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The Economist’s Tom Standage on digital strategy and the limits of advertising

69 points by trey_swann 12y ago

freedomnow 12y ago
True liberty and happiness will only be found in a completely free market.
- netcan 12y ago
  True bliss can only come from unwavering obedience and love for the gods.
bjelkeman-again 12y ago
The interesting thing with the Economist is that they alone seem to be able to do what they do. A weekly editorial summary of news and relevant stories that people pay for, which is read by business people. Is there a competing magazine? I am not aware of it. Their content is unrivalled, although you really need to be aware of their biases. But I don't feel they try to hide them, rather the opposite. However, with so few global sources of information, like The Economist, that do a good job, aren't we in danger of quite a narrow understanding of what is going on? I think the Guardian Weekly is an interesting counterpoint, but it isn't avaiable on digital afaik. Are ther other weekly news magazines that reaches the Economists editorial quality?
- timclark 12y ago
  Der Spiegel is a high quality weekly news magazine that I think compares favourably to The Economist if you read German.
  - netrus 12y ago
    I guess it's time to take a look at Der Spiegel again, but if I remember correctly, their focus is much more centered on Germany, Europe and the West, while the Economist has news from the whole world. And it's articles are short enough to read the whole magazine every week.
    - mike_hearn 12y ago
      The other thing about Der Spiegel is they seem to enjoy provocative/trolling articles more frequently than TE (though TE goes in for this as well from time to time). For instance Der Spiegel seems to pretty frequently write long but vague pieces about how Silicon Valley is taking over the world, will our new techno-overlords be benevolent, etc. Whereas TE tends to treat the tech industry more as an interesting specimen of butterfly to be dispassionately studied. How much that reflects Germanic vs Anglo views of the world, I don't know. But having read articles in Der Spiegel very occasionally, it gave me a pretty different vibe.
- frabcus 12y ago
  Financial Times.
  - cschmidt 12y ago
    But that's daily. I do agree that the FT and probably the NYT are of the same quality. But it takes as lot more time to wade through a daily.
    - disgruntledphd2 12y ago
      I always enjoy the FT Weekend. In general, I find that I miss little from reading my news at the weekends, as there tends to be more analysis.
- bobcostas55 12y ago
  It's much less frequent of course, but Foreign Affairs is in the same space.
  - bjelkeman-again 12y ago
    Yes, I occationally read it, but often I find it hard to deal with the perspective it is written from. Which is really why I should read it.
- benbou09 12y ago
  It would be nice to have other comparable sources, not least because The Economist is very influential, and like any other institution or person, they are often wrong. They seem pretty aware of this, and they write their articles in way that their readers can exert critical thinking. So in the absence of alternatives, we are kind of forced/encouraged to think critically, which is not such a bad thing in the end.
  - bjelkeman-again 12y ago
    I just found that Le Monde Diplomatique actually has an online version. Unfortunately it is only a packaged PDF it seems. However, the content is often a very interesting counterpoint to the standard Anglo-Saxon fare.
- TheOtherHobbes 12y ago
  This model is used by any number of "business intelligence" micro-zines - which are basically market tip sheets, with some trend speculation. It can be very lucrative if you get a following. I've seen sites charging four or five figure annual subscription fees for something that probably only takes a day or two a week to put together. So IMV the Econo is really just industrialising that model, with some extra journo-fluff for credibility. It's completely different to being a mainstream headline newsie like The Guardian, with a fundamentally different reader focus. You're not selling news, you're selling the suggestion that you're on the inside track, with access to the thoughts and beliefs of people who make policy and move markets.
  - blumkvist 12y ago
    You are comparing news to market research...
    - pjc50 12y ago
      Is there a hard distinction?
      - blumkvist 12y ago
        I'm not sure how to respond to that question, so I will just give a straight answer. Yes. A very big one.
        pjc50 12y ago
        Let me try this again, since your answer contains no information. Why do people read news? What are they trying to get from it? Especially in the case of the Economist, a large fraction of the readers are going to be in the business of finance and investment. For the microsecond-to-microsecond data, there's Bloomberg. For longer views? The Economist. Their entire pitch is that it's information likely to be useful to your business.
- ghaff 12y ago
