Facebook’s Surprising Dependency on Premium Content Creators

This article was published as a guest post in AdAge, and is republished here for Digital Quarters readers.

My friends in the expensive business of premium content have an economic bone to pick with a certain social network. The story goes that Facebook gets mundane content from its users for free, and then uses that content to draw its audience of more than a billion people, most of them spending hours on end at the site. And somehow, without spending a dime on content, Facebook rakes in the advertising dollars.

It’s not right, is it? The world’s most creative professionals painstakingly toil to create outstanding – and undeniably expensive – content, all while banal photo snapshots of breakfast make billions for Facebook. Oh, the humanity!

But there’s an insidious catch to the myth that Facebook doesn’t need professionally-produced content. The truth is that Facebook not only benefits from third-party content – the network actually wouldn’t survive without it.

Of course, that’s not a message shouted to us out loud from the tops of the Mountain View campus. In solidarity with Google and Twitter (and more recently Yahoo), Facebook claims that they are not a media company. And the way Facebook slammed the door on the Social Reader last year, leaving previously boosted publishers in a sudden traffic free-fall, you’d have to agree that media is not their top priority. It’s easy to understand why: staring down the barrel of the IPO, Facebook was smart to refocus efforts on advertising on their own site and away from non-revenue-generating avenues like publisher partnerships.

In the long run, however, the Facebook equation will be highly dependent on premium content. As the novelty of status updates wears off and a generation of consumers is born immune to its charms, the utility of Facebook will need to increase. Baby pictures sure seem to garner lots of Likes, but people come to Facebook seeking connections that go beyond a simple thumbs-up. The only way to build true connection is through conversation. And what spurs conversation? Meaningful, relevant content.

You don’t have to tell this to LinkedIn. They launched their own – proprietary!! – content program last fall: a mix of trending business news and opinion pieces written by top CEOs and other influencers. Then traffic and engagement went through the roof. And when did YouTube hit its stride? There’s no denying that elephants are cool, but it wasn’t the user-generated content that attracted hordes of internet viewers – YouTube really took off when people realized they could post and watch clips from Saturday Night Live and other expensive-to-produce shows.

We share and post things we feel strongly about: opinions, news, our favorite TV shows. Without that kind of conversational kindling built into the Facebook feed, the social network will inevitably start to lose our attention. In fact, according to Rupert Murdoch, it’s already happening.

Even if they haven’t publically acknowledged it yet, Facebook is well aware of the gaping content hole in their long term survival strategy. In fact, according to a source at The Wall Street Journal, Facebook has been quietly working on their own news reader for over a year now.

It’s too early to say whether they’ll execute it well. But if they do it right, Facebook could become the one-stop shop for news and premium content – all that stuff we’re currently crawling the rest of the web for. Even better, instead of barraging us with whatever random sponsored inventory they need to move, Facebook knows enough about us to become an ultimate trusted curator – of personal updates, media content, and even products that are truly interesting to me. And the more it works, the more valuable it makes Facebook as a critical distributor for media companies themselves.

It’s not far-fetched … not at all. In fact, LinkedIn’s recent moves in more professional circles validate the opportunity; and Facebook could provide a service for consumers both comparable and complementary to its competitor.

The bottom line is that Facebook does need content from publishers in order to succeed: content is the currency of conversation among users. Without good, thought-provoking, emotion-inducing content, it’s all just duck faces and sponsored messaging.

After all, we’ve seen that before – it was called MySpace.

Where Are the Great New Media Empires?

This article was published in Ben Elowitz’s Media Success newsletter and is republished here for Digital Quarters readers.

I think we all have a clear view of who built the most amazing and enduring media empires over the last several decades.  But even after watching the unfolding of the Upfronts and the NewFronts this spring, I was struck that we don’t yet have an earthly clue as to whose creation will become the next one.  Twenty years into digital media, not one new media company has come even close to establishing a content brand worthy of Disney, Murdoch, Hearst, or Newhouse.

And with digital media’s comparatively fragmented audiences and tiny margins, it’s almost hard to imagine achieving such epic proportions today.  Which makes me all the more curious:  When (and if) the next great media empire finally arrives, what will it look like?

The battle to define the next generation is on, and to date we’ve seen three forms of contestants:  the platforms (Facebook, Twitter), the portals (AOL, Yahoo), and the independents (Vox, Say Media).  Where would you place your bets for the next 20 years?

 

Biggest Winner to Date:  The Platforms

While the last decade has brought challenges (to say the least) to traditional media companies, it has been a golden age for the technology platforms that reach audiences online.  Facebook, Twitter, Netflix, Hulu, iTunes, YouTube, and Amazon have won the lion’s share of our content-surfing attention, and they’ve been rewarded with an influx of ad dollars and subscription revenues to match.

