Kevin Anderson – Knowledge Bridge https://www.kbridge.org/en/ Global Intelligence for the Digital Transition Mon, 06 Jan 2014 09:28:17 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.10 Digital Briefing Live: Malaysiakini’s Chia Ting Ting on building a premium ad business https://www.kbridge.org/en/digital-briefing-live-malaysiakinis-chia-ting-ting-on-building-a-premium-ad-business/ Thu, 01 Aug 2013 14:56:17 +0000 https://www.kbridge.org/?p=3936 Malaysiakini, Malaysia’s largest independent news website, has been able to double their advertising revenue by being nimble and developing a premium advertising strategy that relies more on direct sales and less on ad networks. In this edition of Digital Briefing Live, we sat down with Malaysiakini’s senior advertising manager, Chia Ting Ting, to hear how to develop a premium advertising business to earn more revenue per visitor to your website.

Educating advertisers

It is one of the paradoxes of digital journalism that increasing the size of your audience doesn’t always result in higher income. Some of that disparity can be attributed to the fact that while advertisers want to shift their advertising budgets from offline media to online media, they also need to learn about the opportunities, Chia said. Educating advertisers about the possibilities of digital advertising is an important first step in building an effective and revenue-earning premium advertising strategy.

Educating advertisers starts with producing rate cards and media kits to fully introduce their site to advertisers. One of the key messages is that digital advertising is not a blind mass campaign, she says. Online advertising is about about measurability and being able to target specific audiences. She said:

You need to have a demographic breakdown (of the visitors to your site). That is the main product you can use to attract advertisers and convince advertisers to come and buy advertisement on your website.

To deliver better targeted and better performing digital advertising campaigns, publishers need to invest in technology that allows them to build a demographic profile of their audience. Malaysiakini has detailed information about the age, income and education of their audiences. They have information about the interests of their audience, such as whether they are into automobiles or online banking. All of this data, which is included in their media kits, provide essential demographic information to advertisers so they know who they can reach by partnering with the site.

In addition to printed media kits, Malaysiakini also has an advertising blog which provides further information about advertising packages and advertiser-focused events. These events and conferences are another way to educate advertisers and communicate to them the opportunities they have with digital advertising.

“We actually have a new media school. We discuss different topics, and we invite advertisers, agencies and advertising department staff,” she said. They sometimes charge for these conferences, particularly when they have high profile speakers who bring expertise in digital advertising campaign measurement, models and services. Some conferences are on very specific topics such as how to use measurement tools like Google Analytics.

Premium advertising strategies

One of the factors contributing to the challenge that news organisations have faced in earning advertising revenue from their digital audiences has been downward pressure on digital advertising rates. Many early stage news websites are reliant on advertising networks for their ad strategies, but falling rates over the past several years have made it difficult for news sites to earn enough revenue from digital advertising alone to cover their costs. Malaysiakini earns less than 10 percent of its advertising revenue from ad networks. Instead of relying on ad networks, they have developed premium advertising strategies based not just on the richness of the demographic data but also on providing new ad formats that appeal to advertisers.

Malaysiakini charges premium rates for premium placement on their site. “It is usually the top spot, and it has very high engagement and is very creative,” Chia says. Malaysiakini does not put ad network slots on the top of their pages because it would undermine their efforts to charge higher rates for those slots.

Premium buy advertising is sold by their own in-house sales team, and the premium pricing is for advanced campaigns. Companies allocate a lot of money to premium campaigns, she said. This is where the demographic data of their audience is key in convincing advertisers to pay more, not just for premium placement but also to reach specific audiences.

Chia says that you also need to have flexible site designs to make sure that audiences don’t suffer from “ad blindness”. Ad blindness occurs when publishers have fixed spots and formats for their advertising. After a while, audiences simply learn to ignore these areas of the site.

Be nimble

News publishers need more than just flexible designs. They also need to be nimble to keep pace with the rapid changes in digital advertising. Real-time bidding is coming to markets like Malaysia. As we’ve written about before, real-time bidding, also known as programmatic or algorithmic buying, uses site visitor data to buy, sell and display highly targeted advertising. Publishers are concerned that real-time bidding, or RTB, will put further downward pressure on advertising rates.

“RTB is one type of ad network,” Chia said, adding, “your ad will only appear to your target audience. … (RTB) is not a blind network but a highly targeted network.”

She gave the example of two computer companies, Acer and Toshiba, trying to sell their laptops. They will enter their bid price, and Malaysiakini will enter their floor price, the minimum price they will sell their advertising for. If the companies bid over the floor price, and if the target demographic visits the site, their ad will appear.

There are concerns that RTB will affect their premium ad strategy, but in this industry, when everyone launches a new technology, “we cannot escape from the new landscape,” she said. “We need to be part of it.”

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How to build audience and revenue using events https://www.kbridge.org/en/how-to-build-audience-and-revenue-using-events/ Wed, 31 Jul 2013 12:23:37 +0000 https://www.kbridge.org/?p=3908 One of the common strategies employed by successful news organisations making the digital transition is to diversify revenue streams beyond subscription and advertising to include services and events. Research by US journalism professor Jake Batsell found that some news start-ups are earning up to 20 percent of their revenue from events, an important contribution to their profitability.

News start-ups covering specific niches such as technology or politics are finding the most commercial success in using events, and general interest news groups are using events build audience and increase audience loyalty, which has also had a positive impact on revenue. In fact, some news groups have even regretted not pursuing events as a possible revenue stream, which was part of a larger lack of business focus at launch, Batsell said.

“A lot of news start-ups tend to come from very idealistic roots, from journalists who haven’t had much business training, and they feel like if they go out and do great watchdog journalist that it will pay for itself,” he said, adding, “That is not always the case.”

His research on events, which has been released in a peer-reviewed paper and will be included in an upcoming book, explores how to decide whether an events strategy is right for you and how to develop that strategy.

In a presentation (see at the end of the article) at the International Symposium of Online Journalism in April, Batsell summarised the best practices he identified in 100 interviews with more than 20 news organisations during his research.

  • Designate an event planner.
  • Seek out sponsors to make money.
  • Networking is a key attraction for attendees.
  • Build support in the newsroom.
  • Provide memorable experiences.
  • Don’t expect a “golden goose”, a huge revenue generator, “but with an authentic approach, events can produce revenue and audience goodwill – preferably both.”

Evaluate the opportunity costs

“I think there is an opportunity in just about any market to put together some kind of event that is going to be meaningful to your community, to assemble your community in a way that only you can as a media outlet,” Batsell said.

Almost every community has key business or cultural groups that can form the basis of an event, and asking the right questions will help you evaluate the opportunity:

  • Are there leading business communities in your area, such as agricultural, technology, transportation or the media, that you could create an event to serve?
  • Could you provide these groups an opportunity network?
  • Do you already have special sections covering these business areas?
  • Does your community have key cultural dates during the year that you could create an event around?

Identifying the most promising business or cultural group or demographic will help you identify sponsorship opportunities and estimate potential income.

To be successful with events, Batsell suggests appointing a person who is responsible for the events business.   He said:

Ideally, if you have a director of events, that is great, but not everybody can afford that. If you’re a newsroom who has a social media manager or community relationships manager, that might be a place to go where someone can handle that on part-time basis.

