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Nieman Journalism Lab
Pushing to the future of journalism — A project of the Nieman Foundation at Harvard

Monday Q&A: Raju Narisetti on designing for mobile, the paywall fallacy, and reinventing ads

“If anybody out there thinks a paywall is going to solve our industry’s problems in itself, they’re in for a very rude surprise.”

raju-narisettiLast February, Raju Narisetti had just returned to The Wall Street Journal after spending three years working on the integration of print and digital at The Washington Post. It was a homecoming of sorts; Narisetti spent more than a decade with the Journal, starting as a reporter and working his way up through management. Now he’s on the move again, this time up to the mothership of New News Corp., where he will be senior vice president and deputy head of strategy.

In his brief return to the Journal, Narisetti was responsible for the WSJ’s network of websites as well as the development of mobile apps and video efforts like WSJ Live. In 2012, the Journal was aggressive in trying to expand video, not just bringing WSJ LIve to new platforms but also creating new video shows and uncut video dispatches from around the world.

When we spoke, we talked about using data to make better decisions in the newsroom and how news companies have to take the lead on reinventing advertising. But most of our discussion centered on opportunities around mobile, and how readers are consuming news on smartphones and tablets in rapidly increasing rates. Here’s a lightly edited transcript of our conversation.

Justin Ellis: Congratulations on the new job. What are you going to be doing?
Raju Narisetti: I’m excited. It’s something that came about fairly quickly. But it’s not often in your life that you get to be involved in the creation of a new company, in this case the new News Corp. Even though it’s bringing together some existing businesses, it’s kind of the birth of a new company. So it’s one of those opportunities that doesn’t come that often.

A lot of what I have done in my life — going off to do Mint in India, or helping The Washington Post combine their print and online operations — they have all been similar things involving rare moments in our business. So it wasn’t difficult to want to move into that role after almost 24 years in a newsroom.

Ellis: You consistently have one of the best Twitter feeds for finding interesting stories about media and media companies. Where do you find material, and what do you read?
Narisetti: I think Twitter — unlike all the fears people had that it’s going to turn us into short attention-span people because we were so focused on the character limit — Twitter actually brought serendipity back into my life in a major way. I now encounter and experience so much more interesting content from around the world that would have been impossible in the days when we had a lot of time and bought a bunch of magazines and a bunch of newspapers.

If you follow people you like and trust and value their opinion, it’s an amazing filter. It’s the opposite, I guess, of the filter bubble if you follow enough different kinds of people.

My own reading habits — because I have young kids, I always end up being a very early morning person where I spend a fair amount of time catching up on reading. And increasingly with Twitter, you want to share it as well. I very narrowly use Twitter, to be honest. I do three things with it: I talk about things that I like at the Wall Street Journal Digital Network that I think others might enjoy. I do a little bit of stuff on India, because that’s where I grew up and it’s of personal interest. And I pretty much obsessively look at the business of journalism because I feel like our business models continue to be in amazing flux, so if there’s interesting conversations going on, I participate and share. I think the narrowing of my interest in those areas helps to keep it more focused.

Ellis: I think that’s a good idea. I spend a lot of my time on Twitter reading stories and finding story ideas for the Lab, and it seems that a focus helps you filter.
Narisetti: Part of the reason why I’m happy going into my new role is also that I think we have — especially at the Journal, but in most newsrooms — we have a lot of people who are very, very good at the journalism end of our business. But there’re not that many people who are interested and want to do more at the business end of journalism who have a background in journalism.

This might sound very self-serving, but as an editor and a journalist you always think you are saving the world one story at a time. In my role, I kind of think I’m saving journalism one day at a time by doing things that will help my newsroom have more resources, or my journalism get in front of more people.

I’ve always defined — in this past year when people have asked me what exactly do you do — I’ve always had a very simple mission statement in my head: Get more people to consume more Wall Street Journal journalism profitably. First is how do you expose more people to our journalism. Second is how do you make it more engaging, deepen the experience, or create some interesting experiences. Everything has to be done more profitably so we can fund more of the first two things. If you do it that way, your priorities fall into place, at least for me.

