Category: Audience as Capital

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Audience as Capital Discovery and Curation

From trust in institutions to trust in individuals – Part 1

It’s worth writing about this single question and its answer from an interview with Casey Newton, a writer for the online publication the Verge, and who also runs his own newsletter (that I am subscribed to).

The question itself frames the problem well:

People often say that “people who can tell stories rule the world”. It seems to me that we’re at one of those historical inflection points where the ability to speak convincingly about what is going on and how we ought to feel about it are shifting towards an entirely new kind of competency and expertise on the part of the storyteller. The world (including the tech world we live in) is getting super complex!  So on the one hand, this compounding complexity makes it harder for journalists, PR people, salespeople, storytellers of all kinds, to actually have a complete understanding of what they’re talking about. But on the other hand, that very same complexity gives their stories more power: people need a narrative; they need explanations that make sense to them…

The writer Casey answers well too. Some excerpts:

I think it’s been hard on average citizens and news consumers. There is much more high-quality information available to them at their fingertips, often for free, than there ever has been before. But there’s also an incalculable amount of bullshit all around them — much of it being pushed by those influencers and content marketers and PR people. There are now six PR people for every working journalist in the United States, by the way, and it feels like most of them are in my inbox daily.

The rise of content marketers and influencers have given [founders] friendly new channels to promote their work — ones that won’t ask the more difficult questions that journalists will. 

A weird phenomenon in our current era is that while trust in institutions is generally declining, trust in individuals is increasing. A journalist can become of those trusted individuals — either by gaining access to a big platform perch (anchoring a CNN show, say) or by developing deep expertise on a subject of growing importance. Either way, there are new ways to win now.

See also: the series we did on 21st Century Media.

(Part 2 – what about long-term trust?)

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Audience as Capital RG.org

The write state of mind

The value of prolific writing and creativity is that you’re always in a pattern of thought. You’re constantly assessing beliefs and designing paths to further your understanding of a topic. When entrepreneurial thinkers begin a newsletter on the platform of their choosing, they are doing so out of sheer passion. Their minds are always thinking of enrichment, improvement, development, and progress.

– The Type House, 2PM, Web Smith

So far, this has been the biggest benefit to me of writing regularly.

First, writing gave rise to new questions, issues and ideas to explore and write about.

That made me think about how it was that I chose my topics, resulting in the Mega-Trends and Big Questions model.

That made me evaluate taking writing one step further, and perhaps we will see that unfold over the next few months.

All throughout there is the ferment of creativity and the excitement of creation.

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Audience as Capital

Home and away

“If your blog is your home, platforms like Twitter and Facebook are your vacation homes”. – Crush It!, Gary Vaynerchuk.

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Audience as Capital Data Custody Discovery and Curation The Dark Forest of the Internet

Communities

We discussed the coming explosion of independent publishers in a large number of niches that combine content, community and commerce.

Steading a community is different from having a large number of followers. The former venture capitalist Li Jin describes the hallmarks of a true community:

I believe the following need to be present: high intentionality, P2P interactions, & UGC content.

1) Intentionality: Members seek out the community as a destination, not just as part of a broader platform’s feed

2) P2P interactions: Strong engagement and ties between members

3) UGC content: Members contribute content vs. just engaging w/ what’s broadcasted to them

Just like a publisher’s content can be across a site, Instagram, Twitter, newsletter, a YouTube channel, the corresponding communities can exist in a variety of places. 

The journalist Jon Russel, currently of The Ken, runs his own group on Telegram that, as of this writing, has over five hundred and seventy members. 

The writer Jacob Lund Fisker‘s Early Retirement Extreme community runs as a bulletin board. 

Azeem Azhar runs both his newsletter and his community on Substack using Substack’s discussion threads feature named, well, Community. Here is an example paid newsletter issue with its community.

Many others run private Slack groups. 

