Wetpaint CEO Ben Elowitz on the Future of Digital Media
This article was published as a guest post at AllThingsD, and is republished here for Digital Quarters readers.
A few weeks ago, Forbes Chief Product Officer Lewis DVorkin and I sparred at the Rebooting Media Live event in New York. With an audience of top digital and media executives, I shared the results my company is getting from social — that social users are more than 2.5 times as valuable as users from search. Lewis surprised me by saying that when it comes to behavior on the Forbes Web site, he is seeing the opposite.
With all due respect to Lewis, who is one of the greatest innovators in media, I left realizing that there are different ideas of what “social” can mean on the Web, and that not everyone knows where the gold lies. Putting the whole picture together, there are four different models for social that, despite sharing the same name, are completely different concepts.
Social = Viral Hit
For those on the marketing and advertising side especially, the word “social” often means that you or your client are jealous of someone else’s success. Viral hits are largely based on breakthrough creative, though great distribution is an often-forgotten second factor. Who wouldn’t want to be responsible for the next Old Spice guy? Of course, these kinds of hits are easy to ask for and hard to achieve. And if you do achieve it, you’ll need another viral hit to bring your audience back again.
Verdict: Good luck!
Social = 1,000,000 Fans
Here, the theory goes that social means getting lots of fans, and then something magical is supposed to happen. Like the boys’ adventure with the “South Park” underpants gnomes, it usually ends up with a lot of time and money spent, a big collection achieved, and a big question mark over “what now?” It doesn’t matter how low your cost per fan was, if the value per fan is near-zero. It’s not the size of the fan base that matters — it’s what you do with it.
Verdict: Bad strategy.
Social = Comments
Another concept of “social” is that it’s a medium for conversation. With programs like @ComcastCares, brands have used this approach to shape their brand images and reputations — and it has worked. On the publishing side, the Huffington Post and other publishers have succeeded in using social engagement to drive deep participation and connection among an inner circle of its audience. Hosting a conversation certainly builds a relationship. A “Like,” comment, or share from a user can all get you more exposure on the margin, but, as Lewis noted on our panel, the friends who come that way don’t stay very long and don’t come back much. They came for their friends, not for your Web site. That’s why, even though engagement strategies are great for your core audience, they won’t single-handedly drive the large, loyal audience we all crave.
Verdict: Smart, but it’s not enough.
Social = Lasting Relationship
A lasting relationship with an audience is the holy grail of every brand online. In fact, it has made Amazon the most valuable e-commerce company on earth, and it’s made Disney and the NFL valuable over decades. But what some haven’t realized yet is that the most valuable mode of social is in keeping these relationships connected.
Do you have any idea how valuable a “Like” is? Any seventh-grader goes all atwitter when his crush says, “I like you.” It’s permission to see someone more, get to know them better, and talk to them all the time — not just once, but every day. If you are doing it right, a “Like” or a “Follow” begins a two-way relationship: One where your audience is asking for programming from you every day, week and month; and giving you their interest data about what works and what doesn’t. With that relationship, you can choose what content you create, and when and how you share it. That relationship isn’t once-and-done — it’s ongoing.
And data from our experience shows that it translates into a million visits a week from our fan base — almost one visit for every fan, not to mention dozens more impressions right in their home page, the Facebook news feed. Done right, social can already drive more traffic than search, making a new top venue to recruit, and more importantly, retain an audience.
More and more, I talk to marketers and publishers who have hundreds of thousands or millions of fans and followers, and yet have no idea what to do with them. They haven’t realized that they have subscribers at the ready, waiting for great content and experiences — the currency of their relationship.
Nor do they understand the tremendous value of those subscribers: If you give your friends what they are after, they’ll keep coming back for more, and they’ll bring their friends. This is exactly how companies like Groupon and Zynga have reinvented their categories and created businesses worth billions of dollars in the process.
Verdict: There is nothing more powerful than a lasting relationship.
This piece from Theresia Gouw Ranzetta is the eighth in a series of 10 posts about the future of the media industry contained in a report titled: Rebooting Media: The Digital Publishing Revolution for a Fully Social Web.
Facebook becomes the jumping off point for many browsers who count on their friends to curate interesting media for them. How news gets “found” becomes less about searching Google news, and more about checking your Facebook newsfeed.
Q: What’s changed fundamentally about media with the rise of the social Web, and what do publishers need to do to adapt?
Publishers need to understand the “start” point for their digital users. It used to be a portal, so you cut a deal with one of them. Then, it was a search box, so you SEO-optimized your content. Now, it is a social media platform (Facebook or Twitter), and publishers need to understand how to optimize their content for maximum social sharing and social media amplifications. Don’t get me wrong: in each phase, it has always been about great content. But that is just the necessary first building block. Then you need to figure out the distribution to get maximum audience engagement.