Ellis: How do you get more journalism people interested in the business side? The way things have accelerated and declined in the last five years, it would seem that would be be a good reason to want to get involved. But it sounds like you’re saying we still need more people with journalism backgrounds on the business side.

What I’m really competing for, at the end of the day, is the one single non-renewable thing my readers have, which is their time.

Narisetti: I’m not saying that we necessarily need more people with a journalism background on the business side. I think there’s a strong reason why church and state and that separation has worked really well in our industry, first in separating newsgathering and news reporting from the opinion side, and generally keeping the newsroom somewhat insulated from the ad-selling side.

But there’s no reason why there’s not a shared understanding of each other’s challenges. Because at the end of the day, the business side can only monetize great content and great journalism, and at the end of the day, you can only do great journalism if what you’re doing is monetized well and continues to be monetized by the other side. I think shared understanding of how these work is vital.

I’ve believed, in the last few years, at The Washington Post and here, that we have to move to a much more measurable, performance-centric mentality. And by that I mean see what our readers are doing and understand that. And not make journalistic decisions based on that, but to say, “If I am making a journalistic decision that is not particularly appealing to the readers, it’s not the readers’ problem, it’s clearly something that I’m doing wrong.” Using data to really say “how can we give a better experience with what we’re doing,” rather than saying “we should stop doing what we’re doing.”

I think we’re all in this business — we’re all paid to make decisions about journalism. If you’re saying I’ve got to invest a lot of time and energy in covering Syria or in covering the Olympics, if that’s not engaging to our audiences, it is not to say don’t cover Syria — but how do I cover Syria in such a way that more people will appreciate it? That only comes from an understanding of what they’re consuming, how they’re consuming.

I’ve believed now for a while — we should stop looking at competition. We should stop worrying about The New York Times or The Guardian or the FT or Bloomburg or Reuters, because in this day and age audiences can be very, very promiscuous because of technology. What I’m really competing for, at the end of the day, is the one single non-renewable thing my readers have, which is their time. So if I can grab 5, 10, 15 more minutes of it, I think I can win this battle and not worry about where they might have spent that time.

Ellis: You gave a talk recently and mentioned that a little over 30 percent of traffic to the Journal comes through mobile. That number doesn’t seem that far from the rate at other media companies, but people were still surprised by the way mobile is growing. Do you think there’s an understanding of how big an impact mobile is going to have on journalism?
Narisetti: I don’t think we are there yet in most newsrooms. The reason I went public with that number was that I think people need to understand the profound changes that our audiences are going through. A year ago, I suspect if I went back and looked when I rejoined the Journal, I bet that number was in the low 20s, if that. A year from now that number, I guarantee that number is going to be in the high 40s.

What has happened, I think, is that most newsrooms have created mobile teams to embrace apps and embrace Apple and, now, Android devices. But they’ve seen it as a small team building a product and then not worry about it. Others, like the Journal, who have been more self-aware, have responded in the last few months and last year by creating more responsive design where the content adjusts to the container. But my view is that with so much of your audience consuming your content and your journalism through anywhere between a 3- to 7-inch device, you have to start pivoting from creating just content to creating a great experience and creating different experiences on different devices. And it’s hard.

There’s probably no newsroom in the world — and I probably am not wrong in saying this — there’s probably no newsroom in the world where the mobile team is more than a single-digit team. Maybe occasionally somebody hits like 10 people. That is where I’m very worried — we’ve gone from print-first for centuries, if you will, to (somewhat kicking and screaming) to web-first, and we’re not entirely there yet.

But what we really need to be is increasingly saying: What does it mean to be mobile-first? Because the first experience of consuming your content, whether it’s a news alert, whether it’s an email, whether it’s a browser or an app, is increasingly going to happen on that mobile device. What does that mean, and what is that experience?