  In the US, Time is the closest equivalent. But I certainly wouldn't argue that it's of the same quality overall--and certainly not of the same breadth. The American news magazines were always fluffier and rather US-centric--and these days the one survivor is rather thin some weeks.
- hamidpalo 12y ago
  The really interesting thing is that the Economist has been able to increase their rates while still growing subscriptions. Their digital subscription is as much as print as well. They have been blessed by a wealthy readership that is price-insensitive. I subscribe and would probably continue to subscribe if they jacked up their rates to $200/yr.
drpgq 12y ago
"The other thing about ads is that 41 percent of millennials are using ad block. My daughter has ad block and she goes around infecting every machine she gets to. She puts it on everything." Didn't realize that ad block was that popular with millennials. I was always thought it was more popular with those that were tech savvy regardless of age.
- dublinben 12y ago
  >infecting I would use a different word here, but I love her spirit!
- virmundi 12y ago
  I wonder how effective ads are getting on the web anyway. I'm techy, and I filter them mentally. My wife is consumer literate technical and filters them mentally too. And I have Ad Block.
  - digi_owl 12y ago
    I seem to recall a recent article claiming that companies has started to ask themselves the same thing.
    - TheOtherHobbes 12y ago
      There's always been something cargo culty about online advertising. If that market implodes, it's going to be... interesting.
      - ghaff 12y ago
        I thought that a while ago. It hasn't happened yet but that doesn't mean it won't. And even if it doesn't implode, it could certainly decline significantly. A HUGE amount of the "free" services and content that pretty much all of us take so much for granted around the web are directly or indirectly supported by online advertising. Take that away and, as you say, it will be interesting.
draugadrotten 12y ago
Previous discussion and comments. https://news.ycombinator.com/item?id=9306286 https://news.ycombinator.com/item?id=9306286
netcan 12y ago
Sounds like an interesting guy. I think he’s slightly underestimating or misunderstanding the “VC backed frivolousness” though. No one knew that a search engine could generate 20-30bn p/a in advertising revenue until it did. Even Facebook, taking their advertising “stock” into a more mature existing market didn’t know what it was worth in advance. No one knew that TV advertising would be worth what it is/was until the American’s ‘National Brands’ complex matured. It was all nearly impossible to estimate beforehand. So… I think VC’s are making some sort of a bet that news = attention = advertising revenue. It’s vague, but that’s to be expected. It’s also not an arbitrary connection being made between media and software. The economic difference between Gangnam Style and Charlie Bit Me is that Psy has something to sell that is valuable once recognizable enough. The exchange rate for popularity to money is fairly arbitrary and difficult to determine in advance. In any case, I think they as a business are doing the right thing. We need companies doing their job for the most part. 5% chance at a 20X return can’t be the way everyone does business. OTOH, I’m not sure that journalistically The Economist really does do some difficult task that no one else can do. I mean, the difficult part is investigative journalism is it not? Otherwise, it’s just writers clarifying and putting their own perspective on existing work. It’s investigative in the sense that they talk to experts, I suppose. But, I still get the feeling they’re in the section of the complex which is most easy to solve. Right now you can read the economist and get up to speed on Yemen, The Iran Deal, British Elections, and various smaller topics in the same economist style. They are not in the business of exploring and upsetting and revealing. I’m not worried that this kind of reporting is something we’ll lack for. Anyway, one of the things that did impress me is a lack of a common Old News complaint that people should pay for journalism, that it should be funded somehow and that things are not allowed to change in ways that jeopardise the way they do things. I spoke to a journalist recently that was all complaints about how no one wants to pay for news anymore.
- DanBC 12y ago
  > OTOH, I’m not sure that journalistically The Economist really does do some difficult task that no one else can do They get people to pay for it, which is where others seem to fail.
  - 12y ago
fallous 12y ago
