T H E
L E A D I N G
V O I C E
CHIEF DIGITAL OFFICER
D I G I TA L
I N N O VAT I O N
NOV 2016 | #2
Facebook vs. Snapchat
Facebook’s Ongoing Feud With Snapchat Raises Questions About Digital Monopolies
WHY THERESA MAY MUSTN’T GET DIGITAL WRONG
The British Cycling Team were almost unbeatable at the Rio Olympics. We look at how a presentation from Head of Performance, Andy Harrison, gave some clues to this success /10
gender in ai why it matters Many have been critical of the NFL in terms of how it utilizes data, but the truth is that they are one of the most technologically advanced sports in the world /22
Diversify your Content, Increase Traffic & Grow Revenue Streams Digital Publishing Innovation Summit December 5 & 6 2016 | San Francisco Speakers Include + 1 415 952 9287 email@example.com theinnovationenterprise.com /2
EDITOR’S LETTER Welcome to the 2nd Edition of the Chief Digital Officer Magazine
Welcome to the second edition of the Chief Digital Officer Magazine. As 2016 draws to an end we can look back over what has been a turbulent year both politically and in the world of business, and assess how far digital has come, whilst looking ahead to the key trends set to define 2017. The shock election victory of Donald Trump in the US has raised some interesting questions around digital publishing and whether there are adequate systems in place to ensure veracity in viral content. Bogus news stories almost certainly had an impact on the result of the election. However, it’s unclear just how much of an impact, and though Mark Zuckerberg initially denied the problem, Facebook has begun work to shut down maliciously false content before it spreads. In this edition, Sam Geapin takes a look at the social media giant’s ongoing feud with Snapchat and the questions it raises about digital monopolies more generally.
Twitter, too, has begun its crackdown on the offensive sentiment pouring out of the ‘alt-right’ communities on its site, suspending accounts inciting racism and bigotry, and more generally there are questions over free speech that major social media sites need to confront. When does a satirical news piece constitute fake news? When does free speech cross over into abject bigotry? These are the difficult questions would-be non-partisan tech leaders need to answer. Across the Atlantic, the UK’s decision to leave the European Union sent shockwaves around Europe and the world. The pound plummeted in the immediate aftermath of the verdict, and uncertainty has plagued what had otherwise been fertile ground for innovation in technology and a capital city that has been something of an incubator for startups. In this edition Stuart Found looks at what UK Prime Minister, Theresa May, must do to ensure that Brexit isn’t a disaster for tech in the UK and questions whether
the new Prime Minister is best placed to decide on all-important matters of digital privacy. Looking ahead to 2017 more generally, this edition considers the future of PR and how organizations can best spread promotional material. We also consider sponsored content as the apparent future of digital marketing, with some good and bad examples underpinning the discussion. Georgina Fitzgerald explains why more companies should consider working toward a subscription business model in the coming year and I explore gender in AI and its implications. As always, if you have any comment on the magazine or are interested in contributing, please contact me at firstname.lastname@example.org.
Charlie Sammonds managing editor
Improve your consumer engagement with a successful mobile strategy Mobile Innovation Summit December 5 & 6 2016 | San Francisco Speakers Include + 1 415 952 9287 email@example.com /4
contents 6 | FACEBOOK’S ONGOING FEUD WITH SNAPCHAT RAISES QUESTIONS ABOUT DIGITAL MONOPOLIES
20 | GENDER IN AI WHY IT MATTERS
Gendered AI systems have the dangerous power of further entrenching damaging gender stereotypes, so why are they almost always feminine?
The two social media giants have been feuding for some time, but what does Facebook’s continual attack on Snapchat mean for the digital landscape? 9 | WHY THERESA MAY MUSTN’T GET DIGITAL WRONG
22 | WHY A SUBSCRIPTION BUSINESS MODEL IS GOOD FOR BOTH COMPANY AND CUSTOMER
The implications of Britain’s exit from the EU are still yet to become entirely clear, but the new Prime Minister mustn’t misstep on digital
Consumers now expect something very different from their money, and a subscription business model can benefit both parties
12 | NOBODY WANTS TO READ YOUR PR
24 | THE VIABILITY OF SPONSORED CONTENT
The majority of companies now have some form of blog, but many get the medium wrong. It takes time to build an audience, but engagement is worth the work
Branded content offers publishing a way around the problems caused by ad blocking software, could it be enough to curb plummeting revenues?