I think that’s going to be a profound challenge, not just for reporters and editors, but I think that newsroom leaders haven’t particularly realized it. What I don’t want to do, just like the web caught us a little unaware in our business model — you don’t want the mobile transition to make the same mistake. The real challenge is, in addition to the audiences moving, is how do you monetize, how do you create compelling advertising on these devices? That’s going to be even more of a challenge. I think the more newsroom leaders can talk about this and put more resources and thought into it, the faster we will help our readers, who are already moving by tens of thousands.

Ellis: One part of that I wonder about is how we factor in use cases for mobile. I commute on the bus or train, and I’m reading things for short bursts of time. But it seems that the way we’ve designed things is to make a mobile site that takes the same stories and puts them in a smaller frame.
Narisetti: Obviously, there’s a clear reason to think differently about tablets vs. smartphones, both in terms of the device size itself, but also the functionality and the form factor and what it can deliver. The tablet allows you to mimic a lot more of the serendipitous experience: the flipping of the pages, the art, the full tablet page takeovers. So I think there’s a lot more freedom and flexibility there. The challenge is to create enough templates that can seamlessly take your content and make it much more interesting in a vertical or horizontal manner.

The real challenge, and the struggle, is in smartphones. That is obviously the largest pool of mobile consumption. I’ll give you an example from The Washington Post, where we did an amazing project post-9/11 on corruption in government contracts in Alaska. It led to a significant change in policies that the government uses for contracts. It caught a lot of buzz and had a strong readership in print. The reason for that was the story was very, very carefully planned for print and for the desktop. The designers took care before the jump of the story in print that there’s a nut graf that tells you what the story was — the kinds of things you do when you think about the spatial-ness of your story.

But what we totally forgot was that the audience that is consuming this story on a mobile device — I think by my count, it took about 46 screens of your BlackBerry to finish the story.

Ellis: Oh god.
Narisetti: Right. So nobody’s going to do that. Fair enough. But what we didn’t realize was that the long anecdotal lead that fit so perfectly in print and that can fit perfectly, obviously, on the desktop, that still got you to the nut graf of the story — it took seven screens of your phone to even know what the hell the story was about. So it was a disaster on mobile.

So the lesson there is not to say we should stop doing these stories. The lesson there, with analytics and good consumer data, to say: The next time we do this, our big investigative story, for our mobile readers, the first screen should be a very succinct summary of the entire story, and probably a disclaimer or disclosure to say this is really a long read and we recommend you read it on your desktop or tablet or in the paper, and give that link more prominently. And then, for those who are really die-hard smartphone “I’m really going to read this” types, then start with your long anecdotal lead.

The problem with that is it’s not how your investigative reporter and team thinks as they present the story in their heads. So you’ve got to switch that to say for mobile, the experience is going to be very, very different, and here’s how we’re going to approach it.

To get to that, it’s a fairly long learning curve. First of all, you have to appreciate the fact that a large percentage of your audience is going to encounter that story for the first time on mobile. You have to acknowledge that, and the only way you’re going to do that is provide enough data to the newsroom, and people like me keep talking about how a segment of your audience is doing that. And then to suggest ways to do it. And then to actually follow through and do it. So I think we have a ways to go in doing that.

Ellis: You mentioned before the tension between working purely in native apps and trying to have experiences in mobile browsers. Do you think we’ll reach a point where companies neglect or abandon native apps, or do they need to rethink them and what their purpose is?
Narisetti: We just switched this year to a universal app between iPhone and iPad. Simply because it felt like the technology has evolved and we can actually provide something that meets the needs of both of these kinds of form factors on the iOS level. Our iPad continues to be amazingly popular — people pay for it, only for it, versus buying any other product. People spend as much time as they do with the paper, which is in the high 40-50 minutes on it. So there’s just a lot of value in that.

My personal belief is most metro newspaper paywalls will fail if the paywall was going to solve your business problem.

But I think the original notion that we can have 15 apps, 20 apps — there’s clearly diminishing returns there. I think the notion that you’ll have a couple of flagship apps, then maybe not do a lot of apps but maybe move into a responsive design approach because the browser isn’t going away any time soon — I think that is starting to take hold quite a bit.