In some instances, a journalist or journalists will be involved, to host and/or cover the event, and Batsell says that key in determining whether or not to pursue and events strategy is to determine the opportunity costs of the staff involved. The opportunity cost is the value of the best opportunity that you have to forego to carry out your event. In other words, does the value, both commercially and editorially, of hosting an event outweigh the staff time spent doing existing responsibilities or another activity?

Build sponsorships

While some event strategies are focused more on building audience numbers, loyalty or both, most events are developed with a specific commercial goal. To be successful commercially with events, sponsorships are essential because the bulk of revenue from events is generated by sponsorships, not ticket sales.

It is essential to identify clear sponsorship opportunities early, at the project evaluation stage. If you can’t locate enough sponsors, or if sponsors aren’t willing to pay enough to help you earn meaningful revenue from the event, you might want to either change the type of event or drop it entirely.

Batsell says that is why it is essential to have a member of staff whose job, either part-time or full-time, it is to develop the events.  He said:

You have to have a point person coordinating these events and seeking sponsorship for these events because that is really where these events make their money. It’s not through ticket sales. It’s through finding a good corporate sponsor who wants to put themselves in front of a demographically desirable audience that a news start-up can assemble.

Build newsroom support

After analysing your market and weighing the opportunity costs, Batsell found that news leaders need to make sure that they solicit the support of journalists and editors. He said:

There are still many journalists who were trained that journalism and business were separate entities that should never be mixed. Of journalists that I encountered at these events, some were very comfortable, more or less serving as emcees at these events and intertwining it with their journalism. Others were not so much. They saw it as a marketing exercise, and that is not what they signed up for when they went to journalism school.

If I were a news manager of newsroom where there were some sceptics, what I would point out to these journalists. “Hey, if this can generate more revenue that can save more jobs and pay for more journalism, aren’t we all for that?” I think some managers are better than others at communicating that goal and underscoring to your staff that being ambassadors for your brand and reaching out to your audience in person is part of the job these days. There may be some resistance to that in the DNA of journalists but you gotta get past that because it can help feed the journalism.

Successful examples

Batsell found the most financially successful examples were those news organisations or news start-ups that targeted a commercially desirable demographic and gave them opportunities to network.

Geekwire

In Seattle, he looked at Geekwire, a site that covers the tech start-up community. In 2012, they held nine events which made up 40 percent of their total revenue, boasting a 20 percent profit margin. The events include their tech start-up awards, which provide not only sponsorship but also a chance to generate coverage for the site. Other events are just for fun and act to bring their audience together socially, such as a ping pong tournament. The events are “designed to bring the local tech community together like no one else does”.

Geekwire was profitable during their first full year, but they fell just short of profitability in 2012. Co-founder Todd Bishop told Batsell the shortfall was partly due to costs they inherited from an event they took over from another organisation, which highlights some of the challenges of events. “Events are not a panacea,” Batsell said.

Texas Tribune

Texas Tribune is a non-profit news organisation in Texas that provides coverage of state government. They have a number of events including a regular series called Trib Live, in which Texas Tribune editors and journalists interview newsmakers in front of a live audience. In addition to streaming the video on the Texas Tribune site, it is also streamed on Facebook.

It is paid for by a small number of corporate sponsors. Batsell said:

It’s free to the public, but it often produces news content. Newsmakers say newsworthy things, and the insiders feel like they have to be there. There are 200 to 250 lobbyists with legislative staff at 730 in the morning at the Austin Club, all there convened by the Texas Tribune.

The Texas Tribune makes about 20 percent of its total revenue through events. As a non-profit, the Texas Tribune has a number of sources of revenue and financial support, including foundation support, member contributions and sponsorship. Last year, their revenues were higher than their costs.

Mount Pleasant Sun

The Sun is a newspaper in Mount Pleasant Michigan, and they held an Art Walk event in conjunction with the local arts council. They set up a satellite newsroom at the event and had staff working there for half the day over several days during the event. They didn’t have corporate sponsors, but they did have a special tabloid advertising section in conjunction with the event.

Batsell said events like this were difficult to analyse in terms of success. While it was good for the community, the commercial outcome was more difficult to assess, and Batsell said that in cases like this, being clear about the opportunity costs were key in helping news organisations decide whether this was the best use of their resources.

WBEZ radio Chicago

WBEZ is a public radio station in Chicago. Public broadcasting in the US is supported through a mix of listener contributions, corporate sponsorships and some public funding. Like most public radio stations in the US, WBEZ broadcasts a mix of news, discussion programmes, music and cultural programmes. They have an eclectic range of events, which they believe appeals to their listener members such as themed movie nights or Chicago chef competitions. WBEZ says that the goal of their events is to create a memorable experience that people associate with WBEZ.

While it was again difficult to quantify the success of these events, WBEZ did have some indication that events were playing a part in maintaining their member support. Over the past five years, the number of contributing members had gone down, but the amount of contribution per member had risen. Public radio stations solicit contributions and new members on-air in what they call pledge drives, and they have been able to reduce the number of pledge drive days by 30 percent despite the lower number of members. “Events are a piece of that, but it’s not the only part,” Batsell said.

While success might be difficult to quantify in every instance, Batsell believes that events can be a key alternative revenue stream for news organisations. He said, “I think that every news organisation needs to explore because the opportunities are there.”

Here is the presentation that Batsell gave at the International Symposium on Online Journalism:

http://www.slideshare.net/jbatsell/isoj13-batsell
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Sustainable, staged strategies to serve your mobile audiences https://www.kbridge.org/en/sustainable-staged-strategies-to-serve-your-mobile-audiences/ Wed, 24 Jul 2013 00:30:56 +0000 https://www.kbridge.org/?p=3842 In 2010, Steve Jobs said that we were entering the post-PC era, a time when smartphones, tablets and other smart devices would start to overshadow the personal computer.

While tablets and flagship smartphones might seem developed-world luxuries, mobile broadband and increasingly inexpensive internet-enabled mobile handsets are bringing digital media and communications to all markets. Desktop computer and laptop sales are set to decline in emerging markets, while smartphone and tablet sales expand dramatically, according to figures from research organisation International Data Corporation. As we have noted, for many transitioning countries, mobile is the only way that audiences access the internet.

If you do not deliver a mobile-optimised experience to your mobile audience, you are missing an opportunity to grow audience and grow revenue, as Terence Eden demonstrates in his look at mobile ad networks.

Serving mobile audiences need not be complicated or expensive, and independent news organisations are finding ways to launch mobile strategies despite the press of other priorities and lack of dedicated mobile resources.

Assess the opportunity

The first step in your mobile, or in fact, any strategy is to understand the opportunity, both editorial and commercial.

As Premesh Chandran, the CEO and co-founder of Malaysiakini.com, says, he views everything in terms of return-on-investment and opportunity costs. He outlined some of the thinking that went into assessing their mobile options:

Really, are we going to make money (advertising, subscription) with a mobile app versus a mobile site? What kind of resources will I have to put in? How do we sustain the development?

Malaysiakini, Malaysia’s largest independent news website, had plenty of other challenges and opportunities in the past few years, including defending itself against cyber-attacks that attempted to make the site inaccessible to its millions of monthly visitors.

Chandran had to determine whether the mobile opportunity was valuable enough to dedicate time and resources to when weighed against other demands.