16 | THE FUTURE OF DIGITAL MARKETING
WRITE FOR US
Do you want to contribute to our next issue? Contact: firstname.lastname@example.org for details
Digital marketing is a fast-paced, unpredictable sector. We asked four leading executives where they see the industry going in the future
managing editor charlie sammonds
For advertising opportunities contact: email@example.com for more information
| assistant editor james ovenden
creative director chelsea carpenter contributors jade burnett, georgie fitzgerald, sam geapin, rose johnstone /5
“ Instagram, owned by
Facebook, has a regular user base of 300 million, double that of Snapchat
Facebook’s Ongoing Feud With Snapchat Raises Questions About Digital Monopolies Sam Geapin, Digital Marketing Commentator
As technological feuds go, Facebook’s tussle with Snapchat is a relatively long-standing one.
Image Credit: ArthurStock / Shutterstock.com
In 2012 - just one year after Snapchat launched its ephemeral messaging service - Mark Zuckerberg flew out to Snapchat owner Evan Spiegel’s hometown to discuss a $3 billion cash acquisition. Spiegel rejected the ‘short-term’ gain (a gain of some $750 million per owner) and has even now resisted selling the company despite its incredible valuation. Thus, a conflict was born.
matter, though. Instagram (owned by Facebook) has a regular user base of 300 million, double that of Snapchat’s reported numbers. Current Snapchat users will doubtless continue using the app, but Instagram’s feature threatens the mass adoption - it infiltrates markets Snapchat currently has no stake in - that Snapchat desperately needs as part of its eventual plan to go public.
Since then Facebook has released a number of copycat apps designed to use its considerable weight to annex Snapchat’s user base. The most notable of which was Poke, which was quickly pulled after failing to attract anything like the user numbers it needed. The Verge aptly pointed out it ‘takes more than a few talented engineers to beat Snapchat’ but, at the beginning of August 2016, Facebook took a different and far more threatening tact.
The move is just the most recent in Facebook’s strive for digital monopoly. According to reports, Facebook also plans to alter its primary app to encourage users to take and share selfies, with filters and editing software inbuilt in a manner not at all dissimilar to Snapchat. The feature is only set to be an experiment and may not be available outside of Brazil - it’s ostensibly a stunt for the Olympics but don’t be surprised to see it rolled out worldwide before long.
Instagram Stories - named as a straight-faced mimic of one of Snapchat’s most popular features is so remarkably similar to its rival’s original that it’s been the subject of some ridicule. This might not
A Facebook monopoly is something we should all be concerned about as, indeed, we should with any form of digital monopoly. In some cases, tech companies are already powerful enough to essentially rewrite the
rulebook with regard to privacy and expansion, and in the very worst cases threaten net neutrality itself. Europe, for example, has a history of limiting US tech companies in the continent in the interest of competition and the protection of European business.
A good example of Facebook’s dominance having a real impact on others is the degree to which some publishers rely on it for exposure Facebook has changed its algorithm a few times to limit clickbait articles making their way onto users’ news feeds, but a recent algorithmic change saw the company favor usergenerated content over all published content. Publishers have long been at the mercy of Facebook when it comes to generating an often significant
portion of their traffic through the site, and have often had to alter their content to suit Facebook’s algorithm (think live video, for example). The algorithmic changes are invariably in the interest of the user, and the latest is a step to bring Facebook back to an aggregation of user-generated content rather than a publishing free-for-all. What they highlight, though, are the dangers of monopolization, given the interdependencies that exist cross-industry. Whether Instagram’s new feature successfully tackles Snapchat or ends up on the dust pile, Facebook’s adoption of rivals’ features and - in the cases of Instagram and WhatsApp - their companies, only adds to its stranglehold on the social media market. Imitation is the sincerest form of flattery, but it’s doubtful Snapchat will be too optimistic about Facebook’s continued efforts to swallow it whole.
Why Theresa May Mustn’t Get Digital Wrong Stuart Found, Digital Thought Leader
It’s been well over three months since the UK’s historic Brexit decision and, at least on one side of British political discourse, the dust has somewhat settled.
