Creating an Innovative Community
A FOLIO: roundtable on developing and monetizing social media.
During a session at the FOLIO: Show last September called âThe Online Editorial Toolkit,â Fortune executive editor Josh Quittner said he considered social media to be one of the most important initiatives for magazine publishers. Said Quittner, âIf youâre not working on a Facebook-style application, you should be. A year from now, I guarantee we will be talking about what Facebook application you have, not video.â
Flash forward one year. While Quittner may have underestimated the appeal of video, he was spot on about publishers trying to climb aboard the social media bandwagon. From partnering with existing networks such as MySpace, Facebook and LinkedIn to starting to develop their own networks, publishers are attempting to harness social media (FOLIO:âs own MediaPro site features more than 2,500 members with official communities such as sales and editorial, as well as grassroots start-ups such as Gay Media and the Bulgarian Group).
However, unlike Web sites or even video, social media is uncharted waters for many magazine publishers. With the emergence of vendors like Ning and KickApps, building a network is getting easier. But building one that generates revenue, as well as branding, is the next step. 8020 Publishing dazzled the industry with the success of JPG, an online/print hybrid in which photography enthusiasts post photos online, the community votes on the best and an edit staff features the winners in a printmagazine. However, 8020âs second launch, a travel mag/site called Everywhere, is now on hiatus (although 8020 says it wants to relaunch the effort by the end of the year, as well as launch three additional titles in the first quarter of 2009).
FOLIO: last month hosted a roundtable featuring eight leaders in social media on the publishing side to discuss where social media makes sense and how publishers can take it from experiment to dedicated business.
The Roundtable Participants...
NICK FERRIS | group publisher, Euromoney Institutional Investor
In June, Institutional Investor launched The Financial Net, âa kind of Facebook for finance and banking.â Site features include industry news, job feeds, video, event calendars and blogs as well as networking opportunities for senior financial professionals.
JIM SPANFELLER | president and CEO, Forbes.com
This past spring, Forbes.com debuted its Corporate Org Chart Wiki, a collaborative Web application that invites people to contribute to what they know about company organization charts. Social areas exist specific job titles, including CIOs, CEOs, and soon, CFOs.
STEPHEN MERRILL | general manager, BudgetTravel.com
This summer, Budget Travel launched a social site called My Budget Travel, powered by social platform KickApps, which takes photo and videos that the site calls travel journals. The site can embed media inside stories and allows stories to be rated. My Budget Travel has 10,000 members right now.
ALEX BLUM | CEO of KickApps
STEPHEN SAUNDERS | founder, Light Reading and Internet Evolution
In 2000, Saunders developed Light Reading, a site dedicated to the telecommunications industry that leveraged Web 2.0 features such as blogs, chat, and user content. Saunders sold Light Reading to CMP (now United Business Media) in 2005 and began developing Internet Evolution, a Web site and social network within UBM that investigates how Internet technology will impact communications.
RACHEL MASTERS | vice president strategic relationships, Ning
Ning is a technology provider of social networking platforms. Today almost 400,000 social networks are running on Ning, including Playboy U, the e-magazine Shuffle and Folio:âs MediaPro. Ning is also launching Mom Logic for AOL Lifestyle and will be partnering with a well known travel magazine and a popular womenâs title in the near future.
JEREMY WESTIN | executive vice president business development, Playboy Media Group
Last year, Playboy launched Playboy U, a free networking site for college students 18 years of age or older who have a valid â.eduâ e-mail address. The site features membersâ writing, photography and videos, and encourages user-generated dialogue about relationships, student life and pop culture (but no nude photography).
TED NADEAU | general manager, CondeNet
From adopting an early presence on Facebook and MySpace, CondeNet has added community features to all of its own sites, ranging from forums to user profiles, comments, user generated content and Wikis. Recently, CondeNet has experimented with creating Twitter feeds for all its sites.
FOLIO: It seems as though every six months or so, something emerges as the new savior of the publishing industryâwhether itâs data, video or now, almost everyone is chasing social media. Why develop a social media platform? Whatâs the imperative behind your social media initiatives and what role does this really serve in your organization?
ALEX BLUM: Weâre undergoing a fundamental change. Up until this point, it was a broadcast relationship and it was primarily one-way communication. Now with social media, it becomes a two-way communication. Youâve invited your audience to participate in the creation of the experience, and that develops a much richer, stickier relationship between the publisher and the audience.
