http://www.hongkongfp.com/). The experience of outfits like Circa shows it won’t be easy, but HKFP is pursuing a non-profit model and will seek to recoup its minimal costs through a combination of membership, advertising and donations (full disclosure: n/n was an early sponsor). At a time when Hong Kong (and the world, really) is in dire need of independent voices, we salute HKFP for its commitment, and hope it gets the support it deserves. Hard news might be a tough, and increasingly fragmented, business, but it’s more vital than ever.


If ever journalists doubted their skills were still in demand, Apple’s call for editors for its nascent Apple News team (job posting available at https://www.apple.com/jobs/us/) should serve as convincing evidence. The titan from Cupertino is quite clear about wanting newsroom-tested journalists — not digital content producers, marketing storytellers, social media writers or any of the other iterations on the profession that seem to be emerging (and paying better) these days.

By hiring human editors to pick and choose content for its news app, Apple is adopting a very different approach than Facebook, which relies on algorithms to do the same thing (for its Instant Articles and news feed). It all sounds good — Apple is promising editors will work closely with leading outlets to gather the very best of the news, and to give enterprise journalism the visibility it deserves. And there’s no doubt a human might be able to recognise groundbreaking journalism in a way software can’t. But given Apple’s control freak tendencies, it also raises the question of what kind of remit and freedoms these editors will be given — especially when it comes to stories about Apple itself, which dominate the global media on a regular basis. This is doubly true if Apple News starts to displace other popular aggregation tools like Flipboard, putting pressure on publishers to ‘play nice’ with Apple and its editors to make sure their content reaches a huge potential audience.

On the other hand, there’s no reason to assume Facebook’s news-bots are inherently any more neutral or less susceptible to manipulation — presumably it’d be easy enough to flick a switch so they bypass exposes of the company’s latest privacy breaches. And the success of both Apple News and Instant Articles relies on a certain degree of transparency; any ham-fisted attempts to stifle information will simply drive people to other services.

Still, while not dismissing either news ‘service’ out of hand, consumers should keep in mind that this isn’t ‘news’ as we know it, provided by organisations with an express mission to inform the broader public, and that neither Apple or Facebook are bound by the conventions (or financial concerns) that, even in these strange times, govern most media outlets. Some discrimination is in order … along with perhaps a celebration that at least a few journalists will be working at a cash-rich, fast-growing organisation for steady paycheques.


If there was ever a media industry milestone, this is it. A closely watched annual survey by the World Association of Newspapers and News Publishers shows circulation revenues have displaced advertising as the global newspaper’s industry top earner — for the first time in a century (http://bit.ly/1dIfOmz).

The trend has been building for a while, and has a few interesting, possibly contradictory, implications. On the plus side, fears of influence of the almighty advertising dollar on newspaper coverage may turn out to be overblown, and broadsheets (at least those with self-preservation instincts) will presumably redouble efforts to focus on what matters to their audience. On the other hand, if readers are the biggest contributor to the bottom line, we could see more papers opt for Daily Mail-variety shock-and-fluff tactics in a desperate effort to raise circulation numbers, or raise prices to squeeze more cash out of the readers they do have.

One thing to keep in mind that circulation revenue isn’t necessarily replacing ad income — in many mature markets both are stagnant or declining; it’s just that ad revenues are dropping at a more precipitous rate. Newspapers therefore won’t be absolved of the need to update their business models or hone their content for other platforms. In fact the same survey showed mobile consumption of news is growing faster than ever. Regardless of economic conditions, newspaper ad revenues are also unlikely to stage any kind of meaningful recovery, given the range of other marketing channels advertisers now have to choose from. Not such a great time to be a developed-market newspaper with a limited budget, maybe, but with so many publications (and advertisers) experimenting with new forms of stories and distribution to win hearts,  minds and revenue streams, content consumers will have more choice — and clout — than ever.

 


Godsend, or weapon of mass destruction? Over at Quartz, Monday Note editor Frederic Filloux has sounded the alarm (again) about ad blocking, which is spreading like wildfire, getting more sophisticated and making a bunch of media and marketing types very, very nervous: http://bit.ly/1LFjHmG.

We’re of two minds about this. When it comes to seizure-inducing banners, invasive pop-ups or videos that start playing without being asked, it’s hard to see ad blocking as anything other than a Very Good Thing. However the news that ad blockers are starting to target native advertising and branded content — for example, articles or microsites that are ‘sponsored by’ a company or organisation — is a bit troubling. Okay, so we have a vested interest. And yes, there is no shortage of sponsored content that probably deserves to be zapped. But that applies to all media output — and what about the quality stuff?