The other thing that we, as an industry, don’t do very well is think of what we do as having an expiration date. All experiences deteriorate over time because code deteriorates; the attention you pay to it in updating the database goes away because you’ve moved on to the next project. If we kind of think of what we’re doing as having a particular shelf life, and being very open about it, then I think there’s value in creating one-off apps that die after X months. There’s going to be no care or feeding for the app, it was meant for a limited time, and then you’re done with it — and you discard it, and we don’t mind you discarding it. I think with that notion you might see some limited-edition apps come and go.

Ellis: We’ve seen an acceleration of digital subscriptions and paywalls over 2012 and it seems that’s going to continue in 2013 as more companies look at their plans. Do you think paywalls have become a one-size-fits-all strategy for news companies, or is it something each company needs to tailor for their own circumstances?
Narisetti: I’ve heard now there are close to 450 newspapers in the U.S. and North America that have put in paywalls just in the last 12-18 months. As you know, we were kind of the pioneers of paywalls, because it was never not a paywall for us. Then the FT came along 5, 6 years ago, and The New York Times jumped on board a couple of years ago. I think The New York Times really opened the floodgates.

My personal belief is most metro newspaper paywalls will fail if the paywall was going to solve your business problem. What most of them will do is get a small, low, low, single digit of your total readership willing to pay for something that will add a revenue stream. But if anybody out there is thinking the paywall is going to fix the business-model problem of metro newspapers in the U.S., they’re in for a massive surprise.

You have to think of it as a revenue stream from your most loyal people that will help, because it’s a little bit of an annuity, if you will, that will help soften the blow of what’s happening to CPMs of most papers and what’s happening to advertising. It will cushion the blow, it’ll create a new revenue stream, and in time could create more loyalty and potential upselling opportunities for ebooks and events and things like that. But it’s just going to be that — it’s going to be a stream of revenue that you didn’t have, but it’s not going to solve your problems. If anybody out there thinks a paywall is going to solve our industry’s problems in itself, they’re in for a very rude surprise.

Ellis: The Journal has the strategy of WSJ Everywhere, I’m wondering how you guys strategize — how do you plan what areas you want to move into next and what will be worthwhile investments of time and resources?

Half of my video views happen on other people’s platforms, and I’m totally happy with that.

Narisetti: It’s been two-fold. I think almost everything has been driven by our relatively close connections to our readers and seeing openings there. I can give you a couple of examples. Video has been a great example.

Most of us went to journalism schools where professors would kind of beat into our heads “Show don’t tell,” right? Video really allows you to do both. So it’s a very natural instinct that our industry has wanted to do that, and increasingly readers want to see as well as read as well as experience it. So in that sense, we have followed audiences wanting more of it.

But the good news with video is that it has also been very good for our business models — for two reasons actually. One is that video is the first thing we’re doing in about 15, 20 years where our business model is as portable as our content, because my pre-roll travels with my video no matter where people see my video. Am I sharing revenue with other platforms? Absolutely. But people on those platforms would have never naturally come to me anyway.

So instead of getting hung up on “I want all 100 percent,” we have taken the approach these are all new audiences — they’re going to be on Hulu, they’re going to be on Xbox, they’re going to be on Roku, they’re going to be wherever. If they can watch WSJ Live and we can engage them, and in doing so we can actually sell advertising against that, which we sell, that’s win-win for everybody. The old cliched win-win. But that’s the reality. Half of my video views happen on other people’s platforms, and I’m totally happy with that.

It also fits in with the larger principle we have, which is WSJ Everywhere. If you’re a subscriber and you want to get WSJ where you are, we will provide it for you there. So this video fits in perfectly with that.

Video is also the first time in forever that I’m actually a disruptor — I’m not the disruptee. I have no investments in cable, no investments in satellite trucks, I have no investment in big TV, big studios. I’m messing around with everybody else’s life now, after everybody has messed around with our business model for a long time. So it’s a great position to be in.

