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Publishers battling for "millennial attention"

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Publishers battling for "millennial attention"

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NEW YORK, United States - Millennials - one of the largest generations in history, comprising people born between 1980 and 2000 - are about to enter their peak purchasing years. In the US alone, the group already accounts for an estimated $1.3 trillion in direct annual spending, a number that's set to increase by 15 percent in the next five years. That's not counting the 86 percent of millennials who live in emerging markets like China, India and Brazil. Nor does this take into account the impact this culturally influential group has on the spending decisions of others.

It's no surprise, then, that a wide range of brands are gearing up for fierce competition for millennial mindshare. But tapping the opportunity is easier said than done.

In many ways, millennials are very different to previous generations. For a start, they grew up with the Internet and are hyper-connected. "It's really the tech overlay that is the catalyst that lights a fire under this whole story," said Lindsay Drucker Mann, a vice president in global investment research at Goldman Sachs. Indeed, the media-technology habits of millennials are reshaping everything from the way we communicate with friends (Facebook) to the way we listen to music (Spotify). Publishing is no exception, creating significant opportunities - and challenges - for a new generation of fashion media brands.

"We want to build a brand that's as iconic as MTV or ESPN for this generation," said Philippe von Borries, co-founder of Refinery29, a fast-growing, New York-based, fashion and lifestyle media company targeting millennial women. "But it's not just 18 to 35," he clarified. "For us, millennial is not about age bracket. It's about a mindset. The things coming out of the millennial generation impact everyone from teenagers to people in their 40s," he continued. "Building a media company today is a vastly different thing than it was five years ago."

For millennials and "millennial-minded" people, "mobile and video are primary modes of media consumption. You want to be there," said von Borries. But, critically, the majority of mobile and video consumption takes place on third-party platforms, like Facebook, YouTube and Snapchat, rather than on publishers' own websites. "Video is a distributed medium. Mobile is defined not by websites or apps, but by the mobile ecosystem and that includes places like Snapchat," he explained.

"There is a new age of media upon us," said von Borries. "The paradigm of the last ten years - built on traffic to websites - is changing to a distributed ecosystem. It's going to be a little bit harder to get people to come to your front door directly." This means publishers must learn to attract and engage audiences on third-party platforms. "But that takes a very different strategy to what most publishers have been doing in terms of growing direct traffic."

A month ago, Refinery29 launched on Snapchat Discover, a section of the app where publishers can share short videos or news stories that expire after 24 hours. Most of the content is being created specifically for the platform, for which Refinery29 hired a dedicated 10-person team. "You have to be able to scale up teams out of nowhere for new platforms, where all of a sudden you find millions of new users consuming content," said von Borries. "And that takes a ton of resources." In April, Refinery29, which launched in 2005 and now attracts 25 million unique users per month, raised $50 million in a funding round led by Scripps and WPP. Refinery29 plans to use the money to become "a fully distributed media company that speaks to women globally."

In one small step on the path to becoming "fully distributed," Refinery29 is set to launch on "Instant Articles," a feature which allows Facebook to host stories from publishers on its own servers, so they can be delivered to users more quickly. Although media reporter David Carr famously wrote that hosting stories on the social platform's servers would make publications "serfs in a kingdom that Facebook owns," forcing them to publish content directly to the social platform, only to share the resulting advertising revenue, a slew of major media brands, from BuzzFeed to The New York Times, have signed up, illustrating just how much the landscape has shifted.

Refinery29 also has its eyes on opportunities in traditional media, namely television, with which millennials currently spend less time than previous generations. "Millennial audiences - here, defined by age group - are shrinking and traditional media companies are now looking to digital media companies to help program the future of television," said von Borries. "I think you'll start to see a half dozen or more purely digital companies enter the fray and become TV brands." (Last week, Vice Media announced a deal with A&E Networks to take over one of its cable channels.) "It's sort of one more very huge, tick the box, I'm going to reach a huge new audience milestone."

But Refinery29 isn't the only fashion media company gearing up to meet the challenges and opportunities presented by the millennial generation.

In September, the London-based publisher formerly known as Dazed Group rebranded itself Dazed Media, signaling key shifts at the company, which attracts 3.5 million unique users per month to channels including Dazed, DazedDigital, AnOther, Another Man, Anothermag.com and Nowness (run in partnership with LVMH). For one, the publisher has hired Will Hayward, BuzzFeed's former vice president of Europe, to the newly created role of chief commercial officer to help restructure the company for its next phase of growth. "Each channel now has its own editor-in-chief, its own creative director, its own team. And each channel is able to innovate independently," explained Jefferson Hack, who founded Dazed with the photographer Rankin in 1991.

"This business is doing extremely well, but Jefferson's brief to me is how can we now pour petrol on that," said Hayward. "When Jefferson and Rankin started this 25 years ago, each month they'd get together and they'd select themes and explore these and put everything in one bundle," he continued. "Dazed now has 20 bundles at least. What's changed is that media has simultaneously been unbundled and atomised, but then reconstituted into these new feeds."

British style bible i-D, which was acquired by Vice Media in December 2012, is also targeting the millennial opportunity with a strategy that has completely transformed what was once a digital dinosaur into a next-generation publisher. At the time of the acquisition, i-D's online audience was under 200,000. Today, the company attracts 6.5 million unique users per month.

For i-D, one of the biggest benefits of being part of Vice has been tapping into the distribution expertise of the company's growth team. "It's about adapting our content to fit our audience's consumption habits and expanding our model of distribution to platforms like Snapchat," said Diana Good, the New York-based managing director of i-D. "But at the top of the pyramid, it's about great content."

Indeed, winning in today's media reality isn't just about mastering distribution. It's also about getting the content right in the first place. "We can differentiate according to our platforms and our technology and all of these things, but the soul of any media company is its editorial and what values it has," said Hayward.

Though it sounds counterintuitive, Dazed has been pursuing scale through an increasingly specialised approach to content. "The wonderful thing about the social web is that actually those two things - scale and specialisation - work extremely well together," continued Hayward. "When you stand for nothing and are really vanilla and appeal to everyone, it's very hard to reach critical mass on the social web. But when you have opinion-driven journalism, when you stand for something, when you make a positive difference in the world - that's how you really light up the social web and individual communities on the social web."

Utility is also important, added von Borries. "One thing that stands out with millennials and millennial-minded people is a wish to get involved, a wish to take action. So every piece of content that we publish comes with: Why does this matter? What can I do with this? How can I personally get involved?"

In recent years, fashion has become a major driver of popular culture, hybridising with everything from music to wellness. For this generation, "fashion and style is pop culture," said Hack. In response, Refinery29, Dazed and i-D are all expanding their content mix, using fashion and style as a lens on other verticals. "We've taken style, which is where we started, and we've expanded that conversation, over the last five years, into many other topics - all unapologetically for women - so beauty, health and wellness, but increasingly news, culture and global topics," said von Borries.

In September, i-D launched Amuse, a new video-driven channel, run by a separate team and offering a stylish take on a wider range of topics, from cooking to sex. "I think there are things from a lifestyle standpoint that aren't really right for i-D; like well-being wouldn't really fit," explained Good. "Amuse allows us to dive into those topics." Meanwhile, Dazed is planning a number of new verticals, though the company declined to disclose details. "We're talking about new verticals and significant new launches over the next nine months. We're launching more brands, basically," said Hack.

Refinery29, Dazed and i-D are also expanding their global footprints, tapping millennials in new markets. This month, Refinery29 is launching in the UK, with France and Germany to follow. The company is also looking at India, China and other Asia-Pacific launches. Dazed, meanwhile, has its sights on the US and is currently evaluating partners to help catalyse a major expansion there. "At the moment, for every new user we're picking up in the UK, we're getting two new users in the US. So, I've spoken to potential partners to help us understand how to navigate launching there," said Hack. "The ambition is considerable," he continued. "Over the next 12 months, I think you will see us opening offices in places you don't expect."

i-D already has a presence in the US, the UK, France, Germany, Italy, Spain, the Netherlands, Poland, Mexico and Australia. "Vice allowed us to launch quickly internationally. Without having the infrastructure and great people on the ground who really understood how to build a digital media company, it would have taken a very long time," said Good. But the company has its eyes on new markets, like Japan. "We're continuing to pursue new growth by launching in new territories," she added.

In terms of business model, Refinery29, Dazed and i-D are all doubling down on native advertising, which is less vulnerable than traditional advertising to the realities of a distributed media ecosystem and from which they expect to see significant revenue growth. "I think this generation is really receptive to branded content," said Good, who is particularly bullish on branded video. "Video is definitely the largest revenue driver and I think it's also the most impactful for brands. It's where I see the biggest growth," she said, citing the success of i-D's work for , notably its popular 'A-Z of Dance' video, which earned over 4.6 million views on YouTube.

Dazed recently restructured its creative services arm, consolidating its MAD creative agency and Dazed White Label team under the newly christened Dazed Media Studio. "We don't have an 'agency' - we don't use that word. And we don't produce 'content.' Content is meaningless to us. We produce stories," insisted Hack. Since 2012, Dazed's native advertising business has doubled. The company currently generates about 60 percent of its revenue through traditional advertising, with the remainder coming from native advertising. "It's 40 percent from the studio business, but it's definitely a fast growing part of the business," said Hack. "If brands want to understand how to behave like publishers and do authentic storytelling across platforms and at scale, then we'll help them do that."

Refinery29 does "over $80 million" in annual revenue, of which the majority is thought to come from native advertising. "Native advertising is our business," said von Borries. "It's about custom solutions at scale. We work with brands on big, mission-based themes on an annual basis," he continued, citing Primark, which Refinery29 helped launch in the US. The company recently bolstered its commercial team with the addition of Zach Davis, formerly of BuzzFeed, as vice president of global partnerships and video strategy and Steve Shalit, formerly of The New York Times, as vice president of strategic partnerships and ad product strategy.

But though the formats and platforms may have changed, the essence of great advertising remains the same, said Hayward. "It's always been about telling a story, making a positive and interesting contribution to culture and society and doing that through the lens of a brand. It's not like some new algorithm."
Editor's note: This article was revised on November 11, 2015. A previous version of this article misstated that i-D attracts 9 million unique users per month. This number includes i-D's following on third-party social platforms. i-D itself attracts 6.5 million unique users per month.

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Refinery29, Dazed and i-D Battle for Millennials

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NEW YORK, United States - Millennials - one of the largest generations in history, comprising people born between 1980 and 2000 - are about to enter their peak purchasing years. In the US alone, the group already accounts for an estimated $1.3 trillion in direct annual spending, a number that's set to increase by 15 percent in the next five years.

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Ne ws brands are well placed to take on the challenges that the year ahead will bring, having reclaimed some of their mojo in 2017. They have been significant engineers in the seismic shift in perception of brands and the market in general to digital investment. The Times has been expedient in repeatedly shining a torch into the dark corners of YouTube and highlighting the importance of "safe" and quality contexts. The year ahead will be pivotal for news brands to succeed in exploiting the opportunity and for delivering success via a proliferation of revenue streams.