I've been cogitating on some of the themes Standage brings up in this interview for awhile and I suspect he's far more correct than incorrect. The proliferation of adblocking and incognito browsing is going to do marked damage to advertising networks like DoubleClick because the loss of demographic targeting means they are forced to basically become run-of-site ad outlets. Additionally, the amount of fraud in the ad views and click rates has become far more obvious to advertisers over the last 18 months and will only increase as sites try and game the revenue to make up for ad blocking. This does not bode well for the traditional ad model that has prevailed on the Net for the last 15+ years. I suspect that Facebook becomes the real winner in this due to the fact that no one uses the site without logging in, has provided enormous amounts of targeting info, and with Facebook controlling the ad experience they cut out the likes of Doubleclick and deal directly with the advertisers. They're vouching for the legitimacy of the ad performance metrics and handling the targeting internally using their own data, and so will be able to command a huge premium. A few years ago I would've laughed at the idea that Facebook would be able to compete with Google in the ad revenue market, but I'm not laughing now.
- enraged_camel 12y ago
  Don't adblockers affect Facebook as well? As a Facebook user, companies are spending money to show me targeted ads, but I never see them. No doubt this decreases their ROI.
  - dragonwriter 12y ago
    > Don't adblockers affect Facebook as well? Perhaps, but a major part of Facebook's business model is organic advertisement (pay-for-reach posts) which won't be affected by ad blockers. AFAICT as a user, that's an increasingly important part of Facebook.
- shostack 12y ago
  While you make some good points, I think you may be underestimating the feedback mechanisms of the industry. Viewability measurement is in its infancy, and still has many issues. That said, it is fast becoming a standard measure, and any savvy display advertiser will be using it. At the end of the day, the ones most at risk are brand advertisers who aren't running direct response campaigns. They may have ad recall studies and Marketing Mix Modeling setups that give them some visibility, but there will always be some inventory wasted at the scale those advertisers are dealing with. For direct response advertisers, things are getting better. While it may be harder to target some segments, and that % may be growing, the tools advertisers have available to them simply did not exist even a few years ago. Take for example Google Analytics attribution and multi-channel reports. They have made a basic cross-channel attribution toolset available. To everyone. For free. Think about where the industry was even five years ago and let the impact of that sink in. Facebook's acquisition of Atlas, Google's acquisition of Adometry, and other recent acquisitions in the bid management/dedicated attribution platform space are all pointing in one direction: better visibility into the contribution of your individual efforts. I manage digital advertising for a living and have done so both client-side and at a top agency in the space. When it comes to the space, and in my not-so-humble opinion, the #1 thing clients wanted (and that I want doubly so now that I'm client-side) is better attribution. When you are sitting on the types of data FB and Google are, you have many pieces of that puzzle, particularly the cross-channel and cross-device pieces. You also have the statistician brainpower and engineering talent to create the modeling tools that can give this visibility to advertisers. Why they haven't pushed harder on making that data visible is anyone's guess (I do wonder about how any negative revelations might impact their business), but the acquisitions seem like a big step in the right direction. That said, digital media needs to go beyond static attribution models like: linear decay, time decay, U-shaped, first touch, last touch, etc. Instead, it needs to move more to the dynamic models, where data is assessed at the individual conversion path level. When you look at attribution at the channel or even campaign level, you are missing a ton of the story since the impact of say, a generic video ad vs. a laser-targeted retargeting ad can be night and day. Sure you might want to see channel data in aggregate, but you can't effectively optimize much at that level. The advertising bubble savvy individuals in this industry are aware of those is video advertising. There's been a big hype train, CPMs are frothy, and everyone is switching to some sort of auto-play/auto-play-next-video format. Personally, I'm not convinced the value is really there at many of these CPMs, but I test and let the data decide. The best thing companies like Google and Facebook can do to safeguard against any growing mistrust of online advertising efficacy is to keep improving their attribution tools, particularly for display and view-through performance. Knowing what I do about the data available to me and its strengths/weaknesses I sometimes wish I was back in the days of last-touch models. There's few things as painful for me as knowing that better data exists to optimize against, but not having all the tools I need to get it because they are prohibitively expensive still for many budgets.
keithpeter 12y ago
$2.49 per month sounds ok for a professionally edited daily e-mail about European relevant news. I can't seem to just pay them for the e-mail version. Seems an odd way to go about getting decent writing paid for. Edit: downvoters please explain reasons. My argument is that I'm trying to make what is essentially a micro-payment for good quality writing delivered using a universal protocol (e-mail).

