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A few days back my friend Pip Coburn, who runs an investment advisory service, and his colleague Brynne Thompson asked me to discuss what I have learned about media after spending nearly 12 years on Gigaom, pretty much most of my working life in various aspects of media, and two decades on the internet. It turned out to be a fun conversation that was shared by Pip and Brynne with their carefully curated email list of friends and clients. After going over it, I thought, why not create an abbreviated version and share it online?

Media is not publishing alone

My definition of media? “Anything which owns attention.” This could be a game, or perhaps a platform. Ironically, the media tends to associate media with publishing — digital or otherwise — which in turn is too narrow a way to consider not only the media but also the reality of the competitive landscape and media-focused innovation.

Media continues to be under the influence of deflationary forces of the internet.

Whether it is through stock-market trading or the sale of hotel rooms, the internet has a way of bringing deflationary forces to all businesses that were hitherto inefficient and involved many middlemen. There are two major deflationary forces in digital media that are disrupting business models:

The “ruthless efficiency” of advertising on the internet: highly targeted demand.

The endless inventory available on the internet: overwhelming supply.

The “ruthless efficiency” includes the role of programmable ad exchange and the ability of brands to more accurately target an audience with newer and better tracking possibilities, including the increasing amount of social data we typically share with social web platforms such as Facebook, Instagram, Pinterest and Twitter. We are heading into a future where advertisers can buy traffic at much lower prices. Both forces are deflationary and will need a complete rethink of the business models of the more traditional media companies.

Traffic, writers & analytics

Some media companies that rely on advertising revenue are tying journalist compensation to the traffic their story generates. It doesn’t work because it de-prioritizes writing. Writing works when publications are writing and serving the best interest of their users; numbers are good yardstick but not a way to compensate a person.

Tools like Chartbeat are like mile-markers but they are not complete arbiters. The tendency to adapt behavior and business strategy to this data is becoming far more predominant within the industry, and that is a mistake. Tony Haile, CEO of Chartbeat, reminded me of this quote from Andrew Lang, a Scottish poet: “An unsophisticated forecaster uses statistics as a drunken man uses lampposts — for support rather than for illumination.”

Building a business over time with content that is less ephemeral than stalking celebrities requires more skill and the ability for the writers to generate insight and the publishers business’ to support what generating insight takes.

Fake traffic and bots rule

A few weeks ago, Haile wrote about the challenges facing internet publishing wherein he outlined that nearly 55 percent of people are spending less than 15 seconds on a page. (They analyzed 2 billion pageviews generated by 580,000 articles on 2,000 sites, according to Haile.)

I don’t think that is feasible. Other people in the business agree that a lot of the traffic on the web is bot traffic, so all this traffic people talk about is faux traffic. Is a page being auto-refreshed on an open tab in your browser really useful “attention?” I don’t think so. There are many more examples of this worthless traffic.

No one talks about it. No one really wants to dig in to find out what’s real and what’s not. Plausible deniability is a wonderful thing for politics and advertising. There’s always been a level of ambiguity in the advertising business and nothing really has changed.

What could be the next successful model?

Everyone is trying to figure out what the next model is, but it’s not here yet. There are glimpses of the future. For instance, Foursquare can provide the underpinning of the new version or future iteration of what Bon Appetit or Gourmet currently provide. Instagram and its 200 million monthly active users are participating in a new kind of transmission (like television). Twitter should be at the forefront of this, but there is lack of clarity on part of the company. I have some ideas and am trying to flesh them out.

In searching for the next sustainable business model or media company, the company needs to be great at “owning attention” and the company must be very clear about what it stands for. What are you doing and for whom? Most publishing companies in particular cannot say what they are and what purpose they serve.

When I started Gigaom (the company), I wanted to turn my blog into a service that helped make complex ideas simple. And that philosophy is reflected in our events and our decision to have a subscription-based research business, which in turn has led us to a business model that is less influenced by pure traffic figures.