Success, however, will only come if advertisers are prepared to pay for quality and premium environments. Group M and Newsworks will publish the results of a joint research project that intends to prove the effectiveness of digital premium publisher environments to deliver brand and performance metrics versus the open exchange. This could be a turning point for the medium.

'Success will only come if advertisers are prepared to pay for premium environments'

While a heightened news agenda has fuelled programmatic revenues for news brands, the context of news will continue to be a double-edged sword of paranoia for clients as brand guardians: the proliferation of terrorist-related atrocities and other shocking events has cast a renewed focus on news brands as a potentially negative environment. On such occasions, trust and reach become secondary considerations.

Revenue continues to be fragile. Group M forecasts 2018 print revenue at -11.5%, while news brand digital is likely to deliver shallow growth at 2.6%. The gap between print and digital revenue is reducing, but total revenues (and profitability) are shrinking. In the context of an equally fragile economic backdrop, other legacy media channels are now starting to feel the same heat that news brands have felt for some time. The contest to seize a share of media investment will be greater than ever.

The backdrop is tough but there are reasons for optimism.

News brands are seeing success in new revenue models such as The Guardian Ad Manager Beta (a self-serve platform for SMEs) and The Telegraph and Apple News partnership, which has grown to 10.5 million uniques in Q3 2017 (comScore). We will see more diverse revenue streams that will, in turn, deliver improved first-party data capabilities.

We are all now well versed on the dire threat that the new world order poses to the future of journalism and the free press

Data will be a powerful force for potential success as the introduction of GDPR will be a boon for news brands. On this one, trust is of primary concern - consumers will be far more likely to give data consent to a valued brand.

For those who need further encouragement to become a logged-in user, news brands are in a position to dangle some valuable carrots in the form of ultra-premium content (such as Telegraph Premium) and member schemes akin to Times+. This will help them to disintermediate third parties that extract revenue from the ecosystem.

In fact, it is possible that news brands could gain commercial advantage by helping less forward-thinking ad-tech companies to overcome their own obstacles to consent. All of this means that news brands are well placed to develop personalisation strategies.

Data could be the glue that finally unifies the news brand factions this year, as it's likely that they will come together to bring a combined data offering to market. Signs of a union have been apparent with the launch last year of the News UK, Guardian and Telegraph premium video marketplace, which claims 39.4 million unique monthly users. Collaboration with wider media channels is already in place, such as the Guardian/ Four Four Two/ESPN link-up for the 2018 football World Cup. We can expect to see more of these.

A whiff of consolidation has been in the air for some time now - it is, after all, one of the few ways to guarantee a circulation increase. Trinity Mirror is set to finally acquire Northern & Shell. The acquisition will bring a wealth of Health Lottery data, entry into the celebrity magazine market, and will bolster the Trinity Mirror Big City package. The daily circulation will reach about 1.7 million, which is bigger than Metro, The Sun or the Daily Mail.

Further change is afoot when the Guardian/ Observer goes tabloid this month. The tabloid edition, although driven by commercial necessity, promises a new design that looks as impressive as the Berliner format and will be cheaper to produce and distribute using the Trinity Mirror infrastructure.

Consolidation and a move to tabloid is perhaps not the only act of downsizing that we will experience in the market. Editorial teams have been squeezed to such a degree, one wonders if it is possible to squeeze any more - a further watch-out for a medium that markets itself on quality.

We are all now well versed on the dire threat that the new world order poses to the future of journalism and the free press.

In an era in which fake news is increasingly prevalent and difficult to identify, it is in our collective interests to act.

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Why 2018 is a pivotal year for news brands

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Ne ws brands are well placed to take on the challenges that the year ahead will bring, having reclaimed some of their mojo in 2017. They have been significant engineers in the seismic shift in perception of brands and the market in general to digital investment.

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We need to start making better use of our critical faculties and properly interrogate the data behind headlines, writes Vanessa Clifford.

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It took a terrorist attack for Google to enter the news business.

On September 11, 2001, after hijackers crashed two commercial jets into the World Trade Center as well as a third plane into the Pentagon and another into a field near Shanksville, Pennsylvania, Internet users turned to the search engine for information. Again and again, they typed in terms like "New York Twin Towers," but found nothing about what had happened that morning. Google's Web crawlers hadn't indexed "Twin Towers" since the month before, which meant every result that Google returned was, given the context, totally and painfully irrelevant.

Google quickly set up a special page for "News and information about attacks in U.S.," with links to the websites of about four dozen newspapers and news networks, along with links to relief funds, resources, and phone numbers for airlines and hospitals. A link to this makeshift news page stayed there for weeks, just below the search bar on Google's minimalist homepage. Within a year, Google had incorporated a news filter into its search algorithm so that timely headlines appeared atop a list of search results for relevant keywords.

A new era of personalized news products began, in earnest, as a reaction to horrific global news.

Today, a Google search for news runs through the same algorithmic filtration system as any other Google search: A person's individual search history, geographic location, and other demographic information affects what Google shows you. Exactly how your search results differ from any other person's is a mystery, however. Not even the computer scientists who developed the algorithm could precisely reverse engineer it, given the fact that the same result can be achieved through numerous paths, and that ranking factors-deciding which results show up first-are constantly changing, as are the algorithms themselves.

We now get our news in real time, on-demand, tailored to our interests, across multiple platforms, without knowing just how much is actually personalized. It was technology companies like Google and Facebook, not traditional newsrooms, that made it so. But news organizations are increasingly betting that offering personalized content can help them draw audiences to their sites-and keep them coming back.

A new era of personalized news products began, in earnest, as a reaction to horrific global news

Personalization extends beyond how and where news organizations meet their readers. Already, smartphone users can subscribe to push notifications for the specific coverage areas that interest them. On Facebook, users can decide-to some extent-which organizations' stories they would like to appear in their news feeds. At the same time, devices and platforms that use machine-learning to get to know their users will increasingly play a role in shaping ultra-personalized news products. Meanwhile, voice-activated artificially intelligent devices, such as Google Home and Amazon Echo, are poised to redefine the relationship between news consumers and the news.

While news personalization can help people manage information overload by making individuals' news diets unique, it also threatens to incite filter bubbles and, in turn, bias. This "creates a bit of an echo chamber," says Judith Donath, author of " The Social Machine: Designs for Living Online " and a researcher affiliated with Harvard's Berkman Klein Center for Internet & Society. "You get news that is designed to be palatable to you. It feeds into people's appetite of expecting the news to be entertaining ... [and] the desire to have news that's reinforcing your beliefs, as opposed to teaching you about what's happening in the world and helping you predict the future better."

As data-tracking becomes more sophisticated, voice recognition software advances, and tech companies leverage personalization for profit, personalization will only become more acute. This is potentially alarming given the growth of websites-news-oriented and otherwise-inhabiting the political extremes, which on Facebook are easy to mistake for valid sources of news. When users can customize their news, and customize to these political and social extremes, civic discourse can suffer. "What's important is how people use the news to have a discussion," says Donath. "You may have friends or colleagues, and you read the same things in common. You may decide different things about it. Then you debate with those people. If you're not even seeing the same news story, it leaves you with a much narrower set of people with whom you share that common ground. You're losing the common ground of news."

Information-filtering algorithms, whether those of tech giants or news organizations, are the foundation of personalization efforts. But journalists and technologists approach this info-filtering environment in fundamentally different ways. News organizations share information that is true and hopefully engaging. Technology companies like Google and Facebook enable the sharing of information that is engaging and hopefully true. Emerging technologies will only exacerbate the existing problems with algorithmically promoted junk information.

Still, algorithms have a place in responsible journalism. "An algorithm actually is the modern editorial tool," says Tamar Charney, managing editor of NPR One, the organization's customizable mobile listening app. A handcrafted hub for audio content from both local and national programs as well as podcasts from sources other than NPR, NPR One employs an algorithm to help populate users' streams with content that is likely to interest them. But Charney assures there's still a human hand involved: "The whole editorial vision of NPR One was to take the best of what humans do and take the best of what algorithms do and marry them together."

In an "Inside NPR" blog post about the editorial ethics driving NPR One's personalization (co-written by Charney, chief digital officer Thomas Hjelm, and senior VP of news and editorial director Michael Oreskes), the so-called "secret sauce" behind the app is "an editorially responsible algorithm." Metrics track listener behavior so that, over time, the app can offer content catered to individual preferences. Charney declined to describe exactly what data the NPR One app collects-"We're a little proprietary," she says-but she gave some examples of how the algorithm personalizes NPR content.

For instance, NPR One knows when you stop listening, which in the future can help producers decide how to keep listeners interested. It can also tell which listeners heard a story that later had a correction appended to it, and deliver that correction to the top of those listeners' queues. In at least one case, when a correction was significant, NPR One's algorithm determined who had heard the original segment. NPR then emailed the correction to that list of users.

NPR One can apply that same principle to multi-part stories. If a listener misses the first or second part of a story, the app will be sure to offer the missing part to that listener, something those who listen to NPR on the radio often might miss. "Nobody thinks that's what personalization algorithms are for," Charney says. "But we can counter both the filter bubble and we can counter false narratives this way."

Important news stories-both local and national-are presented to all users, with no options for personalization; the app will always provide the lead story of the day and other important stories selected by editors. So while NPR One enables listeners to choose the "non-essential" stories that are more particular to one's interests-music reviews, for example, or stories about sports or interviews with artists-and decide on the level of depth they hear on certain topics, dialing up or down the frequency of updates, human editors still ultimately decide what you need to hear.

"You may not be interested in Syria. We'll tell you if this big thing happened and you need to know about it, but we'll spare you from the incremental news," Charney says. "The ability to skim across some stories and to dive into other stories, that may be the power of personalization."

We now get our news in real time, on-demand, tailored to our interests, across multiple platforms

The skimming and diving Charney describes sounds almost exactly like how Apple and Google approach their distributed-content platforms. With Apple News, users can decide which outlets and topics they are most interested in seeing, with Siri offering suggestions as the algorithm gets better at understanding your preferences. Siri now has help from Safari. The personal assistant can now detect browser history and suggest news items based on what someone's been looking at -for example, if someone is searching Safari for Reykjavík-related travel information, they will then see Iceland-related news on Apple News. But the For You view of Apple News isn't 100 percent customizable, as it still spotlights top stories of the day, and trending stories that are popular with other users, alongside those curated just for you.

Similarly, with Google's latest update to Google News, readers can scan fixed headlines, customize sidebars on the page to their core interests and location-and, of course, search. The latest redesign of Google News makes it look newsier than ever, and adds to many of the personalization features Google first introduced in 2010. There's also a place where you can pre-program your own interests into the algorithm.

Google says this isn't an attempt to supplant news organizations, nor is it inspired by them. The design is rather an embodiment of Google's original ethos, product manager for Google News Anand Paka says: "Just due to the deluge of information, users do want ways to control information overload. In other words, why should I read the news that I don't care about?"

That is a question news organizations continue to grapple with. If reactions to The New York Times's efforts to tailor news consumption to individual subscribers are any indication, some people do want all the news that's fit to print-and aren't sold on the idea of news personalization.

