Winning the Internet is not as easy as it looks. Re/code held its annual Code Media conference in southern California this week, bringing together media industry executives and journalists for a couple of days of…
Winning the Internet is not as easy as it looks.
Re/code held its annual Code Media conference in southern California this week, bringing together media industry executives and journalists for a couple of days of live interviews, discussion and networking.
In past years, it has offered one of the best snapshots of the intersection of media and technology, a topic that usually ends up with the newcomers like BuzzFeed and Vox being lauded and the old establishment like The New York Times and the magazine industry taking a beating.
This year, everyone's in the same boat. Less than two months into 2016, the year has already been brutal for digital media companies and their employees. The laundry list of companies that have laid off employees reads like a "next big thing" list from 2014, including BuzzFeed, The Huffington Post and Al Jazeera America. Even Yahoo has cut at least seven of its verticals.
"Old" media, as it's called in the industry, has it no better. The Guardian said it would be steadily cutting staff over the next three years, and fashion magazines for both women and men have suffered extensive layoffs and, in the case of Lucky and Details, shutdowns.
In the face of this, staying optimistic is difficult, though media executives don't yet seem to be letting on.
Cosmopolitan's editor-in-chief Joanna Coles faced a barrage of questions from Re/code executive editor Kara Swisher about the future of print media and how it should monetize online. Coles deflected and, despite all the evidence of print's decline thrown at her, offered little other than unbridled optimism.
"I’m not nervous about any of it because I think it’s all incredibly exciting," Coles said.
That kind of statement might have flown a couple years ago, but with digital media having clearly entered its awkward teenager phase — not yet a mature adult, but certainly beyond its childhood — those answers did little to counter the industry dread that is getting harder to tamp down.
That's why executives from legacy media companies like Coles and ESPN President John Skipper endured tough interviews.
And that's why, onstage and off, conversations centered on whether the optimism of the digital media boom years that featured soaring reader traffic and massive funding rounds had given way to a steely reality: The Internet is really freaking hard, much harder than anybody had seemed to expect.
I guess this is growing up
At a conference of mostly media insiders, it took a relative outsider to really speak some hard truths.
Gabe Leydon, chief executive of mobile game giant Machine Zone, best known for its ads featuring Kate Upton and Arnold Schwarzenegger, posed some of the most uncomfortable questions of the weekend.
Leydon, whose company has become one of the most aggressive in marketing on both TV and online, said that just reaching a lot of people wasn't enough.
"It’s easier to say, 'I have five million people.' Where? Doing what?" he said on stage. "Do they actually buy things? Do they click on things? Are they real people?"
He added that as measurement of media traffic improves, the industry could be in for a difficult period as advertisers stop paying for eyeballs that may never come.
"If a sophisticated buyer appears, the whole market might get repriced very, very quickly," he said.
That would be a reckoning for the industry, because most media companies depend on advertising dollars to survive.
Leydon's statements proved prescient. About an hour and a half later, BuzzFeed publisher Dao Nguyen would take the stage to talk about audience development, having just published an essay calling for the media industry to begin talking about total reach rather than unique visitors.
While BuzzFeed's number of unique visitors is second-highest among media companies, its growth in unique visitors is nearly flat, according to comScore.
In the post, Nguyen claimed the 80 million unique viewers the comScore tracks to BuzzFeed each month "represents less than one-fifth of our actual global reach."
This is a point that was teased by BuzzFeed CEO Jonah Peretti about a year ago, when he claimed that BuzzFeed could claim a bonkers 18.5 billion impressions.
Those layoffs come as serious questions are being asked about what kind of value actually comes from online reach due to ad blockers, bots and questionable metrics and viewability.
Still, the Internet is seen as a major problem for traditional media companies, particularly those that rely on reaching users through television.
"TV allowed itself get into a rigged game and it's getting its ass handed to it because online [media] set the metrics," said Joe Marchese, head of advanced advertising at 21st Century Fox, in an interview on stage on the Re/code conference.
Marchese might be overstating by saying TV is losing that badly.
The one digital media company that seems to still be on the upswing is Vice, but for a very old reason — it's going to television. CEO Shane Smith said that the decision to start a dedicated Vice cable channel was "logical" because that's where 75% of all advertising revenue remains.
"It’s bringing us more advertising, more money, more licensing," he said in an interview with Re/code media reporter Peter Kafka and Swisher.
Quality over quantity
The silver lining came from Tony Haile, CEO of web analytics company Chartbeat. After looking at a trove of data, his company found that Leydon is right — a lot of traffic doesn't have much value.
More than half of all pageviews for media companies end up keeping a user's attention for 15 seconds.
The good news comes in the form of the content that does keep user attention. Those stories tend to be of considerable depth and quality, such as The Atlantic's "What ISIS Really Wants" and the deep dive into Amazon's workplace culture by the New York Times.
The least read? That tends to be the content the Internet is best known for, Haile said. The main keywords from headlines of the least read stories reads as a laundry list of click-bait classics.
There's no question that what everyone thought readers wanted is changing. The question for the media industry is how to change with them.
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