Opinion

Felix Salmon

How Gawker wants to monetize comments

By Felix Salmon
May 22, 2012

Back in November, I grappled with the fact that online display ads in general, and banner ads in particular, are clearly not working very well; my suggested alternative was for brand advertisers to embrace the power of the external link. That was one suggestion; there are many, many more. But what they all have in common is that they’re attempts to go beyond the ad, and to leverage the interactive power of the internet.

Over at Tumblr, David Karp is being characteristically vague about what he’s offering to potential advertisers: all we know for the time being is that he “wants brands and marketers to use Tumblr as a way to tell stories that they can’t otherwise tell on other social networks”. Which sounds great, but doesn’t even come close to answering the obvious first question, which is “how?“. I understand that the idea is to sell space on the right hand side of the screen, and that clicking on one of those units will take Tumblr users to the advertiser’s tumblog. But this seems uncomfortably close to the idea that advertisers buy a banner ad and that clicking on that banner ad will take users to the advertiser’s website. The tumblog itself might well tell a story — but then again, so might the advertiser’s website. The difficult thing is getting users to click on things, especially when those things look like — and are clearly labeled as — ads.

Similarly, Facebook’s revenue problems are based on much the same underlying issue: Facebook itself is highly interactive and immersive, but the ads you find there are not. And while there are one or two companies I will follow on Facebook, they’re invariably companies which are run by my friends. Facebook is a great place to keep up with what your friends are up to, but it still hasn’t cracked the nut of working out how to make itself valuable to brand advertisers.

Now, Gawker Media’s Nick Denton has a new idea:

In an internal memo on Thursday, Denton announced the formation of a new sales unit that will focus on helping advertisers and brands take part in the new commenting system

According to the memo, Gawker is creating a new content unit within the sales department that will be headed by Ray Wert, formerly editor of the Gawker-owned automotive blog Jalopnik. This new unit will take over responsibility for all of Gawker’s branded content functions, as well as marketing communications and events — and the purpose of the unit will be to promote the new Gawker discussion platform as a way for marketers and brands to engage with customers in an open forum. Says Denton:

We all know the conventional wisdom: the days of the banner advertisement are numbered. In two years, our primary offering to marketers will be our discussion platform.

Last Friday, Denton gave me, along with a few other New York digital-media types, a preview of his new commenting system; yesterday, I had a pretty geeky conversation with Wert about how he intends to turn it into dollars.

At Gawker, as at most other popular sites, the number of people reading the comments is vastly greater than the number of people writing them. But the way they’re presented, they’re not easy to read, there’s far to many of them, and the signal-to-noise ratio tends to be extremely low.

So Gawker’s new commenting system is based around threads, with the default view being the main, most interesting thread. It’s possible to click through to other threads, and every thread — indeed, every comment — has its own unique URL; what’s more, the person who starts a thread has quite a lot of control over which comments in that thread will get featured.

What that means is that if an advertiser buys a sponsored post — and sponsored posts have been part of Gawker’s menu of offerings for some time now — then once the new commenting system is in place, the advertiser will have a reasonably large degree of control of the conversation that most people see in that post.

Denton’s vision for Gawker Media’s editorial product is very much moving towards comments and away from posts, and he reckons that advertisers will follow him in that direction if he blazes the trail. Expect Gawker’s blog posts to get shorter, in future, and sometimes just be a headline, at least in the first instance, so that the conversation can get going before a pretty post can be put together. And if Denton’s scheme goes according to plan, when you follow a link to a Gawker website, it will often — or maybe even usually — be a link to a comment, rather than to an original post. Eventually, it’s possible to envisage a world where the distinction between the two is erased completely.

This is a very ambitious vision. Historically, Gawker has been pretty weak with respect to technological innovations, and so it’s reasonable to take an I’ll-believe-it-when-I-see-it approach any time that Nick Denton claims to have invented a revolutionary new technology. As Wert said to me, forums have been around on the internet since the 90s, and no one’s managed to reinvent them yet. But a few companies like Reddit and Quora have pointed in interesting directions, and Wert was quite open about wanting to ape Reddit’s AMA (“ask me anything”) feature for his new advertorial conversations.

The idea is for these things to be more a PR/marketing product than a brand-advertising product. The idea is to get challenger brands, in particular, to take part: they tend to be very open and transparent about what they’re up to, and they love the idea of engaging with the public as much as possible, if they can do so in a reasonably controlled environment. When that kind of a brand has some kind of news they want to share, doing so through a Gawker Media sponsored post will be a pretty effective way of getting the news out to a large number of people while at the same time sending the message that they’re trying to be as transparent as possible and are happy to answer lots of questions in a friendly and conversational and open manner. The metric for success, says Wert, isn’t going to be the number of pageviews they get; rather, it will be the amount of earned media they get — the degree to which other media outlets pick up on the initial announcement and the rest of the information that the company reveals in the comments section.