The Times has recently introduced, or plans to do so later this year, a number of customization features on its homepage involving the placement of various newsletters and editorial features-like California Today, the Morning Briefing, and The Daily podcast -that depend on whether a person has signed up for those services as well as readers being able to choose prioritized placement of preferred topics or writers. Soon, the biggest news headlines may still dominate the top of the homepage, but much of the surrounding content will be customized to cater to individuals' interests and habits.

The Times' algorithm, drawing from data like geolocation, will make many of these choices for people. A person reading the news from, say, India might see news relevant to the Indian subcontinent in a more prominent place online than a person reading from New York City. The site already features a "Recommended for You" box, listing articles that you haven't yet read, also including those suggestions in emails to some subscribers.

Then-public editor Liz Spayd discussed the changes in a March column, noting that she'd heard from several readers unhappy with the newspaper's efforts to offer a more unique reader experience, and to document and share subscribers' activity with them. "I pay for a subscription for a reason: the judgment and experience of the editors and writers that make this paper great. Don't try to be Facebook ... Be The New York Times and do it right," commented one reader.

"Don't try to be Facebook" was a common refrain among the commenters. The social network has had its fair share of issues with news curation in its attempts to become "the best personalized newspaper in the world," as CEO Mark Zuckerberg put it back in 2013. To say nothing of the fake news that proliferates on users' news feeds, the "trending topics" section had a very rough few months in 2016. First, news "curators" were accused of bias for burying conservative news stories; then, Facebook laid off the entire editorial staff responsible for writing descriptions of items appearing in the section, with some disastrous results, such as when a made-up story- claiming Megyn Kelly was fired from Fox News for being a supporter of Hillary Clinton-showed up at the top of the "trending" list. The story appeared on the blog USPostman.com, a website registered to an address in Macedonia, known for its robust network of information scammers, PolitiFact reported at the time. In January of this year, Facebook gave up on personalized trending topics altogether, filtering topics by users' geographic regions rather than interests.

Even more troubling than Facebook's trending topics woes was the revelation in September that the social network had sold upwards of 3,000 ads-totaling at least $100,000-to a Russian firm connected to the spread of pro-Kremlin propaganda and fake news. The firm, posing as Americans in a myriad of groups and pages, sought to target U.S. voters during the presidential campaign and, while most of the ads didn't specifically reference the election or any candidates, they "appeared to focus on amplifying divisive social and political messages across the ideological spectrum," wrote Alex Stamos, Facebook's chief security officer, in a blog post. The fact that the topics of the ads were so wide-ranging-varying from immigration and gun rights to the LGBT community and Black Lives Matter-is suggestive of how damaging personalization can be and how it isn't confined to any particular party line. Soon after, Twitter announced it had found and suspended at least 200 accounts linked to Russian operatives, many of whom were identified as the same ad buyers active on Facebook.

Meanwhile, in May, Google briefly tested a personalized search filter that would dip into its trove of data about users with personal Google and Gmail accounts and include results exclusively from their emails, photos, calendar items, and other personal data related to their query. The "personal" tab was supposedly "just an experiment," a Google spokesperson said, and the option was temporarily removed, but seems to have rolled back out for many users as of August.

Now, Google, in seeking to settle a class-action lawsuit alleging that scanning emails to offer targeted ads amounts to illegal wiretapping, is promising that for the next three years it won't use the content of its users emails to serve up targeted ads in Gmail. The move, which will go into effect at an unspecified date, doesn't mean users won't see ads, however. Google will continue to collect data from users' search histories, YouTube and Chrome browsing habits, and other activity.

"The ability to skim across some stories and to dive into other stories, that may be the power of personalization." - Tamar Charney, managing editor of NPR One

The fear that personalization will encourage filter bubbles by narrowing the selection of stories is a valid one, especially considering that the average internet user or news consumer might not even be aware of such efforts. Elia Powers, an assistant professor of journalism and news media at Towson University in Maryland, studied the awareness of news personalization among students after he noticed those in his own classes didn't seem to realize the extent to which Facebook and Google customized users' results. "My sense is that they didn't really understand... the role that people that were curating the algorithms [had], how influential that was. And they also didn't understand that they could play a pretty active role on Facebook in telling Facebook what kinds of news they want them to show and how to prioritize [content] on Google," he says.

The results of Powers' study, which was published in Digital Journalism in February, showed that the majority of students had no idea that algorithms were filtering the news content they saw on Facebook and Google. When asked if Facebook shows every news item, posted by organizations or people, in a users' newsfeed, only 24 percent of those surveyed were aware that Facebook prioritizes certain posts and hides others. Similarly, only a quarter of respondents said Google search results would be different for two different people entering the same search terms at the same time.

This, of course, has implications beyond the classroom, says Powers: "People as news consumers need to be aware of what decisions are being made [for them], before they even open their news sites, by algorithms and the people behind them, and also be able to understand how they can counter the effects or maybe even turn off personalization or make tweaks to their feeds or their news sites so they take a more active role in actually seeing what they want to see in their feeds."

On Google and Facebook, the algorithm that determines what you see is invisible. With voice-activated assistants, the algorithm suddenly has a persona. "We are being trained to have a relationship with the AI," says Amy Webb, founder of the Future Today Institute and an adjunct professor at New York University Stern School of Business. "This is so much more catastrophically horrible for news organizations than the internet. At least with the internet, I have options. The voice ecosystem is not built that way. It's being built so I just get the information I need in a pleasing way."

Webb argues that voice is the next big threat for journalism, but one that presents news organizations with the opportunity to play an even greater role in people's everyday lives. Soon, we likely will be able to engage with voice-activated assistants such as Siri and Alexa beyond just asking for the day's news. We'll be able to interrupt and ask questions-not just in order to put things in context and deepen our understanding of current events, but to personalize them. To ask, "Why should this matter to me?" or even, "What's the most important news story of today-for me?"

Today, you can ask the Amazon Echo to read you the news-a bit like the way radio broadcasters simply read straight from the newspaper when radio was in its infancy. But technologists, journalists, and scholars believe that in the near future, artificially intelligent voice-activated devices will offer a genuinely interactive and personalized news experience. "Maybe I want to have a conversation with The Atlantic and not USA Today, so I'm willing to pay for that," Webb says. "This has to do with technology but also organizational management because suddenly there are like 20 different job titles that need to exist that don't."

The Echo's Flash Briefing comes with preloaded default channels-such as NPR, BBC, and the Associated Press-already enabled, but it's "very much on the consumer to decide" what they want to hear from the Echo, says Amazon spokeswoman Rachel Hass. Any web developer can include a site in the Flash Briefing category the Echo dips into for the news, but being selected as a default outlet by Amazon gives news organizations a huge competitive advantage. Research shows that most people don't change default settings on their phones, computers, and software-either because they don't want to, or more likely, they don't know how to.

Much like a search engine, Amazon isn't focused on differentiating material from various sources or fact-checking the information the Echo provides. The Echo does, however, read a quick line of attribution during news briefings. "As Alexa reads out your Flash Briefing, she attributes each headline or news piece by saying 'From NPR' or 'From the Daily Show,'" Hass explains. There's also tremendous incentive for news organizations to play nice with Amazon as a way to get cemented into the device's default news settings-a relationship that evokes the damaging dependency newsrooms have on Facebook for traffic.

Because Flash Briefings aren't limited to traditional news outlets, you could conceivably find briefings available from all kinds of sources-including full-fledged newsrooms and individuals. Even former Vice President Joe Biden now delivers daily news briefings, introducing various news articles of his choosing, which are available on Google Home as well as the Echo.

"There are already more than 3,500 Alexa Flash Briefing" skills, the term Amazon uses for the app-like command-driven programs created by developers to use on the Echo. For example, there's the skill Trump Golf, which offers updates on President Trump's golf outings whenever prompted by the command, "Alexa, ask Trump Golf for an update."

"I suspect these devices are the most important thing to emerge since the advent of the iPhone in 2007," says Kinsey Wilson, former editor for innovation and strategy at The New York Times, "because they open up spaces-principally in the home and in the car-where it allows for a higher, more informal degree of interaction."

In some ways, voice seems like a natural extension of search. Devices like the Amazon Echo and Google Home will enable people to dip into search engines without having to type. More than that, though, these new devices are meant to be conversational. "It's not so much asking them a bunch of questions but having a collaborative exploration of some topic," says Alex Rudnicky, computer science professor at Carnegie Mellon University. "This idea of, 'Wouldn't it be really nice if you could call up a friend of yours who is very knowledgeable and just have a conversation with them?'"

The personalization element isn't just the heightened sense of camaraderie one might feel with a conversational robot versus a stack of broadsheets or a talking head on cable television. Personalization is rooted in the fact that devices like the Echo actively learn about the human user with every new interaction and adjust their behavior accordingly. This is the same personalization technique used by Google and Facebook-slurp up myriad individual data, then tailor services to suit-but it uses devices that are always listening-and therefore always learning.

Media organizations that want to create conversational news products for voice-activated devices will have to figure out how to produce and package entirely new kinds of stories, perhaps including advanced tagging systems for snippets of those stories, and be sure their methods integrate with the operating systems these devices use. "The existing SEO methods that we have might need to be rethought completely from scratch," says Trushar Barot, a member of the digital development team at BBC World Service. "There may be new methods that emerge that are native to voice recognition."

Personalized voice assistants face potential obstacles. Sounding too much like a machine is one problem; sounding too much like a human is another. "It's very easy for people, psychologically, to start anthropomorphizing the device into a real entity and developing genuine human feelings about it," says Barot. "Plus, the fact that it's a device that's in their home and it's learning more and more about their lives and potentially becoming much more intelligent about proactively offering you suggestions or ideas. That brings up challenging ethical issues."

News organizations' use of voice interfaces raise a host of ethical concerns related to data collection, privacy, and security. We don't know precisely what data these devices collect about individuals (few people read company privacy policies) but, if smartphones have taught us anything, the rough answer is: Everything they possibly can. And there's not an easy answer to who, exactly, owns this data, but one thing's for sure-it's not (just) you. This data has immense value, not just to those generating, capturing, and analyzing it, but to a wide range of companies, tech giants and otherwise.

So what do newsrooms do with audience data? "There are potentially ways for newsrooms to use that personalization [data] in a useful way," says the Berkman Klein Center's Donath. It largely depends "on what you think the mission of the newsroom is. Is it to inform people as well as to possibly to have its own model of what's important information that people should be aware of? Or is it much more of an entertainment model?" If the latter, that audience data is incredibly valuable for organizations to make sure they're creating and distributing the type of content people want each day.

In the near future, artificially intelligent voice-activated devices will offer a genuinely interactive and personalized news experience

Amazon is considering offering developers raw transcripts of what people say to the Echo, according to a July report in The Information. Newsrooms will have to grapple with whether it's ethical to use data from those transcripts as a way to make money, a move that would certainly enrage some privacy-minded consumers. For publishers, that could be an important revenue stream, but it could also creep audiences out and lessen trust, not enhance it.