Mobile market statistics for your country are one place to look. For Malaysia, the opportunity is clear. Mobile subscribers have expanded from 6 m in 2000 to 37 m in 2012, according to market research firm BuddeComm. “After starting off slowly, broadband internet has been expanding strongly in recent years and coming into 2012 had reached a remarkable 63% household penetration,” the group added.

Beyond relying on market statistics, you also have a rich source of information already in your own site data. By looking at your site analytics, you’ll be able to see who is coming to your site via mobile devices and also some basic information about the type of devices. This can help you develop a profile of your mobile audience. You can see if they are using smartphones, such as Android, Blackberry or Apple smartphones, or whether many are using more basic internet-enabled handsets, including Nokia’s Asha line of handsets, which target developing markets.

With more sophisticated analysis, you can determine whether mobile visitors are coming to your site and leaving quickly by analysing your bounce rate and seeing whether mobile visitors are a higher proportion of those leaving quickly. The article linked here highlights the three mobile statistics to focus on in Google Analytics and how to find them. The article says the three figures are:

  • How many people are visiting your website on mobile.
  • How your mobile bounce rate compares to your desktop bounce rate.
  • Which devices your mobile visitors are using.

If mobile visitors are contributing more to your bounce rate than desktop visitors, it might indicate that they are leaving in frustration as your site fails to load quickly and eats into their data use. For many emerging market mobile data users, they are price sensitive and will not want to download large pages. It is not uncommon for modern pages with non-mobile optimised images to be a megabyte or more. On more basic internet-enabled mobile phones, these large pages will be almost unusable.

Mobile site, app or both?

Delivering a good mobile experience for your audience need not be difficult or expensive. After assessing the opportunity, Chandran was able to deliver a range of mobile options for Malaysiakini readers. He said:

We ended up with a mobile site (m.malaysiakini.com) an Android app (because one of our developers was keen to do it) and a iOS mobile app (because an external developer was willing to do it for free). The iOS mobile app, also had a tablet version (one app, two layouts).

Regardless of the project, this shows the value of hiring not just good, but passionate, developers, whether on staff or via contract. Good developers want to take on new projects and develop new skills.

Most publishers will want to start small, which means delivering a mobile site. Chandran said:

We think that for news sites, mobile browsing is easier and more cost effective to manage than apps. Apps need to be consistently updated with every OS version, which is costly.

Many content-management systems can automatically detect whether a visitor to your site is coming from a computer or from a mobile or tablet device and deliver the appropriate template. However, to take advantage of this, you’ll need to have a good mobile template, which includes:

  • A basic fast-loading design modified for smaller screens.
  • Mobile optimised search and navigation.
  • Mobile optimised images that load more quickly over slower mobile connections.
  • Mobile advertising options.
  • If necessary, integration with your paid content system.

Achieving these goals are much easier than they were a few years ago. With growing mobile audiences, content-management systems have added mobile features, and for popular open-source CMSs such as WordPress and Drupal, mobile templates are common.

With the proliferation of devices and screen sizes, some news groups have turned to responsive design. Kayla Knight has a concise but comprehensive overview of responsive design in Smashing Magazine. In it, she writes:

Responsive Web design is the approach that suggests that design and development should respond to the user’s behavior and environment based on screen size, platform and orientation.

Malaysiakini does not use responsive design, and it is still very rare amongst news websites. As your mobile strategy and the revenue from it develops, you might want to consider it in the future. For those publishers who use WordPress, fortunately there are several very good free and premium themes that are responsively designed.

Revenue options

Of course, part of assessing the opportunity includes trying to estimate the commercial opportunity. As with your standard website, you can easily start to generate some revenue using mobile ad networks. As you develop your strategy, you will want to make sure that the ad network you choose meets the needs of your strategy, such as supporting not only a mobile website but also any apps that you might considering developing.

Ad networks can allow you to start earning revenue, but you will also want to make sure that selling your own mobile advertising is part of your revenue strategy. Malaysiakini does not have any advertising staff dedicated to mobile, but they are using both ad networks and in-house sales to support their mobile strategy, Chandran said.

However, one of the key things that many sites are finding is that advertising is only one revenue option in terms of mobile. As we saw in our recent article looking at paid content strategies in Latin America, mobile and tablet apps can be an important part of a paid content strategy. Smartphone and tablet owners are often more affluent than the general population, even in developed markets, and have shown a greater willingness to pay for content.

Mobile must be a part of your digital strategy or you risk artificially limiting your audience and missing the opportunity to establish yourself early in the mobile advertising market. Fortunately, delivering your content to mobile audiences is getting easier, and you shouldn’t wait to start taking a few simple steps to inexpensively serve mobile users in your audience.

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Poor design is costing publishers valuable digital subscribers https://www.kbridge.org/en/paid-content-commercial-integration-as-important-as-editorial-integration/ Wed, 17 Jul 2013 10:43:00 +0000 https://www.kbridge.org/?p=3773 After years of indecision over whether people would pay for digital content, a few high-profile success stories have given publishers hope that they can earn much needed revenue with paid content strategies. Many point to the Financial Times, the New York Times and the strategies of Piano Media in Slovakia as evidence that people will pay for digital content.

However, look beyond these standouts, and the picture is much more mixed. Fortunately, with more paid content projects being launched in the last two years, we now have the data to understand the factors that determine success or failure.

While it is easy to point to the size and resources of the New York Times and the Financial Times, they alone do not guarantee success. While pursuing a very different paid content strategy than the FT and the New York Times, The Times of London has not been as successful with its paid content model, and it is backed by the resources of News Corp. Away from the big beasts of Western Europe and the US, Piano Media works with many smaller publishers and has shown that size doesn’t necessarily matter.

As Tomáš Bella, CEO of Piano Media, said in our previous coverage of paid content, user experience does matter.  It is a point that Earl Wilkinson, the executive director and CEO of the International News Media Association, echoed in talking about the differences between success and failure in paid content strategies. Wilkinson said:

What media company executives tell me privately, across the industry worldwide, is the radically different performance in digital subscriptions has nothing to do with content or design. It has everything to do with a very poor user sign-up experience online.

Your audience expects the easy user experience and excellent customer service of major e-commerce sites, and if you can’t provide that, your paid content strategy will suffer.

Research and data are key

To deliver the best paid content user experience, both Piano Media and the New York Times used research and analytics to refine their approach.

Paul Smurl, Vice President, The New York Times Company, speaking at the Digital Innovators’ Summit in Berlin earlier this year, advised companies to “listen to readers and take their guidance”. It takes “rounds and rounds of research, in person”, he said.

For most companies and especially small independent news organisations, this kind of intensive research costs too much. However, this should be one of the criteria you use when evaluating a paid content company to work with. How deep is their research, not only generally about their own paid content products, but also what kind of audience research can they provide to you.

Wilkinson pulled no punches in criticising the poor user experience many news publishers provide when they are asking their audiences to pay for content.

The consumer expects Amazon. Instead, they are getting a clunky registration process that is the product of poor engineering.

And he believes the reason for such poor engineering is clear.

There are too many print people touching digital (and not enough digital people touching print) in the news industry. Either change the people or outsource this process.

Getting the user to the sign-up page

Of course, you first have to get a potential customer to your sign-up page, and as we recently covered, email and social media marketing are key in getting the customer there, according to British magazine publisher IPC Media.