We have really high sell-throughs, and there’s a lot of interest in different formats of our journalism. We’ve also been, if I say so myself, pretty innovative with our World Stream, where the idea of creating a lot of content is not new. CNN did this with iReport a long time ago. The challenge in this era has been verification and validation of that. And I’m not saying this is iReport — but a video report that says it’s from Syria could end up being two-year-old video from Iran. So the nice thing about World Stream for us is it’s all done by the trained Journal staff worldwide.

We have 1,800, 1,900 journalists worldwide, and the moment a Journal reporter files something, you don’t have to worry about the verification aspects of it. So it inherently gives us a huge advantage in doing something like World Stream. So we’re really leveraging the training and quality that goes into being a Journal staffer, the global reach of the Journal audience, and the audience’s appetite to want to consume a lot of video to provide them relatively raw video in our World Stream.

I think we’ve been very opportunistic. Now we do do 1,600 videos a month, about 120 hours of video. We are probably the largest generator of web video for any newsroom in the world outside of television off the air. It’s something not a lot of people have realized. This has nothing to do with Fox, it has nothing to do with television — it has all been done over the last 3 years in what has been a traditional print newsroom.

Ellis: When you wrote something for Nieman Lab’s 2013 predictions package, you wrote about accelerating innovation in advertising. I’m wondering if you could expand on that a little bit: Do you think we’re not reinventing advertising as quickly as we’re trying to reinvent other parts of the journalism business?

I increasingly think we’ve got to own the relationship between our audience and what they do with advertising on our platforms.

Narisetti: We’re not inventing! The reason I say that is I know, and our companies and our newsrooms and our businesses know, a lot about what our readers do on our platforms with our journalism. We can tell you most-read blogs, most-watched video, time spent, number of pageviews per visit, everything about our journalism.

But the moment you say what is your audience, and what is their engagement with advertising on your platforms, we know very, very little, because we have ceded these to the DoubleClicks of the world, to the ad networks, increasingly to the Outbrains of the world.

And they’ve all kind of said, “We will help you understand what your readers are doing with advertising and we’ll help you monetize it better.” Sounds great! And we use them, lots of people use them. But I increasingly think we’ve got to own the relationship between our audience and what they do with advertising on our platforms. That’s going to be the sweet spot where we can monetize it better, we can actually do a lot more with that information. I think we have abandoned and ceded that to third parties and we need to regain that.

We also need to — most advertising innovation in our business is really intrusive advertising. Somebody comes to you and says, “Can this blow up in your reader’s face?” And often time you’re in a position of saying no, thank you, because that’s not a good experience. Which also means you’re turning down potential revenue. And that’s the right thing to do.

My argument is: Why don’t we have advertising innovation also be part of our mission as an organization, where we come up with innovation our newsroom likes, our advertising guys like, our sales guys like, then we go out and sell that? And we use somebody like the OPA to make it an advertising standard. It doesn’t happen enough.

We shouldn’t be ceding innovation in advertising to third parties. We should be participating, we should be creating, and we should be out there offering it as much as we offer innovative journalism and innovative journalistic projects. We’re not doing enough of that. We do a little bit of it, but we’re not doing it in a sustained way. And as more and more advertisers and marketers get into creating content, we shouldn’t be sitting there idly defending that. We should be saying, “What can we do to create innovative advertising to help our advertisers, along with our content reach our audience on our platforms?”

Ellis: What technology are you most interested in or most excited about right now?
Narisetti: In a very prosaic way, a lot of my sleepless nights are about Android. I think we have cracked neither the experience nor the pay models in Android mobile devices. We have naturally gravitated towards iOS because people are showing a willingness to pay. But the world growth in mobile is increasingly happening, especially outside the U.S., on Android. I really think we need to both provide amazing experiences and monetize that better.

I’m very bullish about video. I continue to be very bullish about video, not just on WSJ.com, but on all these other platforms, partly because of our attitude we want to be where our readers are. I love emerging things like Spreecast, which allows us to do social conversations involving video. I think Google Glass is going to fundamentally change a lot of things. I’ve played with it a little bit, to the extent Google has allowed you to play with it. I’m very optimistic about what that might mean, provided we embrace it and figure out smart things to do with it.