What happens to a person's perception of information, for instance, if the same voice some day is reading headlines from both Breitbart and The Washington Post? "What does that do to your level of trust in that content?" Barot asks. Plus, "there is a lot of evidence that people inherently trust or believe content or news or information shared by their friends. So if this is a similar type of dynamic that's developing, what does that do for newsrooms?"

Loss of a sense of sources is a big issue, according to Donath: "What's useful is knowing where something comes from. Depending on what your perspective is, it can cause you to believe it more or believe it less. When you see everything in this generic feed, you have no idea if it's being reported by something right-leaning or left-leaning. In a lot of ways, the entire significance of what you're reading is missing."

These concerns certainly aren't unique to voice technology. There's reason to worry that personalization will only exacerbate existing trust issues around news organizations given the gaping partisan disparity found in a September 2017 Gallup survey on Americans' trust in mass media. Though Democrats' trust and confidence in the media has actually jumped to the highest level it's been in the past two decades, from 51 percent in 2016 to 72 percent this year, the opposite can be said for Republicans: only 14 percent of Republicans have a great or fair deal of trust in the mass media, which ties with 2016 as a record low in Gallup's polling history.

Although some newspaper readers might like being greeted by name each time a major news organization sends a daily roundup of stories, news organizations run the risk of sounding inauthentic, the way campaign emails from politicians seem impersonal despite their attempts to the contrary.

According to Powers, news organizations should share with audiences that the content they're seeing may not be the same as what their neighbor is seeing-and how they can opt out of personalization. "There needs to be more transparency about what data they're actually collecting, and how people can manually turn [personalization efforts] on or off or affect what they see," says Powers.

Perhaps most importantly, it's essential for news organizations to remember that they can't leave personalization up to algorithms alone; doing so will likely only narrow people's news consumption rather than expand it, and could lead to the spread of misinformation. "You still need to have an actual human editor looking to make sure that what's popular isn't bogus or hurtful," says Powers.

Personalization should be a way to enhance news decisions made by human editors, professionals committed to quality journalism as a crucial component of an open society. The news-filtering algorithms made by companies that refuse to admit they are even in the media business-let alone in a position to do great harm-aren't bound to even the most basic journalistic standards. And yet they are the dominant forces filtering the world around us in real time.
With reporting by Eryn Carlson

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It took a terrorist attack for Google to enter the news business. On September 11, 2001, after hijackers crashed two commercial jets into the World Trade Center as well as a third plane into the Pentagon and another into a field near Shanksville, Pennsylvania, Internet users turned to the search engine for information.

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Agony is the natural state of the news industry. Newspaper sales per capita peaked before color television was a thing, and magazines have been in decline since the Clinton administration. When it comes to the finances of the Fourth Estate, bad news is, generally speaking, the news.

But 2017 has been a uniquely miserable year in the media business, in which venerable publications and fledging sites, divided by audience age and editorial style, have been united in misery. At Vanity Fair, the editorial budget faces a 30 percent cut. At The New York Times, advertising revenue is down $20 million annually after nine months. Oath, the offspring of Yahoo and AOL's union, is shedding more than 500 positions as it strains to fit inside of its Verizon conglomerate. Meanwhile, almost every digital publisher seems to be struggling, selling, or soliciting, whether it's the media company IAC exploring offers to offload The Daily Beast, Fusion Media Group offering a minority stake in The Onion and former Gawker Media sites, or Mashable selling for a fifth of its former valuation. So many media companies in 2017 have reoriented their budgets around the production of videos that the so-called "pivot to video" has became an industry joke. Today, the pivot seems less like a business strategy and more like end-of-life estate planning.

Even the crown princes of digital upstarts, Vice and BuzzFeed, are projected to miss their revenue targets by 20 percent each, which amounts to a combined shortfall of hundreds of millions of dollars. Finally, this week, Time Inc., the storied publisher of magazines and websites, including People, Sports Illustrated, and Time, announced it had reached an agreement to be sold to the Meredith Corporation, whose focus on lifestyle is inspiring rumors that it may yet offload or even shut down Time, Fortune, and Money.

What on Earth is going on? There are at least three major trends contributing to this dismal media moment. They all point to the same solution, and it's something everyone in journalism should know by now: News publishers have to get better at making money outside of advertising.
1. There are too many publishers and not enough ad money.
Here is the briefest possible history of attention and advertising in the 21st century-they have both flowed from desktops to mobile devices and from publishers to platforms. In 2016, 90 percent of websites reported that unique visitors on mobile devices had eclipsed desktop; and 90 percent of the growth in digital advertising came from just two companies, Google and Facebook.

Facebook and Google's dominance stems from one of the great arbitrages in media history. Publishers still bear the cost of reporting, analyzing, and, well, publishing the news. Facebook and Google cinch the bloated web into the straitjacket of vertical content known as results pages and feeds. In the process, they collect unparalleled information about the interests and aspirations of their users and profit from their roles as digital gatekeepers. While some have compared Facebook and Google to cable companies distributing television shows, one difference is critical: TV distributors pay networks an "affiliate fee" for their entertainment, while Facebook and Google owe no such gratuity for the vast majority of its content. In 2017, Google and Facebook are projected to account for about 61 percent combined of the U.S. digital ad market. No other company comes even close.

This reality would be troubling even if online publishing were a static business. But employment in "internet publishing and broadcast," the government's best approximation for online media, has grown by more than 100,000 people in the last decade. As a result, there are too many writers and publications saying the exact same thing-oops, Josh Marshall at TPM already said that -competing for a limited supply of advertising. As a result, digital media's appetite for ads has grown faster than the digital-ad pie.

This is not the same as saying that publishers should just give up on advertising. Without it, The Atlantic might not exist. Neither would most newspapers.* Advertising has been a critical feature of a healthy news business for at least 150 years, since Benjamin Day invented the penny press, and its centrality to the news business isn't disappearing, just dissipating.
2. Media companies accepted VC money. Now they're accepting VC reality.
In many ways, the 2017 correction in digital media is a perfectly normal and predictable outcome of digital media becoming an investment category for venture capitalists. As a rule, the vast majority of VC investments fail. So the failure of several VC-backed digital-media companies isn't an existential shock so much as a mathematical inevitability.

In the last decade, venture-capital firms plowed money into new media companies like BuzzFeed, Vice, Vox, Axios, Mashable, Vocativ, Mic, Uproxx, and so many others, all of which essentially made versions of the same promise: "Trust us. We get Millennials." And, in a way, many of them did "get" Millennials in the loosest sense of the word. While some of them used venture capital to build the foundation of a distinctive editorial voice or entertainment platform, others used it to produce the equivalent of content confetti-fast, flimsy, and forgettable morsels, blasted from the CMS cannon, which upon inspection were less journalism than Millennial Mad Libs: "[Number] Ways That [Google-Trend-Generated Subject] Totally Made Us [Past-Tense Verb]."

It's easy to say that this is all Facebook and Google's fault. But the truth is that many digital publishers ruined themselves. To impress venture capitalists with a story of scale, they chased viral trends and search-engine optimization to grow monthly visitor figures, optimizing for clicks (shallow traffic meant to generate ever-more ad revenue) at the expense of reporting, insight, or niche editorial identities. In any healthy market-for clothes, food, or furniture-competitors try to differentiate, by quality, convenience, or price, to compete directly for consumers' income. But in the free-for-all of VC-subsidized ad-supported publishing, too many sites chased scale for the sake of scale alone, which led to the growth of insouciant meme merchants that, in feeding from the same trough of trending content, were inherently duplicatory. A massive correction was inevitable.

And now it's here. Venture-capital funding for digital media has shrunk for two consecutive years, according to CB Insights, a VC database. Realizing that sites like Vocativ will never reliably reach audiences even one-tenth the size of platforms like Snapchat, investors will simply cut off funding and force sites to sell at a huge discount, like Mashable, or simply close. It won't necessarily be "a full-blown crash," as Marshall gloomily predicted. It will be a far more awkward landing, as several companies redefine themselves as video producers, then tech companies, then data-driven storytellers, before they run out of money.

3. Donald Trump is the Ghost of Christmas Future.

It's advisable to resist the impulse to tie every observable trend on Earth to President Donald Trump. In this case, however, the effect is too obvious to ignore.

As the news cycle has concentrated around the polarizing president, many ad buyers have said they don't want their name near any news story that involves him. (This is a difficult proposition when Trump inserts himself into previously nonpartisan topics, like the NFL). Some companies are simply refusing to spend money with publishers that specialize in hard news. Others participating in automated, or "programmatic," advertising markets have stipulated that their ads cannot appear near any political content. As some premium advertisers abandon political news, ad rates fall and political news becomes a tough venture for media companies, even as traffic is soaring.

The president is the media equivalent of a toxic herbicide, whose very presence makes the ecosystem uninhabitable for advertisers. It's created one of the paradoxes of the 2017 news cycle: Readership has increased within one of the least profitable categories of news.

But the Trump effect isn't all negative for digital-media companies. Fear of and fascination with the president has supercharged an old-fashioned revenue source for news publishers-readers. Subscription revenue has been record growth at The New Yorker and The Washington Post. At The New York Times, revenue from digital-only subscriptions jumped 44 percent- or $75 million -in the first nine months of 2017, compared with the same period from last year. That's three times larger than the $20 million of lost advertising revenue over the same period.

In short, President Trump has pulled forward the future of news by accelerating both the decline in digital advertising and the rise of reader subscriptions.

* * *

Whatever one wishes to call this media moment-a correction, a crash, an apocalypse - it is unevenly distributed. Doom is coming for companies that relied on an unlimited supply of VC money floating them until they cracked a nonexistent code to advertising. Something far less than doom is coming for companies that balanced cost and revenue while experimenting with various forms of direct advertising, events, subscriptions, and memberships. And something almost like success has come for companies that have used the instability of the 2017 news cycle to establish themselves as vital and irreplaceable.

Advertising has been critical to the affordable distribution of news for a century and a half in the U.S. Today's media companies don't have to reach all the way back to the early 1800s for a business plan, to when newspapers were an elite product, selling at the prohibitive price of six pennies per bundle. But they are going back in time, in a way, and excavating a dusty business model that relies more on readers, and less on advertisers, than the typical online publisher. The New York Times is leading the trend. In 2000, circulation revenue accounted for 26 percent of its business. Last quarter, print circulation and online subscriptions accounted for 64 percent of the company's revenue.

The near future of digital news may be as tumultuous as the near past. But it's tough to imagine that readers and viewers will be ill-served by news organizations exchanging a fixation with breadth of scale with a renewed devotion to making a product worth more than $0.00 to its audience.

In its inexhaustible capacity for experimentation, digital media has pivoted to programmatic advertising, pivoted to native advertising, pivoted to venture capital, pivoted to Facebook, pivoted to distributed, and pivoted to video. Here is a better experiment: Pivot to readers.
*This article originally stated that New York Times ad revenue is 40 percent greater than its total wages and benefits. In fact, the company's total spending on wages and benefits is larger. We regret the error.

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Agony is the natural state of the news industry. Newspaper sales per capita peaked before color television was a thing, and magazines have been in decline since the Clinton administration. When it comes to the finances of the Fourth Estate, bad news is, generally speaking, the news.