Of course, none of these platforms are media companies – at least in the sense that not one of them built a business on their own original content.  The definitive stance of Twitter’s Dick Costolo – “I don’t need or want to be in the content business” – has been echoed repeatedly by the leadership at Facebook and Google.  Hulu, Netflix, iTunes, and Amazon may claim more of a kinship with media, but at the end of the day they are still (with occasional exceptions) merely conduits for someone else’s content.

True media brands win over the hearts and minds of audiences with a unique point of view.  Platforms, on the other hand, are mostly dumb but useful pipes.  They get the people the content they want, and they’ve won hundreds of millions of users that way.  But they sure aren’t content brands.  Technology can aggregate an audience, but it takes personality, a point of view, and original content to build an empire.

 

The Original Digital Promise:  The Portals

Back in the v1, the portals were platforms.  They combined three must-haves – a dial-up connection, an email account, and a start page.  They drew a massive audience with these killer apps, and along the way they built content and advertising revenue streams and considered themselves in the media business.

But despite their enviable combined reach of 460 million users monthly, the portals today have an audience problem:  they are no longer genuinely earning their audience.  It’s what Alex Berg calls “the Mazda syndrome”:  you don’t choose a Mazda; you end up with a Mazda.  (Thanks for the 2001 626, mom, I promise to drive it until I can afford something else!)

By and large, users aren’t coming to portals for the content; they are coming to log into the legacy email account that is more cost than benefit to change.  While they’re there, they click on a story.  According to comScore data, almost 70 percent of the visitors to Yahoo’s media properties came from Yahoo Mail.

The portals have both content and audience, but most of their audience isn’t there for the content.  And since portal email use has declined 30 percent in the past four years, that missing link is becoming more and more of a problem.  You can’t build an empire on an unstable foundation.

 

Honorable Mention for Brand Purity:  The Independents

Portals, platforms, and legacy media companies maintain their extensive reach –their single greatest advantage with advertisers – by providing mass content to mass audiences.  But this broad-not-deep approach left an important gap for new entrants to fill:  independent publishers like Buzzfeed, Mashable, and Vox’s The Verge saw the opportunity and brought tailor-made content to niche audiences on the Internet.  In turn they were rewarded with fierce brand loyalty, viral sharing, and exploding visitor growth.

While the top independents have been huge successes with their audiences, they now occupy a tweener role in digital media:  big enough to be meaningful, but small enough to be of “questionable scale,” as the technology folks would say.  Relative to the portals and the platforms that see hundreds of millions of visitors monthly, the independents are tiny fish in a huge sea of entertainment options.

In fact, it’s impossible to build empire-caliber scale on a single media property.  What a media brand needs is a portfolio of properties – it’s the only way to earn premium pricing from advertisers and to leverage your brand into new revenue streams.

The independents are off to a good (albeit small) start with strong brands and loyal audiences.  After all, before there was the Disney empire, there was a mouse on a sketchpad.  We all start from somewhere.

 

Combine Ingredients, Mix Well

Chances are that the ultimate next-generation media company won’t be one of the independents we know today.  But it won’t be a portal, either, nor will it be a platform.  The next media empire will almost certainly have attributes of all three.

Advice for aspiring emperors:  Take a cue from the platforms and become masters of distribution.  From the portals, learn to build massive audiences in order to serve advertisers and build a true network effect.  Like the independents, value and exemplify brand purity – the kind of purity and spunk that also, ironically, built the greatest media empires of yesteryear.

Ultimately, a media company’s strength lies in the brands that it builds.  Those great, big, beautiful brands that draw their own audiences at scale are the prize of the industry.  But the road to get there?  It will take amazing content with great distribution and killer technology.  Now that’s a foundation for a new empire.

Advertising’s Reverse Big Bang

This article was published as a guest post in AllThingsD, and is republished here for Digital Quarters readers.

These are exciting times for advertising, as new technology and new forms of media are bringing advertisers new ways to reach audience, with far better targeting and measurement than ever before.  It’s truly a boom time for ad tech, and one might think that means the sky’s the limit for the growth of advertising.  The only bad news is that instead, this explosion of technology is exactly what’s going to make the advertising market go bust.

That’s because ad technology advances are moving in one consistent direction toward commoditization and efficiency, contracting the market as they straighten it out.  Unfortunately, the dark matter of topline can’t be ignored.  But the good news is there is still time to achieve escape velocity, if you plot the right course.  The way to resist the gravity is to think differently about your value proposition.

 

The Explosion of Ad Tech

Ever since the 18th century handbill, there has been only a fuzzy link between what an advertiser pays and what the advertising is actually worth.  Even today, most ad spend is nearly untraceable – television still gets the lion’s share, and it’s one of the least measurable and most expensive mediums.

The definition of advertising nirvana is meaningful measurement:  knowing not just how much advertising was delivered, but to whom and to what end.  Digital media promised deliverance with its rich data and constant monitoring, and on this promise waves of ad-tech startups have been born.  Want to boost your ROI by programmatically buying the best ads in the best placements at any given moment?  AppNexus has an app for that.  Want to eliminate wasted impressions by targeting your audience with surgical precision?  BlueKai’s got your back.