Interesting to me is that these communities are almost all off the public web and in the dark forests of the Internet, not indexable by Google and other search engines. As Li Jin describes above, truly vibrant communities may form because of a common interest in the publisher’s content, but it is their discussion that adds the most value. Their not being open to the internet if what engenders their openness.

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Audience as Capital Discovery and Curation Making Money Online

Twitter as professional network

The newsletter Not Boring had a very different view of Twitter in a recent issue:

Twitter thinks it’s Facebook, but it’s LinkedIn. 

Twitter thinks it’s an ad product, but it’s a subscription product. It thinks it’s an Aggregator, but it’s a Platform. It thinks it’s a social network, but it’s a professional network: one built for the Passion Economy, based on the strength of ideas instead of past experience.

That realization should be liberating for Twitter and Jack Dorsey. Instead of being the world’s least innovative social network, it can be its mostinnovative professional network. Twitter should be the beating heart of the Passion Economy, and begin capturing some of the tremendous value it creates. 

The newsletter goes on to make the point that with this shifty in positioning comes a shift in monetisation. Like Linkedin, which generates a large part of its revenue from what it calls ‘talent solutions’ as opposed to from ads , Twitter too could create paid products for people who use it like a professional network. As it says, 10% of its users generate 80% of its tweets, so there are clear power users who would be willing to pay for access to privileges and tool.

I think this has merit. This tweet from three years ago resulted in a lot of replies from people across many fields:

For many, Twitter is an invaluable aid to their careers. Their network of followers and the people they follow is their professional network. I have seen people among those I follow use Twitter to build a brand, communicate with prospects, promote clients, build a reputation, just like they would on Linkedin. When we use the terms VC Twitter, Investing Twitter, Crypto Twitter, Science Twitter we’re not just talking about interest-based communities, but the extraordinarily deep engagement between professionals in those fields and their followers. Both derive value from it in a way well beyond what you would expect in a typical social network. There are almost certainly hundreds of such “{Interest} Twitter”s.

End-note: In fact professionals are very likely more effective on Twitter than on Linkedin.

Linkedin’s Facebook-like 2-way connection model means that people are flooded with connection requests (that are solely meant for low-effort lead generation). The volume is now such that the norm is to accept by default, leading to people’s feed being inundated with posts from connections they have no affinity to and no desire to hear from. The signal-to-noise ration is much weaker on Linkedin than Twitter.

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Audience as Capital Discovery and Curation Making Money Online The Dark Forest of the Internet

Infinite reach, micro-brands and linear commerce – Part 2

(Part 1)

In his piece ‘Never-ending Niches‘, the writer Ben Thompson articulates in a new way some points we have discussed before in the context how the Internet has opened up exponential opportunities for people to build powerful micro-brands. In this post we look at one of these points.

So it was with the Internet and the trade-off between reach and time: suddenly every single media entity on earth, no matter how large or small, and no matter its medium of choice, could reach anyone instantly. To put it another way, reach went to infinity, and time went to zero…

… there were three strategies available to media companies looking to survive on the Internet. First, cater to Google. This meant a heavy emphasis on both speed and SEO, and an investment in anticipating and creating content to answer consumer questions. Or you could cater to Facebook, which meant a heavy emphasis on click-bait and human interest stories that had the potential of going viral. Both approaches, though, favored media entities with the best cost structures, not the best content, a particularly difficult road to travel given the massive amounts of content on the Internet created for free.

That left a single alternative: going around Google and Facebook and directly to users.

Old Media relies on paid social for reach and discovery. 21st Century Media relies on organic social. Old Media gamifies sharing on social and on dark forests. 21st Century Media is shared because it speaks directly to readers’ interests.

Put another way, Old Media optimises for reach and hopes that will create a relationship. 21st Century Media optimises for relationships because it knows that will create its own reach.

This reminds me strongly of the upside-down funnel that the cofounder of the email service Mailchimp described seven years ago:

What he describes is, in a nutshell, what drives independent publishers:

When you start a business, you don’t have a budget for marketing. You probably don’t have the time or talent for it, either. The only thing you’ve got is your passion. That damned, trouble-making passion that suckered you into starting your business in the first place. Take that passion and point it at your customers.