The conversation will probably only go on for a day or two, but after that the post — and all its associated comments — will live on in perpetuity, a much more open and accessible record of the announcement than any press release could be.

The problem here, for Denton — and the reason why he got an editorial guy to run this new project — is the old one: how to persuade his websites’ readers to read the sponsored posts and to engage in their comments sections. Wert’s stated ambition — and you can hold him to this — is for his sponsored posts to be so well written and newsworthy and generally high quality that the editors of Gawker’s websites will love to be able to feature them on their home pages. There have been very high-quality sponsored posts in the past, but Wert is going to have to work very hard, I think, to turn boring PR announcements into something of Gawker-level juiciness.

What’s more, this move of Denton’s is to a large degree a reversal of his stated aim back at the end of 2010, when he did his big network-wide redesign. Back then, I explained the departure of sales chief Chris Batty, now at Quartz, as being a function of the fact that Batty was a huge fan of the sponsored post, while Denton’s redesign “essentially sacrifices the idea of having a sponsored post on the home page—something Batty was almost religious about—and replaces it with interstitial videos which aren’t nearly as sharable, aren’t extensible, and quite possibly won’t even have permalinks.” This move of Denton’s, then, is a step backwards, in many ways, towards the Batty vision which he rejected two years ago.

Still, I do like the fact that Denton’s constantly trying new things, constantly trying to reinvent what an online media company can and should be. Really ambitious brands, indeed, won’t need Wert’s help at all: they’ll have the ability to dive straight into existing non-sponsored editorial posts and respond to commenters directly, much as they’re already responding to people who talk about them on Twitter. But I suspect that the brands which do that will actually be more receptive, rather than less receptive, to Wert’s sales pitch — they will already understand the power of conversation.

And in general, I like Denton’s bigger idea of building a comments system designed more for the majority of readers who don’t comment than it is for the minority of commenters themselves. I don’t believe for a minute that the new system will attract the big-name commenters — Dov Charney, Brian Williams — that Denton really wants. But I do think that the new system will make very high-end comments threads much more common. And when those things do appear, they’re wonderful.

I used to help run a site, back in the early days of the blogosphere, called MemeFirst. The posts were short; the comments threads were long, and generally very high quality. We didn’t have much of a signal-to-noise problem, because very few people knew we existed. We were basically just a group of friends using the web as a discussion aid. But the fact is that even though there are many more readers than there are commenters, there are also many more commenters than there are posters. And collectively, those commenters are faster and funnier and more knowledgeable than the staff of any website.

Nick Denton wants to be the first publisher to develop the ability to effectively tap into that collective wisdom. And then, he wants to try to sell his new-found ability to advertisers. If — and only if — Denton can do the former, I suspect that Ray Wert has a decent shot of being able to do the latter.

Comments
9 comments so far | RSS Comments RSS

“Facebook’s revenue problems are based on much the same underlying issue: Facebook itself is highly interactive and immersive, but the ads you find there are not… it still hasn’t cracked the nut of working out how to make itself valuable to brand advertisers.”

Here’s a riff on Nick Denton’s thought process. Have the FB users provide the ads for Facebook. If I am Facebook, I go to all the S&P500 companies and say let me crawl your website and build an advertising catalog. Then I let the FB users tag their photos with whatever gear they have in the photo. It could be an F150, or her blouse from Banana. The person could just tag Banana and it would be a link to the main part of the site. Or, it could be as specific as a 4WD SuperCrew 145″ Harley-Davidson, forest green, and go directly to that product’s page.

It’s a word-of mouth advertising, using your friends as a source of product knowledge. This idea isn’t new or novel just taking a tupperware party to the twenty-tens.

Posted by tcolemanuf | Report as abusive
 

One would think that if Mr Denton was to depend on commenter for his ad placement bread and butter, he might be a bit more accommodating toward those commenters. However, that has not been his practice.

The only new thing enabled by the new commenting system is a new level of noise brought by the disposable burner accounts.

On the other hand, thanks to a couple of overly zealous burner accounts, if you want to advertise Hot Pockets on Gawker, the ground work has been done.

Posted by Snertly | Report as abusive
 

Speaking of comment systems, can you guys update the one Reuters uses? It’s kind of outdated, ya know.

Every ad-supported website wants/needs to come up with a reliable way of monetizing their content. Given the absence of a barrier to entry in this business, there is a seemingly unlimited number of ads on the web. Not only does this ever-increasing supply of spaces to place ads lower the price of those ads, but they are also reducing the value of the ads. People are so bombarded with web ads that they are ignoring them. I read every one of Felix’s posts, but I can’t recall a single ad I have seen on this site (other than for Reuters). I don’t think most people are much different. There is not enough time to look at ads, because there is so much content.