And there are hundreds of other upstarts vying to fix your inefficient ad spend with their own proprietary software.  While they’re at it, they each hope to bite off a piece of the $500 billion advertising market.

 

The Black Hole of Commoditization

The problem is that once they get that bite, they’ll find the new pie of advertising-made-efficient to be a comparatively meager meal.

This is the way disruption often works – new improvements don’t always equal bigger profits.  The Open Source movement in the late 90s – which gave rise to a whole generation of new technologies and businesses – actually cost the software market $60 billion per year in lost revenue, in large part because it enabled developers to unbundle expensive enterprise packages and sell the customer only the necessary bits.  In 2001, the decimalization of the US stock market – initiated by the SEC to make the market more investor-friendly and efficient – narrowed spreads and consequently shrank NASDAQ trading floor revenues by 70%.  And let’s not forget about what happened when device manufacturers digitized the music industry.

With the explosion of digital media, ad space inventory is increasing quickly (anyone checked their mobile traffic chart lately?), while at the same time advertisers are making more focused and efficient buys than ever before.  If that efficiency is working, then net fewer dollars need to be spent to drive better results.  Great news for advertisers – but bad news for publishers with inventory to sell.  With CPMs seemingly lower all the time, a continuation of the trend toward efficient ad buys will mean a dramatic contraction of the advertising market.

Software industry disruptor Marten Mickos (former MySQL CEO) once told investors:  “The relational database market is a $9 billion a year market.  I want to shrink it to $3 billion and take a third of the market.”  Make no mistake – today’s ad tech players are plotting the same.

Is there any chance of maintaining the $500 billion advertising market that we know today?  Probably not.  Like Clayton Christensen says, it’s only a matter of time before disruption wins.

But if we can take a lesson from the industries that have gone through disruption before us, it’s that the incumbents should have embraced the new business models much, much earlier.  Publishers have no choice but to act now and get involved in inventing the next wave of advertising.

 

Gaining Escape Velocity

So how do you compete when your market is collapsing?  Change the way you think about your market.

Yes, publishers sell space to advertisers.  But advertisers want to buy results, not space.   When media companies measure their monetizable assets, they tally up the display inventory they can sell, and the data that can boost an advertiser’s expected returns.  But your assets are actually much more diverse.  Embrace your range – you have a lot more than space for rent.  You have:

  • Brand.  There’s plenty of inventory on the market – just check any ad network or exchange and you’ll find more availability than you could dream of.  But we all know that the same impression is far more valuable to advertisers when they’re buying it with your brand.  Why?  For starters, because your brand offers security and peace of mind to the buyer.  “No one gets fired for buying IBM,” the adage goes, and top brands can charge a similar premium for the low career risk they offer the buying chain.  And when it comes to delivering your message, nearly everyone in advertising still believes that context is important.  Build it right, and your brand represents a premium you can earn to separate yourself from the commodity you sell.
  • Relationships.  You can go even farther by leveraging not just your brand but your relationships – with brand integration.  Your audience comes to you for original content in your signature style, and you know exactly what they love.  Partner with your advertisers to devise creative campaigns that are tailor-made to be knockout hits with your audience.  Play matchmaker and find theme-appropriate advertising sponsors for your best content pieces.  In one fell swoop you’ll improve your audience’s experience and offer brilliant results to advertisers – and earn an additional premium by letting advertisers network through you.
  • Custom Content.  In the past, media created content for the audience’s sake and then relied on advertisers to subsidize it.  Today, advertisers are less willing to subsidize content – but they are more willing to pay for it in other ways.  A few months ago I met with one big media company whose Custom Publishing group had suddenly seen an explosion of opportunity after many years of sluggish demand.  Now that marketers are directly connected with their audiences via Facebook, Twitter, and the like, those advertisers need something to say.  But despite the trendy buzz, very few brands actually have any competence whatsoever at being publishers.  Companies like NewsCred, Percolate, and the one I met with are finding a business putting words in their mouths.
  • Technology.  This doesn’t need to be the sole purview of the ad-tech startups.  You have sophisticated technology already to serve your audience – start using it to help your advertisers buy placements in your feature sets, and then demonstrate the results with quantifiable proof.  Google’s universe-changing innovation was to realize that a simple search keyword (the same one that Yahoo had taken for granted for years) is actually incredibly valuable for targeting.  LinkedIn collects data from its audience and then uses it to surgically target for advertisers – and create results.  Your own new and innovative products can help you succeed and cut out the middleman.
  • Results.  As the universe gravitates toward complete trackability, the one sure-fire thing advertisers will keep paying for is results.  Big, differentiated results – on a big scale.  Brew an alchemy of your particular strengths and differentiators, and then use it to help your advertisers achieve breakthrough success.  It’s harder than selling IAB ad units, that’s for sure.  But ultimately that’s your best chance to drive lasting value for your clients, and ensure robust revenues to come.

