The digital media bubble has burst. Where does the industry go from here?
Toward the end of Traffic, a new account of the early rock n roll years of internet publishing, Ben Smith writes that the failings of Buzzfeed News had come about as a result of a “utopian ideology, from a kind of magical thinking”.
No truer words, perhaps, for a digital-based business that for a decade paddled in a warm bath of venture capital funding but never fully controlled its pricing and distribution, a basic business requirement that applies to information as much as it does to selling lemonade in the school yard or fossil fuels.
Buzzfeed News, a pioneer of the internet news business that walked away with a Pulitzer Prize for international reporting in 2021, said it was shutting down its newsroom on 20 April after shares in the company tumbled 90% since the company went public. Buzzfeed CEO Jonah Peretti said the company “can no longer continue to fund” the site.
But that was just one of the pieces of bad news hitting the digital media sector.
Vice News, another pioneer of the period that once achieved a $5.7bn valuation, said it was re-organizing its news operation and cutting jobs as it seeks to sell itself. On Friday, Vice was said to be nearing a $400m acquisition deal from Fortress Investment Group and Soros Fund Management.
The deal, which would save the company from liquidation, would wipe out nearly every Vice stockholder, the Wall Street Journal reported, including backers such as private equity firm TPG Group, Sixth Street Partners and media mogul James Murdoch.
There have been other recent traffic-war casualties: Gawker, which could be said to have started the blog-to-publishing revolution in the early aughts, following the Drudge Report, closed again earlier this year after a brief re-incarnation. And a new round of layoffs at Disney hit Nate Silver’s data-driven politics and journalism brand FiveThirtyEight. Silver told FiveThirtyEight employees he expects to leave the site “soon”. Insider, too, announced serious lay-offs.
Tracing where the seeds of destruction for the insurgent news business were first scattered is an unfulfilling task. Most sites depended on a high number visitors, propelled by viral forces, that could then be harvested for data and sold to digital advertisers.
But the advertising model had deep flaws, not least that the flow of visitors to websites could be disrupted when the primary distribution networks for the traffic – internet giants Google and Facebook – could at any moment change their codes – algorithm – and send internet news customers elsewhere.
“It’s a whole combination of things, and everywhere you look there’s a different factor,” said Emily Bell, director of the Tow center for digital journalism at Columbia University. “Social platforms are, generally speaking, not places where you can build a business.”
Companies like Buzzfeed that had built advertiser-supported business on social platforms soon found they lost it, often to the social platforms themselves, Bell points out. “They are going to take your money and they are going to take your traffic because they can see exactly where it’s coming from and how much you’re paying for it.”
But at a certain moment Buzzfeed hit hard. It went from pioneering the humorous, irrelevant listicle – 25 celebrities that look like mattresses – to major, ground-breaking investigations and a Pulitzer Prize. It could also dominate news cycles, even if in controversial circumstances. It was Smith’s Buzzfeed who published the notorious Russian election interference “Steele dossier”.
At Vice, the story was appreciably different, more strange and far more of a roller-coaster ride. Like Buzzfeed, it received investment from private equity firms but also from A+E Networks and 21st Century Fox. But the same time, Vice founders pursued their own idiosyncratic paths. In 2015, Bloomberg reported that Shane Smith, Vice Media’s 53-year-old executive chairman, spent $300,000 on a dinner in Las Vegas. Smith later said the figure was mostly correct, except that it had come out to $380,000 with the tip.
Another co-founder, Gavin McInnes, who left the company in 2008, went on to found the Proud Boys. Last week four members of the group, including former chairman Henry “Enrique” Tarrio were convicted for seditious conspiracy in the January 6 Capital Hill riots.
If both Buzzfeed and Vice were in different ways emblematic of their eras, then they’re also unlikely to return. The dreams that they pursued were, like hundreds of other internet-based enterprises, a function of ultra low interest rates and speculative investment that have now passed.
“Clearly that VC route runs out after a while, and it’s never going to come back because of interest rates – you’re never going to get returns on investment putting into a Vice Media that’s missing it’s numbers compared to do something else with your money,” said Bell. “Being squeezed by private equity is an ugly place to be because it has no commitment to making media sustainable.”
At the same time, the Vice-Buzzfeed news insurrection may have achieved what they came to do – shake up the media landscape.
