Wetpaint CEO Ben Elowitz on the Future of Digital Media
A few months ago, Ken Doctor wrote about the cost of a story, highlighting that financial pressures in media require new formulas to lower content costs. But my takeaway was different: that the greater leverage point for media success is not in reducing cost, but in increasing value.
And the hard truth is that each and every story has to pull its own weight on the new social Web these days. Demand for media now comes for the item, not for a bundle.
That said, social networks – led primarily by Facebook and Twitter – provide publishers with increased transparency about what readers consume, interact with, and share; all in real-time.
This makes publishing easier and less expensive, hence more profitable, because editors know exactly what their readers want to consume, and they don’t have to waste time, effort and resources creating content that simply won’t resonate.
To put it a different way: imagine that you have a magazine, and it’s blank. The first page, the home page, might serve as a table of contents. Then, as you click and read along, each page gets filled in – based on what you read on the previous page; the depth to which you read the previous page; and the amount of real-time sharing that you participated in on the previous page. The next page becomes an instant predictive reflection of the prior set of interest signals. This “Magic Magazine” is assembled just for you, and its content is based on your implicit explicit preferences.
I believe that we’re headed in this direction, and we’ll get there, sooner than you might think.
In fact, it’s already beginning. AOL’s Editions product invites each user to thumbs-up and thumbs-down the various topics and sources it shows, resulting in a Pandora-like experience that self-tunes, so that today’s magazine is even more personally relevant to each user than yesterday’s.
And that has the potential to make a more efficient content economy, to the extent publishers can invest in the right content and get it to all the right people.
To do that, publishers must collect all those valuable signals from the audience – which naturally means connecting on the social Web. The social Web provides robust real-time signals about exactly who the audience is, and what they want. That’s why, at Wetpaint, we’re maniacally focused on writing our playbook to master this best. Right now, we derive more than 12% of our visits from Facebook and Twitter, which ranks us #4 when compared to the 50 largest Web publishers. And we expect that figure to double or more over the next 12 months. (In fact, we’ve been increasing our Facebook traffic by 11% per month.) We’re benefiting from more than traffic: the value of each visitor is going up as well, with social visitors coming more frequently and staying longer.
It’s because our social focus lets us serve customers better. Looking ahead, we’re moving in the direction of hyper-personalization, with customized experiences that seamlessly make themselves felt.
You can see this, to some degree, on the Huffington Post today. They pioneered social channels based on what’s hot, and what’s being shared, and then they reorganized their own pages and published in real-time in order to flow into this.
Old-line media players must adapt here, and in a hurry. From my perspective, Forbes, under Lewis D’Vorkin, is way out front and doing an excellent job showing the way.
With all that programming, what about serendipity? It will still be there. But if a publisher can provide 90% of what a consumer needs and wants, that’s a big value add – especially if the remaining 10% is all the stuff the customer doesn’t know they want yet.
Over the next two years, as social media is continuously refined in new and previously unimaginable ways, I believe that the value of individual stories will keep rising.
And, if we focus on the economics of it, the value of a story online can be thought of as an equation: Page Views x RPM.
But the mathematical symbols in this case are directly representative of two really basic things – how much audience the story attracts, and how desirable the publisher’s full offering is to advertisers.
The roots of both of those are in the content; great content increases both dramatically – albeit over time (The truth is: it takes years of repeat!). And, when we peer out across the long-term horizon, it’s clear that great content that increases audience increases overall reach; and this, in turn, has the compound effect of increasing the desirability to advertisers even more.
My strong sense is that publishers of both old and new media can definitely take advantage of this all-important dynamic by closely watching and assessing the way their consumers interact with content on a real-time basis. In the end, the process should be interesting – and profitable.