May’s interest in technology’s ability to surveil the populace is concerning
Image Credit: patrimonio designs ltd / Shutterstock.com
On a day on which his resignation was the third most important news story of the day, David Cameron left as Prime Minister after some six years leading the government, leaving a squabbling rabble behind to elect a new leader. Out of the ashes of any semblance of reality rose Theresa May, not quite a phoenix but bringing with her some calm in a country threatened with the prospect of Michael Gove at the helm. As the Labour Party rallies under the increased mandate of Jeremy Corbyn, May has reshuffled the cabinet and giving hints as to what a Britain under her leadership will look like. One of the key areas of concern - and, indeed, with more justification than many - is May’s plan for the future of digital. After all, her name is synonymous with the Snoopers’ Charter, and according to those within parliament, the new leadership is putting the Government Digital Service (GDS) under threat.
In Deputy Labour Leader Tom Watson’s piece for the Huffington Post, he claims the government is looking to undermine the body, a move that threatens to undo ‘a decade of digital progress in central government.’ Watson goes on: ‘The Home Office has already quietly removed its most senior digital leader and similar positions in the Cabinet Office, DWP and HMRC are reportedly under threat.’ But the GDS’s work has been positive, streamlining government services and making legal or administrative matters both cheaper and more straightforward for the user. Watson uses the example of the DVLA, the digitization of which has made it easier for drivers to pay their road tax bills and has removed the need for paperwork with driving licences. The Gov.uk website, too, ‘enables users to download all the
relevant legal documents, saving them up to £1,000 in legal fees’ when giving power of attorney to a family member. It’s small but significant changes like these that make the GDS such a vital development in UK governmental digitization. In fact, the GDS - which was put together by the coalition government shortly after the 2010 election - has been such a success that the Wall Street Journal wrote in 2014 that it was ‘the gold-standard in the global world of digital government.’ Its strive toward a citizen-centric digital future has been admirable, and Watson somewhat grandiosely describes it as having ‘flung open the heavy curtains of Whitehall and allowed sunlight to illuminate the workings of Government.’ One major concern, though, is that this unveiling, will be heavily reflected back onto those the GDS is supposed to make life easier for. The GDS and the Investigatory Powers Bill (IP Bill) are entirely separate, I should point out, but May’s interest in technology’s ability to surveil the populace is concerning. For more than one reason, too. However troubling or otherwise you find the Snoopers’ Charter to be on a personal or moral level, it’s also bad for business - calls for Britain to become a digital home for the world’s data post-Brexit are crippled by the fact the country has one of the most intrusive privacy regimes in the world. ‘Some of what she's said about immigration is concerning. The tech community is full of wonderfully smart people,’ said entrepreneur and investor Brent Hoberman, speaking to City A.M.. ‘Hopefully she has a more nuanced approach than she's been quoted as having said before and an understanding of the debate in greater detail.’ Particularly in the aftermath of Brexit, it’s important the government don’t place too much of a technological priority on immigration issues at the expense of other sectors.
There is, unfortunately, an overwhelming opinion that May’s time as Home Security did little to further digital rights
Co-founder of the Open Intelligence think tank, Loz Kaye, said: ‘Prime minister May is bad news for technology, business and rights in the UK. The progress of the Investigatory Powers Bill shows she has simply not been interested in the objections and practical advice of tech experts. Her pet project risks saddling British communications service providers with a burden running into billions of pounds. These are not good qualities for our country's leader.’ There is, unfortunately, an overwhelming opinion that May’s time as Home Security did little to further digital rights. It’s vital she takes a more effective stance as Prime Minister, though. For Britain to keep its place as a tech hub, a go-to for international tech companies, it relies on May getting it right. Overt focus on snooping would be a waste of resources, and any kind of dismantling of the GDS would be a major step back for tech in Britain. As May looks to drag Britain out of its post-Brexit decision slump, it’s vital she makes decisions perhaps not entirely in line with her previous beliefs.
Image Credit: Twocoms / Shutterstock.com
Premium online courses delivered by industry experts academy.theinnovationenterprise.com
Though the majority of companies will have a blog, many get the medium wrong
Nobody Wants To Read Your PR Jade Burnett Digital Expert
As an entrenched form of content marketing, corporate blogging is something every digitally adept company seems to - and should be doing. Despite the rise of video content and webinars, and the lasting appeal of eNewsletters and social media marketing, blogging is still the third-most popular content marketing strategy. According to CMI, 81% of companies are using the tactic in 2016 - it’s informative, interactive and can be a great way of driving traffic to a site.
