The ad-pocalypse cometh
Hello friends! You likely signed up for this after reading one of my essays on Medium. I send this thing every few months, mostly a wrap-up of stuff I'm working on, thinking about, and the best reading from around the web — all ending with a sweet flag. See past issues here. Now, to the newsletter:
I’ll be honest, I’ve sat on this newsletter for a few weeks because I’m worried about how it will read. But here we go anyway.
I’ve been pretty angsty about the current media environment in the U.S. and all of its side effects. You could even say I’ve been old-man cranky about it all.
It feels like things are fundamentally broken, that the incentive structure for online media is poisonous, and that we’re suffering for the problem with our politics. I’m bummed because I feel like a fatalist — like the solutions are impossible because it requires a total rethinking of the way things work, especially around revenue models (I wrote about that here in January).
So, I’ve taken to asking friends if they feel the same, and the answer is almost always a resounding and relieving “yeah, me too.” So, I’d like to expand the question to you: Do you feel frustrated with the current media climate? Tell me about it.
I can’t help but think that all of this unhappiness will bring some sort of cataclysm to relationship between publishers, platforms, and advertising — and that's the theme of this issue. The rumblings are there (as you’ll see in the links below), and I suspect that the ad-pocalypse is near.
Okay, whining over.
(Just kidding, the whining shall continue.)
Emptying the draft folder….
I have a handful of half-completed essays about online editorial and the news ecosystem that don’t quite deserve 1,000 words. So, a new semi-annual tradition here: I’m going to empty out my draft folder and share them with you, each containing a prediction about the months to come.
Prediction #1: Single-purpose news sites.
Those of us that write things on the internet assume our readers have the same hyper-complex mental model of how the web works that we do. But to the average reader, the nuances aren’t as obvious.
Both opinion and reported news articles are on nytimes.com with the New York Times masthead. The TV cable pundit who is a paid party operative is on the same network as the serious investigative journalist. The consequences of this confusion are compounding as the editorial ecosystem matures, leading to broader confusion around the credibility of EVERY news outlet.
Prediction: News outlets will begin to take steps to protect their newsrooms from complaints lobbed at their opinion sections. This will result in news sites that only, well, report the news while analysis is spun off into wholly separate brands. And when you see these brands on social media or on television there will be no ambiguity.
Prediction #2: The apolitical backlash
Teen Vogue now routinely publishes political essays (and a “Woke Letter”). ESPN is facing criticism for its increasingly political tone (and its puzzling, from a mission perspective, investment in 538). Russ Douthat observed before the election, “Institutions that were seen as outside or sideways to political debate have been enlisted in the culture war” and his observation seems more prescient each day.
I have a half-baked theory: Most writers, at the end of the day, want to create things their friends like. To beat a dead horse: most writers at these publications are from a narrowing number of backgrounds. They also need content to spread on social media, a medium that rewards emotion. What better way to do that than writing about political issues? But what's important or "right" to writers doesn't always line up with public opinion.
(One case: That "controversial" Pepsi ad? It worked. 45% of people had a more favorable view of Pepsi after viewing compared to 25% less favorable.)
Brands like Teen Vogue and ESPN are ceding the apolitical ground and thus, some of their audience. I suspect there will be a group of next generation media companies that pick up what publications like these are leaving behind, serving audiences that are not being served well by modern online media. The apolitical backlash is coming. (Or, worst case, there will be a coastal and heartland version of everything).
Prediction #3: The rise of the mini-brands
The recent news about Nautilus’ struggles (more below) are just another reminder: the current economics of the web often don't support labor-intensive editorial strategies that focus religiously on quality. If you want to play the sponsored content or scale advertising game, you may be in luck. But if you’d rather not cater to the whims of social media and SEO practices, it gets difficult.
However, the economics of the web DO support small staffs with focused missions and audiences. I expect that more people will spin off more “micro-brands” with less than 20 staff all focusing on a specific niche or audience (i.e. no “general interest” brands). These brands will take little or no venture capital money, and will derive a significant portion of revenue from direct reader payments (events, subscriptions, products, courses). They will rely less on platforms like Facebook, Google, and YouTube and attempt to reclaim websites as destinations largely using email.