69 points by trey_swann 12y ago

freedomnow 12y ago

True liberty and happiness will only be found in a completely free market.

netcan 12y ago
True bliss can only come from unwavering obedience and love for the gods.

bjelkeman-again 12y ago

The interesting thing with the Economist is that they alone seem to be able to do what they do. A weekly editorial summary of news and relevant stories that people pay for, which is read by business people. Is there a competing magazine? I am not aware of it. Their content is unrivalled, although you really need to be aware of their biases. But I don't feel they try to hide them, rather the opposite. However, with so few global sources of information, like The Economist, that do a good job, aren't we in danger of quite a narrow understanding of what is going on? I think the Guardian Weekly is an interesting counterpoint, but it isn't avaiable on digital afaik. Are ther other weekly news magazines that reaches the Economists editorial quality?

timclark 12y ago
Der Spiegel is a high quality weekly news magazine that I think compares favourably to The Economist if you read German.
- netrus 12y ago
  I guess it's time to take a look at Der Spiegel again, but if I remember correctly, their focus is much more centered on Germany, Europe and the West, while the Economist has news from the whole world. And it's articles are short enough to read the whole magazine every week.
  - mike_hearn 12y ago
    The other thing about Der Spiegel is they seem to enjoy provocative/trolling articles more frequently than TE (though TE goes in for this as well from time to time). For instance Der Spiegel seems to pretty frequently write long but vague pieces about how Silicon Valley is taking over the world, will our new techno-overlords be benevolent, etc. Whereas TE tends to treat the tech industry more as an interesting specimen of butterfly to be dispassionately studied. How much that reflects Germanic vs Anglo views of the world, I don't know. But having read articles in Der Spiegel very occasionally, it gave me a pretty different vibe.
frabcus 12y ago
Financial Times.
- cschmidt 12y ago
  But that's daily. I do agree that the FT and probably the NYT are of the same quality. But it takes as lot more time to wade through a daily.
  - disgruntledphd2 12y ago
    I always enjoy the FT Weekend. In general, I find that I miss little from reading my news at the weekends, as there tends to be more analysis.
bobcostas55 12y ago
It's much less frequent of course, but Foreign Affairs is in the same space.
- bjelkeman-again 12y ago
  Yes, I occationally read it, but often I find it hard to deal with the perspective it is written from. Which is really why I should read it.
benbou09 12y ago
It would be nice to have other comparable sources, not least because The Economist is very influential, and like any other institution or person, they are often wrong. They seem pretty aware of this, and they write their articles in way that their readers can exert critical thinking. So in the absence of alternatives, we are kind of forced/encouraged to think critically, which is not such a bad thing in the end.
- bjelkeman-again 12y ago
  I just found that Le Monde Diplomatique actually has an online version. Unfortunately it is only a packaged PDF it seems. However, the content is often a very interesting counterpoint to the standard Anglo-Saxon fare.
TheOtherHobbes 12y ago
This model is used by any number of "business intelligence" micro-zines - which are basically market tip sheets, with some trend speculation. It can be very lucrative if you get a following. I've seen sites charging four or five figure annual subscription fees for something that probably only takes a day or two a week to put together. So IMV the Econo is really just industrialising that model, with some extra journo-fluff for credibility. It's completely different to being a mainstream headline newsie like The Guardian, with a fundamentally different reader focus. You're not selling news, you're selling the suggestion that you're on the inside track, with access to the thoughts and beliefs of people who make policy and move markets.
- blumkvist 12y ago
  You are comparing news to market research...
  - pjc50 12y ago
    Is there a hard distinction?
    - blumkvist 12y ago
      I'm not sure how to respond to that question, so I will just give a straight answer. Yes. A very big one.
      - pjc50 12y ago
        Let me try this again, since your answer contains no information. Why do people read news? What are they trying to get from it? Especially in the case of the Economist, a large fraction of the readers are going to be in the business of finance and investment. For the microsecond-to-microsecond data, there's Bloomberg. For longer views? The Economist. Their entire pitch is that it's information likely to be useful to your business.
ghaff 12y ago
In the US, Time is the closest equivalent. But I certainly wouldn't argue that it's of the same quality overall--and certainly not of the same breadth. The American news magazines were always fluffier and rather US-centric--and these days the one survivor is rather thin some weeks.
hamidpalo 12y ago
The really interesting thing is that the Economist has been able to increase their rates while still growing subscriptions. Their digital subscription is as much as print as well. They have been blessed by a wealthy readership that is price-insensitive. I subscribe and would probably continue to subscribe if they jacked up their rates to $200/yr.