As most publishers know, building a digital audience is relatively easy, but engaging that audience enough to be able to generate revenue from them is another thing. IPC media head of subscription marketing Beatriz Montoya said at a Media Briefing conference in London that the publisher was considering allowing readers access to some premium content if they left their email. Many other sites have added pop-ups that encourage readers to sign up for newsletters.

Email registration is the first step in engaging customers more deeply with your content and encouraging them to subscribe. It gives you a communication and marketing channel to your online audience, but when developing your multi-platform sustainability strategy, it is important that your digital marketing works in concert with your traditional marketing strategy.

Knowing your audiences better

The heavy use of data does not end in designing your paid content offering. In fact, while paid content and advertising are often seen as competing strategies, they are complementary. Digital paid content strategies are about deeper engagement with your audience and deeper knowledge about your audience, and that can be a very attractive proposition for advertisers.

Business Day in South Africa launched the first paid content strategy in the country, BDLive, earlier this year. They use a metered model, where digital audiences get some content for free before being asked to pay. It is similar to the approach used by the FT and the New York Times, and they have worked with Evolok to provide the sign-on and management system.  South African website The Media Online looked at progress at BDLive, including how it is leveraging deeper user data to improve advertising performance.

For advertisers, the subscription model relies on sophisticated analytic tools and data gleaned from user profiles and user behaviour to enable advertisers to construct clear, precisely defined campaigns with minimal churn.  Since its launch, BDlive has attracted a number of campaigns from major South African companies and sold sponsorship packages in a range of niche areas to both large and small corporate brands and public sector firms.

Keeping your subscribers

Of course, gaining new digital and print subscribers is one thing, keeping them is another. In addition to the success of the metered model, many publishers are coupling this with a bundled model, in which they combine print and digital or desktop, mobile and tablet apps in a single subscription. To make this print-digital bundling possible, it is important for news groups to make sure they have CRM, customer-relationship management, systems that are up to the task.

The sign-up page may be turning away would-be subscribers, but Wilkinson believes that another reason for poorly performing paid content strategies is the poor integration of print and digital CRM systems.

Obsessed with delivering a perfect “print + digital” sign-up experience, publishers can’t get their back-end databases to talk with each other efficiently enough – and that back-end difficulty is getting translated to the front-end.

How many times have you gone to a website to buy something and stopped because the shopping or payment process was too difficult? That is what too many potential customers are finding when they try to pay you for your content. The industry has been focused on print and digital editorial integration, but Wilkinson is highlighting that commercial integration is just important.

As more publishers adopt paid content strategies, we now know that people will pay for digital content and we also are beginning to understand what determines success or failure. As you pursue your paid content strategy, remember:

  • Digital audiences have high expectations when it comes to ease of use. Use data and research to make sure you aren’t turning potential customers away.
  • Use the data you gain from your paid content strategy to deliver better results for your advertisers. This will allow you to grow your subscription and advertising revenue.
  • Make sure your CRM systems across print and digital work together so you can deliver the best customer experience to your subscribers regardless of the platform.
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Don’t forget email in your content marketing strategy https://www.kbridge.org/en/dont-forget-email-in-your-content-marketing-strategy/ Tue, 09 Jul 2013 16:01:23 +0000 https://www.kbridge.org/?p=3771 It has been fashionable, over the past few years, to talk about the death of email as more people turn to social networks to communicate. But email newsletters remain a powerful way for news websites to build a loyal audience.

Email marketing seems so low-tech, but it is enjoying a resurgence because it is inexpensive and, if done well, it works.

In an article on technology news site Wired, highlighting an “email newsletter renaissance”, former Hufftington Post Chief Technical Officer Paul Berry said:

As much as we’re told e-mail isn’t sexy, no one sends more e-mail than Facebook or Twitter, and the reason they do is we’re all on e-mail and it brings you back.

An email marketing success story

Two years ago, the Foundation for New Journalism in Iberoamerica launched a programme to provide technical and commercial skills to the rapidly growing number of news and information start-ups in Latin America. As part of this programme, 10 start-ups were chosen “based on their journalism and ethical standards, and their potential for growth” to take part in an entrepreneurial journalism programme.

The results were impressive leading, on average, to an 80 percent increase in site visits across the start-ups, according to James Breiner, writing for IJNet and News Entrepreneurs.  A Salvadoran sports site was a standout success:

El Salvador FC, a soccer website, increased its total visits by 264 percent to more than 1 million by employing a series of strategies, such as updating news at least 10 times a day, promoting news through email and seeding its news in other blogs and web pages.

Obviously, email was part of a broader strategy of regular updates and a wider social media campaign, for example, successful Facebook campaigns drive about 20 percent of the traffic to the site. But you don’t have to choose between email and social media – an effective digital marketing and engagement campaign can and should use both.

It is also important to point out that simply building audience doesn’t guarantee sustainability; despite its success with increasing traffic, El Salvador FC is not yet profitable. However, as the site works towards the break even point, its email and social media strategy has added audience with low costs, although it is time intensive. El Salvador FC founder and editor Carlos Lopez Vides said:

This type of marketing costs us nothing but does require a big time investment. It recognizes the power of the users to share and recommend the product. We, the editors, have to empower the users to maintain their interest and support.

As Lopez Vides says, email marketing is inexpensive. A study in the UK found that it a fraction of the cost of other marketing methods such as direct mail or telemarketing. It was even cheaper than SMS marketing. The same study found that it also had a higher response rate than direct mail or internet advertising, although lower than direct mail or SMS marketing.

How to create a successful email campaign

Just as with your digital strategy in general, data will be key to the success of your email newsletter marketing efforts, and with the renewed interest in email newsletters as an audience building or marketing tool, we have access to data on best practices even before you start.

Email marketings software company GetResponse analysed 21 m messages sent during the first quarter of 2012 to determine the best open and click through rates and also the highest engagement times. The analysis found (emphasis theirs):

One of the most important conclusions is that sending newsletters during readers’ top engagement times of 8 a.m. – 10 a.m. and 3 p.m. – 4 p.m. can increase their average open rates and CTR by 6%.

However, they also point out that you need to analyse your own data to make sure you understand how your subscribers behave.

Another factor that can affect open rates is the subject line of your email. Another newsletter service provider, MailChimp, analysed 40m subject lines to see which ones worked best. They even have a tool that will give you a rating of words used in your subject line based on historical response rates. They compared the best performing subject lines, email newsletters that were opened by 60 to 87 percent of recipients, versus the worst performing subject lines, those that were only open one to 14 percent, and they found:

On the “best” side, you’ll notice the subject lines are pretty straightforward. They’re not very “salesy” or “pushy” at all. Heck, some people might even say they’re “boring.” On the “worst” side however, notice how the subject lines read like headlines from advertisements you’d see in the Sunday paper. They might look more “creative,” but their open rates are horrible.

That doesn’t mean that you can’t be creative in your subject lines, but their research found that it was all about expectations. “The best subject lines tell what’s inside,” they said.

Fortunately, email newsletter software such as GetReponse and MailChimp has become increasingly sophisticated, allowing you to do A/B testing. This feature allows you to test the performance of subject lines or delivery times, for example, Mailchimp will send the same email using two subject lines to a small percentage of your list, then automatically sends out the email with the best performing subject line once the trial period has ended.