A new age of advertising is upon us, and while it may be a golden age in terms of technological advancements, it certainly won’t be one of abundance.  The contraction of the advertising market will force publishers to get creative and add real value with new offerings of our own.  The days of selling space and access to a general audience are over.  But advertisers will always need great media brands to align themselves with – which is why the biggest opportunity for media companies is to combine new technology and new formats with strong brands, and make that alignment more valuable than ever.

In Media, Big Data Is Booming but Big Results Are Lacking

This article was published as a guest post in AllThingsD, and is republished here for Digital Quarters readers.

The New York Times named 2012 the crossover year for Big Data:  as a term and as a concept, Big Data broke through from the tech circle and into mainstream consciousness.  (So much so that even Dilbert’s boss was talking about it.)

We’ve seen huge advances in our ability to generate, collect, and store an explosion of data points:  90% of the world’s data has been accumulated in the last two years alone.  We’re generating 2.5 quintillion bytes of data daily, and every serious company is dutifully logging and contextualizing every impression, every click, and every purchase with excruciating detail.

That said, shockingly little happens to the information once it’s been stowed in the database.  A good friend gave voice to this dirty little industry secret the other day:

“Nobody wants to use the data.”

He’s remarkably spot-on.  Even though almost every CEO says their company is becoming data-driven, the fact is that most high-level decisions are still being made from bullet points, not data points.

What the data revolution brought us was systems for collecting data – but collecting is the easy part.  And even more importantly, it’s the safe part.

 

The Real Problem:  Data Phobia

The trouble with data is that it asks as many questions as it answers.  Your engagement is down, bounce rate is up, search traffic is up – why is that, and what can we do to make it higher, lower, and higher?  Data almost never hands you the answers or insights directly; it just illuminates the issue.  And it illuminates a whole bunch of them at once, so it’s up to you to figure out what the priorities are.

If this problem is an “opportunity in disguise,” most executives seem quickly scared off by the masquerade.  In truth, Big Data raises the bar for how smart you have to be as an executive.

The easy answer – leaving the analytics to the analytics department – relieves you of the responsibility of figuring it all out, as though it’s unknowable to anyone without a degree in data science.  But it also relieves you of the answers.

What is the executive’s greatest fear?  That exposing the trove of data without knowing what to do with it makes them look worse, not better.  In media, many have hidden that fear behind the veneer of idealistic purism.  I remember talking with Martin Nisenholtz several years ago when he was at The New York Times about how data is used in a newsroom; I asked what would happen if he shared performance metrics with reporters in real time (obviously this was before Chartbeat) to see what their audience cares about.  He said, “They would throw me out.”

Our strong institutions and professional commitment to standards have ensured the journalistic values of truthfulness, accuracy, objectivity, impartiality, fairness, and public accountability.  None of those values are furthered by closing our eyes and ears to our own audiences.  The result is a paradoxical culture that boldly states “content is king” and yet refuses to quantify its value for fear of tainting the purity of the product.

 

The Opportunity:  Using Big Data to Make Big Bets

Until recently, we have had startlingly few case studies of the transformative power of Big Data on which to model our own big changes in media.  Instead we’ve had IT initiatives that promised big insights, but ended up delivering big databases and bigger IT bills.  For once, it’s not the IT department’s fault – it’s those of us who are using the data (and, more often, aren’t using it) who are to blame.

That’s why I turn to those who have made the big bets to see what’s different.  Netflix has long been the poster child for using data to drive results, and now they’ve proven in no uncertain terms that when you ask your data the right questions you can find hugely valuable insights – even in the sacred domain of content creation.

Before Netflix pursued the option to buy House of Cards, they looked to their massive data stash.  They wanted to know:  Do Netflix users enjoy political thrillers?  Check.  Of political thriller enthusiasts, how many also watch David Fincher films?  A whole bunch.  Oh, and one more thing:  Is this crowd fond of Kevin Spacey?  As it turned out, there was a very healthy crossover in that Venn diagram.

Not only did this insight give Reed Hastings the confidence to bid on House of Cards – it gave him the level of certainty necessary to outbid heavyweights like HBO and AMC for the series.

What I love most about this story is that the questions were so simple, so logical.  Sometimes the sheer volume of data at our fingertips overwhelms us and makes us forget that the fundamental strategic questions haven’t changed.  What has changed is that now we have far better access to the answers.  And when you can give your users what they want based on the signals they themselves have been sending you, that’s when Big Data starts to earn its keep.

