Wednesday, September 26, 2018

Media—Amazon Wants To Run Digital Advertising and Subscriptions For Newspapers

Maybe not AMZN directly, but the lines of distinction between Bezos, Amazon, and the WaPo are very faint-to-nonexistant except for the legal fictions.

A deep dive from NiemanLab, Sept. 25:

Newsonomics: The Washington Post’s ambitions for Arc have grown — to a Bezosian scale
It is increasingly the tech stack of choice for major news publishers. But now Arc wants to be the backbone of your digital advertising and subscriptions, too.
In the blink of a digital era, The Washington Post’s Arc publishing platform has sprinted from an experiment to a full-on strategic business.

Arc is now used by more than 30 clients operating more than 100 sites on four continents. It’s not the industry standard, but it’s not too early to call it an industry standard. But its ambitions are still nowhere near met. Now the Post is moving Arc into a new phase, talking of a connective effect that could impact the face of the business formerly known as “newspapering.”

Arc wants to be more than a technology stack — it wants to be a network.

“Arc is reaching a critical mass of most of the advertising markets in the United States, the major markets,” Shailesh Prakash, chief product and information officer for the Post, told me recently, listing off cities where it has customers — New York, Los Angeles, Chicago, Boston, Philadelphia, Dallas, Washington.

How do publishers traditionally make money? Two ways: from advertisers and from readers. Arc has plans to be a player in both for news sites around the country and around the world.
First, ads: The Post will begin testing an ad network based around Arc clients in 2019. “We’ve got this technology we call Zeus, which basically does a more effective header bidding. Does things like autoplay for video, refreshing of ads. And I think our sales team is fairly good on the programmatic side to figure out how to get more, to squeeze money.”

Can the Post convince publishers in all these different markets to let the Post power some of their advertising?Prakash thinks so. “It’s good for us because The Washington Post now has a wider network to sell to, and it’s good for them because we think we can raise their CPMs. Certainly, we raise our own CPMs over here with our technology. So can we do that for others?”
He says Zeus increased the Post’s CPM ad rates by 30 percent. What drives that growth? Speed, viewability, and optimizing programmatic bidding, says Prakash.

Next, readers: The Post’s new ambition is to become a key part of its customers’ digital consumer revenue too — that is, the digital subscription businesses of its customers. At the end of this month, starting with the New Zealand network of sites NZME, the Post will launch a paywall product Prakash calls “a CMS for subscription.”

“Everybody has a paywall, but there’s a lot of back and forth that goes on every time you want to try a particular offer,” he said. “Let’s say Mother’s Day is coming, and you want to be a retailer — put some kind of an offer out there. There’s a lot of friction between the business team that wants to do and the design team and the engineering team that has to implement it.”

Just as content management systems took a once difficult task (updating a webpage) and made it one-click easy, this new offering aims to make paywall adjustments simple to pull off on the fly — “you basically put your creative in there to set your prices and to let the offer go,” Prakash says. Want to make your sports paywall tighter than your opinion paywall and see what happens? Make traffic from Reddit unmetered for the day? Offer out-of-town visitors a different deal than locals get? Each of those could be worthy ideas, “but then it gets lost in all the usual confusion that occurs when an engineering team gets involved.” The goal is to enable rapid and frequent paywall testing, “to empower the business analysts to do their own experiments to come to an optimal configuration of what works for them. The next version of the paywall of the subscription module will be propensity-based.”
At this point, the Post plans to market this offer-making technology to Arc clients. As it develops a more sophisticated propensity modeling — intended to parallel the work of such paywall-tech incumbents like Piano Media — the Post and Arc could get more fully into the digital subscription business. It’s not hard to imagine networked, perhaps bundled, digital subscription offers, though that’s not in immediate plans. The subscriptions product will be in beta this fall and “will become generally available early winter,” says Prakash.

If this story sounds familiar, it’s because this isn’t the first time a Jeff Bezos-led company has tried to pull this trick — becoming the infrastructural underpinnings of an industry by offering products both good enough and easy enough that they fade into the (highly profitable) background. That’s the path Amazon Web Services took to becoming a profit-producing machine. And AWS followed the same path Arc wants to head down: a technology stack built first for internal use (running Amazon’s servers, running the Post’s digital publishing), developed for a “first and best customer,” and then licensed out to the world.

Not a replacement — an upgrade
As the daily newspaper world continues to reel — from print ad loss, uneven digital moneymaking, and intensifying cost pressures — the Post wants to make Arc central to the business strategies of the trade....

Earlier today
"UK's News Media Association says Google and Facebook should fund the journalism from which they profit"
"Amazon staff said to be taking bribes to leak data" (AMZN)