Marketing your paid content offering

Email registration for newsletters has also been used as part of a paid content revenue strategy, allowing those who register to access premium content on your site.

As digital advertising rates dropped, publishers have used email newsletter signups to gain more information about their users, which they use to deliver more targeted advertising and as part of the marketing strategy for their paid content offerings.

British magazine publisher IPC offered email newsletter subscribers access to ‘certain content’ to entice readers to sign up for newsletters or register with sites, says The Media Briefing. Once IPC has an email address, it works to gain even more data about these users so that they can tailor marketing messages about subscriptions and paid content options.  It is a typical funnel marketing strategy.

Email marketing may seem simple, but successful news organisations and media companies are using it in incredibly sophisticated ways as a means to increase their audience and audience engagement and also as the first step in marketing their paid content offerings. The key is to make sure that you’re taking advantage of all of the tools that modern email marketing software delivers so you can get the best results.

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News organisations in smaller markets must develop multiple digital revenue streams https://www.kbridge.org/en/news-organisations-in-smaller-markets-must-develop-multiple-digital-revenue-streams/ Wed, 26 Jun 2013 05:00:36 +0000 https://www.kbridge.org/?p=3699 Most news organisations have found great difficulty in charting a path to sustainability relying solely on digital advertising. The only sites that have successfully done this are ones that are able to attract huge audiences.

This is all the more challenging in smaller, less digitally developed markets. To achieve sustainable digital growth, news organisations – particularly in these smaller markets – will have to creatively develop a range of revenue streams to start generating financial returns from their digital efforts.

BRICS driving digital development

One of the challenges for the digital transition for news organisations is that it is happening at different rates in different countries and can even vary widely within countries. Digital media and digital markets in the urban centres of major emerging economies may look very similar to North America and Western Europe, but in the early stages of the digital transition, digital opportunities look much different.

As Orlando Alvarez, Creative Director in Publicidad Comercial Lowe El Salvador, points out in another Knowledge Bridge article, in the smaller markets of Latin America where digital is not well developed, advertising agencies struggle to make digital campaigns pay as budgets are smaller and dedicated digital budgets are usually non-existent. This is what news organisations experience in smaller markets around the world.

Alvarez highlighted how the major economies in Latin America – Mexico, Argentina and Brazil – are driving digital growth in the region, and he highlighted how the digital market is very different in smaller economies.

The same could be said in Africa, where major economies such as South Africa, Kenya and Nigeria have digital market dynamics completely different to most other countries in sub-Saharan Africa. A lot of international coverage of African digital development focuses on Kenya and South Africa. As a report into the contribution of the internet to the South African economy said, South Africa is thought to have the largest internet economy in Africa. But even in South Africa, the report found that internet advertising was fourth out of five categories in terms of contribution to the South African economy. Digital advertising only accounted for 1.5 bn Rand compared to 29.2 bn Rand for internet access.

In Asia, the massive economies of China and India flatter the digital advertising growth figures. In Russia, while internet growth is booming across regions, it still lags well behind St Petersburg and Moscow.

Creative solutions for sustainability

This requires news organisations in smaller, less digitally developed markets to think creatively about how they identify digital opportunities and how they grow their business to support those efforts.

Keep costs low – One simple answer to this conundrum is simply to keep costs low. One of the reasons why digital media is so disruptive is that distribution costs are so much lower than other media such as print. As we highlighted in our recent Digital Briefing looking at content-management systems, it’s always a good idea to focus on lightweight, flexible and low-cost solutions.

Develop niche products – As Alvarez said, most digital-only media outlets have survived by focusing on “very defined target audiences”. Niche products, whether digital or print, have a place in most markets, regardless of their stage of digital development and disruption.

As Michael Chalhoub, the founder of Gulf Sports Media said at the recent World Newspaper Congress, “Print is not dead, neither in our market nor in the world, it is just being redefined: there is a huge demand for niche products.” Sports, entertainment and lifestyle sites or special publications can be very popular not only with audiences but also advertisers.

Develop digital ‘tools’ – In developing markets with publicly available data, Knight International Journalism Fellow Justin Arenstein recommends that news organisations think beyond stories and develop digital tools. While this might sound counterintuitive because most people assume that the costs would be too high to support in a developing digital market, Arenstein highlighted the StarHealth tool created by The Star in Kenya. The searchable database allows readers to see if a doctor has been convicted of malpractice. The project cost less than $500 and took one developer four days to build with the assistance of two journalists.

Arenstein told editors at the World Editors Forum, “These are tools that people start to use beyond news. They also make people come back to these sites, and this eventually helps to generate revenues.”

Develop digital services and other revenue streams – As we discussed at the MDIF Media Forum last December, one area where many MDIF clients and other news organisations around the world are finding success in building revenue streams is by offering a range of new services. These might be digital marketing, community management or website and app development. As Alvarez said, 95 percent of digital advertising revenue in the smaller markets of Latin America comes from work around community management and website and app design.

The benefit of offering such services for news organisations is that they can develop their digital capacity while offsetting costs by selling it more widely, domestically or even as it grows, internationally.

Events can also be another way to build revenue to support digital efforts if sufficient sponsorship can be attracted. MDIF client Malaysiakini hosts digital marketing events, some meant to educate and attract advertisers and other larger events to earn revenue from ticket sales and sponsorship.

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Don’t wait to compete for mobile ad revenue https://www.kbridge.org/en/dont-wait-to-compete-for-mobile-ad-revenue/ Fri, 21 Jun 2013 11:18:11 +0000 https://www.kbridge.org/?p=3635 The global mobile internet advertising market is forecast to almost double this year from $8.8bn in 2012 to $15.82bn, according to eMarketer, and Google is the undisputed leader, capturing 56 percent of all global mobile advertising revenue.

No other company is even close to Google. The survey saw Facebook take second place, having captured 13 percent of worldwide mobile ad revenue in the two years since it began running mobile ads. That means that these two companies alone capture just shy of 70 percent of all mobile ad revenue.

In countries like Bangladesh, Senegal, South Africa, Ghana and Indonesia, a report last year by mobile browser maker Opera found for a majority of internet users in those countries that mobile is the only way people access the internet. Smartphones and simpler mobile phones with internet access might be the primary way that your audience is accessing your website, which is something easily confirmed by looking at your digital statistics packages.

Also statistics show that mobile audiences are younger audiences, and this is just another example of how digital platforms allow you to reach different demographics, rather than simply shifting your current audiences.

Initially, the opportunity to earn revenue from mobile advertising seemed even less than internet advertising, which has seen rates plummet over the past few years. However, as we have seen with the desktop internet, major players have been earning vast sums of money. The challenge for news organisations is that they haven’t enjoyed the same dominance in digital that they enjoyed in print and still in enjoy in broadcasting.

The major internet players are already aggressively growing their mobile advertising revenue and news organisations cannot afford to wait to pursue their own mobile revenue strategies.

Building a staged strategy

The first step is to make sure that you are doing your best to serve mobile audiences. Fortunately, making your sites mobile friendly is now easier than ever with mobile themes and plug-ins for popular platforms such as WordPress and many development frameworks that allow you to create mobile and tablet editions for your sites.

