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A word to Jesse Colombo’s boss

Forbes.com pays its contributors, in part, based on how much traffic their stories attract:

Chief product officer at Forbes Media Lewis D’Vorkin says in a post outlining the scheme:

It’s a simple deal: there is a flat monthly fee, a bonus for hitting certain unique visitor targets, and a fee per unique user after bonus targets are achieved. For paid contributors, the arrangement requires a certain number of posts per month and a specified level of audience engagement through our commenting system. (We consider the precise terms a private matter between Forbes and the individual contributor.)

D’Vorkin wants to underline that Forbes actually pays many of its contributors – an increasing rarity in online journalism; at least for expert commentaries. He writes:

Why do we pay contributors when others don’t? As a traditional publisher, Forbes believes content creation is a serious endeavor, and experienced content creators do command a price (admittedly, not what many are accustomed to). We hand select our contributors for their topic-specific knowledge — our audience deserves nothing less.

And adds:

We’ve entered a world of Entrepreneurial Journalists, incentive-based content creators who build a brand under their name and attract an audience to their topic-specific expertise. These Entrepreneurial Journalists will use tools that enable them to create and market their content in a social media setting. Their followers and knowledge will then help them build a multifaceted career that can span many different media environments.

D’Vorkin was an executive editor at Forbes back in 1996, just as the web was starting to crash in on traditional publishing. After stints in the wilds of dot-com land, including Slant.com, he’s hit on a scheme that both puts money in contributors pockets, and incentivises them to promote their content. 

In the brutal world of online publishing, where so many are failing, he's helped make Forbes.com one of the most high-profile business sites, and one where 400+ contributors can make real money. A September 2013 Journalism.co.uk article quotes Forbes Media COO Mike Federle saying some Forbes.com contributors make more than $US100,000 a year. 

Undermines credibility
But commentators here have also used the scheme to bash Forbes.com contributor Jesse Colombo over the head.

Commentators, including Bernard Hickey (on RNZ’s The Panel and elsewhere) and BusinessDesk’s Pattrick Smellie (on Stuff) have accused Colombo of once-over-lightly analysis of NZ’s alleged bubble, and a click-bait headline designed to pump up traffic, and his pay, under Forbes’ traffic reward system.

Colombo has fought his corner over his bubble theory, including in an AMA with NBR readers. And some of the criticism of him ignores events. He must be right some time, Steven Joyce and others have narked, given he predicts bubbles everywhere. Colombo says he’s already been right, having made his bones predicting the GFC ignited by the US housing bubble.

The Forbes contributor is ready to keep counter-punching, and battling opponents point-by-point, with logic and data. Yet his publication's pay-by-the-eyeballs model is undermining his credibility (and Colombo did himself no favours on that score with a post that, in part, gloated about traffic to his original post on NZ, 12 Reasons Why New Zealand's Economic Bubble Will End In Disaster. Neither did it help when he tweeted to Lorde, pointing out his column and suggesting "You may be interested").

On The Panel, Hickey said Forbes was trashing its brand for short-term gain.

Forbes' best comeback: pays 10x more for repeat visitors
I’ve asked D’Vorkin to respond to the accusation his model encourages clickbait.

He’s acknowledged my request but so far not answered questions (I’ll cut the guy some slack; it’s the weekend).

One point he might bring up: According to a Poynter Institute piece, Forbes pays a contributor for each first-time unique visitor, but 10 times more for each return visit from that person during the same month.

Presumably a person is not going to return if they think a contributor has wasted their time with a clickbait headline.

The paywall alternative
I’ve also asked D’Vorkin for his opinion on paywalls.

There are paywall downsides, including fiddly logons, a stunted ability to promote stories through social media, and constant battle with competitors who can rip off content within minutes.

But there are also strong, upsides, including the fact that subscriber-funding encourages sharper content (think of the quality difference between shows on HBO and ad-funded free-to-air TV); the fact it delivers a qualified audience (not self-selecting online survey qualified, but reach-into-their-wallet-qualified) and a solid source of revenue in an age when online ad revenue mostly goes to Google, and is spread thinly over countless sites elsewhere.

Paywalls are not for every site. I can’t see a mainstream news site ever succeeding with one.

But for some media, including business publications where it can be expensed (or your boss pays under NBR’s Business Subscription scheme, which around two-thirds of NZ’s 500 largest enterprises now belong to), it can work. I’m interested in D’Vorkin’s thoughts on why Forbes hasn't gone down this path, so hopefully he’ll weigh in shortly.

ckeall@nbr.co.nz

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Comments and questions
3

I read Politico until the paywall clicks in,one of a daily diet of around 50 different sites,often for one story.The NBR's paywall works reasonably well,until Whaleoil starts sniffing blood.

No doubt Forbes and Mr Colombo will appreciate this free publicity.

As Mae West said "Its always better to be looked over than overlooked".

Now ... to digress from how Forbes should run its business (ha ha) ... and getting back to the subject. New Zealand sure is a bubble economy as I outline with a structural approach on Scoop with "New Zealand's bubble economy is vulnerable".

It's the kiwi way - head in the sand and shoot the messenger.
Read Jesse's article and rebuttal. He is picking bubbles and highlighting what might cause them to burst. And he's right in his analysis - it's all economically logical.
The rebuttal from kiwi commentators is "we are different" or "it's not a housing bubble because...it keeps rising". There is no serious analysis done by journalists here or bank economists for 2 understandable reasons:
1. The data reinforces the bubble view (you have to argue that there has been a decoupling from economic gravity to justify current prices as being sustainable, particularly with now rising interest rates).
2. Banks (the only supposedly "educated" commentators speaking in the market) have a vested interest in not pricking the bubble given their vast exposure to residential mortgages.
Trust me, commentators in Japan in the 90s, the US and UK in the 2000s etc all said that they were different at the time. The reality is everything moves in a cycle and we are in the mother of all asset-inflation cycles based solely on cheap credit from the World's major central banks, who have been pursuing a deliberate (and successful!) policy of pumping up asset prices to buffer the world economy against deflationary pressures. i.e. make Joe Punter feel wealthy because his house and share prices have gone up, encourage him to borrow at very low rates and hope he spends more at the store so that economic activity improves and more people get employed. But asset prices have only gone up because of cheap credit - global population growth and personal/corporate incomes have not increased nearly enough to justify the current price levels.
Central bank major concerns now? How to wind back the enormous credit stimulus without causing a massive asset price correction tha spills over into aggregate economic demand/GDP growth. This is what keeps the Fed and PBoC awake at night.
We need to realise that the past 6 years have been just a vast economic experiment as it has never been attempted before (the stimulus, or the tightening). But the tightening is coming and people need to be prepared for it, that's why I wish our politicians, economic commentators and journalists would start taking a more objective, data-oriented view of things and recognise the context within which NZ's economy and house prices are existing. That way we can educate the public to make the right decisions about their personal leverage, savings rates etc and we won't lurch into another crisis.