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The future for published media looks like this

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Publishers and agencies outline their plans for a more prosperous future in the face of unprecedented challenges and threats.

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An ad-tech firm says it has discovered a large and sophisticated advertising-fraud operation in which fake websites and infected computers were used to scam advertisers and publishers out of upward of hundreds of thousands of dollars a day.

Denmark-based Adform, identifier of the scheme, named it "Hyphbot" and estimates that it has been going on since at least August.

According to Adform, the fraudsters behind the Hyphbot scheme created more than 34,000 different domain names and more than a million different URLs, many designed to attempt to fool advertisers into thinking they were buying ad inventory from big-name publishers such as the Economist, the Financial Times, The Wall Street Journal and CNN. It is a tactic known in the industry as "domain spoofing."

The perpetrators then generated a wave of nonhuman, or "bot," traffic that loaded the fraudulent sites, which made money mostly through video ads. Video ads are lucrative because they carry higher rates than other online display ads.

Fake traffic is a serious issue for advertisers because it means they have wasted money buying ads that were served to computer programs, rather than real people who might go on to purchase their products. And real publishers get cheated out of potential advertising revenue.

Adform says much of the impact of the scheme could have been thwarted if publishers and ad-tech companies had implemented and kept up-to-date with a new industry initiative called Ads.txt, which is designed to stamp out domain spoofing.

Adform's investigation suggested that the people behind Hyphbot used a network of data centers and unwitting consumers' computers, infected by malware, to access more than half a million IP addresses, mostly from the U.S., to mimic real browsing behavior on the network of fake sites.

The suspicious URLs were presenting themselves in ad auctions via at least 14 different ad exchanges at a rate of up to 1.5 billion requests to ad buyers a day.

Adform began informing the majority of ad exchanges affected on Sept. 28, two days after it began its analysis. Since then, it has seen a reduction in the fraudulent traffic, although Hyphbot is still believed to be active. Adform also informed the Federal Bureau of Investigation in the U.S. and Metropolitan Police in the U.K. Adform's full findings were independently reviewed by two industry experts before the publication of the white paper.

Jon Slade, the chief commercial officer of the Financial Times, said the publisher was "not surprised" to hear of another fraud scheme based around spoofing. Last month, the Financial Times ran its own investigation and found 25 ad exchanges had been offering fraudulent ad space, purporting to be from FT.com.

"We are urging all actors in the supply chain to urgently implement and adopt the Ads.txt standard," Mr. Slade said. "It's one of the best bets for a cleanup that we have."

Dow Jones, the unit of News Corp that includes The Wall Street Journal, said it implemented Ads.txt about a month ago and echoed the FT's sentiment that solving the larger problem "requires the participation of all parties involved."

A spokesman for Turner, the Time Warner unit that operates CNN, said it also implemented Ads.txt earlier this year.

The Economist declined to comment.

It is difficult to extrapolate exactly how much money the scheme has made so far. Adform describes Hyphbot as "likely the biggest bot network" to hit the online ad industry. Jay Stevens, Adform's chief revenue officer, gave a "conservative" estimate that, at its height, the scheme could have been generating at least $500,000 a day.

Last December, ad-fraud detection firm White Ops discovered a Russian ad-fraud operation called Methbot that it said was defrauding U.S.-based online advertisers of more than $3 million a day, a figure that some in the industry say was overstated.

Hyphbot has the potential to be "three to four times" bigger than Methbot because it spoofed more web domains and used a larger bot network to generate the fake traffic, according to Adform's research findings, outlined in a white paper published Tuesday.

An estimated $6.5 billion in ad spending is expected to be wasted this year due to fraud, according to a report released in May by White Ops and the Association of National Advertisers. But, that amount is down 10% from 2016, suggesting some industry efforts to tackle the problem may be working.

Ads.txt is a mechanism that allows publishers to display to ad buyers all the legitimate sellers of their ad inventory via a text file on their websites. Buyers and their ad-tech vendors can crawl those files - such as thisone from WSJ.com -and know to only to buy a particular website's ads from those listed sellers.

More than 36,000 web domains have adopted Ads.txt since it was introduced five months ago by the Interactive Advertising Bureau, the U.S. trade body said.

Publishers adopting Ads.txt isn't a full solution. It requires everyone else in the chain-from ad buyers to demand-side platforms and ad exchanges-to sign up and ensure the files are updated and scraped regularly in order for the initiative to work effectively.

Aside from Ads.txt, Adform has also listed other suggested remedies in its Hyphbot white paper, which include encouraging ad-tech vendors to check their data warehouses for suspicious patterns of bid requests outlined in its report and shutting off associated networks.

Write to Lara O'Reilly at lara.o'reilly@wsj.com

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Fake-Ad Operation Used to Steal From Publishers Is Uncovered

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An ad-tech firm says it has discovered a large and sophisticated advertising-fraud operation in which fake websites and infected computers were used to scam advertisers and publishers out of upward of hundreds of thousands of dollars a day. Denmark-based Adform, identifier of the scheme, named it "Hyphbot" and estimates that it has been going on since at least August.

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A demo of Unruly's outstream format on The Sun's website

The Verified Marketplace will be a joint sales platform for a single type of video ad inventory, called "outstream" video.

Outstream video ads are standalone ad units and are often placed within a news article between paragraphs of editorial text.

"The reason we are focusing on outstream is we believe it's the fastest growing video format," Hamish Nicklin, the chief revenue officer of Guardian News & Media, said.

Outstream was worth £363m or 52% of the online video ad market in the first half of 2017 in the UK, according to the IAB, which said video revenue overtook that of banner ads this year.

Advertisers will be able to buy outstream video ads on The Verified Marketplace through News UK's UnrulyX platform.

The publishers say The Verified Marketplace will be a "trusted, brand-safe" platform for "high quality" video advertising that can reach a potential audience of 39.4 million unique users across four national titles: News UK's The Sun and The Times, The Guardian and the Daily Telegraph.

Independent measurement companies Integral Ad Science and MOAT will verify the video ads on The Verified Marketplace.

The fact that News UK, Guardian News & Media and Telegraph Media Group have managed to strike an agreement is a small but important breakthrough.

The newspaper groups spent more than a year on a failed effort to pool their ad sales in an initiative that was called Project Juno and renamed Rio and then Arena.

They hoped that joint ad sales could stem declining revenues and make it easier for agencies and advertisers to buy from news brands, but the project collapsed as first DMGT and then Trinity Mirror and TMG pulled out.

Those involved in The Verified Marketplace believe it is evidence that something has been salvaged from Project Arena and offers hope of further collaboration.

"We're excited about it because it shows the market that we've listened," Nicklin said, acknowledging that agencies want the buying process to be easier.

"We think it's a good product, we know outstream video is growing, we know brand safety continues to be an issue, and it shows news brands can collaborate. It bodes well for the future."

Nicklin played down suggestions that consumers might skip or pass over outstream ads. "The fact that outstream is the fastest-growing video channel tells me advertisers certainly believe in it," he said.

Jason Trout, Unruly's managing director of EMEA, said The Verified Marketplace "will deliver high-quality ad formats and peace of mind to advertisers at a time when trust in the programmatic eco-system has never been lower, solving the problem of scarcity of genuinely premium, verifiably brand safe and viewable video environments".

Robin O'Neill, manager director of digital trading at Group M, welcomed The Verified Marketplace, saying it meets two important criteria as it offers "professionally produced, high quality content for our clients' advertising campaigns" and " the ability to independently verify delivery and performance of campaigns".

Nicklin said the news publishers had learnt from the Juno-Rio-Arena talks on collaboration that it was easier to take small "chunks", rather than "chewing the animal in one go".

He added: "We know collaboration is what the market wants."

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News UK, Guardian and Telegraph co-found Verified Marketplace for video ad sales

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The Verified Marketplace will be a joint sales platform for a single type of video ad inventory, called "outstream" video. Outstream video ads are standalone ad units and are often placed within a news article between paragraphs of editorial text.

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Facebook is finally letting publishers build paywalls inside Instant Articles, but only on Android phones.

On Thursday, the social network announced its latest remedy for publishers that while able to tap into large audiences on Facebook, are afraid to give away their content too cheaply. The paywall plan, being done in partnership with a small group of publishers including The Los Angeles Times, Hearst, The Economist and The Washington Post, lets publishers cut off non-subscribers after reading a certain number of Instant Articles, which are the fast-loading posts Facebook developed especially for media partners.

Some publishers that believed the economics of Instant Articles weren't working in their favor had lost interest in them, including Hearst. Now, two of Hearst's flagship newspapers, The Houston Chronicle and The San Francisco Chronicle, will test the paywall option.

The threshold is 10 articles to start. Other levels will eventually be tested, Facebook said in its announcement on Thursday. Facebook also said that only Google Android devcies would support the paywall, at least for now.

Apple is resisting the program because it demands a split of in-app revenue, and it couldn't come to terms with Facebook on how to categorize these transactions, according to people familiar with the impasse. In short, Apple demands a cut, and Facebook arranged the program to funnel all proceeds to publishers becasue it thinks the revenue should qualify as coming from the mobile web not in-app.

Facebook declined to comment for this story.

"Many publishers identified subscriptions as a top priority, so we worked with a diverse group of partners to design, refine, and develop a test suited for a variety of premium news models," Facebook said in its announcement. "We also heard from publishers that maintaining control over pricing, offers, subscriber relationships, and 100 percent of the revenue are critical to their businesses, and this test is designed to do that."

The readers who hit the paywall will see a subscription link to the publisher's website, and the publisher will keep all the revenue from the sign-up, Facebook said. The Instant Articles also come with ads even for paying subscribers, according to people familiar with the prorgam.

Facebook launched the Facebook Journalism Project earlier this year to deal with publishers' issues on the platform.

Facebook said it was testing other options, as well, such as a subscribe button that appears before hitting the paywall, and replacing "Like" buttons at the tops of stories with "Subscribe" buttons.

Facebook said publishers are seeing 50 percent more revenue per post on Instant Articles than this time last year. Also it updated its audience network numbers, saying it generates $1 million a day for publishers that use the ad-serving platform.

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Facebook Gives Publishers Paywall for Instant Articles

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Facebook is finally letting publishers build paywalls inside Instant Articles, but only on Android phones. On Thursday, the social network announced its latest remedy for publishers that while able to tap into large audiences on Facebook, are afraid to give away their content too cheaply.

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Niche Online Publishers Bank on Subscriptions Over Advertising

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A growing number of independent publishers, whose audiences are too small for significant ad revenue, are using new technology to help them sell subscriptions.

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When it comes to advertising on Facebook, people should be able to tell who the advertiser is and see the ads they're running, especially for political ads.

That level of transparency is good for democracy and it's good for the electoral process. Transparency helps everyone, especially political watchdog groups and reporters, keep advertisers accountable for who they say they are and what they say to different groups.

In September, our CEO Mark Zuckerberg talked about the initial steps we were taking to help protect the integrity of elections, both in the United States and around the world. Earlier this month, our VP of Public Policy Joel Kaplan provided additional details on what we're doing to make advertising more transparent, increase requirements for authenticity and strengthen our enforcement against ads that violate our policies.