TED NADEAU: Features that are on the site are definitely affording better engagement, more repeat visits, a deeper experience while youâre there. But also weâre using social media to extend our content and extend our reach beyond our Web sites so that we kind of break down the walls of our Web sites.
STEPHEN SAUNDERS: I think thereâs another really important reason why people are interested in this, which is that major customers and their agencies are demanding it. One of the big changes for publishers, particularly in b-to-b, is to work out how to give their customers what they want, but also how to make money from it. Itâs really important that people donât embrace this trend in the same way that they embraced the Internet in the late nineties with an âif we built it, they will comeâ attitude.
FOLIO: Where do you see that happening?
SAUNDERS: Generally, thereâs a fixation in social networking on traffic. Well, traffic is useful if youâre delivering banners or branding. But itâs also a nasty competition to be in, particularly in b-to-b where the traffic numbers arenât as high as they are in consumer publishing. Agencies expect these huge numbers. Itâs much more important to refocus the agency and the client on the quality of your audience.
Internet Evolution only has about 135,000 visitors a month and weâre now dividing that audience into even smaller groups which focus on different verticals. Some of those only have 3,000 members but because theyâre very well qualified, the sponsor is happy with it.
JEREMY WESTIN: Individual pieces of content are very commoditized in a world where Google can take you straight in somewhere and you come right back out to Google. What any brand that comes from another medium has to do in translating to digital is build experiences around the brand and not just small pieces of content. Weâre also moving away from a mother ship, destination-only view of your brand and making sure that you are taking your act on the road to where the traffic is with YouTube and MySpace and Facebook. Those advertising models are clearly not yet mature. But try to test something.
RACHEL MASTERS: I grew up a complete magazine addict. I lived to have magazines delivered to my house. I read Interview, Vogue and Details. If I had the Internet and could connect with other people who were reading Details, and share videos and photos with them and the like, I think my whole world would have changed.
WESTIN: And to think those people, that age now, arenât reading magazines at all.
MASTERS: Exactly. This is their magazine. I donât think that the traditional skills of a great publisher have really changed with social networking. Itâs about your content, your brand and your editing skills.
STEVEN MERRILL: The early expectation was that we had to have social media on Budget Travel. It makes sense in the travel space, people want to share their photos in huge numbers. The first question was, whatâs got to be on there and then the second question is, do you just add it and hope a bunch of people show up and start trading photos and friending each other?
For Budget Travel, and maybe for a lot of other travel sites, thatâs not right. What can you really facilitate for your readers and for your visitors and what are you just pretending you can facilitate?
JIM SPANFELLER: Didnât Arthur Frommer recently have a statement about consumer ratings of travel destinations, negatively depicting the social media aspects of the travel sites?
MERRILL: You know, Arthur Frommerâs name is still on our magazines but we donât speak to Arthur a great deal. But I think, a critical question to ask is not just, hey, letâs stick it on there and everythingâs going to work. Itâs what can you reasonably facilitate for your readers and they for you.
SAUNDERS: Thatâs exactly the problem with video. Why is the content considered better on video than it would be on HTML or PowerPoint or anything else? The publisherâs role doesnât change at all. The purpose of business is to make money and you do that by creating content.
In b-to-b, people donât want to talk about business stuff on public Web sites. That was certainly true with Light Reading. So the next step is to develop proprietary content which historically is how b-to-b publishers attract their audiences and monetize them. That hasnât gone away at all. In fact, itâs become even more important. It has to be in the budget. If you work for an uber-publisher and they think that having a social network is going to replace the need for paid editors, then you have a problem.
BLUM: Thereâs a difference between an experience which is a combination of technology plus editorial programming and just the technology. Some companies think if they deploy the technology, people will come and it will be successful. Thatâs far from the reality of the situation. You need an editor or some other individual within the organization thatâs been designated to be the community leader. Eventually, if you have a successful community, leaders will emerge and pick it up. But if youâre not sort of nurturing that at the very beginning, itâs not going to happen magically on its own.
NADEAU: On Epicurious.com, Tanya Steele is the editor-in-chief, and she is all over the site. She has a very engaging voice and she speaks a bit offline as well. But she is the one that is setting the tone of the site. There are other kinds of community leaders throughout that are trying to generate little subgroups as well.
MASTERS: We believe that community managers are going to be the next generation of cool job to have. And, like you said, that canât be a marketing manager or your product manager. Youâre going to need a community manager.
NICK FERRIS: Yes, it should be a community editor.
NADEAU: I think it needs to be.