In doing so they created opportunities for original, smaller news operations, with a tighter focus and often behind a pay-wall, to form. The most successful of those –Politico, Axios, Puck, Airmail, Talking Points Memo – have found that adaptability is sometimes a greater attribute than hauling around a famous old media reputation.
But not always. The greatest legacy of Vice and Buzzfeed, says Bell, may be that they forced existing media brands to modernize. Once staid brands like the BBC, the New York Times, the Washington Post – and countless others – have fully embraced digital news and the digital revenues that come with it. They have often done so by hiring many of the names that emerged from their digital rivals.
“Their practices and the application of certain practices helped change journalism for the better, make it a bit more relevant,” Bell said “And the idea that lumbering legacy media would never get digital has turned out to be completely untrue – some of the strongest digital offerings come from organizations over a hundred-years old.”
We need levelling up, not sucking up – the-media-leader.com
Opinion: 100% Media 0% Nonsense
Media is more important than ever to advertising. But do enough of those working in media really understand it, asks the editor.
How much does a journalist need to understand about the subject matter they’re writing about?
I’ve been a journalist for 15 years now and this question has rattled around my brain at every turn. How much specialist knowledge is required to do a story justice? How little knowledge can I “get away with” in order to give my audience what they need to know in a palatable way?
The answer, in my experience, is not a simple one. Sometimes “less is more”. You wouldn’t believe how many articles I’ve edited over the last few years, from colleagues and external writers, which are overly detailed, too technical, and bursting with “look how much I know” vibes. Sometimes our industry benefits from generalists who can look at specialist areas with fresh eyes and perspectives from other walks of life.
As usual, the optimal outcome is likely one which promotes as much diversity as possible. Which is why The Media Leader has spent the last few months building our editorial team of journalists to provide insightful and useful content every day on our site and newsletter, but also to inform the array of conferences we host. We don’t claim to be experts, but we do draw on our impressive industry columnists who have “been there and done it” in various areas of media and advertising.
With great growth comes great responsibility
Here’s a dirty secret for you: often journalists don’t really understand what they’re writing about. Many will develop an ability to accurately report what they are told (one step removed from stenography) and others still will develop a good sense to draw on authoritative sources.
One case in point is industry analyst and ex-WPP research lead Brian Wieser, whose latest Madison and Wall newsletter revealed analysis showing that “media agencies were responsible for nearly two-thirds of large agency group growth over the last decade”.
I don’t know how Wieser has come to this conclusion but, having read his work over many years, I take his analysis seriously and feel confident enough to pass it on as useful and authoritative. He estimates that WPP, Publicis Media, Omnicom, IPG and Dentsu (outside of Japan) relied on media agencies for 30% of their revenue in 2022, up from 20% in 2012.
We generally talk about “ad agencies” in our industry, but is that what these businesses are, really, anymore? If the bulk of your business is media-buying, you’re mostly a media-buying company.
‘Hi, I’m a chartered media planner’
And yet, despite media being so important to advertising, sometimes you wonder whether a lack of understanding is plaguing the very people who plan and buy media at agencies, or the advertisers who oversee substantial marketing budgets which go towards media spend.
I was intrigued by a recent blog post by Brian Jacobs, the Crater Lake & Co founder and former international media director at Leo Burnett (when an “ad agency” used to plan and buy media — imagine!)
He suggests we should seek to “kitemark” media planning and buying, or encourage practitioners to prove their proficiency by taking some sort of qualification.
Jacobs argues: “[F]inancial advisors have to take regular exams to update and keep their qualifications. Why aren’t agency media people responsible for investing large sums of money subject to the same scrutiny?”
So I asked Jacobs, what makes you think they need this sort of scrutiny? Some of what I heard was frankly disturbing.
“I hear it all the time when advising on media pitches. Agency people presenting from a script using words and phrases they don’t actually understand, or quoting from studies with which they’re not familiar. The look of panic when you ask them to explain the background from which they’ve drawn their conclusions. The lengths to which they’ll go to avoid answering a question of understanding, instead answering a quite different question to which they happen to know the answer.”
Jacobs may be overlooking how intimidating he is; perhaps these poor agency planners have stagefright in front of someone who literally wrote the book on how to spend advertiser’s money (albeit nearly 40 years ago).
But I’ve heard much the same before anecdotally. There was a network agency strategist expressing frustration recently over junior planners who “accept TGI recommendations without adopting common sense… not unlike driving around with a Sat Nav and misunderstanding it so badly you drive off a cliff.”