Must-read links:
One sign of the ad-pocalypse: Publishers are starting to revolt against platforms (remember kids, always own your platform). The Chicago Tribune writes how Facebook has suddenly throttled the traffic it was sending there. Publishers like the New York Times have also begun to pull out of Instant Articles when they “found that links back to the Times’ own site monetized better than Instant Articles.” But guys, don’t worry, Facebook totally cares about you. 🙄
Another sign of the ad-pocalypse: Yahoo’s demise is a sign of things to come. With Google and FB collecting 85 percent of all ad revenue, what’s left for the rest of us? From The Atlantic: “If you run a business that relies on digital-advertising revenue for an outsized portion of your funding, you need to find new streams of revenue. Now. It may already be too late.”
On the surface, the science magazine Nautilus is doing everything right: Its writing has won a number of awards, its site is well-trafficked, its articles boast incredible design and depth, and the brand is much-respected amongst both scientific and media communities. Yet, the magazine is behind on its payments to contributors and if it doesn't receive additional funding, could be in serious trouble.
Ever notice those “stories from around the web” blocks that are at the end of most articles? Chances are, those articles were served up via Outbrain or Taboola, who are now reportedly in merger talks. According to Datanyze, the combined entity would be the second biggest player in the space. Less competition = not good for publishers.
One of the rays of hope here is The Outline which is avoiding scale while designing articles and ads for actual humans. As with any media brand there are still questions: Who, exactly, is the audience for Outline? Haven’t seen many many other people claim they have “better ads” only to retreat to the mean? Haven’t readers shown to be ambivalent about a well-designed article page? The current triumph of The Outline isn’t its "success." It’s that somewhere out there a group of smart people are trying something different. As founder Josh Topolsky writes “No one has all the answers, but very few people are even trying to get them.” We could use more people trying to get them.
The reason the web looks like shit? Ads. A browser named Brave comes with built in ad-blocking and is attempting to change the economy of the web with something it calls “Basic Attention Tokens.” I’ve used it on and off for the past two weeks. So far so good!
Speaking of trying awesome new things, the app Hooked invented an entire new way of presenting fiction as text message conversations. The company calls it “chat fiction” and they have been rewarded with the #1 spot in the Books category of the App Store.
Another sign of the ad-pocalypse: Not only are the ads ugly, they don’t even work. My friend Sapna Maheshwari writes in the New York Times how Chase cut the sites it was advertising on from 400,000 to 5,000 and THE RESULTS WERE THE SAME.
My buddy Tom Critchlow writes about what makes good content when all context is lost. In a word: brand.
The consequence of the media industry’s revenue crisis is often seen as an industry problem. But the effects reverberate beyond writers and journalists. The resulting budget crunch has centralized much of our media production on the coasts. And, well, you know what happens next.
This isn’t just a news/content thing. In music, bands made more money in 2015 from vinyl than from streaming.
When the phone company became too big, the U.S. government broke it up. Should we think about doing the same to Google and Facebook?
*cut to me nodding aggressively*
Personal Update:
My new gig as the editor in chief of GrowthLab and I Will Teach You to Be Rich is moving along swimmingly. More insights from this process to come soon. But in the meantime, I’m in search of guest posts for both sites. Things I’m looking for in particular:
Official newsletter flag (for now):
We like to tell children to be anything they want to be, and to live the life they want to live. Whitney Smith actually followed through. Obsessed with flags since he was a young boy, Smith dedicated his entire life to studying and promoting the things. He gave the study of flags its official name (vexillology), designed the official flag of Guyana, founded the Flag Heritage Foundation, and edited the Flag Bulletin. Pictured above, his design for the Antarctic flag lost out to this version as the official continent emblem in 2002. According to Wikipedia, it was designed to look unlike any other nation’s flag, to signify Antarctica’s location on a standard globe, and to stand out in the snow.
Dear reader you stand out better than any orange flag Whitney Smith could come up with. Thank you for getting to the end of the longest-ever edition of this newsletter. <3
-Sean
Above: New York from the Wythe Hotel in Brooklyn.
I’ll be honest, I’ve sat on this newsletter for a few weeks because I’m worried about how it will read. But here we go anyway.
I’ve been pretty angsty about the current media environment in the U.S. and all of its side effects. You could even say I’ve been old-man cranky about it all.