drpgq 12y ago

"The other thing about ads is that 41 percent of millennials are using ad block. My daughter has ad block and she goes around infecting every machine she gets to. She puts it on everything." Didn't realize that ad block was that popular with millennials. I was always thought it was more popular with those that were tech savvy regardless of age.

dublinben 12y ago
>infecting I would use a different word here, but I love her spirit!
virmundi 12y ago
I wonder how effective ads are getting on the web anyway. I'm techy, and I filter them mentally. My wife is consumer literate technical and filters them mentally too. And I have Ad Block.
- digi_owl 12y ago
  I seem to recall a recent article claiming that companies has started to ask themselves the same thing.
  - TheOtherHobbes 12y ago
    There's always been something cargo culty about online advertising. If that market implodes, it's going to be... interesting.
    - ghaff 12y ago
      I thought that a while ago. It hasn't happened yet but that doesn't mean it won't. And even if it doesn't implode, it could certainly decline significantly. A HUGE amount of the "free" services and content that pretty much all of us take so much for granted around the web are directly or indirectly supported by online advertising. Take that away and, as you say, it will be interesting.

draugadrotten 12y ago

Previous discussion and comments. https://news.ycombinator.com/item?id=9306286 https://news.ycombinator.com/item?id=9306286

netcan 12y ago

Sounds like an interesting guy. I think he’s slightly underestimating or misunderstanding the “VC backed frivolousness” though. No one knew that a search engine could generate 20-30bn p/a in advertising revenue until it did. Even Facebook, taking their advertising “stock” into a more mature existing market didn’t know what it was worth in advance. No one knew that TV advertising would be worth what it is/was until the American’s ‘National Brands’ complex matured. It was all nearly impossible to estimate beforehand. So… I think VC’s are making some sort of a bet that news = attention = advertising revenue. It’s vague, but that’s to be expected. It’s also not an arbitrary connection being made between media and software. The economic difference between Gangnam Style and Charlie Bit Me is that Psy has something to sell that is valuable once recognizable enough. The exchange rate for popularity to money is fairly arbitrary and difficult to determine in advance. In any case, I think they as a business are doing the right thing. We need companies doing their job for the most part. 5% chance at a 20X return can’t be the way everyone does business. OTOH, I’m not sure that journalistically The Economist really does do some difficult task that no one else can do. I mean, the difficult part is investigative journalism is it not? Otherwise, it’s just writers clarifying and putting their own perspective on existing work. It’s investigative in the sense that they talk to experts, I suppose. But, I still get the feeling they’re in the section of the complex which is most easy to solve. Right now you can read the economist and get up to speed on Yemen, The Iran Deal, British Elections, and various smaller topics in the same economist style. They are not in the business of exploring and upsetting and revealing. I’m not worried that this kind of reporting is something we’ll lack for. Anyway, one of the things that did impress me is a lack of a common Old News complaint that people should pay for journalism, that it should be funded somehow and that things are not allowed to change in ways that jeopardise the way they do things. I spoke to a journalist recently that was all complaints about how no one wants to pay for news anymore.