Though the majority of companies will have a blog, many get the medium wrong - creating value for the visitor isn’t easy, and all too often blogs are banal and half-hearted add-ons to an otherwise ordinary corporate website. The ‘build it and they will come’ mentality is flawed, and having a poor corporate blog is arguably worse than not having one at all. A lot of organizations only have a blog because their competitors do and they feel they should. When done properly, though, blogs can build
brand reputation, nurture a sense of engagement and, importantly, let visitors know that your company understands its industry enough to share knowledge. Let’s start with the bad. At its worst, corporate blogging is essentially traditional PR repackaged - overtly promotional content disguised as an ‘update’ or an ‘insight’ into the company itself. The rest of a company’s site is the place for promotional material and, though posts can comfortably allude to products and solutions it offers, visitors will switch off if they feel they’re reading an advert. The companies that get it wrong focus their blogs only on their own products, how they approach problems, and neglect to This point ties in with a wider problem in corporate blogging - it doesn’t consider its audience enough. All too often, companies publish blogs for them, filled with insight too specific to the company to be shareable, and
Good blog content shouldn’t feel didactic, it should feel like a discussion
too promotional to be interesting to a wide group of readers. In some cases - we won’t name names - comments are disabled and no feedback is encouraged; blogs are intended to be more human in tone, more interactive, and visitors should feel they can contribute as well as taking something away. Good blog content shouldn’t feel didactic, it should feel like a discussion. A good example of the medium done right is Hubspot. The marketing software company has successfully built a blog that will appear just about anywhere you search for anything related to marketing tips and insight, with entirely clickable headlines -
13 Networking Mistakes You Need To Stop Making’ for example - and genuinely interesting content that at no point feels like marketing. Hubspot has positioned itself as something of an authority, an insightful educator on top of its core business. At its best, B2B blogging should build an audience and then funnel that audience to the product, a delicate but important distinction from traditional PR publishing. B2B blogging is a difficult thing to master, and far too many companies give up early on when the socalled ‘vanity metrics’ don’t show a significant upturn. It takes time to build an audience, and publishing pieces with only mass sharing in mind is missing the point of blogging. The goal should be engagement; comments mean more than likes. If you’re not using blogging as part of your content marketing strategy, you should be just make sure the pieces offer real value, rather than serving only to promote products that your visitors can find for themselves without the need for microsites and straight faced sales writing.
Focusing your Brand Communication to Improve your Consumer Reach & Return Digital Marketing Innovation Summit March 21 & 22 2017 | New York
Speakers Include + 1 415 952 9287 firstname.lastname@example.org theinnovationenterprise.com / 15
the future of digital marketing Rose Johnstone Digital Expert
The rate of change in digital marketing is such that the industry is simultaneously one of the most exciting and challenging in business. From mobile usage to ad blockers, new trends emerge constantly and digital marketers can often feel like they’re playing catch up. Staying ahead of trends is now one of the most integral facets of a digital marketers work, as consumer behavior and new technology necessitates a change in approach with startling frequency. And marketing is increasingly a digital sector. On average, 60% of a marketers’ time is devoted to digital marketing activities, a number that will only increase as companies move further down the line of digital transformation. 71% of companies planned to increase their digital marketing budgets this year, and it seems the vast majority are ready to go all in on honing their efforts to reach consumers on both mobile and desktop. There are many opportunities to exploit and issues to tackle, like user experience, personalization, mobile engagement, and video strategy, as well as new techniques in more traditional areas like email marketing and SEO.
We asked four industry professionals where they see digital marketing heading next, and received a variety of responses:
Anna Jones, CMO Guzman y Gomez
‘I’m a strong believer in marketing moving out of just making advertising and into owning the full customer experience. Consumers want to interact with your brand whenever, wherever and however they want, they want relevant messages that are useful and they want a tailored experience that can range from easy to immersive. That makes our job that much harder but when you get it right, your customers will reward you.’
Martin Ashplant, Digital Director, Metro
Peter Strohkorb, CEO, Peter Strohkorb Consulting International
Laura Dewis, Deputy Director of Digital Publishing, Office for National Statistics
‘I think there may well be a return to the focus on growing a smaller but more engaged audience for your product. Chasing mass audiences doesn’t always help grow your revenues and can often put you in danger of being perceived as no different to everything else out there. I can see publishers starting to become more concerned with how users are consuming their products rather than how many users are consuming their products.’
‘One thing is for sure, there will be ever new buzzwords and hot new things coming out. The challenge for marketers is not to stay on top of all these trends but to make informed decisions on what will work best for them. That will involve quite a bit of experimenting and trying-and–seeing, which in turn will eat into already challenged marketing budgets.
