James Breiner: Entrepreneurial Journalism

Michael McCutcheon of Mic.com

As the publisher of a business newspaper in Baltimore, I used to tell advertisers confidently that no other news medium could duplicate our audience of CEOs, business owners, and high-income decision makers.

First Yahoo Finance undermined us. With their user database, they could deliver advertisers the same people who were reading our newspaper, plus many with that profile who were not.

Now social networks like Facebook are using their data to do the same thing. They can promise to deliver that same targeted audience a lot cheaper.

This is bad news for news publishers, especially since they have become more dependent on Facebook and other social networks for their Internet traffic. Publishers have a harder time establishing the value of their brand to advertisers.

Pew Research reported in 2014 that 30 percent of U.S. adults get news from Facebook. That percentage has been growing, and other social networks, such as LinkedIn, are trying to become publishers, not just platforms, as Mathew Ingram of Gigaom has reported.

In other words, the social networks are competing with news publishers to own the audience, and the advertisers, for news. I am going to focus on how two publishers are dealing with this challenge — Mic.com in the U.S. and Elmeme.me in Argentina.

Reader loyalty a new focus

Mic.com, a news site aimed at millennials, with 19 million monthy readers, is trying to funnel casual visitors into channels that build loyalty.

Michael McCutcheon, director of branded content at Mic, offers this advice to publishers: “If you’re looking for sheer growth and quick growth, Facebook is a platform to really focus on. After you have an audience that’s coming back, that’s a good time to build out your other channels,” McCutcheon told me in an interview via Skype.

One of Mic’s channels for building loyalty is a daily newsletter. Users who sign up for the newsletter are choosing Mic as their news source. Even if only 10 percent of that audience opens the newsletter, they are interacting directly with the publisher’s content and are thus more appealing to advertisers who want to link their brand to Mic’s audience, McCutcheon said.

Applications for loyalty

Mic is also developing an application for mobile users with the aim of converting the casual visitor who comes through a social network into a loyal user. The user of an app, McCutcheon explained, would be accessing Mic’s content directly. Users of news applications tend to check their mobile devices many times a day, which is also attractive to advertisers.

“We’re increasingly looking at the number of returning visitors as a measure of how we’re building brand loyalty,” McCutcheon said. “We’re looking at how likely a particular article will convert a new reader into a returning visitor.”

From an advertiser’s point of view, the gold standard of web traffic is the direct visits that can come to a site from newsletters and apps as well as bookmarks and typing in a publisher’s URL.

New metrics of “attention”

Although publishers still emphasize the metrics of unique visitors and page views, largely because most advertisers still use them to make spending decisions, new metrics are gaining popularity. The so-called attention web measures how actively users engage with content by measuring scrolling, sharing, commenting, time spent on a page, and “liking” or favoriting.

These attention metrics are being advocated by the web measurement company Chartbeat, and McCutcheon believes they will become more widespread in the next few years.

Driving these attention metrics is the goal of Elmeme.me in Argentina, a site of news mainly about popular culture and entertainment. Elmeme suffered a severe blow to its traffic numbers in January of 2014 when Facebook changed its formula (algorithm) for recommending content to its users. What the founders learned from that experience is that they needed to try new tactics to bring their audience closer, to make them more loyal.

Both McCutcheon and I served last summer as advisors to the founders of Elmeme, Santiago Sarceda and Mercedes Reina, and other Latin American news entrepreneurs at The Media Factory News Accelerator in Buenos Aires.
 

Santiago Sarceda of Elmeme.me

Engaging with users 

 Sarceda said the Facebook setback taught them the importance of getting readers to return to the site again and again. They decided the best way to achieve that was to engage in a conversation with users, ask for their opinions, reply to their commentaries, and encourage them to contribute.

“The key is to share content that interests readers, that they can interact with,” Sarceda told me last week in an interview via Skype.

Elmeme survived the Facebook crisis and has prospered. After receiving $75,000 in seed money in the Media Factory, Elmeme is just now completing its second round of investment. Their big traffic numbers are 600,000 unique visitors and 3 million page views a month, half of that from mobile devices.

Last week, 53% of the website’s traffic was coming from social networks, with Facebook accounting for 90% of that and Twitter 8%. Search engines produced 33%.

Lately Elmeme has been encouraging users to register on the site and to contribute articles. So far, 4,000 people have registered, and last month 33 users contributed content. Roughly two of the 10 articles produced daily for the site are written by users.

New products and Mexico

Elmeme publishes a news style guide for contributors with instructions on how to select news topics, how to research them, how to write them, and how to verify facts. The editorial team reviews and verifies the articles before publishing. Sarceda said the plan is to develop beyond this guide into offering basic journalism courses and increasing the percentage of user content.

With the second round of investment, they hope to hire a news editor to produce content for a Mexican edition. Mexico has three times the population of Argentina and a large middle class that makes it an attractive market.

Sarceda and Reina are also looking to develop a content production business. Many advertising and public relations agencies need to produce articles that their clients can put on their websites and blogs, and the entrepreneurs believe they have the expertise and contacts to provide that content.

(Betazeta in Chile has seen the same trend toward content marketing and is creating a business around it.)

Sleeping with the enemy

The data that social networks like Facebook, Twitter, and LinkedIn have on their users makes them formidable competitors for advertising. It is impossible for an individual news publisher to duplicate the scale of audience on the social networks.

In addition, the social networks’ ability to target ads cheaply to the same demographics targeted by publishers undermines their pricing power. And the social networks are damaging the relationship between the publishers and their audiences. Many users don’t notice or don’t care that the article they just read on Facebook about how to ask for a raise was in the Washington Post, Forbes, or Yahoo Finance.

So news publishers will have to continue this uneasy relationship of relying on social networks for volume of traffic while innovating news ways to create loyalty. Maybe they need to consider more native advertising. Upworthy, the news aggregation platform, is reporting that its native advertising campaign has brought in $10 million in its first nine months.

What news publishers cannot do is stand pat. The social web will continue gobbling up their readers and advertisers.

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