Successful business models hinge their ability to measure value. “A well-measured medium is a more valuable medium” according to Nielsen Media Research’s website.
As more reliable and commonly accepted metrics emerge to measure content performance, the more that organizations can estimate the value they create. And, others can estimate how much they would be willing to pay for it. Money will flow to where there is value in the chain. Marketing analytics are based on this sort of reliable measurement, and deals are done based on it. As metrics become better, publishers may be able to use new incentives for writers and producers. Also, a publisher could potentially convince aggregators to pay based on content’s performance. Aggregators could sign up freely or cheaply and pay if content spreads past a targeted threshold. If the price is low enough, and the aggregator can accurately measure the performance, it would be in their interest to share earnings in exchange for reliable content.
In particular, better ways to measure engagement and impact online will likely hold the greatest potential for independent publishers in the future.
Metrics for Engagement
For many independent publishers and aggregators, 60-70% of their online visits are for less than 10 seconds, and 50-60% of all visitors only come to the site one time. With such ratings, traffic number can often be a misleading sign of engagement.
Some people say that “page views” are becoming an irrelevant metric. In fact, many companies such as Nielson/NetRatings, Compete and Facebook are moving to “attention-based” web metrics based on time spent on site. Last July, Microsoft introduced “engagement mapping,” a way of measuring the return on investment based on how all interactions with marketing efforts lead users to take action. There is still disagreement, however, on the best way to measure engagement. Managers of projects such as Yahoo’s Buzz believe that comments, ratings, frequency of sharing and clicks are better metrics for engagement.
If measuring attention is the future of advertising, then why is there still so much emphasis on measuring page views? Muhammad Saleem, a social media consultant and contributor to open-source journalism project Newassignment.net, said the problem is a disconnection between the advertising and publishing industries. “The reason why there is an eternal quest for traffic, not only in terms of unique visitors, but also maximizing page views per visitor, is because advertising networks let you in on the basis of how much traffic you’re generating, and your eventual income is based on the number of impressions (and clicks).”
New metrics for engagement will profoundly affect all publishers, particularly smaller independent publishers who do not generate as many page views, but serve a niche that can deliver great value. Furthermore, if independent media organizations start viewing news as a “loss leader” and sell other products, engagement measures could become critical to their business.
For example, measuring the “average revenue per visit” (ARPV) based on advertising revenue is a common practice. However, people such as Benjamin Joffe, Managing Director at Asia Internet consultancy +8* and Co-Founder of MobileMonday Beijing, have called for new measures such as “average revenue from user” (ARFU). ARFU is based on non-advertising revenue directly from users such as digital goods (e.g. background music, avatars or casual games) or real-world products, which may be a better measure of a user’s engagement from a financial perspective. For independent publishers, it could include users’ donations. Joffe said that advertising has caused media companies to focus too much on generating page views, not making their services better. “Users are mere ‘eyeballs,’ while the real clients are advertisers. The revenue mix defines the service DNA.”
With stronger engagement measures a publisher can better estimate the lifetime value of a customer to make marketing and customer acquisition investments.
While advertising is making progress in measuring engagement, nonprofits also need to find better ways to measure how engagement leads to social impact in order to attract philanthropy.
Metrics of Social Impact
Most independent media organizations are driven by their social purpose more than business. However, measuring social impact is difficult, especially when it comes to goals that include influencing political dialogue, promoting progressive values, or launching a new meme. The complexity of factors contributing to impact online makes it harder for organizations to pinpoint their value. Independent media organizations must simply bear witness about their ultimate social impact through anecdotes. Nevertheless, the more reliably they demonstrate impact, the more philanthropic funding they can attract.
Imagine the value for social change that independent publishers could derive from tools that reveal exactly what online activity leads to social action.
This blog is an excerpt from The Big Thaw, a guide to the evolution of independent media, written by Tony Deifell of Q Media Labs and produced by The Media Consortium, a network of leading independent media outlets. Learn how your organization can use this report. For more information and recommendations from the study, click here.