Q: We’ve gone from SEO (Search Engine Optimization) to SMO (Social Media Optimization), so how will search change as the Web becomes more social?
Reference or informational search will remain relatively unchanged (for example, “What is the capital of Iowa?”). But “search,” where you are looking for guidance or information that has a subjective or has a taste aspect to it, will be completely transformed by social. Instead of typing in “Best sushi restaurant in Palo Alto,” you will ask your friends, or go to a site with a like-minded social groups (foodies, vegans, etc.).
I think we are still in the early days of SMO. Many large publishers have not yet even thought about this, nor are they aware that they should be. As with SEO, they will need to upgrade their content management / publishing systems and processes. Many will turn to start ups, like Wetpaint, to help with this.
But SMO can be even more. Unlike in the search world, where a supposed Chinese wall existed between SEO and SEM, leading platforms can now encourage their advertisers to also invest in SMO as well. So a very savvy company can leverage and get synergies from their investments and learnings from SMO + SMM (Social Media Marketing) in a collaborative way.
As with the early days of the portal and search platform eras, the ecommerce players were the first to experiment, invest and learn about the power of the new platforms to get broader distribution / audience. This is understandable, given that their business models more easily lend themselves to direct data gathering and learning for marketing spend. Once again, in social, I see the ecommerce players blazing a trail for publishers: the GroupOns, Zyngas, ModCloths, and Birchboxes of the world are good places to start.
In parallel to social, I think we are also seeing a platform shift – from PCs to mobile Internet devices. So, clearly the rise of iOS and Android are important platforms for publishers to understand and adapt to, both in terms of the technology and the distribution nuances.
Q: How do you build a brand in publishing when, with greater frequency, media is distributed through social channels?
You need to learn how to build your brand following on social media and realize that, no matter how strong your brand is in other channels, this is a whole other effort. It is not just an add-on and thinking of how to get “Likes.” The “packaging” of your content needs to be social media optimized for sharing and tie to your social media presence on your Facebook page and Twitter. It is an interconnected ecosystem that cannot be thought of as separate pieces.
Q: What are the critical success factors in publishing as we look to 2020; and who will be the winners?
Understand that we are in a new era. Social media distribution, branding and user-driven pull – not your push distribution – will win. Also, understand how your mobile approach is intertwined with what you need to do. The winners today will be the companies that have created these new social and mobile platforms (Facebook, Twitter, Apple iOS and Google Android), as well as the market leaders who have successfully built the first leading companies on top of these platforms (Zynga, Groupon etc.). As for the winners in 2020: I’m in the business of funding start up innovation, so I would say it’s the companies that may not even yet be formed – but they will be, in the next year or two.
Theresia Gouw Ranzetta joined Accel Partners in 1999. She is an investment Partner in Accel’s Palo Alto & New York offices and focuses on companies in the social commerce, vertical media, consumer mobile applications and privacy/security markets.
To download the complete report, please click here: Rebooting Media: The Digital Publishing Revolution for a Fully Social Web
This week, we made some announcements about our achievements at Wetpaint, and it has prompted me to take a look back at 2011. It’s easy to be proud of the 6.4 million unique visitor audience we have built at Wetpaint Entertainment monthly. It is a significant accomplishment in just 15 months since we launched, and the Wetpaint team has worked passionately to get us here. But even a number like that is, well, just a number. The real value of what we did in 2011 lies in the all the learning we had about how to build, run and monetize a successful media property online.
And that learning makes me feel grateful – because as successful as we have been this year, it’s been against a context of upheaval in the industry. Media is not easy. Old formulas from print and broadcast are no longer working. And even the just-minted generation of seemingly successful digital companies, from Demand Media to Zynga to Facebook itself, are having to constantly innovate to stay on top of the wave that they’re on as they hope to catch the next.
Clearly, the most important keys to financial success in media are building audience and monetizing that audience – and we’ve made significant progress on both here at Wetpaint. Our greatest strength has been the data engine we’ve built to acquire, assimilate, and apply every possible insight about our audience. We learned that smart and targeted analysis can improve everything we do; that lots of rapid experimentation is critical; and that social traffic is far more valuable than search.
We also learned more about the Kardashians and the people on the The Bachelor/Bachelorette than anyone in this world should. Our editors did a bang-up job capturing the liveliness of the entertainment industry and they definitely deserve plenty of credit.