I love Tout, for example, which allows our reporters to upload video from iPhones, has been a big boon for us. I’m a huge fan of Storyful. I think the whole verification of social media — they are the new AP of the future and I think there are big opportunities there. There are lots of little and big things that excite me. It’s the Android thing that keeps me up at night.

                                   
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  • malcolmintl

    Interesting read. With regards to Raju’s remarks on paywalls: we have observed that the most viable business model for content combines free ad supported sections and paid premium content. But content models are also evolving as methods of monetization that shift beneath publishers’ feet. Metro newspapers must test, try, and adapt cost structures to take advantage of new digital content creation (e.g. video blogging, shorter articles from more contributors, comments rapidly affecting the article content) and methods to consume them (mobile, tablet, RSS feeds, etc.). In this new world involving content oriented to video, social, mobile, contextual paid content ads, and even embedded commerce, newspapers will see themselves no longer as an old style “metro newspaper” but a true next generation digital content producer.

    How are new content and monetization models going to turn out? In lieu of a crystal ball, the answer lies in rapid adaptation based on feedback. I’m the CEO of MediaPass, a newer and better paywall solution, and we use this method to determine the right price and charging model for a site. Testing and revision based on data is our mantra. The winners have always been and will continue to be the ones who experiment quickly and keep what works. Paywalls can deliver substantially better results with minor tweaks. Small changes we make astound publishers with double digital yield increases. The difference between experimenters and non experimenters can result in ten times more revenue annually. Though we encourage and support those experiments, some cultures don’t intrinsically want to keep trying. The ones who do always make more money then the ones who don’t without fail.

  • Petteri Vainikka

    Great interview and refreshing to hear a reputed publisher actually speaking out loud about their value sharing problems with the various ad tech companies promising to “help you [the publisher] understand what your readers are doing with advertising and we’ll help you monetize it better”, but actually just using the publishers to accumulate, and trade on, data (the fast emerging life-blood of digital advertising across all channels and formats).

    This uneven value appropriation of – what is and should be – the publishers’ own data, is not unique to ad networks or free site audience profiling providers (such as Quantcast) either, but equally common practice with social media widgets (e.g. AddThis and Disqus) as well. These are all ‘free services’, which base their business models on collecting and on selling the publishers’ data, typically monetizing it through a variety of forms (as they have no cannibalization effects to consider e.g., between direct premium sales and RTB unlike their publisher ‘clients’).

    What can then be done to transferring the relationship – and the understanding thereof – between readers content (be it editorial or advertising) back to publishers?

    As a good first step, publishers need to read the Ts&Cs of their various technology suppliers, and rid themselves of those relationships that are clearly harmful to their long term business viability. (Long term business viability means having something valuable, non-commoditized, and unique to offer to advertisers – and readers of course also!)

    Second, review the business models your technology suppliers work with. Cut back on ‘free services’ as there are no free lunches(!), and also be very cautious of revenue share models as well. Digital advertising is the only enterprise software market wherein revenue share is a normal business model – perhaps not surprisingly, digital advertising is also the only enterprise market wherein technology vendors routinely hold the upper hand vis-a-vis the customers they serve!

    Finally – for full disclosure – I’m CMO at Enreach (www.enreach.me), an exclusively premium digital publisher focused Big Data company from Scandinavia that provides exactly what Mr. Narisetti is calling for, “we’ve got to own the relationship between our audience and what they do with advertising on our platforms”, and with a business model wherein all data is exclusively owned by the publisher, all use of the data (audience targeting and audience level campaign engagement reporting for example) is at a fixed monthly fee, not revenue share. Last, perhaps oddly, looking at the still somewhat ongoing RTB hype, we are focused on applying audience data to direct sales, not for the programmatic market (what is effectively a massive buy-side driven retargeting market).

    Our clients are currently mainly the large – digitally savvy and highly profitable – Scandinavian media companies such as Sanoma and Egmont. Perhaps the US should look outside its own coasts for publisher side technology innovation to see what other digital futures are possible?

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