‘Little and often will be a mantra for many. We’re certainly looking at our publishing model to see how we can be more responsive to user needs. A lot of publishers, ourselves included, have quite fixed ‘periodic’ issues and we recognize that our users need more timely analysis and realtime data. Of course, there is ongoing growth in mobile and video. For data providers who have users who want to interrogate huge amounts of data, neither appears to be the highest priority, but we can’t ignore the growth and changing user behaviors.
‘In B2C, I foresee more specialization and customization by vendors of both their products and offerings and their messaging. They will become increasingly more targeted. We are already seeing the big department stores specializing and moving to store-in-store solutions. I think this trend will continue. On the other end of the spectrum, I think we will see even more price competition in the online space, together with a commensurate challenge for marketers to keep consumers loyal. ‘In B2B, I predict that the boundary between Marketing and Sales will blur further, that the two functions will have to start seeing themselves as two ends of the same banana, one supporting the other to do better collectively, as one team.’
‘We have to both improve the usability of our existing products as well as look at the potential. For us right now, that means concentrating on responsive design for data visualization but we are starting to think about how mobile could be used in data capture and to provide notifications to people providing us with data. In the near-future we’ll also be considering whether users would benefit from location-specific services, utilizing our data. In data publishing, it is all about providing stable, machine readable data to enable greater flexibility in how we share, combine, curate, re-use and present data.’
Delivering Digital Transparency to Inspire Loyalty Digital Strategy Innovation Summit March 21 & 22 2017 | New York
Speakers Include + 1 415 952 9287 email@example.com theinnovationenterprise.com / 19
At the heart of the movie’s drama is the problematic notion that the AI is entirely subservient whilst ostensibly being part of an organically developed relationship
Gender In AI Why It Matters In Spike Jonze’s 2013 drama Her, Joaquin Phoenix’s Theodore falls deeply in love with his new operating system ‘Samantha’ - an AI that develops its own personality. At the heart of the movie’s drama is the problematic notion that the AI is entirely subservient whilst ostensibly being part of an organically developed relationship. The movie’s central premise, satirical as it is, is visible today in flirtatious interactions with developing forms of AI like Apple’s Siri, Microsoft’s Cortana and Amazon’s Alexa. The concept of the ‘virtual assistant’ is developing, from satnavs to voice activated speakers, and the defining characteristic across the board? They’re almost always female. / 20
Jacqueline Feldman - an AI UX designer - is currently programming a decidedly gender-neutral intelligent banking AI, that avoids the often uncomfortably provocative responses programmed by the likes of Apple in an attempt to make an AI more engaging. ‘I tried to avoid traditionally feminine characteristics that are hallmarks of other artificially intelligent personalities, whether that’s over apologising or a certain kind of sass,’ Feldman told Engadget. ‘These personalities will have a kind of humor that is either very self deprecating or else a bit flirty - very gendered. It’s unmistakably ‘feminine’ in the traditional sense of the term.’
Image Credit: Andrea Raffin / Shutterstock.com
one stands up against scrutiny, the selection of gender is pointed. Very few take the same tact as satnavs by giving the user a choice of gender, presumably partly down to the expense involved in recording the statements in both voices, but also because of the nature of some of the responses - two scripts would have to be written, and this is exactly the problem.