In terms of monetising mobile audiences, while eMarketer looked at global mobile advertising revenue, most news organisations do not operate globally and must instead focus on their local or regional market. You will want to first evaluate where both your consumers and your advertising markets are in terms of mobile adoption. If your consumers have already flocked to mobile but your advertisers are still reluctant, initially, you’ll need a low-cost solution but one that scales as the opportunity grows.

Start with mobile ad networks  – Just as ad networks can help you get a start in paying for the costs of your initial internet efforts, there are mobile ad networks specifically designed to help you begin monetising your mobile audience. mobiThinking has an up-to-date guide to ad networks and a guide on how to choose an ad network, including a list of ad networks by region and country. One key thing they note is that no one mobile network is dominant.

Just as with your traditional internet advertising, you’ll want to develop premium advertising options as quickly as possible. Ad networks can help you with that and as the digital advertising network matures it is rapidly developing premium options and strategies across all forms of digital advertising including mobile.

When you’re developing your mobile site, you’ll want to make sure that you can easily integrate ad networks and standard mobile ad formats.

Explore local advertising opportunities – For local media, there are unique opportunities. Google has found that about 50 percent of all mobile search is local, and that means that often your audience is looking for nearby businesses or services. Local media already have the sales relationships with local businesses, and this can be a great competitive advantage. You’ll want to explore what options mobile allows for targeted local advertising.

With the rapid rise of mobile, advertisers and marketers see a huge opportunity, which means that there is a lot of money pouring into innovation in this space. For instance, in Malaysia, telecommunications provider Maxis has launched a mobile deals service targeted at 15 shopping destinations that will send subscribers to their myDeal service offers when they are shopping. The service doesn’t require an internet connection but instead relies on determining the location of the customer based on mobile phone masts (cell towers). The deals are delivered by SMS.

Tablets offer unique revenue opportunities – When thinking about mobile content and revenue strategies, it is also important to consider tablets, especially phablets – large screen smartphones – such as Samsung Galaxy Note or Asus FonePad. These devices are competitively priced when compared to smartphones and an absolute steal with compared with laptops or large-screen tablets. For emerging markets, this is the perfect option for someone who doesn’t want or simply doesn’t want to pay for both a smartphone and a laptop.

Tablets or phablets open up all kinds of opportunities if they are popular in your market. For one, numerous studies show that tablet owners engage with content almost as heavily as print readers. That’s definitely something to remember when pitching to advertisers.

Of course, advertising in not the only source of revenue to consider. As we noted in our April Digital Briefing, Folha in Brazil introduced a paid-content strategy that charged for tablet and mobile app access. In most markets, tablets are initially bought by affluent members of your audience, and this type of strategy allows you to add a new revenue stream from those who can afford to pay for your content. Note that less than six months after Folha started charging for their tablet and mobile apps, they also added a metered paywall for their website.

Launch a mobile division – As your mobile market grows and the commercial opportunity will support it, larger organisations should consider launching a mobile division to create mobile products and generate mobile sales. The Media Briefing in the UK recently profiled how Norwegian publisher VG has done just that and is on track to dramatically increase the group’s mobile revenue. Norway is a very advanced digital market, but in major emerging markets, mobile use may quickly catch up with developed markets in ways that the traditional internet won’t for years to come.

This staged strategy will help you grow are your market and your organisation develops. However, no matter the size of your organisation or the state of your mobile market, it is an opportunity that news organisations cannot choose to ignore. The major internet players are moving aggressively to dominate in mobile just as they have with the desktop internet, and news organisations must make sure that they do not wait until Google and Facebook come to dominate your mobile market.

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PwC report: TV growth to continue for next five years despite shift to digital https://www.kbridge.org/en/pwc-report-tv-growth-to-continue-for-next-five-years-despite-shift-to-digital/ Wed, 12 Jun 2013 10:28:11 +0000 https://www.kbridge.org/?p=3608 Growth forecasts for the top 10 largest newspaper markets 2012-17 by PricewaterhouseCoopers

Major emerging markets and regions will power the next five years of growth in media and entertainment, and in these rapidly growing markets, growth will come not just from digital but also from traditional media such as television and newspapers, according to an annual media forecast by PricewaterhouseCoopers (PwC).

Globally, digital media will continue to be the prime driver for growth. PwC defines digital revenue sources broadly, including not just advertising but also consumers buying digital content and digital access. The report finds that:

By 2017, digital revenues (including consumer spending on digital content, digital advertising spending and spending on Internet access) will account for 47% of the total, up from 35% in 2012.

However, digital media is not the only growth story in the report. PwC forecasts that eight core markets – China, Brazil, India, Russia, Middle East and North Africa, Mexico, Indonesia, and Argentina – will see growth rates double that of the entertainment and media sector as a whole over the next five years.

And in many of these markets, especially in Latin America and Asia, television and newspapers will contribute to the growth as well a digital.

Key digital trends for emerging markets

Split between digital and non-digital spending 2012 and 2017 by PricewaterhouseCoopers

It’s hardly surprising that over the next five years digital entertainment and media will continue to power forward. However, dig more deeply into the global, top-line figures, and media leaders in emerging markets can find a lot of strategic insights.

  • Classified advertising – Just as they have in developed markets, the report says that “online classifieds are set to take over from their print equivalents in developing economies in the next five years”.
  • Search advertising – On Knowledge Bridge, we’ve covered extensively how targeted search and social media advertising often dominates digital advertising. The report says that search will remain dominant with an important caveat. If Google is not a major player in your market, search advertising isn’t necessarily the king of digital advertising.
  • Mobile access – The future is not only digital but mobile – and we cannot stress this enough. Emerging markets are playing a huge role in this shift. “Brazil, China, India and Russia alone will account for 45% of fixed-broadband subscriptions and 50% of mobile Internet users by the end of 2017,” the report found.
  • Mobile advertising – Do not be timid about embracing mobile because you don’t see the advertising opportunity. “Mobile advertising is finally set to take off properly, with growth forecast across all regions over the next five years,” according to the report, and by 2017, mobile advertising will account for 15 percent of all internet advertising revenues.

Traditional media to continue growth in emerging markets

TV advertising split by type - multi-channel, terrrestrial and online, by PricewaterhouseCoopers

While digital access, content and advertising will be one of the highest areas of growth over the next five years, growing middle classes in emerging markets will also drive growth in revenues for traditional media including television and newspapers, especially in rapidly growing markets in Asia and Latin America.

Thus far, TV has been very resilient to the digital disruption rocking other media sectors such as newspapers, magazines, music and books. As the PwC reports says, it continues to deliver not only the mass audiences but also the attention that advertisers crave. The next five years will see little change in that. Free-to-air terrestrial channels will continue to deliver the bulk, 70 percent, of TV revenues, only down a few percentage points from the current mix.

Again, the only real news here is that emerging markets will see the fastest growth. Kenya, India, Indonesia, Brazil and Nigeria will see the fastest rise in TV advertising revenues. Indonesia, Kenya, Thailand and Vietnam will see the fastest growth in terms of pay TV subscriptions.

Another important trend that the report highlighted for emerging markets is the opportunities for regional media to reach diaspora audiences. As Jeff John Roberts says in paidContent, tapping into diaspora audiences in mature markets can be a rich source of revenue for emerging market media players. He highlighted this from the report:

As expatriate communities grow, distributors are increasingly crossing geographical borders to address them. Examples include iRoko, which targets the African diaspora in wealthier markets and has more customers in London than Lagos.