SAUNDERS: It has to be. Weâre going to have about 30 or 40 verticals eventually and weâre planning to have editors for each one. Once youâve got 5,000 or 10,000 people in a b-to-b sector, once they connect with people and theyâve done their various Facebook things, what else are they going to come back for? We built in news feeds and calendars but youâve got to a) keep developing and b) have some editorial direction. Weâre thinking about doing Webinars every quarter or audio Webcasts. You need that editorial push. Theyâre not going to wake up and think, âOh, Iâm going to get a hundred of my friends to sit around today.â Theyâre too busy.
FOLIO: What type of content works in this social setting? Ted, you spoke in the beginning about pushing some of your traditional content through social media. How have youâve done that successfully?
NADEAU: Most of our content has RSS feeds and weâve built lots of applications on Facebook and MySpace that push the content out. In certain cases we are putting our editorial on the site in a way that allows people to play with it. For instance, on the Concierge travel site, we have kind of atomized a lot of the content so that the user can create trips and move things around and then share those trips with other people. But itâs not yet clear to me how much time the audience wants to necessarily spend on consistently adding content.
MERRILL: I think the idea that thereâs user generated content and then thereâs editorial content is already antiquated. Maybe we ought to be thinking about how you co-mingle and not just run it on the bottom of the site. Thereâs probably a pretty interesting space where maybe an article is never finished. Maybe an article begins and you start to report on it and then people start to say, well, actually thatâs incorrect. Itâs a frightening time in that way. But not confronting it is probably a mistake.
NADEAU: Chris Anderson, whoâs the editor-in-chief of Wired, has talked about how their writers are using blogs and other mechanisms to talk to their audience while theyâre writing the article to give some information and get feedback. I think itâs a great model for publishers.
WESTIN: Iâve seen some newspapers do this well. There are traditional articles that are published and then these writers also have blogs on the site and the blog environment is much more informal. You expect that kind of back and forth but it also keeps a level of pristine âweâre the editorial voiceâ on the article side.
MERRILL: I look at something like Yelp and I look at the capacity for Yelp to begin to promote its best and most active reviewers. And as a person on the editorial side, I get concerned. If we donât start shaping the conversation and actively participating in the conversation, other people are going to do that off on the side and they will become the tastemakers.
BLUM: If you execute well then itâs not a danger for your brand. In fact, it will grow brand awareness and adoption over time. And what I mean by doing it well is you canât fake that. The audience will sense that the community leader or whatever, the editor in this particular case, is faking it.
SAUNDERS: Thatâs a little bit different than what Stephen is suggesting, which is actually allowing your user to become your editor. And I think it is dangerous yet at the same time I think thereâs a way to do it in an appropriate fashion. On Internet Evolution, our major sponsor wanted blogs on the site so we created this blogosphere where we invited industry experts to write about next generation Internet technology. And then we opened that up to user comments and then we started to invite the people who were making really educated comments on those blogs to become bloggers. Weâve now got 140 bloggers and 40 of them came from the user community. Everybody has a site where some of the readers are complete idiots. These guys have to pass some editorial standards.
MERRILL: It has to be editorially shaped. We just had our 10th anniversary issue at Budget Travel, and it was an entirely reader-generated issue. All the photos and the cover shot were from readers and all the articles were actually from readers.
I was speaking to the editor about this concept and he was scared. And I think his editorâs letter that month indicated he was scared. But it was editorially shaped. Editors were leading the discussion but the readers were writing it.
SPANFELLER: Whatâs old is new again, right? So you can look like a place like Geocities or you can look like a place thatâs survived and continues on today like About.com. If I read something on About, Iâll consider it. But I wonât give quite the same credibility to what I read on About that I might give to something that Iâve read from Time.
WESTIN: I think thereâs a large segment of the population for whom the authority is the SEO. You type in your search query and whoever comes up first, itâs like, well, these guys must know what theyâre talking about.
SPANFELLER: We found that the Forbes brand is a much stronger draw than even some very well known individual journalists or commentators. And we will get much higher traffic for a similar headline because it says Forbes than almost an identical headline next to a well-known columnist.
NADEAU: In order to make sure that the comment or the content is from the right person, I think what we need to make sure is that weâve got profiles and start to introduce reputation filtering, so that you can know over time, has this person just posted one thing about this one property and thatâs it? There are certainly some people on Yelp that I actively follow because we share similar tastes.