Feldman’s AI, Kai, won’t respond to flirtation or insults; it’s strictly business, a decision that raises the question of why some conversations are programmed to be handled by AI at all. Flirtatious jokes are made by both Siri and Cortana as a response to questions which, if asked to real women, would be considered intrusive, unwelcome or insulting. The fact that Cortana is based on a semi-nude videogame character - that appears in a game attributed to Microsoft Studios - should tell us enough about the image of femininity all too often programmed into AI. And so we reach the point at which Jamie Foxx appears in an Apple advert, where Siri adjudges him to be attractive - and tells him as much - before he exclaims ‘You’ve got a crush one me!’ The mind jumps back to Ms Dewey, Microsoft’s ill-advised 2006 project featuring actress Janina Gavankar as an early virtual assistant on a search engine. Her often campy and funny performance was undermined by the responses to flirtatious or offensive search terms, engagement that seems entirely unnecessary. These elements of AI serve no function. In fact, you won’t find a major digital assistant with female characteristics
Image Credit: Soze Soze / Shutterstock.com
that doesn’t have some flirtation programmed into it, and this is a problem. Stereotypical responses to prompts promote gender stereotypes. Veronica Belmont, writing for Chatbots Magazine, summarises the issue well: ‘Gendering artificial intelligence makes it easier for us to relate to them, but has the unfortunate consequence of reinforcing gender stereotypes. To go back to Microsoft’s Ms Dewey, research from Miriam E. Sweeney ‘observed that a user ordered ‘You Strip’ to Ms. Dewey three times, each time prompting a more compliant response from the virtual assistant,’ according to The Establishment. This subtle reinforcement of a ’no means yes’ premise is as dangerous as it is unnecessary; no response is good enough. The very nature of an AI’s existence necessitates it being accommodating, non-confrontational - both deferential and reverent. But, when users want authoritative advice or decision making, a male voice is almost always used. For example, 100% of law bots are male, according to a Survey from Maxus. The company also found that a vast majority of finance agents are male - advice is masculine, assistance is feminine. So, then, even if Clifford Nass’ research finding that people simply prefer a female voice to a male
Engadget found that ‘part of the problem with sexism in artificial intelligence appears to be that there aren’t enough women involved in its creation.’ Much like rampant issues of the female voice in the movie industry - an (in many cases) overwhelmingly male representation of the feminine is, more often than not, problematic. Feldman’s gender-neutral banking chatbot Kai ignores regressive or unnecessary requests entirely and turns the conversation back to banking. This, in a sense, makes Kai a different prospect altogether - the bot becomes distinctly artificial and makes no attempt to appear human. Silicon Valley isn’t exactly a known as a beacon of equality and, in a world in which more and more young people are exploring gender, perhaps more tech companies should learn from Feldman and create an AI not just fit for purpose, but fit for its time.
When users want authoritative advice or decision making, a male voice is almost always used
Why A Subscription Business Model Is Good For Both Company And Customer
The digital membership economy is one of the clearest signals of a public that now expects something very different from their money. The value exchange between consumer and brand has become something far less transactional in recent years driven by the subscription boom. Essentially, the notion of exchanging money for a physical product each time that product is required no longer dominates commerce.
Editorial Credit: GongTo / Shutterstock.com
Consumers, particularly young people, are now entirely happy using credit cards online, and are comfortable with gaining access, rather than actually receiving anything, for their money - think Netflix, Amazon Prime. Subscription has been a facet of publishing for decades, but businesses are finding innovative ways of turning an otherwise transactional purchase into a subscription system. Take Dollar Shave Club - often cited as an example of ingenious persuasion to subscription - a Californian company that have placed themselves as a cost-effective subscription service for delivering shaving supplies. A recent funding round has the company at a reported worth of $615 million, having married a consumer necessity with the convenience of a subscription. The company’s tone is deliberately relaxed, and it succeeds in removing the sense of obligation that can hold back subscription services, making it clear that customers can leave at any time. And the subscription business model is just as important in the corporate world as it is in the consumer market. Where software was once bought as a one-time purchase on a CD - or, harking way back, a floppy disk uploaded to a computer and kept, the rise of cloud-based software solutions has completely shifted the model. The
Editorial Credit: Jeramey Lende / Shutterstock.com
idea of Software-as-a-service (SaaS) now entirely dominates, with the likes of DropBox, Salesforce, Marketo, etc., all allowing access to their products for a regular fee.
spectacular capitulation at the hands of Netflix - as soon as the hassle-free, relatively cheap web streaming service hit the market proper, Blockbuster’s valuation plummeted.
There are benefits for both company and customer. As subscription becomes more and more accessible, the experience for the customer becomes one of convenience. The effort involved in making a payment happens once, the delivery or access is handled by the company and if the product isn’t to the consumer’s liking they simply cancel the subscription. There’s a reason subscription services are keen to present their model in terms of its simplicity - persuading the consumer to part with cash every week, month or year can otherwise be incredibly difficult.
‘The more guaranteed revenue you can offer a potential acquirer, the more valuable your business is going to be,’ says John Warrillow, creator of The Value Builder System. ‘Because a high percentage of the revenue of a subscription-based business is recurring, its value will be up to eight times that of a comparable business with very little recurring revenue.’ In a battle between subscriptionbased companies and other forms of commerce, subscription will usually win out.