 

Five Questions You Should Be Asking Your Data

Forget about Omniture and Google Analytics and all of the data minutiae you’re already tracking.  Forget about little personalization features.  The most valuable data doesn’t fit on the dashboard.  Think bigger and move upstream:  what’s the most amazing new product or service you can create?  Here are five places to start digging:

1. What does my audience LOVE?  Cut the data every way you can to deeply understand this, with nuance – then reorient around that product.  It might be parenting advice, or current memes, or breaking news.  If you can find a common thematic thread in your most-consumed content, you have a great starting point for further segmentation.  Lauren Zalaznick turned the Bravo network around by pinpointing the five key interests of the audience, cutting out the clutter, and giving them more and more and more of what they loved (hence the hugely popular Top Chef and Real Housewives).

2. How do they want it?  Netflix noticed that a significant number of users were watching marathon-style, and so they bucked TV tradition and released House of Cards all at once.  How could you change your content packaging to better match the real habits of your users?  Many have tried and failed with full-length video programming on the web; that’s because (so far at least) most Internet audiences can’t sit still long enough to watch a 30- or 60-minute program.  Adapt your delivery to what your audience wants.

3. How can I best relate to them?  Personality is critical – so which of your brands’ public talents and personalities relate to whom?  It might be a popular columnist, Don Draper, or Boo the Pomeranian.  Figure out which personalities your audience connects with the most, and leverage them into the other themes and packages.

4. What secret signals is my audience sending?  Target famously figured out how to identify pregnant shoppers and even estimate their due dates months before the woman ever purchased a stroller or a pack of diapers.  Find out which clues in your data indicate that a customer may be on the path to a new phase of life, and start messaging them with your relevant content even before they get there.

5. Where is my sweet spot?  Once you discover the key themes, packages, and personalities that resonate with your audience the most (and at which relevant life stages), you can cross the data sets and identify your best untapped opportunities.  Don’t just tweak your existing products and advertising – create whole new products that are designed specifically to thrive at the intersection.  Just as the strong affinity overlap for Spacey / Fincher / Cards gave Netflix the confidence to make a bold bet, your own Venn diagram will spotlight your best chances to create knockout content that is destined to succeed.

 

Rethinking Management:  Ask, Understand, Execute

When it comes to dealing with Big Data, our skills haven’t evolved as fast as our capacity.  We all have a functional specialty, whether it be content creation or distribution or sales or management – so whose job is it to ask the right questions of the data?  Big insights and actions aren’t led by a data scientist; they are led by an executive who has an integrated view of customers, products, distribution, and sales.

But asking Big Data the right questions isn’t just a new practice to add to the management to-do list.  Pulling it off requires a rethinking of the manager’s role entirely.  We’ve traditionally thought of management as the discipline of managing people and managing the business.  Now it’s time to add “managing our understanding” to the job description.

The time of the executives who merely “execute” is past.  The successful executives in this post-Big-Data world first ask, understand, and then execute with the full support of the data behind them.

The New EPG: Every Media Company Must Master the Science of Programming

This article was published as a guest post in AllThingsD, and is republished here for Digital Quarters readers.

Web, mobile, and social platforms have created a huge conundrum for media companies: we are experiencing an explosion of content, and yet it is harder than ever to find an audience.

It’s a stark contrast from the glory days, where distribution was fixed and scarce, and all we had to do was put a great product out there! At the time, all content had its own native distribution outlet — a channel on the dial, a spot on the newsstand, a movie theater, video store — that delivered it to the bulk of its audience. That distribution was beautifully limited — there’s only room for 12 channels on a VHS dial, 16 movies at a multiplex, and maybe several thousand titles at video rental stores.

But today, where distribution and consumption are in constant flux. Look at TV. To be truly “Everywhere” these days, a TV show has to be on network, cable, YouTube, Netflix, Hulu, iTunes, Facebook, and Amazon, have its own native app in Apple and Android stores — at a minimum — and a presence in Google’s mighty search index.

To succeed today, digital media companies need to get control of their distribution. The opportunity for savvy media companies is to abandon the outdated if-we-build-it-they-will-come mentality, and master the craft and science of programming.

Programming is the skill of matching content to audience. Programming is what built the global TV and film industry from $200 billion to $300 billion in the last decade. If you want to succeed in digital media going forward, programming is everything.

I spent time recently with a friend from CBS and told him about what my company Wetpaint does to program social as a channel:  In short, we deterministically deliver the right content to each audience at the right time. That might mean, for example, a recap of yesterday’s news timed for the morning bus ride, a short-form video clip posted to coincide with a mid-morning coffee break, a gossipy tidbit just as lunch begins. “That may work in entertainment,” he said.  ”But it would never work in breaking news.  In news, everything needs to go out immediately.”

So I did some research, and it turns out he’s wrong. When you look at what our editors consider breaking news within the entertainment category, the vast majority of stories — more than 75 percent — perform better when they’re packaged and presented at another time of day, and not when they first break.

While immediacy became the mandate in the ages of CNN and Google, smart programming is far superior in an age of multiple distribution outlets.

