The Newsonomics of 2011 news metrics to watch

[Each week, our friend Ken Doctor — author of Newsonomics and longtime watcher of the business side of digital news — writes about the economics of the news business for the Lab.]

In the digital business, the old aphorism — “If you can’t measure it, it doesn’t exist” — is rapidly moving from article of faith to fundamental operating principle. Measurement systems are just getting better and better.

Yes, there are still quite a few naysayers in the digital news business, those who believe that editorial discretion is superior to any metric the digital combines can kick out. They’ll say you can’t measure the quality of journalism created — and, of course, they are partly right. The truth of the moment is that good (to great) editors, armed with good (to great) analytics, will be in the winners in the next web wars. The same is true for digital marketers working for news companies. Unless they combine their knowledge of markets, customers, and advertisers with often real-time numbers about performance, they’ll lose business to those who do.

The counting of numbers, though, is tricky. So many numbers, so little time, as 24/7 digital keystrokes stoke endless reams of data. Which ones to count, and which to pay closest attention? Meaningful numbers, of course, are called metrics, and meaningful interpretation of those numbers we now call analytics. These analytics, discovered or undiscovered, then drive the business, and they are particularly important in great times of change, when whole industries move profoundly digital. As that old investigative reporter Sherlock Holmes said, “Data. Data. Data. I can’t make bricks without clay.”

In the spirit of the new year, let me suggest some of the more valuable emerging metrics for those in the news business in 2011. Further, in that spirit, let’s pick 11 of them. These aren’t intended to be the most important ones — the mundane price of newsprint, trending up recently, still is a hugely influential number — but ones that are moving center stage in 2011.

1. How much are news companies getting for tablet advertising? Or, in more numerical terms, what’s the effective CPM, or cost-per-thousand readers? In 2010, those with tablet news products reaped a small windfall, gaining rates as high as $150 per thousand readers, which would be 20 times what many of them get for their website ads. Much of that business was “sponsorship,” meaning that advertisers paid simply for placement, not actually based on number of readers. It was the blush of the new, and the association with it, that drove that kind of money. While early 2011 pricing is still very good, as the tablet market goes mass, what will happen to the rates news companies can charge advertisers? This is a huge question, especially if tablet news reading does hasten movement from ad-rich newsprint (see “The Newsonomics of tablets replacing newspapers“).

2. What percentage of unique visitors will actually pay for online access? It’s going to be a tiny percentage — maybe one to five percent of all those uniques, the majority tossed onto sites by search. If it’s less than one percent, paid metered models may be of little consequence. At two percent, especially for the big guys, like The New York Times with its imminent launch, the numbers gets meaningful and model-setting.

3. Where are the news reading minutes going? The Pew study showing that Americans are reading news 13 minutes a day more, probably given smartphone usage, was a thunderbolt — a potential sign of growth for a news industry that has felt itself melting away. With tablet news reading joining even more smartphone reading (only 20 percent of cellphones are “smart” right now), each news company will have to look at its logs to see which readers are reading what with what kind of device — which will tell where reading is increasing and where (let’s guess, print) it is decreasing. Then comes the job to adjust products accordingly.

4. How good are the margins in the fast-developing marketing services business? Tribune’s 435 Digital, GannettLocal, and Advance Internet are among the leaders selling everything from search engine marketing and optimization to mobile and social to local merchants. It’s a big shift for big newspaper companies used to selling larger ticket ads to relatively few customers. There is no doubt that local merchants want help in digital marketing. The number to watch for the newspaper companies is their margin on sales — after paying off technology partners from Google to Bing to WebVisible. Once we see how those margins settle in, we’ll know whether marketing services is a big, or small, play to find local news company profit growth.

5. How much of digital revenue is being driven by digital-only ad sales? McClatchy has been a leader in unbundling print/online sales, with digital-only now approaching 50 percent. That’s a big number for all media companies to watch. Not only is the market pushing them to offer unbundled products, but the sooner they sell digital separately on its own merits, the faster they grasp the growing business and slowly cut the cord to the declining one.

6. How much of news traffic is now being driven by Facebook and Twitter? A few companies, including The Washington Post, know daily how much of their traffic is driven by social media; many others have little clue. Those that do watch the number know that Facebook and Twitter are the number one growth driver for news “referral” traffic, and that social traffic (friends don’t let friends read bad news) converts better to more regular readership than does search traffic. This metric then pushes newsrooms to more greatly, and more quickly, participate in the social whirl.