But while all our great content and social mojo would succeed in delighting audiences, it wouldn’t be enough to make a strong business without excellent monetization. And so I’m equally excited to note that as we get ready for 2012, we’ve found that our formula of great content and social mojo is just as valuable to advertisers as it is to our audiences. I’m pleased that we will be working with the team at Cambio Group via their joint venture between AOL, Jonas Group and MGX Lab. Together, we will be serving outstanding advertisers with some of the most innovative offerings around.
With this partnership in place, we are able to turn amazing traffic into amazing financial results. It will mean strength for our model and our company into 2012 and beyond.
But the implications are even broader for the industry, and that’s because we are setting a model that others can follow as well. And that is what I’m most excited about: What media needs most is a model that can be scaled and repeated – and our latest results make it clear we are on the right track to build it.
Each week, we hear of major publications and traditional broadcasters who are struggling to stay afloat in a digital age with new economics and new expectations. Despite the promise of interactivity made with the internet revolution over the last 15 years, most publishers have done little more than replicate dead trees online, with zero innovation beyond the hyperlink, the slideshow, and an embedded video now and then.
And yet we can see from the rising successes of the last decade like Facebook, Google, Zynga, YouTube, and others that what catches audience attention is interactivity.
To earn loyal audiences today, publishers need to go beyond content creation: they need to produce compelling experiences that distinguish them and get the consumer coming back for more. The Pew Internet & American Life Project concluded that “when asked whether they have a favorite online news source, the majority of online news users (65%) say they do not.” In an era where the consumer’s cost to switch is the flick of a click, publishers must offer compelling, differentiated experiences to earn loyalty. Choices abound consumers: there are scads of publishers online in every category; content suggestions offered constantly via social networks; and blue links proffered by search engines dozens of times per day per reader. In an environment of choice, as brand experts have known for years, nothing builds loyalty like a great experience.
And now is the perfect time to create those breakthrough experiences. The enabling technologies for the digital customer experience have improved considerably in recent years: we now have ubiquitous broadband, flash and other streaming video, plus HTML5 and maturing mobile application platforms. Add to that personalization, targeting and social graph access, and there are some amazing opportunities to innovate.
It’s not just consumers that are thirsty for upgraded experiences. Advertisers are showing that they will pay more for immersive interaction over basic display ads next to text. Video ads during full TV episodes on ABC.com, Hulu, and others, or mid-day live sporting broadcasts command many times the CPM of typical display ads. Indeed, according to Michael Learmonth at AdAge, The Wall Street Journal’s online video content is bringing in envy-inspiring CPMs at $75 – $100.
But video is not the only way to create an immersive customer experience online. Online sites of traditional publishers like Better Homes and Gardens are experience train wrecks (to be fair, they’re not alone in that regard). Contrast that with the much more successful (certainly from an ad rate perspective) MarthaStewart.com which has many of the same elements – a top stories slideshow, cross-promotions for the print magazine, etc., and it’s a substantially better experience due to the focus on design and usability that is expected of the Martha Stewart Omnimedia (MSO) brand.
Even still, much more can be done with today’s technology to put the consumer’s needs and interests first. The latest example I’ve seen of true creativity in user experience design is Microsoft’s (MSFT) Glo. There are additional signs of greatness in the tablet demo that Time Warner (TWX) built for its Sports Illustrated brand. And The New York Times (NYT) continues to excel in their applications and interactive graphics which enjoy significant pass around (bit.ly shows over 5,000 social media clicks to a recent budget infographic and today’s “A Moment in Time” project has already generated over 100 tweets in the first 15 hours). But too few companies are making similar efforts to distinguish themselves. The opportunities are there, and we need to step up.
Consumers will decide which brands deserve their loyalty and content alone won’t cut it. We are on the brink of a total revolution of experience. For publishers, it’s reinvent or fail.
Do you know additional examples of publishers innovating?
Last week, I explained why the traditional ways of judging “quality” in published content are useless in the digital age. Judging by readers response to that piece, those dated values (which I labeled credential, correctness, objectivity and craftsmanship) are still sacred to many people. But here’s the problem: They simply aren’t enough to win audiences, drive financial success, or, for that matter, ensure viability. The demise of institutions like Newsweek proves that—and shows that publishers that don’t move beyond these anachronistic measures of success will perish.
So this week, I’m offering part two of my take on the changing definition of quality in published content. Here are the four new rules of quality that publishers must obey to flourish. The biggest difference between the old and new definitions of quality are who’s doing the judging. In the era of Publishing 1.0, when production costs were high, alternatives low and time ample, the editor deemed something quality or not. But today, content isn’t scarce at all—in fact, it is in oversupply. And it is the audience that judges quality directly, dozens of times per day.
So, according to the audience, what is quality? It comes down to these four characteristics:
—Relevance. Read the rest of this entry »