The expertise of digital programming is in its infancy, but some of the secrets for success have emerged. Here are a few:

1. You don’t have one big audience. 

Digital media companies need to know who their audience is and what they like, and then customize their product and pitch accordingly. But convention on the web has been to serve everyone the same thing — and the folly of that is a massive missed opportunity. Instead, understand your value to all your major audience segments. After all, each person you reach thinks of herself as an audience of one.  Meet her where she’s at, and you’ll find your resonance — and performance — will be much greater.

For decades, the National Football League operated on the basic assumption that football is for guys. That conventional wisdom was upended in 2010 when research by the NFL and Nielsen found that more than 40% of the league’s fans were women. (It’s upwards of 44 percent now.) Of course, football fans (both male and female), segment along many lines — and NFL marketers will have to find ways to speak to, sell to and grow all those demographics. But acknowledging women was a huge and lucrative step to grow the league’s opportunity massively.

2. Learn what will resonate. (Hint: In the battle for consumer hearts and minds, heart wins every time.)
Once you know who your customers really are, and can group them by their common interests, the world opens up.  You have the freedom to design new content and experiences to delight them. It doesn’t have to be one-size-fits-all any longer; your brand doesn’t have to be watered down to its most basic and neutral. Many brands and publishers struggle for relevance — but once you articulate who your audiences are and understand what they’re interested in, the door is open to all kinds of new conversations. Research, feedback and analytics can help you become expert in each of your audience segments. Then use those insights to grow your brand.

Sticking with the NFL as an example, when the league learned about its popularity with women, it took that finding and ran with it, introducing a new website, ad campaign and product lines — all aimed at the now 80 million women who tune into NFL games each weekend. Female fans rewarded the new attention by dropping millions on NFL apparel, jewelry, nail polish, yoga mats, etc. The league went further and partnered with the American Cancer Society to raise awareness about breast cancer, which explains all the pink flourishes (gloves, socks, wristbands, etc.) on the field and the sidelines these days. This overdue — and heartfelt — outreach strengthened the bond between the NFL and its huge female fan base. The league’s bottom line smiled. In 2012, NFL fans spent $3.2 billion on consumer products.

3. Timing is everything.  
Of course, the most basic element of the art of content programming, one that’s been mastered by the TV networks, is knowing what performs when. Prime time shows don’t work in the mornings; re-runs would squander the huge opportunity of evening viewing. There’s a time for opinion and a slot for hard news, and reversing them tanks performance and tunes out audiences.

But on the web, well, somehow the only rule of thumb our industry seems to know is “the best time to post is now.” And it’s preposterous.

In terms of social, the state of the art sounds better, at least at first:  There are lots of generalizations out there about when to post content: Mornings are better than evenings, Facebook sharing spikes on weekends, tweeting peaks on Fridays. Well that’s all great in theory, since it documents average behavior of average audiences. But the point isn’t to get it right for someone else’s average consumer.  Whether we’re talking about work or play, we all develop our own individual routines and habits. Discovering the personal quirks of your particular audience is a goldmine for programmers.

How powerful is it? Several years ago, a UK content agency called Collective Content was helping a small management firm develop its programming strategy. Traffic to the client’s website waned on weekends. Nothing surprising there. But Collective Content began to notice an uptick in Sunday visits. “Sunday evenings had become the new Monday morning,” wrote Collective Content founder Tony Hallett. “Execs and other managers were getting a jump on the working week. This was a great time to feed their need for information.”

At Wetpaint, we try to time content delivery to the distinct habits of our audiences, which vary from show to show. The very young (13-24) Pretty Little Liars audience likes a fast-paced, high volume content diet, so we serve them fresh stuff all day long. Older (55 percent are over 24) Greys Anatomy fans catch up on new content in the evening, just before they get into TV-viewing mode. So we freshen our Grey’s Anatomy pages late in the day.  If you program according to someone else’s guidelines, all your best shots will miss your target.  Instead, know your audience and you will hit the mark.

4. Like it or not, people judge books by their cover. Design your packaging to resonate.

In pre-digital days, content packaging discussions went like this: How long is the story? Do we need photos or illustrations? Today, fuhgeddaboutit. Digital editors have lots more arrows in the quiver. They can trot out old packaging chestnuts like long-form profiles or Q&As, or they can present content in slideshows, video, audio, polls, quizzes, clickable infographics, Spotify playlists, etc. The packaging options just keep growing — and so does the menu of social media megaphones you can use to trumpet the final product.

Working all those levers in a way that engages your audience and exploits the strengths of each packaging and delivery option is an art and a science. BuzzFeed is one of its master practitioners. In its self-proclaimed rules for “How to Go Viral” (an infographic, of course), Buzzfeed recommends making lists (“9 out of ten Internet lists go viral.”), using quizzes to appeal to user vanity (“People online love talking about themselves.”) and staying relevant. We won’t quibble with the BuzzFeed rulebook. But in our own experience, packaging — like timing and just about everything else — is audience-specific. Fans of Vampire Diaries like to vote, for example; so we give them polls. And it works — to the tune of more than 2,500 ballots cast for Vampire star Nina Dobrev in our sexiest legs poll.