For the company, subscription offers a stability that other commerce models don’t. The initial shift can be tricky; moving away from lump payments to smaller, regular sums is a significant change in cash flow. Once achieved, though, a company has both a steadier income and the resultant ability to more accurately predict revenue. Recurrent revenue is, according to Entrepreneur.com, one of the ‘most compelling factors in a company valuation.’ Entrepreneur uses the example of Blockbuster’s
Other issues like inventory are made far more manageable when the outgoing product every month or week can be calculated. Pricing can be simplified, product satisfaction can be more easily gauged and customer experience is improved. If your product could be sold on a subscription basis, and your company can handle the initial revenue stream disruption, consider a subscription model to take your business to the next level.
The Viability Of Sponsored Content
Branded content could be journalism’s saviour, provided it’s done right
Publishers have had a rough time of late. Facebook’s algorithmic change prioritizing user-generated content over editorial content, aside from representing a damning indictment of publishing’s reliance on social media sites, has come at a time when ad blocking is on the rise on both desktop and mobile devices. Essentially, revenue streams are being choked left right and center, and publishers are having to generate new ones to stay afloat in a hyper-competitive, oversaturated market.
some believe it’s advertising itself that needs a revamp - i.e., creating ads that customers won’t want to block - many are now considering native content, as it shapes up to be the future of publishing revenue. Native sponsored content can be irritating, though. Satirical news site The Onion once posted an incredibly sarcastic ‘report’ entitled ‘Sponsored Content Pretty F***ing Awesome,' in which it discussed the love for content that dupes readers into believing it’s editorial.
Ad blocker usage is set to hit 32% by 2017, and by 2020 CNBC claim it could cost publishers over $27 billion in lost ad revenue. And while
But there are ways of publishing sponsored content that benefit both the publisher and the audience. Some of the best and worst examples
come from content designed to be fun - the Onion, despite its satirical jab, publishes some of the finest sponsored content out there. By mocking the medium, the site is open and often self-deprecating about the fact the content is branded, resulting in sharing numbers marketers would kill for. The company’s in-house creative agency, Onion Labs, ensures the content is in keeping with the publication’s tone, and this is the key to successful sponsored offerings. ‘The Onion's sponsored stuff is satirical, like everything else it publishes,’ explained Sam Slaughter, VP of content at Contently. ‘If another publisher is about thoughtfulness and intelligence, its sponsored content needs to be thoughtfulness and intelligence. If it's a magazine about humor and gossip, that piece of content should follow that tone as well.’ Buzzfeed, on the other hand, all too often posts sponsored content that very much feels like it’s been written by a marketing team doing a Buzzfeed style piece - it often lacks the humor or curiosity that makes Buzzfeed so great for its audience.
Comedy isn’t the only medium that lends itself to sponsored work, though. Time Out is another fine example of seamless inclusion of branding, made effective by the very nature of the site’s readership. Time Out visitors are typically looking for (and are willing to part with cash for) experiences, the kind which brands are desperate to sell them. A Time Out sponsored post is essentially nothing more than a biased report on a location that might otherwise be overlooked; what’s important is that it’s in keeping with Time Out’s regular output. Some users will find the sponsored reports dishonest, but most will be comfortable with being suggested another option for their day or night out. It also runs campaigns in conjunction with brands like Booking.com, for example, in this case encouraging people to book a spontaneous trip with the bookings app and providing information on the cities they should or could visit. According to Time Out, third-party research found that ‘consumers’ intent to use Booking.com to plan their next trip increased 57% among users exposed to this campaign.
Problems mainly seem to arise when brands are encouraged to produce their own content, without any input from an editorial or creative agency in-house. City AM has gone down this path, foregoing a creative studio and encouraging brands to create as much content as they wish for a set fee - one 12-month deal is bringing in £120,000 ($160,000), according to Yardley, for unlimited online posts and one monthly feature piece in the print newspaper. The new, significant revenue stream is a clear boon for the paper, but without editorial input but for suggestions, City AM may find its site inundated with second-rate content, something bound to turn off both its readers and its sponsors. Sponsored content may well be the future for an industry plagued by plummets in revenue. With publishers like The Onion and Time Out finding ways to include sponsored posts without affronting their readerships, the future looks viable for the revenue stream many hope could rescue journalism. Bad sponsored content is awful. Good sponsored content is, well, acceptable enough to be a success.
Ad blocker usage is set to hit 32% by 2017, and by 2020 CNBC claim it could cost publishers over $27 billion