My understanding is that the pandemic has worsened this understanding gap. Agencies cut costs too quickly in 2020 and rehired too quickly again during the recovery, with many junior people promoted too swiftly.
MediaSense’s Media’s Got Talent? survey last summer also warned that a majority of people in this industry complain of “over-specialisation” as a limit to their career progression. I’ll repeat: sometimes “less is more”. Over-specialisation is almost as bad as a lack of knowledge — you become so adept at doing one thing that you can’t relate it to how it’s good for all the other things which matter too.
Avoiding a Waystar endgame
Perhaps Jacobs is right and it’s time to create a new gold standard qualification for media planners and buyers to show they actually know what they’re talking about when it comes to media and advertising generally, not just small bits of it.
I’m particularly interested in hearing readers’ views on this, privately or publicly. The Media Leader and our parent group Adwanted is actively looking at how we can provide more education and training tools for the industry. We journalists might just learn something, too.
Because if we don’t encourage a culture of learning and achievement to succeed in media, all we’re left with are a collection of businesses resembling Succession’s Waystar Royco — a nest of viperish and sharp-elbowed sycophants climbing over each other for personal advancement.
Media, as Wieser has shown, has become too economically important for that. We need levelling up, not sucking up.
(But then again, look at this remarkably prescient piece on the importance of generalists from 2011 from one Greg Grimmer, who very coincidentally happens to be my CEO…)
Omar Oakes is editor of The Media Leader. 100% Media 0% Nonsense is a weekly column about the state of media and advertising. Make sure you sign up to our daily newsletter to get this column in your inbox every Monday.
Michaeli slams right-wing, Haredi media for treatment of slain female soldier – The Times of Israel
Labor party head Merav Michaeli attacks right-wing and religious news media for their treatment of Sgt. Lia Ben Nun, a female soldier killed alongside two male colleagues during a Saturday terror attack.
“On the coalition’s media channels, they see a young man and woman alone at night on guard duty, and all they can think about is sex. Not responsibility, not service, not courage, not comradeship. Just sex,” Michaeli says, opening Labor’s Knesset faction meeting.
A commentator on the right-wing Channel 14 insinuated without any proof that the soldiers from the mixed-gender battalion were behaving inappropriately during guard duty when they were killed.
She also singles out ultra-Orthodox media outlets that showed pictures of Staff Sgt. Ohad Dahan and Staff Sgt. Ori Yitzhak Iluz, but either blurred Ben Nun’s image or featured a photo of an inanimate object, in line with the practice of some Haredi media to not broadcast or display women’s faces.
“As far as Netanyahu’s people are concerned, women are good only to be a womb, on their terms, certainly not to be combat soldiers, members of the Knesset, leaders, or just women in their own right,” Michaeli fumed.
“That is why will not give up until we win the fight for democracy and our country,” she adds, tying her criticism to the larger debate on the coalition’s plans to constrain judicial power.
Canada should look to its past and Europe for guidance on media policy — but not south
Seventy years ago, Canadian leaders turned away from the British model of media policy that rejected advertising-supported private broadcasting.
While it’s gone well for a few private corporations, it hasn’t benefited the Canadian public. And the future heralds an even more dangerous American-style media landscape here in Canada.
Canadian leaders once understood the importance and even the potential danger of media to the public. Those lessons need to be remembered. The honourable early history of media policy in Canada needs to be embraced anew.
Aird Commission findings
In 1928, the Royal Commission on Radio Broadcasting, also known as the Aird Commission, was created to consider alternative models for the future of Canadian broadcasting.
It was led by Sir John Aird, the president of the Canadian Bank of Commerce. As media scholar Marc Raboy writes in his comprehensive history of Canadian broadcasting, Missed Opportunities, the Canadian Broadcasting Corporation was established because of public pressure that came from a broad coalition of civic organizations that made up the Canadian Radio League.
The Aird Commission found much to be alarmed about regarding radio. As Aird stated in 1932:
“I have watched — naturally I felt it my duty to watch — the program and the material that was coming over the air, and much of it is of the most objectionable character … what I object to most strongly is the character of the ribald songs and vulgar dialogues regarding robberies, burglaries, hold-ups of banks and things like that.”
The commissioners listened to radio around the world and heard the concerns of various communities with access to the medium. They consistently heard complaints about content, but also about advertising.