Television advertising hasn’t moved online quickly, and PwC thinks that it is wrong to over-estimate the shift from traditional paid TV delivery systems, such as cable, to so-called over-the-top (OTT), internet-carr lanedelivered services. OTT services will remain a small portion, only 6 percent, of paid TV revenues by 2017.

The digital transition has not been so kind to newspapers, and it is important for publishers to note the shift from print to online classified advertising even in emerging markets. However, newspapers will continue to grow over the next five years across Asia and Latin America. Growth in Brazil, India, China and Indonesia will offset declines in newspaper circulation in mature markets such as the US, UK, Japan and Germany.

Leverage data to benefit from the multi-screen shift

PwC painted a picture of a connected but also a confused consumer. Digital has increased consumer choice, but Roberts at paidContent said:

the report (citing people in Singapore who pay for pirated content even though a legal version was available for free) also suggests that the volume of content is leaving consumers “confused.”

With so many choices, customers might be confused, they might be overwhelmed by the options to them, but the level of choice has led them to expect “my media” rather than “mass media”. The future is increasingly one of multiple screens – TV, tablets and smartphones – but this will pose challenges to media companies. To deliver this personalised content and also targeted advertising to consumers, media organisations will have to constantly innovate, especially when it comes to data about their audiences. Again, Roberts pulled this highlight out of the report about the type of data that media companies will need to use:

granular, small data— derived through analytics—that gives insights into customers’ actual and likely behavior in response to a particular message or experience.

It will not be enough to know who your audience is but also what they are likely to do. As advertisers look to increase the return-on-investment for their clients, they will want to know not just the size of your audience and their interaction with your content but also much richer behavioural data. This is why Amazon has just announced that it will be leveraging its vast mountain of e-commerce data to help target advertising.

While paid content has been a major focus in the past year, PwC still sees a huge opportunity for advertising revenue, but media companies will only realise this opportunity if they embrace a multi-platform approach that leverages not only content but also customer data.

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WAN-IFRA: Non-traditional revenue sources and print-digital bundling show promise for news revenue https://www.kbridge.org/en/wan-ifra-non-traditional-revenue-sources-and-print-digital-bundling-show-promise-for-news-revenue/ Thu, 06 Jun 2013 20:14:40 +0000 https://www.kbridge.org/?p=3586 No Signs of a Newspaper Crisis in Asia and Latin America by Statista

No Signs of a Newspaper Crisis in Asia and Latin America by Statista

In the past five years, print circulation and advertising continued to grow in Asia and Latin America while falling dramatically in most other parts of the world, with Eastern Europe suffering most, according to the 2013 World Press Trends report by WAN-IFRA.

In some ways, little has changed in the past year. Newspapers, both in print and in digital form, continue to enjoy unprecedented readership, with more than half of the world’s adult population reading content from newspapers. However, with advertising revenue declining over the last five years by 23.3 percent in North America and Western Europe, by 24.9 percent in Australia and New Zealand and by a dramatic 30.2 percent in Eastern Europe, the industry is still under pressure.

As with last year’s report, WAN-IFRA found that engagement remains a challenge. However, the study has found some rays of hope and successful strategies that are beginning to show promise in generating revenues both from digital circulation and also from new non-traditional revenue sources.

Competing for digital attention

Newspapers continue to enjoy large audiences digitally. However, while newspapers find that digital platforms have increased their readership, the engagement they enjoy is low compared to internet giants such as Google and Facebook.

The report found:

While more than half of the digital population visit newspaper websites, newspapers are a small part of total internet consumption, representing only 7 per cent of visits, only 1.3 per cent of time spent, and only 0.9 per cent of total pages visited.

To put this in perspective, Nielsen in the US found in 2010 that internet users were spending 40 times more time on Facebook than any news site. They spent 8 to 12 minutes a month on local newspaper websites, but they spent on average seven hours a month on Facebook.

Finding new revenue in the digital age

While the challenges have changed little in the past year, newspapers are finding ways to generate revenue to offset the declines in advertising.

Develop paid content strategies – With the success of the New York Times in implementing their paid content strategy, the report said that almost half of the newspapers in the United States have rolled out paid content plans of their own. The strategies vary. “Forty per cent are using a metered model, one-third charge for premium content, 17 per cent require payment for any access, and 10 per cent use some other model.”

Subscriptions are performing better than single copy sales, and the report also found that “The packaging of print/digital subscriptions is becoming increasingly successful.”

News organisations around the world are trying this bundling strategy, including Folha in Brazil, and the newspaper has signed up 45,000 digital subscribers in the first year of operation of their paid content strategy.

In our overview of Latin American paid content strategies in April, we found a number of different approaches including metered and hard paywalls, bundled print and digital subscriptions, digital kiosks similar to Apple’s Newsstand service and also platform based options in which publications charged for access to tablet editions.

While proving an important source of revenue to help offset the decline in advertising in some regions, PricewaterhouseCoopers found that paid content may not be enough to totally offset the declines in advertising.

AdAge quoted Greg Boyer, managing director at PricewaterhouseCoopers’ entertainment, media & communications practice as saying:

There are some very positive signs about the resilience of the industry, but a lot of that lost revenue won’t necessarily come back.

Look to tablets to match print engagement – Audiences are increasingly turning to mobile, and while advertising revenue on mobile lags, research found “news engagement via tablet, as measured by time spent with news content, is equal to that of the printed newspaper”. With higher levels of engagement, there is the promise that advertising revenue could be higher on tablets than on the web.

Develop non-traditional revenue streams – Non-traditional revenue streams have been a bright spot for some newspapers  and offer one possible template for news organisations looking to develop new revenue streams elsewhere. The report found:

In the United States, 27 per cent of newspaper company revenues now come from non-traditional sources: 11 per cent from digital, 8 per cent from new revenue from other sources (service to clients in addition to advertising), and 8 per cent from non-publishing revenue (e-commerce).

Developing these services before traditional revenue streams start to drop may provide insulation from digital shocks. What new revenue streams are you pursuing? Have some proven more successful than others? Let us know in the comments.

Leverage print dominance to fuel the digital transition – All but a handful of newspapers in North America and western Europe failed to leverage the powerful position they had in print to ensure their digital, multi-platform future. But according to Frédéric Filloux, the general manager of for digital operations at Les Echos Groupe in France, news groups in Latin America and Asia are succeeding where their developed counterparts failed. Writing on his popular blog, Monday Note, Filloux said:

At a much faster pace than in the West, Latin America and Asia publishers take advantage of their relatively healthy print business to accelerate the online transition. These many simultaneous changes involve spectacular newsroom transformations where the notion of publication gives way to massive information factories equally producing print, web and mobile content. In these new structures, journalists, multimedia producers, developers (a Costa-Rican daily has one computer wizard for five journalists…) are blended together.

They have achieved this by rethinking newsroom organisation and management. Of course, key to this conversion is not simply to rethink the newsroom organisation but also to rethink sales strategies and techniques. The digital transition is just as much a transition in business and advertising as it is a shift in editorial thinking.