Today we're sharing an update on the progress we've made towards accomplishing those tasks.

ADDITIONAL TRANSPARENCY FOR ALL ADVERTISING
We're going to make advertising more transparent, and not just for political ads.

Starting next month, people will be able to click "View Ads" on a Page and view ads a Page is running on Facebook, Instagram and Messenger - whether or not the person viewing is in the intended target audience for the ad. All Pages will be part of this effort, and we will require that all ads be associated with a Page as part of the ad creation process. We will start this test in Canada and roll it out to the US by this summer, ahead of the US midterm elections in November, as well as broadly to all other countries around the same time.

We know how important it is to our community that we get this feature just right - and so we're first rolling it out in only one country. Testing in one market allows us to learn the various ways an entire population uses the feature at a scale that allows us to learn and iterate. Starting in Canada was a natural choice as this effort aligns with our election integrity work already underway there.

During this initial test, we will only show active ads. However, when we expand to the US we plan to begin building an archive of federal-election related ads so that we can show both current and historical federal-election related ads. In addition, for each federal-election related ad, we will:

1. Include the ad in a searchable archive that, once full, will cover a rolling four-year period - starting from when we launch the archive.

2. Provide details on the total amounts spent.

3. Provide the number of impressions that delivered.

4. Provide demographics information (e.g. age, location, gender) about the audience that the ads reached.

POLITICAL ADVERTISERS WILL HAVE TO VERIFY THEIR IDENTITY
As Joel Kaplan mentioned, we're going to require more thorough documentation from advertisers who want to run election-related ads. We are starting with federal elections in the US, and will progress from there to additional contests and elections in other countries and jurisdictions. As part of the documentation process, advertisers may be required to identify that they are running election-related advertising and verify both their entity and location.

Once verified, these advertisers will have to include a disclosure in their election-related ads, which reads: "Paid for by." When you click on the disclosure, you will be able to see details about the advertiser. Like other ads on Facebook, you will also be able to see an explanation of why you saw that particular ad.

For political advertisers that do not proactively disclose themselves, we are building machine learning tools that will help us find them and require them to verify their identity.

We remain deeply committed to helping protect the integrity of the electoral process on Facebook. And we will continue to work with our industry partners, lawmakers and our entire community to better ensure transparency and accountability in our advertising products.

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Update on Our Advertising Transparency and Authenticity Efforts

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by Rob Goldman, VP of Ads When it comes to advertising on Facebook, people should be able to tell who the advertiser is and see the ads they're running, especially for political ads. That level of transparency is good for democracy and it's good for the electoral process.

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Hello, and welcome to Tech Tonic, a podcast that looks at the way technology is changing our lives. I'm Richard Waters, West Coast editor of Financial Times in San Francisco. Last week, we heard from Francesca Bria, a digital innovation expert. She talked about her work in helping European citizens reclaim digital sovereignty. This week, we hear from a researcher focused on the effects of data-dependent technologies, like that of Facebook and Twitter, on society and culture.

If you are interested in destabilising a population's confidence in institutions and intermediaries, you gaslight them. You get the so they can't tell what is reality.

That's the voice of Danah Boyd. She's a principal researcher at Microsoft, visiting professor at New York University, and founder and president of the Data & Society Research Institute. She spoke to the FT's Hannah Kuchler in New York.

So thank you so much for joining me, Danah. First of all, I thought this was fascinating. Data & Society held a workshop called "Who controls the public sphere in the era of algorithms?" in February 2016, and one of the questions in the blurb appeared pretty prescient. You said, "Can Facebook determine the outcome of the US election?" So what made you worry about what we're worrying about now all the way back then?

The funny thing about studying people's use of technology is you get to watch how people try to manipulate it for all sorts of purposes. And for me, a lot of these threads go way back. They go back to the earliest days in which I was studying social media. And I spent the better part of the 2000s looking at how people were trying to alter algorithms for economic gain, political ideals, or just plain entertainment. So fast forward to the point of 2016. We were very interested not just in what the companies could possibly do, where we felt like there was a lot more boundaries set in motion for them, but what people could do to the company's architectures.

In some ways, I don't think this should be surprising, although I fully admit that it has become surprising. Search engine optimisation. This is the beginning of search engines. Political campaigns have built social media efforts early on, and some of those are extraordinarily manipulative. I think what's different now is that people are waking up and recognising that decentralised networks, who are not part of the current political establishment, can coordinate through network technologies to play a role that, historically, only really powerful actors once were able to play.

Yeah, and I think when they're waking up, they're not really sure what we can do about it. Do you have any ideas?

Looking at what's going on, I think it's important to go back to the roots and ask, why? Why is it happening, who's participating under what conditions, and what are those root factors? The reason I say this is that most of the discussions of what to do now are Band-Aid fixes, right. Moments where we're like, oh, somebody has made money over here running misinformation campaigns. Let's stop the money making efforts. And while that's totally reasonable, I think the roots are really critical. Part is what is happening culturally in an American context-- I'll put it in American context first, but there's different parts around the world. In the United States, we've seen strategic efforts over a very long time to fragment the American [? polis. ?]

And that has occurred both at a very specific and localised level in that US military, which used to bring people together across geography, had actually-- plays not nearly the [? specific ?] role that it once did, so that moment of getting to know people that were different has collapsed. Ever since the late 70s when we went 24/7 news media, and we started to see monetisation, and in particular financialisation of our media ecosystem, we've increased the level of opinion making in our media, and it's become polarised in its opinion making.

That's only been further magnified in the US by the lack of local news, which of course is connected to financialisation and hedge fund takeovers. So you have all of these conditions where people are very ripe for a fragmented worldview. Now layer onto that what happens in the US in 2008, where due to an economic collapse, a lot of people throughout this country feel as though their identities are completely destabilised.

They don't know what their future is. They're scared about economic conditions. And regardless of whether or not we actually saw a massive increase in inequality, we saw a massive increase in perceived inequality. And the result is that people felt more and more tribal, so we've already had the conditions to be polarised, and then you create a tribal dynamic on top of it.

And then you go forward, and you have the next generation. You have young people who are looking out to their future and seeing limited access to economic possibilities, huge debt to go to universities, et cetera. And the result is that they're frustrated, insecure, and they're not sure what's going on. And so that moment where they might be just playing with an effort to game Oprah Winfrey on her TV show suddenly turns into a moment where they can shape the political election.

And for a lot of folks, there's something very fun about being part of these campaigns. And I think that's one of the things that people really miss in all this. It's not that there's any one type of actor participating here. We're dealing with many different categories of people coordinating in a decentralised way, willing to share tactic even if they don't share a goal, and that is so strange for anybody used to running a political campaign or running an activist campaign, where you understand what the goal is and you try to align people on tactic. That's not what's happening here.

So you think that the way that we're talking about it at the moment-- We're talking about Russian actors as if they are just a separate discrete entity that is sitting in some kind of FSB building somewhere interfering with elections. You think that we should see it as much more fluid and connected to other issues, and maybe not addressed solely by changes in technology.

I believe that there's a lot of different actors, including foreign, state, and foreign non-state actors. Even when we're talking about who are the Russians, we're quickly going to the internet research agency, which is a well known troll farm who is notorious for leaving tracks everywhere. They're not even trying to hide. That's why they are the easiest to identify. And they definitely have relationships with the Russian state, but are they the Russian state? That's not so clear.

So what happens is, when you have alignment there, that may not actually even be the state, where my guess is we're also seeing state actors and we're seeing other non-Russian state actors. But we're also seeing white supremacists, and white nationalists, and we're seeing Hindu nationalists, and we're seeing conspiracy theorists, and we're seeing teenagers. And we're seeing all sorts of different groups all throwing spaghetti at the wall trying to see what sticks.

What's notable about their efforts is that they're trying to find vulnerabilities in our media landscape. And that means both our social media landscape and our news media landscape. So they're trying to find the moment where journalists will actually propel their views and scale them and amplify them by either know repeating a message that they're trying to get out there, or by negating it, knowing full well that the boomerang effect's in play, which is that if you don't trust a news media outlet, and a news media that tells you something, you might think there's actually something true to what they're trying to negate.

They're also looking for vulnerabilities in social media, and their relationship to social media is different depending on the platform. With Twitter, it's actually mostly about trying to get to journalists, not trying to get to the mainstream public. And so some of the most common tactics I watch are these sock puppet accounts. These fake accounts who tweet at journalists, not tell them to follow a link or do something, but asking questions.

Asking journalists a question for which you know that a journalist is like, oh, is there something there, and starts googling it, having found, then the YouTube video and the blog post that was set up for the journalists to find. They are targeting an amplification agenda. Now with Facebook we're dealing with a different environment. That's all about trying to get information to spread, but what is the end goal, right?

So one of the things I think that will come out as we watch the Internet Research Agency, the Russian-affiliated corporation and their campaigns on Facebook, there's nothing common about the kinds of ads they put out there. They have ads that are pro and against pretty much every position you can imagine. What they have in common is a general sentiment that you should not trust the media, and you should not trust the government of your own country. So the narrative that they're putting out there is not one to propel a specific belief, but to ask people to question everything.

That's also a form of critical thinking. That's also a narrative that we encourage in our education system, and so we're seeing these coupling of frames happen at scale. And there's no doubt that internet technologies mirror and magnify the good, bad, and ugly of every part of the system, and that social media platforms are part of it as are news media platforms. The question is, how do we deal with it as a systemic issue rather than thinking that we can solve it by any one actor doing better or going away.

So do you think that the media needs to be better at, rather than just throwing its hands up and saying, oh my god, there's so much misinformation out there, and actually trying to track misinformation and making sure that it doesn't amplify them?

I think it's imperative for the news media in particular to step back and recognise that they may be part of the ecosystem, they may be being gamed, and to figure out what stories they should not be amplifying. Consider this: it used to be common amongst journalists to not cover when people die by suicide. Why? Why did journalists not cover it? They didn't cover it because they were concerned that they would actually create replication. We'd seen a tonne of studies showing that the more journalists talked about suicide, the more people then went and tried it, so the worst thing you could do when you were covering the death of a celebrity, which was itself a newsworthy story, was to highlight that they had died by suicide.

We've actually undone that strategic silence. We have seen that manipulation occur in a variety of domains. Islamist conversations. What do we cover in terms of beheadings, or in terms of any ISIL or ISIS related content? It may be newsworthy, but how do we not use our platforms to radicalise? And that's really imperative for news media actors. For social media actors, I think a lot of it is trying to identify this new form of gaming. And in some ways I think of it as a security vulnerability.

So we have historically understood security has an access issue, something like the Equifax breach, where the issue is getting access to people's data or information, but there's a new form that has emerged because of these our systems, which is data injection adversarial attacks. And so I think that, just like companies had to start thinking about search engine optimisation and who was trying to mess with their systems at scale, we also have to look at it in this light.

And I think we have to get innovative, but I think the most important thing to realise is that we will never fix it. One of the reasons for taking on a security mindset is to realise that it's an iterative and evolving process. As long as we have people that are interested in bringing down institutions and information intermediaries, we're going to have these vulnerabilities. And so we need to get smart about how we evolve our understandings with it, rather than thinking that we can find the silver bullet.

