Reality Check on the Promises & Pitfalls of New Technology
Update: This article was originally published in October. We have since updated it with new information on publishers' digital ad revenue.
New technology comes with a lot of hype, particularly when discussed in the context of how it can “save” publishing. Remember when digital magazines were supposed to fully replace dying print magazines? As it turns out, print is still alive and well, and the platforms that once supported the digital magazine’s rise are now defunct, like Apple Newsstand, or stagnant.
That’s not to suggest new technology isn’t making a meaningful impact on the publishing industry. But in order to discover the technology that can make a practical difference on their businesses and bottom lines, publishers need to question their assumptions and cut through the hot air surrounding new tech.
We all need a reality check every once in a while. That was the goal of our technology summit FUSE: The Convergence of Technology & Media. The tech-centric discussions challenged attendees to question the hype and learn from publishers who have achieved their goals by implementing new solutions.
Here are five reality checks to bear in mind when considering the latest and greatest in media technology:
1. Publishers’ share of digital ad revenue is shrinking.
The digital advertising industry continues to grow by leaps and bounds each year, and is now a $59.6 billion business. That means publishers’ digital ad revenue must be growing, right? While overall digital ad sales are growing, the majority of revenue—$7 out of every $10 earned—is going to Google and Facebook. That’s because these sites are capturing massive amounts of traffic and are increasingly where consumers go to find news and information, rather than on publishers’ homepages. Where the eyeballs go the advertising dollars follow.
Despite these challenges, and as FUSE conference chair Jeffrey Litvack pointed out during his keynote, publishers do have some advantages over the internet giants. Unlike Facebook and Google, publishers create valuable content, and according to a recent comScore study, ads on premium publishers’ sites drove more brand lift and had greater viewability than when those same ads were featured on non-publisher sites. Publishers need to find better ways to measure and communicate this value to advertisers in order to reverse digital declines.
2. Virtual reality is not going to revolutionize publishing.
During the Futurist Keynote, Stephen Masiclat, director of Syracuse University’s New Media Management Graduate Program, surveyed the emerging technologies he believes will have a profound impact on the media business and those that are overhyped. Masiclat says that although Mark Zuckerberg wants bring virtual reality (VR) to Facebook’s 1 billion users, it’s not an experience that is conducive to media for a variety of reasons. Those include VR’s massive storage requirements, its nauseating experience, and its questionable applications to journalistic content. While Masiclat admits there may be a role for VR in the video game space, he cannot envision a user experience where readers would want to virtually interact with a news story on the Syrian refugee crisis or an in-depth feature on the presidential election. Without a clear use for the technology, Masiclat maintains that VR is too expensive for most publishers and consumers to adopt any time soon.
3. Artificial intelligence will augment human journalism, not replace it.
The fear (or hope) that artificial intelligence (AI) will replace journalists and editors reveals a lack of understanding of the technology. Masiclat says that the real opportunities in AI allow reporters to enhance the content that they already create. For example, Masiclat is working on a project in which a journalist can write a piece of content and mark key elements in the story. Then an algorithm can develop rules for customizing the journalist’s story, remixing the article based on audience interests. Forbes is also experimenting with AI, said Forbes Media CTO Michael Dugan. The publisher is working with a vendor to develop a recommendation engine that learns what type of content readers are interested in based on their past behavior and then recommends new stories based on those interests. The goal is to keep readers on the site longer and encourage them to engage with more content, said Dugan.
4. Augmented reality has real applications for publishers.
It’s clear that augmented reality (AR) is a popular technology among consumers. The rapid rise of Pokémon Go proved the potential of AR and its ability to deliver engaging user experiences. And this technology presents direct applications in the publishing world. AR has the ability to add context to the information publishers create, says Masiclat. “I think it’s the real next evolutionary step for the journalism content businesses. How long have you been talking about news you can use throughout your career? That’s the essence of augmented reality: having useful information layered on top of everyday context.”
Masiclat adds that in an era of information overload, context is increasingly important for publishers and readers. Providing information to readers when and where they need it most is something AR is uniquely suited to tackle. AR technology can take into account consumers’ environmental data, like their latitude and longitude and their smartphone camera input. Then an AR app can analyze consumers’ content preferences and user behavior and display content that would appeal most to them. Publishers already have the content and facts that readers are interested in learning; AR is simply an opportunity to present that information in an environment and at a point in time when readers need it most. And, unlike VR technology, AR is relatively inexpensive for publishers and consumers to implement.
5. First party data is the most important asset publishers have.
First party data was discussed throughout FUSE. Litvack called it a “gold mine” for publishers. “A huge percentage of advertisers and marketers are beginning to understand the idea that they don’t just need to buy in scale. They can buy very specific, targeted audiences based on specific behaviors.” Publishers need to have the capabilities to parse and target their audiences in the ways advertisers want and are coming to expect, says Litvack.
Publishers’ first-party data can also help them and their advertisers understand readers from a multi-platform perspective. Publishers can track “known” or registered users across devices and platforms. That helps them better understand their readers’ behavior and can enable the delivery of more targeted marketing campaigns. “Consumers view content on their phones, on their desktops, on other devices, but it’s really just one individual,” said Litvack. “Now advertisers realize that [using publishers’ first-party data] they can target these users on an individual level, no matter what device they’re on.” That’s much more reliable than cookie-targeting, which has difficulty tracking users across devices (especially mobile) and many consumers clear their cookies regularly.
Time Inc. has invested heavily in this type of audience targeting. The publisher acquired the ad tech company Viant in early 2016, helping to grow its database to over 1 billion registered users and target ads to those users based on their demographic and behavior across platforms.
Related story: The Top 10 Media Trends Publishers Can't Ignore