(Part 3 – a ‘Cambrian explosion’ of direct-to-consumer companies)

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Audience as Capital Discovery and Curation Making Money Online

Infinite reach, micro-brands and linear commerce – Part 1

The writer and media entrepreneur John Battelle describes a form of media arbitrage in the ad industry today:

A big publisher like Buzzfeed or Cheddar sells a million-dollar advertising deal to a marketing brand. The media company guarantees the marketer’s message will collect a certain number of audience impressions or views, charging the marketer a “cost per thousand” for those impressions. (Known as “CPM,” cost per thousand pricing ranges widely, from a few pennies to $25-40 for “premium” placements)…

Because (Facebook and Google are cheaper, have better targeting), publishers have become audience buyers on Facebook, Google, and other networks. Enterprising publishers began packaging their own content with marketing messages from their sponsors, then they got busy promoting that bundle to audiences on Twitter, Facebook, and Youtube, among others.

This is where “the arb” comes in: The publisher will charge the marketer, say, a $15 CPM, but acquire their audiences on Facebook for $7, clearing an $8 profit on every thousand impressions.

But marketers still prefer this approach to simply advertising on social themselves because they

… still believe that the context of a media brand can help their messaging perform better, and they’re not wrong in that belief. So they’ll pay a bit more to have their messaging associated with what they believe is quality editorial.

These practices – “packaging their own content with marketing messages from their sponsors” on social media – will lead to the erosion of the media company’s brand.

The one way sponsorship works is when the publisher has a direct relationship with a defined, loyal audience. Think of websites like Daring Fireball, podcasts like Joe Rogan’s or newsletters like the Morning Brew, each of them their own micro-brand. In this case when the sponsor’s message is packaged with the publisher’s content, the targeting is sharper, it happens on the publisher’s medium, the publisher controls the narrative, and the audience hears about it in a transparent context – this last is Battelle’s main point, the intermixing of content and marketing on social ruins context, which is why it’s disingenuous.

Sponsorship via direct-to-audience properties becomes the norm in the 21st century. This value that these independent publishers capture is the return they see on the capital they have built up in the form of their audience.

(Part 2 – what about the Internet makes micro-brands more attractive than large publishers)

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Audience as Capital Data Custody

A mistake, online presence and ownership

This is a short but important one. Earlier this week, Google lost ownership of the blogspot.in domain. On the day this post was written, it is still marked ‘for sale’.

If you created your blog in India, Google automatically redirected the <your user name>.blogspot.com domain to <your user name>.blogspot.in. Over time, the latter became the domain most sites would link to. This means with this change, all the links that referenced your blog via blogspot.in – Twitter, Facebook, other blogs, even Google search results – are now broken.

In the new Fire 2.0 era your presence online is your capital, meaning the ownership of your identity must reside with you. Not with Linkedin or Twitter or Facebook or about.me. Nor with Google or WordPress or Substack, all of whose business priorities and decisions are independent of yours. These can all be destinations where you publish, build your tribe, create your reputation, but your canonical identity should be your own domain.

This instance seems to have been a mistake but it could well be simply Google deprecating country-specific domain names – a business decision. Like its decision to shutter Google+. Or Yahoo’s to shut down Geocities. If your blog was on one of those, it’s gone from the Internet. Or it could have been on Livejournal, sold by the American company SixApart to a Russian media entity, now conforms to Russian law and serves Russian ads. In all of these cases, you do not have control over your presence.

If, like Google, if ever you forget to renew your domain, let it be your oversight.