5. Test, test, test – for insights you can use.
If you follow my Digital Quarters blog and Media Success newsletter you know I’m a nut for data. I firmly believe that the only way you can truly know your audience in all its wondrous eccentricity is to embrace testing with a gusto that borders on obsession. (Yes, I am seeing somebody about this.) Every shred of content you produce, from the glossy video to the tiniest tweet, is an opportunity to learn something about the consumers who visit your site. Don’t waste it.

As you generate (via surveys, focus groups or, our favorite, A/B testing) and then sift through the mounds of data, trends will unfailingly emerge. These insights into user preferences help drive programming decisions here at Wetpaint.

Testing tells us that our Bachelor and Bachelorette fans revel in relationship gossip. Stories about dating, cheating, break-ups, pregnancy rumors, etc. perform four times better than episode-related news like recaps or sneak peeks. But within that relationship news subcategory, the two audiences diverge: Bachelorette watchers are scandalmongers. Bachelor fans are sentimentalists. We tailor our content accordingly. Testing has also made us smarter about social media. Facebook posts with photos work best when we’re promoting content for scripted (Grey’s Anatomy) or reality (Bachelor) shows. For breaking news, text-only posts do just fine. If the news is big, words are enough to catch the eye.

6.  The Newsfeed Is the  new EPG – and you must be present to win. 

The greatest opportunity of all in digital media is the chance to be relevant to your audience — not once a day, not on an appointment basis once a week, but minute by minute. To do that means being where your users are at all hours of the day — with exactly the right content at the ready. For consumers, it would be like the “Electronic Program Guide” that we’ve had on TV for the last 20 years – only it would be completely personalized and constantly refreshed. Quel fantasme, n’est-ce pas? 

Lo, there’s an app for that — and it’s the #1 app on every smartphone. Yes, Facebook is the new Electronic Program Guide. Consumers check Facebook many times a day — usually just briefly, sometimes longer — to see “what’s on” in their lives. In fact, 23% of all time spent on smartphones is spent on Facebook mobile apps.

For media companies, the great opportunity here is to cement your relationship with your audience by getting in their network — and then turning up the content they’ll enjoy to whatever frequency interests them. Do it right — with great audience targeting, insight, timing, packaging and testing — and you earn a position at the top of the newsfeed hour after hour, day after day.

Who understands this well in media? Yahoo’s Marissa Mayer talks about building a “daily habit” with consumers. Why not twice a day, or more? That is the power of presence in the feed. And it comes from meeting each member of your audience where she is.

Smart programming is like a good relationship. It requires paying attention, being responsive, trying new things. It’s hard work, but the rewards are enduring — a loyal, ongoing relationship with a growing audience.  And that surely makes it worth the effort.

Facebook is Ushering In a New World of Relationship Media

This article was published as a guest post in AdAge Digital, and is republished here for Digital Quarters readers.

Today’s consumers are far more connected, with social profiles following them around wherever they go. And Facebook’s recent moves show the company is taking full advantage this in a series of small steps that, if successful, could literally overhaul media and marketing.

In the past, the bulk of any marketing plan was fulfilled by buying ad impressions. But Facebook’s goal of omnipresent connectedness with its users presents a rare opportunity to change this model, to sell relationships, not impressions. And that’s not all.

For several months now, Facebook has allowed advertisers to match their email lists with its user database. That was a smart move, because it enables a brand client to develop its relationship with consumers in their natural “social habitat”—all with advantages of segmentation, testing, measurement and optimization.

At the time, it looked like Facebook may have launched the only online direct marketing system capable of competing with email. (And one that might just also render direct snail mail obsolete, #thankyoufinally.) But with its latest add-on, “lookalike audience” targeting, Facebook now offers a whole new kind of advertising. The lookalike product, which is still in beta, lets an advertiser reach beyond its actual customers and message potential customers who look a lot like them.

With these two powerful offerings, Facebook is bundling the best of both brand and direct advertising, combining reach with relevance.

Why is that important? Because, as I’ve written before, Facebook’s greatest opportunity is in the $540 billion brand advertising market. That’s where marketers have been fishing for new customers, blasting their messages over TV, radio, and display ads in the hopes that they attain the magic combination of reach and frequency that will move consumers through a mythical funnel. The theory is that by exposing people to a brand’s message over time, they develop a fondness for the brand and a propensity to buy at a later date.

And yet, brand advertising hasn’t moved online en masse. Only about 18 percent of the brand advertising market has made the digital jump, largely because true long-term relationships with online consumers have been so difficult to measure and quantify.

But what HAS come online is direct marketing. In fact, Facebook’s archrival Google has grown the entire market of direct marketing by roughly $40 billion in annual revenues since it first started serving search ads. That’s because its performance can be quantified exactly in terms of very short-term transactions: from a click to a buy, more often than not separated by just minutes.

