As digital publishers struggle to boost revenue, many have opted into real-time bidding (RTB) platforms to fill their inventory, created their own exchanges, or experimented with new ad units that drive higher audience engagement - and higher CPMs. One company offering a new model for publishers is Selectable Media. Selectable's ad units ask users to "pay" (either with money or with their time, for example, by watching a video ad or completing a survey) in order to "unlock" content experiences on publisher sites. Currently, its units are live on newspaper, magazine, gaming, and music sites.
I recently had the chance to sit down with Selectable's CEO and my longtime friend Matt Minoff to talk about content innovation, the New York tech scene, and the best country in which to get locked up. Below, excerpts from our conversation:
Kristin Kovner: Recently in The New Yorker, DoubleClick founder and Business Insider Chairman Kevin Ryan said that journalism, print, or digital, "is a bad business so far." What's your take?
Matt Minoff: I'd say publishing is a challenged business, but there's huge societal value in premium content. Newspapers, magazines, websites - people need a trusted source where they can find news and analysis. There is a lot of content out there, though, and a lot of digital sites don't have the same journalistic standards and editorial oversight as The New York Times and The Washington Post.
KK: Funny you mention The New York Times. I think they're one of the few publishers who has done a nice job managing the transition to digital. Where have they gone right and what have they done wrong?
MM: Their meter model was innovative. It allowed them to segment their customer base better. Thinking about media, and this is the same as with many other businesses, there's always 5 percent of the audience that is really loyal and will pay for content. Then there's going to be 15 percent who arrive via search or social and don't even think about the publisher, and a large majority in between who want access but are unwilling to pay.
The meter model helped the Times better bucket their consumers and give those loyal readers an opportunity to activate. It is telling that a large number of newspapers followed in their tracks - including The Washington Post, who said they'd never do it.
The New York Times seems to be the furthest ahead in figuring it out, but they still don't have all the answers.
KK: No one does. So with your products, you're essentially creating a new business model for publishers, letting users "pay" for content with their time. Where are you seeing the biggest success?
MM: We enable consumers to choose the way they pay for content. If they're really loyal they can pull out their credit cards; if they're only interested in an article, we give them a micro-transaction model. And if not, they can find the content from another source. We're helping publishers better understand their audience, segment it, and monetize it.
KK: Anything surprising in the data so far?
MM: One thing that's surprising is that, across the verticals - be it gaming, newspapers, magazines, or getting Wi-Fi access at an airport - similar percentages are self-selecting into the various buckets. Less than 5 percent are going to pay, regardless of the content or experience they're trying to access. Most people would rather trade their time for access than pay.
KK: The units are so flexible. What's been your favorite advertiser campaign?
MM: We did a campaign for National Geographic's show, "Locked Up Abroad." Users would watch a trailer for the show, and take photos of themselves locked up in a country of their choice.
KK: That's hilarious. Did people do it?
MM: Over 60 percent of people who completed the video chose to get Locked Up! Users were sharing their photos on Facebook with the tagline "Help! I'm Locked Up Abroad and the only way to bail me out is to watch the show." We saw a lot of virality around these posts and their friends could click on the link in Facebook and create their own.
KK: So here in New York ad tech is growing like gangbusters. Made in New York is everywhere. Is there an ad tech bubble?
MM: A lot of companies are popping up trying to solve niche problems for marketers and that is making it hard to discern what's valuable. There will need to be some consolidation, but I think there are plenty of standalone companies that will continue to drive value for publishers and advertisers.
KK: What companies - aside from your own - are most exciting to you right now?
MM: One company that's doing really well is Outbrain, with their content recommendation engine. They are capitalizing on the rise of content marketing and have created a new revenue stream for publishers.
KK: I'm going to stop you right there. I gave them a shout-out a few columns back - don't want my readers thinking we're shilling here! Who else?
KK: Let's talk about RTB. Should publishers be excited, scared, or both?
MM: Both. What is already happening is a bifurcation of inventory. There are standard ad units that are being bought and sold in real time and that will continue to grow since it is operationally more efficient. Then there are high-impact, high-touch executions that require a direct sales team to work hand-in-hand with a client. I believe there will always be a need for both.
The area where I think there's opportunity is to use the RTB data to build private marketplaces and keep control of pricing and inventory.
KK: But will clients go for that?
MM: How clients react is definitely the wild card. As more premium publishers move in that direction, operational efficiencies will be created that will make the whole process smoother.
KK: And the sales teams and media teams could spend more time thinking about big, creative ideas that drive more value for advertisers and bring higher CPMs to publishers.
KK: What's one piece of advice you'd give marketers today?
MM: Brand marketers need to make content that's right for the media they're buying. There's still too much repurposing of content - for example, TV spots - and not leveraging the fact that brands have an interactive audience. It requires a lot of experimentation. If brands aren't experimenting, they should be. They should learn, iterate, and be open to exploration.
Experiment image on home page via Shutterstock.
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Kristin Kovner is a digital marketing, technology, and media industry veteran. Her firm, K-SQUARED STRATEGIES, helps high-growth media and tech companies develop and execute best-in-class marketing strategies. Prior to opening her own consultancy, Kristin served as the Vice President of Marketing Strategy at AOL, where she managed the AOL and AOL Advertising brands and set and executed the go-to-market strategy for AOL's owned and operated websites, including AOL.com, Moviefone, MapQuest, Engadget, and The Huffington Post.
Prior to joining AOL, Kristin served as the Head of Industry Marketing for YouTube and held various roles on Google's marketing team. Kristin has also worked as a journalist for Newsweek and SmartMoney, The Wall Street Journal's magazine, and as an economic consultant at Bates White LLC.
Kristin graduated Phi Beta Kappa and Magna Cum Laude from Yale College and currently lives in New York City.
March 19, 2014