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Audience as Capital Data Custody Discovery and Curation Making Money Online The Dark Forest of the Internet

For newsletters to become the new blogs, discovery is the missing piece

The last couple of posts described why online archival of sites and blogs is something I’m interested in. Specifically, the web is getting old, domains expire, blog hosting services change. That reminded me of this article from 2013 by the blogger Jason Kottke:

Instead of blogging, people are posting to Tumblr, tweeting, pinning things to their board, posting to Reddit, Snapchatting, updating Facebook statuses, Instagramming, and publishing on Medium. In 1997, wired teens created online diaries, and in 2004 the blog was king. Today, teens are about as likely to start a blog (over Instagramming or Snapchatting) as they are to buy a music CD. Blogs are for 40-somethings with kids.

Kottke himself is one of the Internet’s most well-known, longest-published bloggers, having written for twenty-two years running, with well over ten of those full-time. But his essay highlighted a trend that has continued unabated. There are more people writing online than ever before, but that has increasingly been on closed platforms like Medium.

The trend around newsletters is encouraging. We have talked before of how major journalists moving to their own newsletters could even spawn a wave of independent, reader-supported journalism. There are many hundreds of high-quality newsletters now, to the point where discovering them is going to be an issue. There is no good search/browse/recommend for newsletters yet.

Newsletters are email, a technology much older than the web itself. But they’re easier to keep track of someone’s writing than a blog. RSS and RSS Readers never really caught one because it was one more piece of software readers had to use, but everyone has an email inbox. For the writer, publishing an email is as simple as, probably simpler than publishing a blog post.

The downside is discovery – where do you find interesting things people are writing?

Discovery is going to particularly important if newsletters are to thrive as an easy means of causal writing and distribution for the average person – because while newsletters have been around from very early on in the form of people just mailing a group of friends and growing organically from there, the latest wave of newsletter services typefied by the venture-funded Substack for who monetization is an important goal. That changes what the service optimizes discovery and promotion for: newsletters about topics that are ‘current’, that have the highest chance of conversion to paid, and not the long tail. It starts looking like other Silicon Valley businesses:

Arguably, it’s another example of money and prestige coming for an internet-age creative format that was better when it was a hush-hush community activity—non-remunerative, an anti-discovery algorithm, full of in-speak, artistically strange (see: podcasts, blogs, fan fiction, memes).

Without discovery, newsletters aren’t going to replace social media as the place most people share what’s interesting to them. Nevertheless, they remain an extremely hopeful medium for independent, direct-to-reader journalism.

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Audience as Capital Data Custody Making Money Online Privacy and Anonymity Real-World Crypto

On the independence of editorial and business during business model transitions

This Financial Times article on the effect of the pandemic on the already precarious state of newspapers’ finances is a good read overall. And at least during the pandemic, it is not behind the FT’s strict paywall.

This little bit in particular stood out for me:

While the audience for online news jumped to new highs during the pandemic, most sites convert fewer than 1 per cent of website visitors into paying readers. Although there are no sector-wide figures, some publishers admit most of those that do pay in America and Europe are older, more wealthy and white.

If it is the dominant class in any market that is the one that pays, there is a risk in the newspaper biasing its coverage towards the interests of that class. Today’s advertiser-driven model carries the same risk – does the move to paid subscriptions simply swap one set of patrons for another?

All media has had tension between business and editorial, and good media has always had a wall between the two sides. But that tension is heightened at times of major business model transitions like this. In the new model, you have a direct relationship with your audience, which pays you. When you lose them, you lose both your readership and your revenue. Independence of editorial gets harder.

This is going to be the big test for both news organizations and independent publishers with the inevitable move to pay-to-read.

End note:

One model is to rely entirely on donations, and force them to be anonymous, like via cryptocurrency. We explored this briefly in part 4 of our series on 21st Century Media. Now neither side of the news organization has any way of knowing who the audience is. It is unclear if there is a natural upper bound on how large of a news organization can run on donations alone. That altruism seems to be the natural governance model for the internet doesn’t mean it is a viable business model.

Another variation of this model could be for news organizations to move to subscriptions, but for a third party neutral organization to act as the trustee of the identities of subscribers. Now this organization could be supported by donations, but now we’re talking about one or a handful that need to be supported, not every news org.

(ends)