Savvy companies use or sponsor content not to hammer home a blunt marketing message, but to engage people and position themselves as authorities in their fields, which requires the content to be convincing, and to contain real information or insights. Who would deny Alibaba might have some useful things to say about e-commerce, or HSBC about the opening of China’s capital markets? Ad blocking certainly has its place, but targeting all sponsored content is a bit like using a flamethrower to take on a mosquito. We’d argue for a more nuanced approach — which is where some good, old-fashioned human editorial judgement may need to come in.

(As an aside, for an example of good, informative sponsored content, check out this Economist collaboration with Asia-focused Australian bank ANZ, which looks at the various ways integration is progressing in Asia-Pacific: integrasian.economist.com. Full disclosure: n/n was involved in this project, but it shows how a company can contribute to the dialogue around a remarkable process in which it’s also playing a role.)


Action camera-maker GoPro buying a virtual reality company. Verizon shelling out $4 billion for AOL to engineer a mobile video revolution. Facebook giving media giants the opportunity to publish directly on its platform via the Instant Articles initiative. With all this going on, it’s no surprise we’re seeing a lot of articles like this one (http://read.bi/1PrNZ2H) announcing that the age of content has arrived. Again.

It’s not much use to have a fantastic distribution tool or network without any content to call your own — hence Verizon’s determination not to become a ‘dumb pipe’ that does nothing but deliver other companies’ intellectual property (and ad traffic). At the same time, content needs an audience, and content creators will increasingly be forced to work with the giants of social media to reach the biggest ones. Facebook’s reach is massive and the terms for its Instant Articles service are fairly generous, so signing up seems like a no-brainer for publishers — hence why marquee names like the New York Times and National Geographic are among the early adopters. And while Facebook can (and probably will) change the terms later, it will still need well-known producers of credible content for its foray into news to succeed, meaning publishers will always have retain a certain amount of leverage.

That said, it’s inevitable that by coming to the content via Facebook’s platform many users will associate what they read or watch via Instant Articles with the Facebook name and ecosystem, even if the original publishers plaster their names and fonts all over it. More people will be telling each other about the stories or videos they saw “on Facebook” and not necessarily mentioning the original producer of the content — much like happens with with Youtube now. Publishers are therefore, unwittingly or not, helping build Facebook’s credibility as a media and publishing force its own right, and may be weakening their future negotiating position with Facebook and clout with consumers. Count on Facebook eventually forcing Instant Articles, regardless of where they come from, to conform to a more unified look or style to accelerate this process.

Distribution is important, but in the interests of balance (and self-preservation) content creators may not need to pursue reach above everything else; a bigger audience doesn’t necessarily mean more engagement, subscribers or dollars. Consistently producing top-notch material for a smaller, more receptive group of followers can be a more effective way to build loyalty and a reputation, and distribution (at least to start with) can be as simple a matter as using the industry or personal networks you’re already part of. Social media has produced some behemoths, but it’s also a great leveller, allowing content producers to reach a wide number of people without riding another brand or technology’s coattails. On the other hand for distributors or platforms (like Verizon, and Facebook) it’s nowhere near as easy to find a consistent, freely available and largely automated source of relevant content (yet). Content might not be king — but it’s got a healthy amount of sovereignty.

 


Where’s the best place in China to be a technology startup? According to a CNN article by one of n/n’s very own it’s not bustling Shanghai, or even our much-beloved home base of Hong Kong, but the factory boomtown of Shenzhen, where manufacturing prowess and (now) funding have combined to produce some very interesting results. Read more here: http://edition.cnn.com/2015/05/14/tech/shenzhen-startup-city/index.html

Sounds like a place worth watching, though not having a hardware focus, we’re not planning to pick up and move across the border just yet …


For media companies and other creators of content, it’s one of the oldest debates in the book — is it better to specialise, or appeal to as wide an audience as possible?

According to a fine article by the new-age marketing gurus at Digiday (http://bit.ly/1AzEPF7)  the answer is, well … a bit of both. At least if you’re The Wall Street Journal, which is determined to keep its coverage broad, but simultaneously investing heavily to zero in on ‘niche’ industries like logistics. While not without risks, it’s a solid strategy to play that runs counter to the wider industry trend of publishers constantly expanding reportage to ensnare as wide an audience as possible — sometimes burning through a lot of resources and alienating people in the process. Something to keep in mind here though — first, the ‘niche’ areas the WSJ is targeting aren’t exactly of the ‘molecular physics’ or ‘animal husbandry’ variety. Logistics for example is a $4 trillion industry home to some of the biggest companies in the world; plenty of ripe marketing possibilities there. So perhaps the trick is to not only balance some degree of mass appeal and subject-level expertise, but to choose the fields you specialise in carefully.