SPANFELLER: Weâre about to launch the Stock Picking Community. Itâs a similar type of concept where people pick stocks and then we track how those picks have done. The better theyâve done, the higher theyâre rated, and the more prestige we give them on the site. In the beta test there was a guy named Drunken Monkey who did quite well. Better than most of the high priced analysts.
SAUNDERS: But you do have to have rules. We learned that the hard way at Light Reading when the telecom bubble inflated and burst and we had over a million unique visitors a month. If you have a big enough community thereâs going to be a trailer park sitting off to the side of it and that was what our message boards were. They were pretty unpleasant places but they were also responsible for driving huge amounts of traffic.
They were also really bad for business. That traffic didnât convert into advertising, and in fact, major advertisers like Cisco and Lucent just wouldnât advertise because there was so much profanity and ad hominem attacks. After a couple of years we went in and dropped a gasoline bomb on our trailer park and cleared it out and deleted about 250 accounts. We lost about 30 percent of our site traffic but over the next twelve months our revenues increased about 30 percent. All of a sudden we were getting half million dollar contracts.
FERRIS: We check everyone who joins our membership. So if you say you work for this bank and we do a background check and you really donât, then you get rejected. But we asked hedge funds what would they require to be part of a network. And nearly 9 times out of 10 they wanted to have the ability to be anonymous.
NADEAU: We use social networking functions on the site as a mechanism to collect user data and thatâs important for monetizing the site. We also have sites where the editors donât want to have any kind of registration. And itâs a challenge because somebodyâs got to pay the bills.
FOLIO: Letâs talk about that. What are the steps for monetizing social media?
WESTIN: One of the bigger things for advertisers is this great unknown of user generated content. Weâve tried to create campaigns that are tied to franchise elements of the brand, like sponsorships around live events, so itâs rooted in something that the advertiser understands.
Itâs going to be interesting to see who the first advertisers are who really buy into this concept. Weâve been able to sell a few advertisers who are willing to take risks. I think as you get closer to the P&G world, itâs going to be a much tougher scenario.
SPANFELLER: I donât know if any of you remember the one-to-one marketing efforts that were the craze at one point online. They failed for many reasons, primarily because there was nothing on the Web that would compel people to really just enter information about themselves.
Now the major ad networks are realizing that this information is a very important asset to be used for delivering greater relevancy. And itâs proven to be more effective than the behavioral data with some of these large ad networks. You see MySpace coming out with their data portability announcement, Facebook the next day coming out with theirs. Google coming out with Friend Connect. Whatâs this all about? They say on the surface itâs about making it easier for people to interact. Really what itâs all about is being the de facto provider of this underlying technology for social profiling.
BLUM: LinkedIn has been in the middle of some of these things where people have tried to scrape data off the network. Theyâve been taking steps to try to counteract that.
MASTERS: Membership data, traffic data and a branded experience is sort of like the Holy Trinity now. And thatâs a real opportunity to get higher paid CPMs. Chris Anderson runs DIY Drones, a social network on Ning thatâs all about robotics. And he was talking about how a CPM rate is about $7 because everyone there is all excited about DIY Drones, compared to their usual run of network CPM rate on MySpace, which is usually about 30 cents.
SAUNDERS: In vertical b-to-b, a typical CPM rate is $75, so as you go into more specialized spaces, having identity information about the people on your site is useful in boosting CPM. But I actually think CPMs and advertising based-revenue streams are a big red herring moving forward. I think the easiest and most obvious way to make money from social networking is definitely lead generation. The first killer app for lead generation was not social networking, it was Webinars.
I also think there is going to be a trend moving forward where advertisers expect the leads to be better. Theyâre really going to put pressure on publishers to shorten this sale cycle. One of the projects which Iâm working on for next year is an experiment to extend the lead generation program which we have on Internet Evolution by putting a back end on it which looks at what people are reading on the site, but more importantly, how they react to it, whether they post messages on it and also how they answer questions. And thatâs going to generate a huge amount of data that advertisers can divide into different groups in terms of their potential to make a sale.
FOLIO: How does your sales team have to change?
BLUM: Iâm sure you guys are doing this but Iâd just counsel everyone to be really transparent about how youâre using the information. If youâre not, that will eventually come back to bite you.
SPANFELLER: Absolutely right. Weâre having to educate people that not all user generated content or social media oriented sites are created equally. The ad world tends to put everything into one bucket. So social media inventory is equal to You Tube or equal to MySpace, where itâs 10 cent CPMs at best. If itâs part of a mega-generic, no-context sort of social network, somebodyâs profile has no value.
