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TODD SMITH'S SPIN CYCLE: Facebook is changing news consumption

Todd Smith

Todd Smith

In many ways, a 26-year-old Facebook engineer is transforming the way the public consumes journalism.

Greg Marra heads a team developed the technology that drives Facebook’s News Feed – the stream of updates, photographs, videos and stories that users see. He is also fast becoming one of the most influential people in the news business.

Facebook now has a fifth of the world — about 1.3 billion people— logging on at least monthly. It drives up to 20 percent of traffic to news sites, according to figures from the analytics company SimpleReach. On mobile devices, the fastest-growing source of readers, the percentage is even higher, SimpleReach says, and continues to increase.

The social media company is increasingly becoming to the news business what Amazon is to book publishing – a behemoth that provides access to hundreds of millions of consumers and wields enormous power. About 30 percent of adults in the United States get their news on Facebook, according to a study from the Pew Research Center. The fortunes of a news site, in short, can rise or fall depending on how it performs in Facebook’s News Feed.

Though other services, like Twitter and Google News, can also exert a large influence, Facebook seems to be at the forefront of a fundamental change in how people consume journalism. Most readers now come to it not through the print editions of newspapers and magazines or their home pages online, but through social media and search engines driven by an algorithm, a mathematical formula that predicts what users might want to read.

It is a world of fragments, filtered by code and delivered on demand. For news organizations, the shift represents “the great unbundling” of journalism, according to The Washington Post.

Just as the music industry has moved largely from selling albums to songs bought instantly online, publishers are increasingly reaching readers through individual pieces rather than complete editions of newspapers or magazines. A publication’s home page, said Edward Kim, a co-founder of SimpleReach, will soon be important more as an advertisement of its brand than as a destination for readers.

The shift raises questions about the ability of computers to curate news, a role traditionally played by editors. It also has broader implications for the way people consume information, and thus how they see the world.

Roughly once a week, Marra and his team of about 16 adjust the complex computer code that decides what to show a user when he or she first logs on to Facebook. The code is based on “thousands and thousands” of metrics, including what device a user is on, how many comments or likes a story has received and how long readers spend on an article.

The goal is to identify what users most enjoy, and its results vary around the world. In India, he said, people tend to share what the company calls the ABCDs: astrology, Bollywood, cricket and divinity.

Facebook executives frame the company’s relationship with publishers as mutually beneficial: when publishers promote their content on Facebook, its users have more engaging material to read, and the publishers get increased traffic driven to their sites. Numerous publications, including The New York Times, have met with Facebook officials to discuss how to improve their referral traffic.

The increased traffic can potentially mean that the publisher can increase its advertising rates or convert some of those new readers into subscribers.

Social media companies like Facebook, Twitter and LinkedIn want their users to spend more time, or do more, on their services — a concept known as engagement, said Sean Munson, an assistant professor at the University of Washington who studies the intersection of technology and behavior.

Facebook officials say that the more time users spend at its site, the more likely there will be a robust exchange of diverse viewpoints and ideas shared online.

 

Four brands succeeding without traditional advertising

In 2014, businesses will spend nearly $545 billion on advertising, and that number is expected to increase by another $100 billion by 2018, according to eMarketer. But there are major brands, with huge market share, steering away from traditional advertising.

Despite their size and influence, these brands have built loyal followings by co-opting the grassroots, relationship-focused marketing tactics that are often the domain of smaller businesses. Here are some big brands succeeding in the digital era:

1. Krispy Kreme

There’s no shortage of companies competing for your breakfast dollars. Starbucks, Wendy’s, McDonalds and even breakfast newcomers like Taco Bell all rely on TV commercials and paid advertising to draw you into their restaurants. This makes the Krispy Kreme success story even more remarkable. The doughnut giant built its empire – with sales topping $1.07 billion in its best year – entirely on word-of-mouth marketing and social media strategy.

2. Costco

The Great Recession made us all into budget-conscious shoppers, and Costco is reaping the benefits. Over the last few years bargain warehouse retailers have experienced significant and sustained growth at a rate of four to five percent per quarter, according to Forbes.

Today, Costco is the second largest retailer in the United States – bringing in over $100 billion in revenue annually – and it didn’t get there by running TV commercials. Despite the fact that it’s going head-to-head with retail giant Wal-Mart, Costco continues to embrace an unorthodox advertising strategy: no advertising at all.

3. Sriracha

Even if you’ve never set foot in an Asian restaurant, you’ve likely encountered the ubiquitous Sriracha rooster. In the last several years, this mouth-burning condiment has become something of a cultural force. Search on Etsy and you’ll find all manner of fan-produced memorabilia – from Sriracha t-shirts and bumper stickers, to baby onesies and charm bracelets.

Meanwhile, bottles of hot sauce are flying off of store shelves. Sriracha sold 20 million bottles last year alone. The company doesn’t have any official social media presence, and its website hasn’t been updated since 2004. Sriracha is an example of making an amazing product and letting consumers do the rest. In short, its philosophy can be summed up as: If you bottle it, and it’s awesome, they will come.

4. GoPro

GoPro, maker of high-definition personal cameras for adrenaline junkies, does do some traditional advertising. But that’s not how it built its loyal following of nearly 2.6 million YouTube subscribers. Its YouTube channel is packed with videos of customers skydiving, base jumping and deep sea diving. Whatever your extreme passion, GoPro has a vertigo-inducing, user-generated video for you. Rarely a week goes by without a GoPro-filmed feat going viral on Reddit or Facebook. This media strategy is resonating with customers to the tune of 3.8 million cameras sold last year, according to CNN money.

If there is one lesson we can take away from the success of these non-advertisers, it’s that a winning strategy – even without advertising – comes down to product and people. These brands focus on making high quality products. They trust people and the power of word-of-mouth to do the rest.

 

Grounded Mic | High-flying commercial space image 

The high-flying commercial spaceflight industry suffered a couple of serious blows to its identity in the last two weeks. The bad news began on Oct. 28, when Orbital Sciences Corp.’s Antares rocket exploded just seconds after blasting off on an unmanned cargo mission to the International Space Station for NASA. Then, on Oct. 31, Virgin Galactic’s SpaceShipTwo crashed during a test flight; one of the two pilots aboard was killed and the other injured, apparently seriously.

The causes of the two accidents are unclear, and so are the consequences. But the fallout could be huge for Orbital Sciences, Virgin Galactic and the entire private spaceflight industry that has been building up some serious momentum over the past several years. For now, the commercial spaceflight industry has a tarnished mic. The Spin Cycle hopes its image returns to flight soon.

Each week, The Spin Cycle will bestow a Golden Mic Award to the person, group or company in the court of public opinion that best exemplifies the tenets of solid PR, marketing and advertising – and those who don’t. Stay tuned – and step-up to the mic! And remember … Amplify Your Brand!

 

» Todd Smith is president and chief communications officer of Deane, Smith & Partners, a full-service branding, PR, marketing and advertising firm with offices in Jackson. The firm — based in Nashville, Tenn. — is also affiliated with Mad Genius. Contact him at todd@deanesmithpartners.com, and follow him @spinsurgeon.

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