Digital Quarters

Gawker Media has for years frustrated the stalwarts of journalism by paying its writers (gasp!) for the results theycreate.  Now, founder Nick Denton is going one step further to move his staff toward economic success.

With a new compensation program rolled out this week, as described in a memo from Nick published by The Awl, Gawker is updating its compensation to pay for audience growth, not just pageviews.

Why is he doing it?  Because another unique visitor is worth so much more than another pageview from someone you’ve seen before.  While this is true for all publishers, it’s especially true in Gawker’s case:

About a year ago, Gawker ditched ad networks in favor of displaying “Gawker Artists” in unsold inventory.  Chris Batty, head of sales at Gawker, explained that the program was “for the purpose of better engaging their readers, helping artists and maybe even themselves in the process — by draining the network swamp and getting hard to work on creating online marketing experiences valuable enough to cover the cost of original content creation.”

So Gawker’s price umbrella is standing tall; but without remnant, they are running short on fill.  Samples over various days in the last few weeks indicate that four out of five page views on Gawker properties are unmonetized, either with Gawker artist banners or no ads at all — a much lower fill rate than most publishers target.  (In research, we were hard pressed to hit a frequency over 2, no matter how much we clicked around the Gawker family of sites.)

The problem, of course, is the frequency cap.  And Nick has the right workaround:  he is focusing on growing his audience, not just his intensity of usage.

That will pay off.  Already, by focusing on premium advertisers like Blackberry and Cisco, Batty and his team are still able to make several times more money than a model where every impression is given to a network.  And the more he grows his audience – and gives his writers the right incentives to do so – the more premium advertisers he can attract.  So Gawker now has aligned incentives, motivating writers to draw in unique visitors creates an inventory pool that lends itself perfectly to high-dollar, frequency capped deals with top advertisers.

And as a second factor, it indicates real smarts about building the Gawker business to be stronger.  While it’s easy to game extra pageviews with flashy content features that draw clicks and layout changes that split content onto multiple pages, these often make the user experience worse rather than better.  By focusing on high value ad buys and featuring artists in unsold spaces, Gawker encourages behaviors that build great customer experience – which not only attract new audience members, but create an impression that draws them back time after time.

Contrast Gawker’s focus and reporting with old media:  where those who write the content scarcely hear a word about how it performed.

I have one friend who contributes to the New York Times from time to time.  I asked her what kind of performance data they provide to help her tune her writing.  Her answer:  “None at all.”  Shame!

In an industry whose executives are always complaining about the failing economics, what’s so bad about increasing the economic incentives?