7. How much will membership grow at the highest-quality, online-only local news start-ups? MinnPost just hit 2,300, an impressive number, but it’s been a three-year road to get there. It is hiring a membership director and trying to better convert regular readers to members. The Texas Tribune is pushing toward 2,000 and Bay Citizen 1,500. Can membership be a significant, and ramping, piece of the new news business model, or will it have to look elsewhere — advertising, syndication, events, more grants — to find sustainable futures?

8. How many titles — and readers — is Journalism Online able to bring into its Press+ network? Journalism Online has moved from a question mark to a well-situated player in the iPad-fueled universe of paid content. Its Press+ network offers the promise of that elusive “network effect” — but only if it gets real scale.

9. How much “extra” do news companies charge for digital access? Okay, every publisher wants to be paid for news content. But as they test out pricing, they’re all over the board in how much to charge. Some want to charge as much for digital as for print; others are willing to throw in digital access for “free” if readers maintain print. The number to watch is one probably about 10-20 percent higher than print alone — as an opt-out upsell — and see how much that sticks with print readers. If that works, new “circulation” revenue helps replaces some of that disappearing ad money — and provide a route to a time of mainly digital, partially paid access.

10. What’s your cost of content? No journalist likes to be thought of as a widget producer, but news is a manufacturing trade, as the Demand Media model has shown us. How can news companies lower the cost of content while creating more? That’s why we see new Reuters America deals, Demand partnerships, more user-gen, more staff blogging. Editors are more needed than ever to make quality judgments about new content, but they and their business leaders must understand what content — high-end and low — really costs to produce.

11. How much do you spend on analytics? Ultimately, investing in the collection and interpretation of data is a big test of news companies’ ability to play digital. I’ve noted (“The Newsonomics of the FT as an Internet retailer“) how the Financial Times has set the pace for the industry in establishing a new team of (non-newspaper) people to run its analytics arm. That operation now numbers 11, up from nine last year. A good beginning metric for any news company to ask: How much money are we investing in understanding our business with the tools of the day?

Links on Twitter: Time-shifted reading, AP and Fairey make nice, two words Microsoft doesn’t want Apple to own

"What I am saying is that if we don’t reflect our communities—both on- and off-line—we’re doomed." http://nie.mn/fCNDPH »

One effect of the move to mobile: time-shifted reading http://nie.mn/enp1PZ (via @jennydeluxe) »

"Digital journalism is different, and the real opportunity is in thinking about how it’s different" http://nie.mn/i40xJF »

What do y’all think? Is Twitter really full of regional accents? http://nie.mn/hL41Ml »

.@AP and Shepard Fairey reach a settlement in the Obama poster case http://nie.mn/gQxBkB »

PSA for Boston folks: The Globe’s hiring for tons of digital positions, including social media producer http://nie.mn/en54ax »

Jon Stewart is kind of excited about the Verizon iPhone http://tv.gawker.com/5731224/ »

How to shut up people who are boring you on Twitter—without shutting them off http://nie.mn/fpkI7X »

Microsoft wants to claim the term “App Store” for its own http://nie.mn/hLPxki »

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  • “Blood libel”: How language evolves and spreads within online worlds

    When Sarah Palin used the term “blood libel” to describe purported attacks on her and the Tea Party movement in the wake of Saturday’s tragic shooting in Tucson, some were left wondering why the former governor would use a phrase historically associated with anti-Semitism.

    But, whatever the merits or demerits of Palin’s usage, it didn’t come out of nowhere. And that alone is a useful reminder that the Internet’s a big, diverse place, stocked with ecosystems, subcultures, and communities that each bring their own assumptions about language. For journalists (or anyone), it can be easy to think that your little corner of the Internet is representative of the big picture. It’s probably not.

    The use of “blood libel” may seem inexplicable — that is, until you go back and look at how the word was used in particular digital media circles during the days since the Tucson shooting. The Lab has written previously about Internet memes, how ideas tend to move more like heartbeats than viruses through the web’s extremities. And the path “blood libel” took — while, on the one hand, it suggests the social divisions that can live online — also offers some insight into the trip memes take as they bubble up into the consciousness of the mass media.

    With a bit of Google News sleuthing, supplemented by a trip to the Lexis-Nexis archive, it appears that the term “blood libel,” pre-Palin, was adopted by some conservative commentators in the immediate aftermath of the Tucson assassination attempt.