It feels like things are fundamentally broken, that the incentive structure for online media is poisonous, and that we’re suffering for the problem with our politics. I’m bummed because I feel like a fatalist — like the solutions are impossible because it requires a total rethinking of the way things work, especially around revenue models (I wrote about that here in January).
So, I’ve taken to asking friends if they feel the same, and the answer is almost always a resounding and relieving “yeah, me too.” So, I’d like to expand the question to you: Do you feel frustrated with the current media climate? Tell me about it.
I can’t help but think that all of this unhappiness will bring some sort of cataclysm to relationship between publishers, platforms, and advertising — and that's the theme of this issue. The rumblings are there (as you’ll see in the links below), and I suspect that the ad-pocalypse is near.
Okay, whining over.
(Just kidding, the whining shall continue.)
Emptying the draft folder….
I have a handful of half-completed essays about online editorial and the news ecosystem that don’t quite deserve 1,000 words. So, a new semi-annual tradition here: I’m going to empty out my draft folder and share them with you, each containing a prediction about the months to come.
Prediction #1: Single-purpose news sites.
Those of us that write things on the internet assume our readers have the same hyper-complex mental model of how the web works that we do. But to the average reader, the nuances aren’t as obvious.
Both opinion and reported news articles are on nytimes.com with the New York Times masthead. The TV cable pundit who is a paid party operative is on the same network as the serious investigative journalist. The consequences of this confusion are compounding as the editorial ecosystem matures, leading to broader confusion around the credibility of EVERY news outlet.
Prediction: News outlets will begin to take steps to protect their newsrooms from complaints lobbed at their opinion sections. This will result in news sites that only, well, report the news while analysis is spun off into wholly separate brands. And when you see these brands on social media or on television there will be no ambiguity.Prediction #2: The apolitical backlash
Teen Vogue now routinely publishes political essays (and a “Woke Letter”). ESPN is facing criticism for its increasingly political tone (and its puzzling, from a mission perspective, investment in 538). Russ Douthat observed before the election, “Institutions that were seen as outside or sideways to political debate have been enlisted in the culture war” and his observation seems more prescient each day.
I have a half-baked theory: Most writers, at the end of the day, want to create things their friends like. To beat a dead horse: most writers at these publications are from a narrowing number of backgrounds. They also need content to spread on social media, a medium that rewards emotion. What better way to do that than writing about political issues? But what's important or "right" to writers doesn't always line up with public opinion.
(One case: That "controversial" Pepsi ad? It worked. 45% of people had a more favorable view of Pepsi after viewing compared to 25% less favorable.)
Brands like Teen Vogue and ESPN are ceding the apolitical ground and thus, some of their audience. I suspect there will be a group of next generation media companies that pick up what publications like these are leaving behind, serving audiences that are not being served well by modern online media. The apolitical backlash is coming. (Or, worst case, there will be a coastal and heartland version of everything).
Prediction #3: The rise of the mini-brands
The recent news about Nautilus’ struggles (more below) are just another reminder: the current economics of the web often don't support labor-intensive editorial strategies that focus religiously on quality. If you want to play the sponsored content or scale advertising game, you may be in luck. But if you’d rather not cater to the whims of social media and SEO practices, it gets difficult.
However, the economics of the web DO support small staffs with focused missions and audiences. I expect that more people will spin off more “micro-brands” with less than 20 staff all focusing on a specific niche or audience (i.e. no “general interest” brands). These brands will take little or no venture capital money, and will derive a significant portion of revenue from direct reader payments (events, subscriptions, products, courses). They will rely less on platforms like Facebook, Google, and YouTube and attempt to reclaim websites as destinations largely using email.
Must-read links:
One sign of the ad-pocalypse: Publishers are starting to revolt against platforms (remember kids, always own your platform). The Chicago Tribune writes how Facebook has suddenly throttled the traffic it was sending there. Publishers like the New York Times have also begun to pull out of Instant Articles when they “found that links back to the Times’ own site monetized better than Instant Articles.” But guys, don’t worry, Facebook totally cares about you. 🙄
Also: don’t worry Facebook, it looks like publishers are getting tired of Pinterest too. Choice quote: “We’ve yet to find anyone over [at Pinterest] who can actually talk to you about driving organic traffic.” Ouch.
