Engagement: the New Digital Metric

By: Alan D. Mutter

Everyone knows you have to measure things correctly to manage a business well. But the converse of this axiom is that you can get into a lot of trouble if you measure the wrong things.   

Unfortunately, this has happened in the newspaper industry with respect to digital media. Now, it has got to stop.  

In a misguided effort to apply the historically successful print business model to digital media, publishers have spent nearly two decades trying to assemble the biggest audiences they can on their websites and, of late, their Facebook pages and Twitter feeds.   

But large and undifferentiated audiences don’t matter in the digital realm as much as ones that are homogeneous, engaged, and readily targetable for advertisers.  

Smart digital publishers who have assembled groups of loyal and like-minded readers are selling contextual advertising for $15, $30, or more per thousand impressions, at the same time generic inventory goes for $1 per 1,000 hollers at entirely too many newspapers. Which business would you rather be in?  

Smart digital publishers have found that the key to boosting CPMs is passionate audience engagement. The concept was defined as follows in a 2008 white paper by a consulting firm that calls itself, perhaps ironically, Web Analytics Demystified (http://tinyurl.com/webdemystified):  

“Visitor Engagement is a function of the number of clicks (Ci), the visit duration (Di), the rate at which the visitor returns to the site over time (Ri), their overall loyalty to the site (Li), their measured awareness of the brand (Bi), their willingness to directly contribute feedback (Fi), and the likelihood that they will engage in specific activities on the site designed to increase awareness and create a lasting impression (Ii).”  

While it might be fun to do the above math for the typical newspaper website, here is an easier way to see how engaging newspaper sites are.   

In each of the last nine months through June 2011, the Newspaper Association of America has reported that the average visitor spends about 3.5 minutes per session on the industry’s websites. By contrast, the average visit at Facebook in June 2011 was 11.1 minutes, up 33.7 percent from 8.3 minutes in the same month in the prior year, according to ComScore, which tracks statistics for both NAA and Facebook. 

Engagement is rising at Facebook, because it has created a compelling place for people to get and give information about everything from what’s in the news and what’s on sale to the hottest new music and where the gang will meet for drinks after work.   

While newspapers can’t possibly compete head-on with Facebook, they can play to the passions of their readers by creating optimized online, mobile, and social products across a wide variety of topics.  

The power of engagement is illustrated in these examples from “The Story So Far”(http://tinyurl.com/storyso), a must-read discussion on the economics of digital media that was published in May by the Tow Center for Digital Journalism at Columbia University:  

The high school sports site at The Dallas Morning News captured an average of 14 page views, compared with news at 2.8, weather at 4.8, and general sports at 7.7. Last year, the site brought in $700,000 in revenue, according to a Morning News executive quoted in the report.  

PBS.com found that its most dedicated users — who lingered on the site for an average of 13.5 minutes vs. an overall average of 3 minutes — were also its most productive donors. “Such users were 38 percent more likely to donate money to PBS than less-engaged users,” said the Columbia report. When the PBS team discovered their super-users loved video, they stepped up promotion and now are selling video advertising for $30 per thousand views.   

In the pre-digital era, newspapers could charge premium prices for advertising to large audiences, “because advertisers could be persuaded to buy access to a big audience they didn’t know much about,” said the Columbia study. “Today, advertisers have far more choices and far more information.”  

The chase for online traffic has put news organizations “on a sugar high of fat audiences and thin revenue,” the researchers continued. And that is strategically misguided at a time when user loyalty and passion will be the keys to building healthy and profitable digital-publishing businesses.   

The longer editors and publishers are rewarded for super-sizing audiences instead of building engagement, the longer they will be heading in the wrong direction. 

The metrics for an engagement-focused incentive plan include:

• Rising time spent on the site, not merely increasing the numbers of unique visitors or page views.

• Increasing ad rates, not just gross sales volume (though ever-higher sales must be included in any sensible plan).

Remember, you can only manage things right if you measure them correctly. Now is the time to start.  

Alan D. Mutter is a newspaper editor who became a Silicon valley CEO who now is a consultant to media companies on technology and technology companies on media. He blogs at Reflections of a Newsosaur (newsosaur.blogspot.com).