As a result of its research, the Aird Commission proposed a publicly owned corporation not unlike the British Broadcasting Corporation (the BBC). It argued the new medium of radio should be regarded as a national public service rather than a profit-making industry, and its ownership and operating structure should be organized to recognize this principle.
Creation of the CBC/Radio-Canada
In 1936, the Canadian Broadcasting Act created the Canadian Broadcasting Corporation/Radio-Canada as a Crown corporation funded through fees known as receiver set licences (initially $2.50 per licence) with limited financing from advertising.
Richard Bedford Bennett, the Conservative prime minister of Canada who had the unfortunate task of attempting to unite a divided and economically struggling country through the Great Depression of the 1930s, pushed the CBC through its parliamentary hurdles.
“This country must be assured of complete Canadian control of broadcasting from Canadian sources. Without such control, broadcasting can never be the agency by which national consciousness may be fostered and sustained and national unity still further strengthened.”
In addition to telling the Canadian story to the booming cities of Vancouver, Montréal and Toronto, the CBC was tasked with reaching remote and isolated rural and maritime communities, providing both national and local voices reflecting Canada and in two languages: English and French. Canada’s vast territory and multilingual character made the CBC one of the world’s most far-reaching and complex public broadcasters.
Yet the Aird Commission recommendation that private broadcasting should be fully replaced by public broadcasting never happened.
The British model of public service media funded through receiver licence fees was eventually abandoned in 1953, and CBC funding would be tied to the shifting sands of parliamentary funding.
Cuts to the CBC
In 1984, the Conservative government of Brian Mulroney made significant cuts to the CBC, and those cuts increased under the Liberal government of Jean Chrétien.
Make no mistake — the BBC has more than its share of problems. While it’s thrived without advertising, it has lost some of its audience to the private commercial broadcasting that began in the U.K. in 1955 and from political pressure exerted by both Labour and Tory administrations.
Nonetheless, the BBC continues to dominate broadcast and online news in the U.K. The CBC has not fared as well.
Budget cuts to the CBC, often fuelled by partisan politics, have wrought havoc. The Windsor CBC station I watched as a child growing up in Detroit was once a profitable Canadian production powerhouse, but it cancelled popular local programming and slashed the news operation.
In 1990, because of further budget cuts, CBC closed down the station’s news department, spurring street protests from thousands of Windsor citizens.
A “Save Our Station” committee was formed to pressure both CBC and the Canadian government to preserve the Windsor operation. Some limited news service was established because of these protests, but other communities once served by the CBC had no such luck.
Private broadcaster CTV has eclipsed the CBC as Canada’s most-watched television network. And according to the independent media database IMDb, CTV’s top programs are all American productions; mainly police and medical dramas.
The European way
Europe suggests a better path. A recent study by the European Broadcasting Union shows a strong correlation between a country’s democratic well-being and robust public service media, including online media.
Social media policy in the United States has generated echo chambers of misinformation and conspiracy and has certainly not curtailed the erosion of civic knowledge. A 2022 study by the Annenberg Public Policy Center reveals that while many Americans are angry about politics, less than half of those surveyed understood the basics of U.S. government.
And in Canada? According to Statista, Canada is one of the world’s most connected online populations, with a social media penetration rate of 89 per cent of the Canadian population.
The most popular media sites in Canada are also U.S.-based — Facebook, Twitter and Instagram.
U.S.-based, advertising-driven social media sites designed to stoke outrage are not creating more informed Canadians. The actions of the so-called Freedom Convoy illustrates this phenomenon.
And, unfortunately, similar to American civic illiteracy, a recent Forum Research Poll suggests only one in 10 Canadians would pass the Canadian citizenship exam.
The future of advertising-driven media does not bode well for democracy. Even Silicon Valley leaders are warning against a laissez-faire U.S. policy approach in terms of generative artificial intelligence/large language models like ChatGPT.
The American threat to Canada continues not because of U.S. power, but because Canadian leaders have not put in place policies to foster and protect Canadian democracy.
Civic organizations of all stripes need to come together to demand a new approach to media that’s informed by lessons from Canada’s past and by the obvious mistakes evident south of the border.
This article is republished from The Conversation, an independent nonprofit news site dedicated to sharing ideas from academic experts. The Conversation is trustworthy news from experts, from an independent nonprofit. Try our free newsletters.
It was written by: Mark Lloyd, McGill University.
Mark Lloyd does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.
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