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Hacked news organisations help you spot the next attack https://www.kbridge.org/en/hacked-news-organisations-help-you-spot-the-next-attack/ Mon, 03 Jun 2013 14:12:52 +0000 https://www.kbridge.org/?p=3560 Syrian Electronic Army Twitter account, screengrab

The hacktivist group, the Syrian Electronic Army, has been on a roll recently, tricking journalists at some of the most well-known news organisations, including the Associated Press, Thomson-Reuters, the BBC and the Financial Times into giving up their usernames and passwords. The hacktivists have then used the Twitter and WordPress accounts of these news outlets to damage their credibility and spread pro-Assad government messages.

These incidents have been embarrassing, and the natural response is to play them down. However, two news groups – the American satirical news site, The Onion, and the Financial Times – have resisted the urge to sweep the attacks under the carpet and have instead detailed them.

Not only does this caryy the best tradition of journalism into the digital age with the news organisations practicing the transparency that journalists so often call on others to embrace, it also provides a valuable public service to other news businesses on how to spot these sophisticated attacks and prevent themselves from also becoming victims.

Attacks rely on trusted sources

The popular image of a hacker is one of a technical savant so steeped in the ways of computers and network security that no lock is strong enough to keep them out. While this does describe a small elite, most hackers do not rely on complex technical attacks, instead relying on tricking you out of your usernames and passwords, a process known as social engineering in the hacking community.

One of the key elements of these attacks is that they rely on networks of trust – either in colleagues or in trusted sources. Most of these attacks begin with phishing and spear phishing attacks. At The Onion, staff began receiving emails from “strange, outside addresses”. But that’s not all. The example The Onion gives in its write up of the attack is a faked email from Elizabeth Mpyisi from a UNHCR address. Many journalists would be familiar with UNHCR, the United Nations High Commissioner for Refugees, and a quick search turns up a skeletal LinkedIn profile for an Elizabeth Mpyisi. The attackers are counting on the fact that journalists would be familiar with UNHCR and would trust it as a source of information. As for the social media profiles connected to Elizabeth Mpyisi, do not take this as evidence that the email is legitimate. Hoaxers and hackers have been known to set up fake social media accounts to support their attacks.

However, journalists and editors must immediately ask why anyone from UNHCR would be contacting them with this brief and slightly cryptic email. Also, Mpyisi is listed as a community services officer, and her LinkedIn account is listed as being registered in Uganda. Why would a Ugandan employee of UNHCR be contacting employees of The Onion? Journalists are professional sceptics, and in this age of frequent digital attacks, it is worth employing this scepticism to keep yourself from being the next victim.

In the case of the FT attack, the Syrian Electronic Army had first targeted the personal email accounts of FT journalists, according to FT lab co-founder and director Andrew Betts.

In the emails to both The Onion and the FT, they contained links that appeared to be to news stories in the Washington Post or CNN. However, the links actually redirected to a hacked WordPress site, “rather a high profile one but we thought it rude to name them, and they’ve since fixed it”, Betts said. The staff at The Onion were then redirected to a fake Google Apps login. In the case of the FT, the hackers faked the newspaper’s corporate email login page. Once logged in, the FT employee was redirected to their corporate Gmail inbox and “were none the wiser”, Betts said.

Copying these webmail pages is all too easy. Some news organisations’ corporate webmail login pages can be found using a simple search, and with the increasing use of Gmail for corporate email, it isn’t that difficult to guess the address.

These types of tricks are the common way that most of these attacks now start. The tricks that hackers use are always changing and constantly growing more sophisticated, but the tactics have remained largely the same for much of the past decade.

How the attack escalates

Once the hackers had access to an internal email address, then the attack intensified. Betts said:

By targeting those FT staff that advertise their email address publicly, the hackers eventually managed to secure access to an FT.com corporate email account. With this, they also had access to our global address list and with it the email addresses of every member of FT staff. They began sending the same email to a much larger number of FT.com users, this time from legitimate FT.com email accounts.

In both instances, the attackers use your own email systems against you. Back at The Onion:

After discovering that at least one account had been compromised, we sent a company-wide email to change email passwords immediately. The attacker used their access to a different, undiscovered compromised account to send a duplicate email which included a link to the phishing page disguised as a password-reset link. This dupe email was not sent to any member of the tech or IT teams, so it went undetected. This third and final phishing attack compromised at least 2 more accounts. One of these accounts was used to continue owning our Twitter account.

The FT was able to work with Google to blacklist the site that was being used to compromise the accounts, which meant that any email containing the link would not be delivered, and The Onion forced a company-wide reset of their Google Apps accounts.

The FT shared how they managed to wrest control back of their accounts. One thing stands out, they worked closely with both Google and Twitter. If you use third party services such as these, you will want to make sure that you have good contacts with the companies, and if you are working with major US or European internet companies, try to get a local contact so that you’re not waiting for hours before the US wakes up and comes online.

Lessons from the attacks

The FT and The Onion have done a valuable public service by detailing the attacks, however embarrassing they might be. They also have added several suggestions on how news organisations can defend themselves against such attacks. Here are some of the lessons they have learned.

Widespread services make big targets – In the end, only several Twitter accounts and two out of 60 WordPress blogs were compromised at the Financial Times. As Betts point out, these are some of the most widely used third party services and platforms used by news organisations. “This problem will likely get worse over time as more organisations adopt the same online tools – if a vulnerability is found against one, it can be used against all – increasing the motivation for the hackers to find holes,” Betts said.

Hackers share tips on how to exploit, and they often cooperate. Betts says that there was evidence that the attack against the FT came not only from Syria but also from Russia.

However, it’s not just hackers who share information on how to break into sites, there are several popular guides on how to improve the security of the services you use, including WordPress.

How many people really need high-level access? One step the FT took after the attack was to re-examine its security procedures and limit high-level access to only those staff who require it. Does everyone need access to your corporate Twitter account? WordPress has the ability to limit access based on roles. For instance, you can set up accounts that allow contributors to submit content but not publish that content live to the site. You will need to strike a balance between allowing access so no process relies on a single technical staff member or editor, but you also don’t want to give everyone access to make major changes to your site.

Make two-factor authentication mandatory – As these attacks have become more widespread, more internet companies have added two-factor authentication. Often this is implemented so that in addition to your username and password, you also need a code that will be sent to your mobile phone to access your account. Google, Facebook and recently Twitter have all added two-factor authentication. Google will also provide you with a set of single use codes you can use if you don’t have mobile phone access. The FT has now made two-factor authentication mandatory. If an internet service provides you with a way to be more secure, use it, without exception.

The Onion’s tech team also recommends using an app such as HootSuite to manage your social media accounts. “Restricting password-based access to your accounts prevents a hacker from taking total ownership, which takes much longer to rectify,” they said. They also suggest using an email to register with Twitter “isolated from your organization’s normal email”.

Educate staff This is key. Both of these attacks were only possible because members of staff were tricked into surrendering their usernames and passwords. Security training is no longer a luxury. It is essential. Often these attacks are carried out by patriotic hackers, people not employed by the government but sympathetic to it. Out of a sense of national pride, they will attack international and domestic critics of their government.

Digital security is a cat-and-mouse game, with hackers constantly coming up with new ways to trick users into sacrificing their own security, but also with security professionals and staff learning new ways to defend against these attacks. Fortunately, these two news organisations have shared valuable lessons on how to stay safe. Take advantage of their honesty and openness and make sure you’re not the next victim.

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