So if we're trying to learn from the security industry, do you think we should be doing things like having red teams, which is what the security industry does, to have teams which their whole purpose is to try and penetration test, see where they can get into the network, but instead-- this might not be finding the loophole-- but see how you can use the network for impact?

I'm a big believer in red team and blue team efforts. The tech industry used to believe in the culture of tests, which is that you would do quality assurance assessments of a system before it went out there. One of the things that social media changed, back in the early days of Friendster, was to let the public actually do the test for us. To roll out a new feature and find the bugs, because of something that broke when it was live on platform. I think that is now costing us tremendously.

My colleague Matt [? Gritson ?] talks about the need for white trolls, which is what does it mean to actually ask people to mess with the system in that red team sense to really see how to build it out. Certainly you need that kind of adversarial thinking whenever you're trying to build a system, because one of the challenges and the beauties of building these technologies is that people design for the ideal end goal. They design for what could be, not for all the ways in which it could be abused and misused. And I think that's one of the reasons why a lot of tech actors are completely flabbergasted by what's going on right now, because they so desperately want the technology to be doing the good work that they designed it for, and that is being-- the technologies are being used for, but that also means that along with that good, we're also seeing some deeply destructive practises.

How much do you think is structural? I mean, there's also been a lot of talk in the last year or so about attention, and how things will spread through Facebook faster if people are liking them and people are looking at them. And so, therefore, that really plays into the hands of anyone trying to disrupt the system. Facebook isn't going to change its newsreader, make it like a curated newspaper, which has nothing to do with how much we pay attention to stuff. They seem to have a very good motive to keep people on site for as much time as possible.

I would argue that all of the media right now has an incentive to try to get people to click and consume as much as possible. News media as well social media. That is the cost of financialisation. That is the cost of needing to return on investment every quarter and make more money and more profit each time. I think that it's been an existential crisis for news media, because they've tried historically to hold on to two imperatives, one of a faith-based belief in producing content for the public to create an informed citizenry, and an economic imperative that is affected and shaped their industry writ large.

Social media undoubtedly grew up purely in an ecosystem where profit was already part of the story. so even though most tech founders started with an ideal of community, an idea of connecting people around the world, they have to come to that question of financial motive really fast. The challenge with an advertising based model, whether we're talking news media or social media, is that it is all about eyeballs. It is all about attention, and that attention can be very, very costly, because what is most motivating for people are often the things that are least psychologically beneficial for them individually and least socially beneficial. So if it bleeds, it leads, and the same thing operates within social media.

We see this content that makes you know emotionally responsive. And indeed one of the biggest challenges for polarised content is that people hate post. They throw content into Facebook to express their anger and their frustration about what some other might believe, and, as a result, they help propel content that is extraordinarily costly. And I think that's where the amplification mechanisms on social media are not just the platforms themselves, but the way in which the public as a whole becomes a part and parcel of that amplification channel, which is one of the reasons why we have reached an emotional exhaustion with consuming a lot of news content at this moment, because it's just overwhelming.

And that's one of these broader geopolitical environments, because again, you can manipulate that. If you are interested in destabilising a population's confidence in institutions and information intermediaries, you gaslight them. You get them so that they can't tell what is reality. And one of the best ways to do that is to overwhelm them. And in an ecosystem that is written-- driven by attention, and driven by eyeballs on sight, of course that's very easy to do, so I think it's exactly accurate that this is a lot of attention, and attention is connected to financialisation.

And do you sense any kind of backlash brewing against the amount of attention that we give to social media?

So there are certainly individuals who are sick of it and opting out, or trying to go to environments that are filled with kittens and babies. There's also simultaneously a lot of very public critique of social media, in particular. Calls for regulation, calls for companies being pressured into doing different changes to their product. And that is all coming from this very heady moment where people can't tell which way is up, but the broader challenge I'd say is that, when people are in a state of true emotional exhaustion and they're calling for change, they're not going to find solutions to the structural problems.

They're going to be looking for the Band-aids for the moment, and I think we're going to build a lot of Band-aids for the moment right now. I don't think that there's any way not to, because it's politically necessary for government, for industry actors, for a whole variety of civil society groups, but I'm just hoping that we can use this point of exhaustion and point of frustration, and people wanting to be out of the situation, to propel into a broader, more systemic change around how our media infrastructure operates, and how we band together as a society. That's a longer term project and one that I don't know that we've even begun.

Yeah, people briefly quitting Facebook after the election isn't going to change that. The other thing that there seems to be a lot of attention on, something that we've known we're moving in the direction of huge amounts of data being sucked up about us for a long time, but I think the recent developments in the advancing machine learning has made people more concerned that the amount of data that's being collected about them might be used for things that they don't really understand at all. Do you think this is an exciting moment or worrying moment in terms of data?

I think it's both. Let's talk about the positive first. We are on the precipice of a whole set of advances in medicine that are only made possible by sharing a tremendous amount of data so that we can understand things like the growth of cancer. The possibilities and potential of precision medicine are phenomenal, and we want to remedy the potential harms, especially in a country that connects medicine so deeply to an insurance profit motive, but we want to make certain that we can develop innovative remedies for people who are suffering from terrible diseases. And so I'm extraordinarily excited about the amount of data that we need to ingest and build the advancement in machine learning and neural networks technologies in order to get there. That's phenomenal.

On the flip side, we're using the same types of technologies, and the same obsession for data, to amplify practises that have had long and historic problems. Think about what we're doing in the criminal justice ecosystem. Criminal justice has been a disturbing and fraught sector from the beginnings of this country, not to mention the degree to which it is extraordinarily racist and destructive.

We have more people incarcerated in the United States now than we had enslaved during the height of slavery. It's a terrible situation. So when we introduce technology and amplification mechanisms into that space, and we try to train systems based on historic paths, all we're doing is amplifying historic prejudice and historic racism. And so that's an environment where I don't think we know what we're doing, and I don't think we're being responsible in how we're doing it. And there is indeed a profit motive that's driving it, and an obsession for efficiency and lowering of costs without actually questioning whether or not this is healthy.

Then, of course, we go back to the news information and the social media context. On one hand, people want content that connects them to their world. And you ask anybody what they love of social media, and it's about the ability to connect. It's about having the information at your fingertips, and the ability to connect with people you love across distance. And that is made possible by the sharing of data, because you're sharing it with people to connect. But that same data can be used to engage in different kinds of surveillant practises for economic incentives, advertising, and of course for other political incentives, and so that's one of the things that's so tricky, because it's not really about individual data in any of those 3 cases.

It's about how your data relates to other data within the system. It's about the ability to understand prediction, and when we're engaged in any act of prediction, we are basing our information on the connective tissue of the rest of society. And the question is whether or not we're doing it for end goals that we believe are productive or ones that we believe are destructive. And one of the biggest challenges is that not everybody agrees on what those end goals should look like.

And do you think we'll see-- We talk a lot about personalisation. Do you think that we'll see philtre bubbles coming out of the realm of Facebook and coming into all sorts of realms? I mean, for example, there's been some interesting stories written about personalised pricing on Amazon. Do you think we end up in a situation where we actually have constructed different realities for everyone?

Humans self-segregate because it's comfortable. We find people that are like ourselves. And lots of sociological and psychological literature has shown time and time again, that given any form of choice, we go to a whole world in which we have as homogeneous of a surroundings as possible. The challenge is that what Facebook has been designed to do is to amplify your desires. And if your desires are to live in a philtre bubble, it will do that work for you. It will amplify them.

And that's one of the reasons why these systems are so costly, these personalisation systems that are indeed going from Facebook to every other environment, because you want to be in your own comfortable environment. You want to be in your gated community online, offline, and everywhere else. The question is what does it take to rebuild a society in which we are able to work across distance?

So I refer to the idea of the military, and the military is a really important part of an American social infrastructure, because the US military, the standing army, has always been based on the idea that people from around this country, who are fundamentally different, had to be socialised into a unit across difference to stand by each other enough to die for each other and to die for this country.

That is an important commitment. There is nothing at that scale. We're not going to ask everybody to do that. And, indeed, as we lose structures like the military, we lose the processes of being so utterly uncomfortable. How do we commit voluntarily to being uncomfortable again in order to meaningfully connect? That's going to be the solution to personalisation, the counter to personalisation, but as long as there is an economic imperative to giving people what they want, we will see personalisation produce philtre bubble after philtre bubble.

I'm going to slightly change tack now. One of the other issues that the tech industry has been dealing with a lot in the last year or so, or at least it has become public in the last year or so, has been conversations about people speaking out about sexual harassment from VCs and other tech leaders and senior men in tech. And you wrote quite movingly about your own experience with inappropriate propositions from tech entrepreneur Marc Canter, and I just wanted to look broadly at where we are in the industry on this. I mean, do you think that after all this publicity, harassment is going to decline?

No, I actually think it's going to get worse, and that's what I struggle with most. So sexual harassment, and more insidious forms of sexual abuse, inevitably come from a differential in power, an abuse of power, and that abuse of power is further magnified when people don't believe themselves to have power and yet they do.

One of the biggest challenges amongst the tech industry is that many of the people who are part of it see themselves as geeks, as outsiders, as social misfits. They don't see themselves as being powerful. That's part of why we're having such a confused conversation about the role of social media. Facebook doesn't see itself as being one of the most powerful companies in the world. And so what happens is that, whenever you have power and you don't know it, the likelihood of abusing that power only increases.

So let's look at what tech dealt with in terms of historically around that power. So geek culture often allowed for a form of shared identity for people who felt socially ostracised in other parts of society. Nowhere was that more honourable than geek forms of masculinity. The idea that you could you weren't necessarily one of those alpha men who were making it big in the financial sector, but you had pride in what it meant to be a guy in tech, and that normalised a certain form of masculinity that we saw grow at scale.

And then tech all of a sudden became the most powerful sector in American society, but it didn't necessarily go with the cultural ethos. So we may make movies about geeks and celebrate them in ways that look very different than real genius back in the day, but for most tech folks this is their safe haven of their people like them. And now we're asking hard questions about who gets to be a part of tech, because tech has so much power. We're asking why are there not more women in tech. We're asking why are there not more people of colour in tech.

And those are very important questions to be asking, but for a lot of people whose identity is wrapped up in what it means to be in tech, they're basically feeling as though they're being under attack for not being acceptable enough. The same attack vectors that actually made the culture emerge the way that it did.

And, unfortunately, what that has meant is that, not just at the highest levels of tech, but the whole way through tech, we are seeing increased kinds of misogyny, increased kinds of sexism, and all it takes is a little moment when a mid-level engineering manager has been told and incentivised that they need to be more diverse in their hiring practises, and they have an interview candidate that they don't believe is as qualified as a male candidate, and they're pressured by their boss to hire that woman. And that is a radicalisation moment. That is a moment in which anger and resentment and misogyny start to breed.