Another sign of the ad-pocalypse: Yahoo’s demise is a sign of things to come. With Google and FB collecting 85 percent of all ad revenue, what’s left for the rest of us? From The Atlantic: “If you run a business that relies on digital-advertising revenue for an outsized portion of your funding, you need to find new streams of revenue. Now. It may already be too late.”
On the surface, the science magazine Nautilus is doing everything right: Its writing has won a number of awards, its site is well-trafficked, its articles boast incredible design and depth, and the brand is much-respected amongst both scientific and media communities. Yet, the magazine is behind on its payments to contributors and if it doesn't receive additional funding, could be in serious trouble.
Ever notice those “stories from around the web” blocks that are at the end of most articles? Chances are, those articles were served up via Outbrain or Taboola, who are now reportedly in merger talks. According to Datanyze, the combined entity would be the second biggest player in the space. Less competition = not good for publishers.
One of the rays of hope here is The Outline which is avoiding scale while designing articles and ads for actual humans. As with any media brand there are still questions: Who, exactly, is the audience for Outline? Haven’t seen many many other people claim they have “better ads” only to retreat to the mean? Haven’t readers shown to be ambivalent about a well-designed article page? The current triumph of The Outline isn’t its "success." It’s that somewhere out there a group of smart people are trying something different. As founder Josh Topolsky writes “No one has all the answers, but very few people are even trying to get them.” We could use more people trying to get them.
Also from the Outline: The web looks like shit.
The reason the web looks like shit? Ads. A browser named Brave comes with built in ad-blocking and is attempting to change the economy of the web with something it calls “Basic Attention Tokens.” I’ve used it on and off for the past two weeks. So far so good!
Speaking of trying awesome new things, the app Hooked invented an entire new way of presenting fiction as text message conversations. The company calls it “chat fiction” and they have been rewarded with the #1 spot in the Books category of the App Store.
Another sign of the ad-pocalypse: Not only are the ads ugly, they don’t even work. My friend Sapna Maheshwari writes in the New York Times how Chase cut the sites it was advertising on from 400,000 to 5,000 and THE RESULTS WERE THE SAME.
Also: Sapna also speaks with P&G’s chief brand officer Marc Pritchard on his frustration with ads. Choice quote: “a big thing is if [our ad is] showing up in content we want to be associated with. That’s one piece of it, but the other piece of it is, is it showing up in a place where people are actually viewing it? So, is it a bot or is it a person? Is it showing up in a place where there’s enough traffic for it to be worth it?”
My buddy Tom Critchlow writes about what makes good content when all context is lost. In a word: brand.
The consequence of the media industry’s revenue crisis is often seen as an industry problem. But the effects reverberate beyond writers and journalists. The resulting budget crunch has centralized much of our media production on the coasts. And, well, you know what happens next.
This isn’t just a news/content thing. In music, bands made more money in 2015 from vinyl than from streaming.
When the phone company became too big, the U.S. government broke it up. Should we think about doing the same to Google and Facebook?
*cut to me nodding aggressively*
Personal Update:
My new gig as the editor in chief of GrowthLab and I Will Teach You to Be Rich is moving along swimmingly. More insights from this process to come soon. But in the meantime, I’m in search of guest posts for both sites. Things I’m looking for in particular:
- Entrepreneurial case studies. Do you own an online business? I’d love to talk to you about your product, how it affects your lifestyle, and how you got started.
- What it takes to be a “top performer.” Are you among the best in your field? I want to hear from you. I’m looking to go behind the scenes of those who are at the top of… well, anything. Whether it’s working out, careers, money. Anything.
Official newsletter flag (for now):
We like to tell children to be anything they want to be, and to live the life they want to live. Whitney Smith actually followed through. Obsessed with flags since he was a young boy, Smith dedicated his entire life to studying and promoting the things. He gave the study of flags its official name (vexillology), designed the official flag of Guyana, founded the Flag Heritage Foundation, and edited the Flag Bulletin. Pictured above, his design for the Antarctic flag lost out to this version as the official continent emblem in 2002. According to Wikipedia, it was designed to look unlike any other nation’s flag, to signify Antarctica’s location on a standard globe, and to stand out in the snow.
Dear reader you stand out better than any orange flag Whitney Smith could come up with. Thank you for getting to the end of the longest-ever edition of this newsletter. <3
-Sean
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