DanBC 12y ago
> OTOH, I’m not sure that journalistically The Economist really does do some difficult task that no one else can do They get people to pay for it, which is where others seem to fail.
- 12y ago

fallous 12y ago

I've been cogitating on some of the themes Standage brings up in this interview for awhile and I suspect he's far more correct than incorrect. The proliferation of adblocking and incognito browsing is going to do marked damage to advertising networks like DoubleClick because the loss of demographic targeting means they are forced to basically become run-of-site ad outlets. Additionally, the amount of fraud in the ad views and click rates has become far more obvious to advertisers over the last 18 months and will only increase as sites try and game the revenue to make up for ad blocking. This does not bode well for the traditional ad model that has prevailed on the Net for the last 15+ years. I suspect that Facebook becomes the real winner in this due to the fact that no one uses the site without logging in, has provided enormous amounts of targeting info, and with Facebook controlling the ad experience they cut out the likes of Doubleclick and deal directly with the advertisers. They're vouching for the legitimacy of the ad performance metrics and handling the targeting internally using their own data, and so will be able to command a huge premium. A few years ago I would've laughed at the idea that Facebook would be able to compete with Google in the ad revenue market, but I'm not laughing now.

enraged_camel 12y ago
Don't adblockers affect Facebook as well? As a Facebook user, companies are spending money to show me targeted ads, but I never see them. No doubt this decreases their ROI.
- dragonwriter 12y ago
  > Don't adblockers affect Facebook as well? Perhaps, but a major part of Facebook's business model is organic advertisement (pay-for-reach posts) which won't be affected by ad blockers. AFAICT as a user, that's an increasingly important part of Facebook.
shostack 12y ago
While you make some good points, I think you may be underestimating the feedback mechanisms of the industry. Viewability measurement is in its infancy, and still has many issues. That said, it is fast becoming a standard measure, and any savvy display advertiser will be using it. At the end of the day, the ones most at risk are brand advertisers who aren't running direct response campaigns. They may have ad recall studies and Marketing Mix Modeling setups that give them some visibility, but there will always be some inventory wasted at the scale those advertisers are dealing with. For direct response advertisers, things are getting better. While it may be harder to target some segments, and that % may be growing, the tools advertisers have available to them simply did not exist even a few years ago. Take for example Google Analytics attribution and multi-channel reports. They have made a basic cross-channel attribution toolset available. To everyone. For free. Think about where the industry was even five years ago and let the impact of that sink in. Facebook's acquisition of Atlas, Google's acquisition of Adometry, and other recent acquisitions in the bid management/dedicated attribution platform space are all pointing in one direction: better visibility into the contribution of your individual efforts. I manage digital advertising for a living and have done so both client-side and at a top agency in the space. When it comes to the space, and in my not-so-humble opinion, the #1 thing clients wanted (and that I want doubly so now that I'm client-side) is better attribution. When you are sitting on the types of data FB and Google are, you have many pieces of that puzzle, particularly the cross-channel and cross-device pieces. You also have the statistician brainpower and engineering talent to create the modeling tools that can give this visibility to advertisers. Why they haven't pushed harder on making that data visible is anyone's guess (I do wonder about how any negative revelations might impact their business), but the acquisitions seem like a big step in the right direction. That said, digital media needs to go beyond static attribution models like: linear decay, time decay, U-shaped, first touch, last touch, etc. Instead, it needs to move more to the dynamic models, where data is assessed at the individual conversion path level. When you look at attribution at the channel or even campaign level, you are missing a ton of the story since the impact of say, a generic video ad vs. a laser-targeted retargeting ad can be night and day. Sure you might want to see channel data in aggregate, but you can't effectively optimize much at that level. The advertising bubble savvy individuals in this industry are aware of those is video advertising. There's been a big hype train, CPMs are frothy, and everyone is switching to some sort of auto-play/auto-play-next-video format. Personally, I'm not convinced the value is really there at many of these CPMs, but I test and let the data decide. The best thing companies like Google and Facebook can do to safeguard against any growing mistrust of online advertising efficacy is to keep improving their attribution tools, particularly for display and view-through performance. Knowing what I do about the data available to me and its strengths/weaknesses I sometimes wish I was back in the days of last-touch models. There's few things as painful for me as knowing that better data exists to optimize against, but not having all the tools I need to get it because they are prohibitively expensive still for many budgets.

keithpeter 12y ago

$2.49 per month sounds ok for a professionally edited daily e-mail about European relevant news. I can't seem to just pay them for the e-mail version. Seems an odd way to go about getting decent writing paid for. Edit: downvoters please explain reasons. My argument is that I'm trying to make what is essentially a micro-payment for good quality writing delivered using a universal protocol (e-mail).