And so one of the challenges for me is how do we get through this, because our current incentive structures aren't working. Our shame structures may push out individuals, but they don't address the broader systemic issues. And I think it's going to take a lot of hard work to do that, but the most important work is going to be in getting by and writ large from people to realise that we have to collectively rethink what the culture of this industry is. And that's going to be hard for a lot of people who are deeply wed into the correct culture.

There's so much hard work to do. Thank you so much for taking the time to speak to me.

Thank you for having me.

We'll be back next week with another episode of Tech Tonic. In the meantime, if you'd like to comment on today's show or suggest any topics you'd like us to cover in future episodes, please email us at techtonic@ft.com. Don't forget to subscribe to our show on your favourite podcast app, and if you write a review, that will help other people find us, too. Thanks for listening.

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Hello, and welcome to Tech Tonic, a podcast that looks at the way technology is changing our lives. I'm Richard Waters, West Coast editor of Financial Times in San Francisco. Last week, we heard from Francesca Bria, a digital innovation expert. She talked about her work in helping European citizens reclaim digital sovereignty.

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The strategy to rescue the Guardian from financial oblivion has attained a landmark position by increasing its revenue from readers to a point where it now outweighs the paper's income from advertising.

This significant shift in the Guardian's business model, making it less dependent on a highly challenging advertising market for media companies, results largely from a quadrupling in the number of readers making monthly payments under the title's membership scheme, which has grown from 75,000 to 300,000 members in the past year.

The paper has also slightly increased - to 200,000 - its subscriber base for its print and digital products. And in a development which has even surprised senior Guardian executives, a further 300,000 individuals have made single donations to the paper, which has been posting appeals at the end of articles, urging readers to financially support its commitment to open access journalism.

These one-off donations, totalling several million pounds, come from 140 countries but a substantial proportion has arrived from the US, suggesting that despite a recent diminution of the Guardian US operation, the paper has a committed audience in a country with established traditions of supporting public interest journalism through philanthropy.

Together, the 800,000 contributors (members, subscribers and donors), along with casual sales of the physical paper, give the Guardian a record number of paying readers; more than the half-a-million pinnacle in print circulation achieved in the late 1980s.

After a long cycle of eye-watering annual losses, amounting to more than half-a-billion pounds since 2009 and causing many to believe that the 196-year-old paper was on its way to bankruptcy, there is finally cause for optimism.

Reader revenue strategy reaps rewards

In a long interview with The Drum, timed to coincide with the revelation of the new figures, the chief executive of Guardian Media Group, David Pemsel, reveals some of the secrets behind the rise in reader payments. "Our readers contribute more to this organisation now than advertising," he says.

He predicts that Guardian News & Media will drive down its annual losses to £25m for the year to 31 March 2018 (compared to the £45m shed last year).

That puts him and editor-in-chief Katharine Viner on course to meet the ambitious three-year target they have set of breaking even by April 2019. "If we get to the end of this year and the minus 25 (million pounds) number, we have in effect halved our losses and kept our revenues broadly flat," he says. "No one is ever complacent... but pretty much every number we have set out we have achieved, as well as supporting arguably some of the best journalism we have ever done."

Pemsel, who became GMG's CEO in 2015, joined the company as chief marketing officer in 2011, having previously been at ITV. He was then GMG's chief commercial officer and therefore must take some responsibility for the Guardian's past financial pain.

Why is it that a paper that always positioned itself as a great soothsayer of the media's digital future has taken so long to see the value of reader relationships?

It is a "million dollar question", says Pemsel, as he makes a spirited defence of GMG's historic digital strategies and avoids criticism of Alan Rusbridger, the journalistically brilliant former Guardian editor-in-chief and architect of an ambitious programme of international expansion which coincided with the paper's financial difficulties.

"If you go back to 1995, from then to where we were in 2015, then you cannot fault the Guardian's progress against its digital hunger to innovate [and] to fully embrace all of the digital opportunities," he says. "You go from the ninth largest newspaper (in the UK) to the third largest English speaking news organisation in the world, with 160 million browsers and over 1bn page impressions almost every month for the last seven months. That is a proof point of the effectiveness of our digital strategy and of our journalism."

He accepts that "some might say 'Well, you did that at the cost of X-amount of money'" but argues that the strategy was right in recognising that "the future ultimately was going to be an open, widely distributed ecosystem".

Re-evaluating reach online

The trouble was that a vast audience, though it was an endorsement of Guardian journalism, wasn't in itself the business model that GMG executives imagined it to be.

"The problem with reach is that it can breed complacency," Pemsel says now. "You can look around the building and you've got screens with big [audience] numbers and monthly dashboards going out saying 'Hey, we've got bigger'. But it masks the relationship you are cultivating with your readers."

He points out that "some of the most atrocious content companies in the world can be big, it doesn't mean that you are being read or making an impact on the world...it just means you are big".

Pemsel says that, as commercial boss, he was starting to monetise the Guardian's online audience when "a huge swing to programmatic" advertising, led by Google and Facebook, meant that the "the connection between digital reach and revenue snapped".

So GMG has had to learn to think beyond reach.

The advertising downturn coincided with Viner taking over from Rusbridger, and Pemsel being promoted to CEO in a relationship that, due to the dire financial position, has led to the Guardian's editorial and commercial teams working more closely than ever before.

Emphasising the "agility" that this arrangement brings, Pemsel says the approach is essential to maximising the value of reader relationships. "If you are going to put the reader at the heart of everything, you need to have a common data set and a common understanding of reader journey to know what parts of the site can be optimised to deliver reader relationships [and] reader revenue. You can't do that in silos."

The break even strategy has been about saving money as well as making it. Viner and Pemsel have overseen a programme of deep cuts that has seen the loss of more than 300 posts. "It was incredibly tough but we have said that we will break even and we will," he insists.

Converting readers into members

The strategic transition from reach to reader relationships is known within GMG's building at King's Cross in London as "anonymous to known".

When the Guardian first announced its three-tier (rising to £60-a-month) membership scheme in late 2014, shortly before Rusbridger announced he would be standing down as editor, many of the paper's rivals sniggered at its presumptions of reader loyalty. But while there have been errors - a plan to use a Grade II listed railway warehouse as an events hub was scrapped - the latest figures are a vindication of the idea, which gives members benefits such as exclusive emails and ad-free reading.

Pemsel has no compunction in using inclusive language such as "contributor" or "supporter" to encourage payments from readers who were once encouraged to expect free access to a publisher that would be funded by advertising. He notes that the "most transactional" publishers (think of News UK) are now using the term "member" in their marketing.

The largest group of Guardian members is, unsurprisingly, from the UK, although there is a sizeable cohort from the US. Pemsel is bullish about the prospect of making even more money from this scheme and from one-off donors. "We are at the foothills of genuinely exploring how far that strategy can take us," he says. "We have got 160 million browsers at the top of our funnel and we are doing a lot of strategic analysis of our data to work out how many regulars we have, and on the conversion of the number of people we have got a paying relationship with. We have got a long way to go."

He credits chief customer office Anna Bateson, and her predecessor David Magliano, with playing key roles in driving reader contributions. "In partnership with people in editorial, our data teams are now working out the most scientific way to optimise by article and by country and by genre, the most efficient way to be able to drive reader support," he says.

The previous presence of Wikipedia founder Jimmy Wales on the Guardian's board has helped to generate insights into how the online encyclopedia harnesses financial support from its user community. "It's interesting to listen to Jimmy's vision of Wikipedia, and how they have worked out some incredibly technical and scientific ways to optimise for support. I'm not saying that we are replicating what Wikipedia are doing but that level of digital and analytical sophistication is now being worked through [here]."

Refining the appeal message

The Guardian is continuing to experiment with its financial appeal message - known internally as "the epic". "We are optimising that by article and within video and podcasts and are trialling how we optimise that off-platform," Pemsel says. "That's just us getting really smart about understanding the triggers for getting people to contribute."

These "triggers", says the CEO, are often related to breaking news. "We are obviously very sensitive about not asking for contributions around content that is reporting on some of the horrors. But when there are news surges, whether that be announcements on Brexit or in the States around what's happening to Trump, we can see spikes in our traffic and news articles that create levels of contribution." He adds that the Guardian is looking to do more to "create our own moments" which might move readers to take action.

"I think we will explore the opportunity around articles. I can imagine some kind of product set that brings to life how one optimises certain parts of the site. I'm not going to lay out our product roadmap for the next six months but I do believe through our data understanding we will be able to create a set of products which will allow people to want to keep contributing."

An early sign of the willingness of readers to donate money to support Guardian journalism came through a series in the US called "This Land is Your Land", which highlighted the threat to America's public land in journalism that was backed by over $114,000 in public donations. "The Defenders", a newer international series on environmental activism produced with the NGO Global Witness, has also generated support from donors.

Although competitors have tried to suggest that Guardian US is a busted flush that underperformed at the last US election, Pemsel is clear that it remains central to GMG's strategy. "We ended up having to halve the number of people in the US office but since then, as opposed to it being a financial drain on the business, this year it will make a positive contribution."

Similarly, the paper's Australian operation is seen as being suited to reader contributions. "We are very clear on our strategic agenda editorially over there because we are not just doing wide waterfront news, we are very [strong] on environment, indigenous people... there's a whole theme out there which is quite specific and is driving reader contribution."

As it pores over an audience of 160 million monthly browsers and around 9 million daily uniques, the Guardian will methodically look at ways to turn regular readers into financial supporters. "We are prepared to explore country by country because we know that audiences are slightly different from Australia to the US to here," says Pemsel.

He is "agnostic" about whether readers give support as subscribers, members or donors. Either way, their data is valuable. "For every person that contributes we know more about them and that can be translated into a richness of understanding that advertisers can understand," he says.

The Guardian's financial future

Pemsel is not shy about talking about making money. It is, after all, what he's paid to do. At a business known for its liberal left values and its social conscience he takes home a salary and benefits package of £706,000.

Some Guardian readers might be uncomfortable at the thought of being "monetised" but equally they might count themselves fortunate to access the paper's consistently outstanding journalism free of charge, which is no doubt why so many are bringing out their credit cards.

The CEO argues that its the Guardian's unique ownership model, run by the Scott Trust, that is the key motivation for those who wish to support its journalism, particularly those making one-off donations. "We are a truly independent company, protected by a trust, and people feel compelled to make a re-occurring contribution with no reciprocal value exchange other than supporting the Guardian."

When Viner and Pemsel drew up their three-year target to break even by April 2019, they didn't realise that they were putting themselves on a similar timetable to Theresa May and David Davis in delivering a deal to leave the European Union. But much has happened in the world in the past 18 months, and the recent political turmoil speaks to the Guardian's mission.

"When we launched this relationship strategy, Brexit wasn't known, the Trump situation was not known... and the fear generally about how the world is behaving right now, we didn't know that," Pemsel says. "If anything, the break even aspiration and our purpose has become critical because the role of the Guardian, as with other quality news organisations, has become more important than ever."
Ian Burrell's column, The News Business, is published on The Drum each Thursday. Follow Ian on Twitter @iburrell

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How the Guardian found 800,000 paying readers

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The strategy to rescue the Guardian from financial oblivion has attained a landmark position by increasing its revenue from readers to a point where it now outweighs the paper's income from advertising.