NADEAU: That act of education with the marketer creates a bond. Weâve got a bunch of applications that are on Facebook and MySpace and they all have advertising in them. The target is small but thereâs so much buzz about Facebook, marketers are getting pressure and weâve got to be in there because theyâre scared to be in there. They want a company like ours to hold their hand and bring them in.
SPANFELLER: Iâd be careful about tying your overall community onto the coattails of MySpace or Facebook. Thereâs a lot of work being done on Facebook right now and my guess is at MySpace as well about how to better monetize their page views. Ten cents might be aggressive for what theyâre getting at this point and I think that those guys run a danger of becoming this generationâs e-mail. Thereâs all this e-mail inventory on the portals and they canât monetize it.
FERRIS: I think certainly our salespeople are finding, yes, social media actually opens doors because itâs something new. Itâs not another banner, itâs not another video, itâs something a bit more interesting and exciting. That door is opening but the salespeople are not getting the commitments yet and itâs still easier to buy traditional media than it is social networking.
SPANFELLER: A lot about media is that people define themselves by the media they choose and thereâs a community around those choices. And this is a way to exercise that concept in a way thatâs never been available before. So, yes, you get better bonds with your community and that makes your overall property stronger. And if you commoditize it, thatâs not a bad thing. But I donât know if that should be the first order of priority.
SAUNDERS: I donât agree with that at all. Youâre operating on a much larger scale business than the ones which Iâm used to. The people that I work with, they have to have community and revenue lined up in a plan that makes sense. Itâs tough times in publishing. This thingâs got to make money.
NADEAU: But I would say the tools that we have to create community are inexpensive. Creating a page on Facebook doesnât cost a lot of money. I realize thatâs not a community on one of our sites. But weâre in an era of Web site development where you can build things so inexpensively.
MASTERS: I really think thereâs a tremendous opportunity around e-commerce. Both on the b-to-b side and the consumer side, you may have an opportunity to provide a storefront or the like with your partners and take a piece of that revenue cut.
SAUNDERS: We have subscription products based on communities, so itâs kind of almost a reversal of the old model.
SPANFELLER: But youâre also using it to promote live events as well, arenât you? I think thatâs an even bigger opportunity for b-to-b publishers, to take your social network and put it in a real world environment. Live events are where most of the money in specialized b-to-b publishing is coming from, so if you can sync those two things up then you really do have a good business case.
FOLIO: Letâs go around the table. Whatâs been your biggest challenge with developing social media to this point and how have you addressed that challenge?
NADEAU: I think that building things on the site is challenging. What weâve realized is that we have to have a very small, slim staff, because thereâs not a huge amount of revenue in it right now. With a traditional magazine company the review loops can be kind of endless at times, and weâve chopped a lot of that out.
FERRIS: As a b-to-b company, there was a big belief both internally and externally that people in our market would not use a social networking site. We had to take a leap of faith.
The next step was to realize we actually had to build The Financial Net ourselves. To get critical mass on a network like this is going to take a long time. This is something we spent three, almost four years on. We got ourselves a developer team in India. We launched it in June of this year and so far itâs gone extremely well but itâs a long, long road and a lot of work. I remember falling asleep reading tons of pages of specs that I was writing myself. I mean, it was a very soul destroying business, creating a network in your head. The first person we used actually had a nervous breakdown.
Another concern is, so many people are trying to build out their own social platform, if youâre not the first to market in your category, you might as well be dead and buried.
SAUNDERS: I agree with Tedâs point that people are the hardest part of the equation. I think your programmers and your developers have to be part of the business unit and they canât be 3,000 or 6,000 miles away.
MERRILL: The challenge for me over a number of years and a number of organizations has been to figure out how to convince folks throughout the entire team that there has to be some kind of integration of the readerâs voice and get them over the fear factor of it. I think thatâs a huge challenge. Donât integrate it comprehensively first. Integrate it in a few places and see what comes out of it. See if people like the outcome.
WESTIN: For any consumer brand trying to capture value in this space, I think the biggest challenge is coming to grips with the fact that we are so early in this whole life cycle. Itâs not even the first inning, itâs more like batting practice and at this point you have to be prepared to experiment and know that some things arenât going to work.
Try and stay very true to your core business as youâre launching social media initiatives, and not get too far afield. I think in these early stages itâs about careful experimentation, trying to be very data-centric and knowing what your goals are going into any of these projects so you can really measure how you performed and take those learnings for the next time.