    The first use of the phrase I uncovered came on January 9, one day after the shooting, on the website Renew America. As conservative activist Adam Graham put it: “When someone on the left says that the Tea Party movement is responsible for the shooting in Tucson, they are leveling the political equivalent of a blood libel that blames an entire political movement for the actions of a person who in all likelihood had no connection to the movement.” Note that Graham links to the Wikipedia page on “blood libel,” demonstrating knowledge of the traditional meaning of the term.

    The term really sprang into use, however, when conservative blogger Glenn Reynolds (Instapundit) used it in an op-ed in The Wall Street Journal on Jan. 10. Headlined online as “The Arizona Tragedy and the Politics of Blood Libel,” the piece asked: “So as the usual talking heads begin their ‘have you no decency?’ routine aimed at talk radio and Republican politicians, perhaps we should turn the question around. Where is the decency in blood libel?”

    In the days after that piece appeared, more conservative bloggers picked up “blood libel” — and it was further amplified when commentators of a variety of political stripes used the phrase in their discussion of the Reynolds op-ed. Both Reason Online and Associated Content quoted Reynolds’ use of  the term “blood libel” in their broader discussion of political rhetoric and violence. I also found “blood libel” used, without reference to Reynolds, in Human Events, The Washington Examiner, and Big Journalism (in the comment section).

    The surest sign that the “blood libel” meme had caught on, though, came when it started to be used in major media comment sections like those of the Washington Post. Ordinary website readers were now referencing the term.

    And then came Palin. And here we are.

    None of that is a scientific analysis, of course. And as helpful as digital tracking tools like Google and Nexis can be, the fact that “blood libel” was lurking in the web’s shadows in the first place, ready to emerge almost fully formed, suggests the unknowability of the web — its anonymity, its opacity — as much as its readability.

    Still, the general path “blood libel” took over the past few days shines some light on how particular terms move within the digital media ecosystem, and how the use of language that seems strange to many — as it did to many commentators, judging on their reactions to it — can appear “normal” to others who are operating within a different discursive community. That’s not to make another lamentation of “cyber-balkanization” or another call for the return of the “mass public sphere” where everyone read and thought the same thing. It is just a reminder, though, that our digital house has many rooms. Sometimes, when you feel like politicians aren’t speaking to you, you’re right. They’re not.

    AP and Shepard Fairey: Now, they’re business partners

    The AP just announced that it’s settled its lawsuit against Shepard Fairey. (Officially, legally: “The Associated Press, Shepard Fairey and Mr. Fairey’s companies Obey Giant Art, Inc., Obey Giant LLC, and Studio Number One, Inc., have agreed in principle to settle their pending copyright infringement lawsuit over rights in the Obama Hope poster and related merchandise.”)

    The news isn’t a surprise — yesterday, the AP reported, U.S. District Judge Alvin Hellerstein filed an order dismissing both suits based on a “suggestion of settlement” — but the AP’s announcement does contain a rather fascinating little tidbit:

    In settling the lawsuit, the AP and Mr. Fairey have agreed that neither side surrenders its view of the law. Mr. Fairey has agreed that he will not use another AP photo in his work without obtaining a license from the AP. The two sides have also agreed to work together going forward with the Hope image and share the rights to make the posters and merchandise bearing the Hope image and to collaborate on a series of images that Fairey will create based on AP photographs. The parties have agreed to additional financial terms that will remain confidential.

    So the big copyright case ends with a juicy little irony that you can read generously (“work together”) or more cynically (“merchandise”). As Fairey previously put it, in an explanation echoed in much of the case’s media coverage, “This is about artistic freedom and basic rights of free expression, which need to be available to all, whether they have money and lawyers or not.”

    Today, he said: “I am pleased to have resolved the dispute with the Associated Press. I respect the work of photographers, as well as recognize the need to preserve opportunities for other artists to make fair use of photographic images. I often collaborate with photographers in my work, and I look forward to working with photos provided by the AP’s talented photographers.”

    Haiti, before/after/now: Google images tell the tale

    It’s been a year since Haiti’s devastating earthquake, and news organizations have been finding creative and commendable ways to mark the sad anniversary. Some are going local, finding stories within their communities that bring the tragedy home; some are going meta, examining big-picture issues like technology and foreign aid as they relate to the crisis. And others are going back — to Haiti itself, to the scene of the quake, to paint a picture of how far the country’s come and how far it still needs to go.

    Of this last group, The New York Times’s coverage stands out: The paper’s interactive team put together a fantastic interactive map of the devastation, allowing users to experiment with satellite images of Haiti before the quake, immediately after, and now.