Facebook’s dreams of siphoning brand advertising dollars from other media are based on the premise that it can truly develop measurable long-term relationships with target consumers. And now, with the ability to target “lookalikes”—that is, to get in front of new potential customers who are, at least statistically, similar to real customers—they may be able to do exactly that.

For marketers, that means metrics and messaging that are far more individualized than the offline alchemy of “spray-and-pray.”

For Facebook, it means tapping the best parts of two worlds at once. One is the readiness of marketers to pay for what performs—as Google has demonstrated, there are tens of billions of dollars waiting out there for the one who succeeds. The other is the need for brands to begin relationships with consumers long before that last click—when it’s often otherwise too late to make a first impression.

We all recognize the value of a tool that can systematize and maximize relationships. But in the marketing discipline, the science of “customer relationship management” (CRM) doesn’t start until the first purchase. Facebook’s new tool offers the potential for brands to begin a relationship much earlier and nurture it so that a person moves from prospect to customer.

Most importantly, future tools and analytics could let brands measure each touch point along the way, to discover which interactions strengthen relationships, and which weaken them.

(illustrations via XKCD)

The resulting potential goes far beyond CRM and direct marketing. We’re talking about precisely targeted and nearly personalized brand advertising. That combination has been both a theoretical nirvana and an oxymoron. Until now.

Facebook is making a legitimate play to unite the opposite ends of the spectrum: CRM and brand advertising are both incredibly valuable tools in the marketer’s toolbox, yet they couldn’t be more different in terms of their use and impact. Brand advertising, at its best, combines the ability to reach a large target audience with a powerful experience that can create interest. CRM is a vehicle for micro-casting specific messages to already-identified individual targets at specific trigger points—all with the goal of moving each person one step closer to a sale.

If you could combine the best of both, you could blend the incredible reach of brand advertising with the extraordinary relevance of CRM.

Facebook’s recent efforts are allowing brands to extend CRM all the way up the funnel to form one-on-one relationships at the branding stage. Whether it will work or not, it’s a visionary way for Facebook to transform its customers’ businesses, and its own.

But most importantly, it promises to transform the currently context-free ads on the right side of the screen into relevant, personalized, contextual recommendations for users. And that’s a happier, healthier relationship for everyone.

Which Facebook surely hopes will help it conquer the most valuable relationship of all: the one with the brands who spend $540 billion a year on advertising.

Will the strategy succeed? That’s still a big unknown. But if it does, it’s going to be worth a ton to Facebook.

The Nuclear Option: Google’s Tricky Maneuver to Force Brands to Use The Google+ Social Network

Sources have told me for months that Google has been considering it, and tonight I finally saw that they pulled the trigger. 

Google just made a simple yet tricky change designed to compel brands to post on the Google+ social network.  The change is as simple as two words — free marketing — and it’s an offer that brands can’t refuse.  Google is now giving brands a free space on one of the most valuable pages in the world:  the search engine results page for users who search for their brand.  For almost every brand, their own name is the most valuable search keyword they have.

Try it right now:  search for Ferrari, and next to the familiar 10 blue links on the left, you’ll see something new and incredibly valuable:  a free advertisement for Ferrari, featuring the brand’s latest post on Google+, complete with a timestamp that demonstrates freshness and relevance – or, in the case of brands that don’t publish frequently or good enough, could shame them on a key page.

And next to it?  A big button more prominent than any link on the page enticing users to “follow” the brand on Google’s search engine.  A click on that link begins a relationship that is worth may times over the value of the first search itself.

Implicitly, Google has made a new offer to every brand on the planet:  post to Google+, and you can own a huge and prominent space on the most important page outside your own website – and build a following.

The alternative?  Don’t post – and not only forego what’s basically a free advertisement, but worse you end up leaving the results on the left side of the page to Google’s algorithm.

It plays right into the first rule of branding:  “Always control the message.”  And that’s an offer that no brand can refuse.

But it’s not just brands who would be crazy not to play.  Anyone who wants to own their own name is now being enticed with the same offer.  Celebrities and other personalities will be lured, as will anyone who cares about their reputation.  Which Google surely hopes is, well, all of us.

With this change, Google has gone nuclear against Facebook, playing their trump card in what clearly appears to be an attempt to force adoption of their own competitive social network.

In the past, Google+ leaders Vic Gundotra and Bradley Horowitz have pooh-poohed ambitions to compete with Facebook to become a social network linking consumers to each other and brands – but this new development clearly flies in the face of their prior comments.  Despite their assertion that “Google+ is just an upgrade to Google,” the reality is that Google is using its dominance in search to all but force brands to be social on its network. 

It’s beyond ballsy.

And I can’t help but be suspicious of the timing – it comes just one month after Google reached a settlement with the FTC that concluded it hasn’t violated anti-trust laws in search.  Relieved of major legal concerns in the U.S. related to its market dominance, it’s exploiting its dominance in search in an attempt to force a win in social.

Touche, Google.