At some point, advertisers will catch on to this. And then maybe a decade or so later, VCs will face up to reality and stop funding so many of these sites. But I think the answer might come when low cost electronic payment systems (without absurd margins for the payment processors) are ubiquitous, and websites can charge a cent or two per page view (or more for some sites). It doesn’t sound like a lot, but I have to think it will be more than the ad revenue they are going to be generating. Of course, that won’t be good for Facebook, as their users would not pay anywhere near that much (and Zuckerberg has promised FB will always be free).

Posted by KenG_CA | Report as abusive
 

It just blows my mind that you took the time to write. About this. Whole thing.

http://www.hotpockets.com/

Posted by DavidMcDavidson | Report as abusive
 

To me, the least intrusive ad is the ad I’ll take the time to read, and that usually means Text Ads. Short text ads. Bullet points that I’m either interested in, or not. Flash and banners I block using browser extensions. But the problem is, ads are controlled by ad agencies, and ad agencies like earning what they earn – I mean, they’re stuffed with creative, clever people who deserve to be paid well – but the downside of that is they “fancy up” the message using graphics, clever writing, and lots of money. It’s overkill.

That’s why, despite it’s defocussed strategy, Google is still the leader in online ads. It’s simple, straightforward, and inoffensive. Yahoo is too full of in your face ads; Facebook is, well, a mess so I don’t think I’d recognise an ad on a FB page, while Twitter seems to me like the only one of these big social nets that has a chance of success – and it too is going down the Text Ad route.

One thing present in print media I don’t see so much on blogs – and this could be interesting – is the advertorial, as widely used in the Free Newspaper industry. In the UK FInancial Express use this method, and I am frequently clicking through from their email newsletter to read some interesting story about the Finance industry. I know they’re ads, but the clickable text is small, so I don’t start off irritated, and the articles relevant. I wouldn’t click on a shampoo link mind you…

Posted by FifthDecade | Report as abusive
 

This seems almost impossible to get right. But if someone can recreate the S/N ratio of a good FB (or email or whatever) thread between friends into an open arena, there is a lot of money to be made.

Posted by AngryInCali | Report as abusive
 

Are these sponsored comments?

Posted by arimelber | Report as abusive
 

It seems to me the problem here is the constant problem with advertising — there are different types of it, and most of it is not of the fuzzy “informing the public, who want to be informed” variety that people like Denton praise.

First we have the “build the brand” advertising, the stuff that is slathered everywhere, so that you feel buying a Samsung TV or a Ford car, is a safe purchase. A cousin of this (which I do not understand, unlike the previous example) is Coca-Cola or P&G style advertising, for products that have little risk associated with purchasing them — they’re cheap, and if you don’t like Coca Cola Chocolate, you’ll never buy another can.
Point is, both of these seem to be based on being everywhere, not on being relevant.

Then we have all the emotion-driven advertising, the stuff that’s basically designed to exploit faults and flaws in human psychology — to persuade people trying to cut back on drinking to drink more, to persuade people trying to reduce weight to eat candy, to persuade people deep in debt to buy yet more clothes. I’m sure you can build conversations around those — god knows drunk people seem to love talking about the various things they have drunk one various occasions — but that seems like a recipe for getting to MySpace real fast.

Finally we have the “inform the consumer” type ad, but the problem here is that it’s a rare company indeed that wants a fully-informed consumer. By all means let the blog commenters rave about about the 1.5GHz A15 powered core of the new HTC Two, but we’d rather they not mention that it feels hot in the hand and runs out of battery after only about three hours of use.

Either you trust that your product is good enough to stand for itself in spite of these flaws (and there are ALWAYS flaws); or you start to institute censorship, and the tech elite (who are more interested in the actual technology than in how wonderful HTC is as a company) decide to move to one of a dozen tech sites that are rather more interested in the whole story, not just the positive parts. There is, after all, a reason these people abandoned the happy talk of the trade press for blogs in the first place.

Posted by handleym99 | Report as abusive
 

LOL…Gawker has degenerated into total crap in the last 12 months (and even when it was at its best it was only “meh”, IMO). Not to mention that quite a few of their employees are total dicks. Of its 8 networks (io9, Deadspin, etc), it’s probably at No. 5 right now in terms of overall quality. Stuff like outing folks who don’t really deserve that (ie ABC reporter Robin Roberts) and cheap flame bait like “Obama is being patronizing to issues of gay marriage”, as well as the unnessecary overhaul of the comments section (which has led to stuff like some guy spamming every article with “Hot Pockets” ads, which I think is some sort of backlash from telling Drudge Report readers that Matt Drudge was gay after he linked to their site about the Roberts outing) makes me think that Gawker is on the way out in a year or two and owner Denton and co. will be slumming it up elsewhere (probably Salon.com).

Posted by robcypher | Report as abusive
 

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