    The feature’s general awesomeness isn’t a surprise: Fairly or not, excellence from the team is pretty much an expectation at this point. What’s more remarkable than the graphic’s quality is its source: The interactive uses images from Google Earth and the earth imagery outfit GeoEye. And those images were offered by Google itself.

    In advance of today’s anniversary, a rep from Google Maps and Earth reached out to news organizations, offering a downloadable, high-res photo album; before-and-after stills, hosted by a third party, of tent villages; and videos of before-and-after scenes, including Port-au-Prince’s Pétionville Golf Course-turned-tent camp (on both Quicktime HD and YouTube) and Haiti’s National Palace (Quicktime HD, YouTube). It also provided raw footage — of the Cathedral of Our Lady of the Assumption (July ‘09, January ‘10, November ‘10), Haiti’s airport (July ‘09, January ‘10), its National Palace (August ‘09, November ‘10), and Pétionville (August ‘09, November ‘10) — and contextual info in the form of a collection of Lat Long blog posts describing the mapping efforts the outfit undertook throughout 2010.

    On its own, none of that — Google’s provision of images and video, a news organization’s use of it — is a huge deal: News outlets regularly make good use of Google’s trove of information, for stories big and small. But, as an experiment in collaboration, the Times’s Google-fied cross-pollination is a small reminder of the benefit that can come when news organizations take advantage of resources that lay beyond the walls of their own newsrooms — finding ways of getting there without actually going there. As Sean Carlson, Google’s manager of news industry relations, explained to me: “We’ve heard that Google Earth and Google Maps can be like helicopters in the hands of any news organization.”

    The images, videos, and background info are all still available for any news outfit that wants to use them. A good thing, because, today’s 365-day news peg notwithstanding, the story of Haiti’s devastation isn’t over. The quake created 20 million cubic feet of debris. A year later, only 5 percent of that has been cleared.

    Two journalism awards to know: Worth Bingham for investigations and Taylor Family for fairness

    January is awards entry season in newsrooms across the country — the time when copy machines burn through countless toner cartridges, churning out copies of that great story you wrote back in April, the one that got the mayor thrown in jail.

    And since more journalists are facing financial difficulties these days, it’s worth appreciating the journalism awards that attach a goodly-sized chunk of money to the prestige that comes with winning. I want to let you know about two such prizes we administer here at the Nieman Foundation that have deadlines looming: The Worth Bingham Prize for Investigative Journalism and the Taylor Family Award for Fairness in Newspapers.

    Worth Bingham Prize for Investigative Journalism

    First up: the Bingham Prize, named for the late reporter and member of the storied Bingham journalism family. You can read all about the prize here, but here’s the description:

    The Worth Bingham Prize honors investigative reporting of stories of national significance where the public interest is being ill-served. These stories may involve state, local or national government, lobbyists or the press itself wherever there exists an “atmosphere of easy tolerance” that Worth Bingham himself once described in his reporting on the nation’s capital. The investigative reporting may cover actual violations of the law, rule or code; lax or ineffective administration or enforcement; or activities which create conflicts of interest, entail excessive secrecy or otherwise raise questions of propriety.

    In other words, good old fashioned watchdog reporting. The winner of the Worth Bingham Prize will receive $20,000; past winners include Seymour Hersh, Bob Woodward, Carl Bernstein, Dana Priest, Anne Hull, Diana Henriques, Bill Dedman, and other great journalists. We accept entries from newspapers, magazines, and online-only outlets (sorry, broadcasters).

    The deadline is coming up quick, though: Entries must be postmarked by this Friday, January 14. So get cracking! Entry details here.

    Taylor Family Award for Fairness in Newspapers

    The second prize is the Taylor Family Award for Fairness in Newspapers. The prize was established by the family that published The Boston Globe for more than a century, in particular Globe chairman emeritus William O. Taylor. The purpose of the award is “to encourage fairness in news coverage by America’s daily newspapers”:

    The guidelines for the Taylor Fairness Award do not offer a definition of fairness. This is deliberate, recognizing that elements of fairness in journalism are diverse and do not easily lend themselves to a precise definition for a journalism competition.

    Past winners include the Chicago Tribune, The Hartford Courant, The Charlotte Observer, The Sacramento Bee, and the Globe itself. First prize is $10,000. The contest is only open to newspapers and their websites. You’ve got a little more time to apply for this one: Friday, January 21 is the deadline. Details here.

    Good luck!