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YOU WON’T BELIEVE WHAT HAPPENS NEXT WHEN I TALK TO JESSE COLOMBO’S BOSS

Key points

  • Forbes.com pays contributors more for repeat traffic to discourage click-baiting
  • Forbes pays around 400 contibutors to produce original content
  • Forbes is making money, with online (53%) bringing in more ad revenue than print

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Something's been nagging me after the whole Jesse Colombo thing.

To quickly recap: The economics analyst posted a piece on Forbes.com called 12 Reasons Why New Zealand's Economic Bubble Will End In Disaster.

Debate followed. Everyone from Steven Joyce to NBR economics editor Rob Hosking weighed in. Colombo fought his corner during an NBR AMA.

But the economic debate was over-shadowed a number of commentators, including Bernard Hickey (on RNZ’s The Panel and elsewhere) and BusinessDesk’s Pattrick Smellie (on Stuff), who accused Colombo of once-over-lightly analysis, and a click-bait headline designed to pump up his audience, and his pay, under Forbes’ traffic-based contributor payment system.

All the protagonists, including me, were quoted a Poytner analyis piece from 2011, and an equally creaky editorial from Forbes Media chief product officer Lewis D’Vorkin, the father of the incentive-based contributor payment model (Forbes Media being the name for magazine's combined print, online and events business).

I recently had a quick phone chat with the New York-based D'Vorkin, and his comments are worth reading if you're interested in publishing, or the quality of what you read in the hard-scrabble world of online publishing.

The very fact Forbes' payment system is traffic-based, and some of Colombo's behaviour — including his and his tweet to Lorde and a follow-up post devoted largely to gloating about coverage and traffic — made it easy for critics to lump the site in with lazy repeater sites like Business Insider, Mashable and so forth with their endless repackaging and annoying social media teasers ("You'll never believe what happens next when ... ", "10 reasons the ... " etc).

But in a world where so many sites are repeaters, or aggregators (hello Yahoo and MSN), it's worth a nod to site that actually publishes original articles and commentary. 

The entrepreneurial journalism model is worth investigation. I'm not sure it was right to beat Colombo over the head with it.

Here's what the Forbes boss had to say for himself:

Chris Keall: Jesse Colombo’s had a lot of media here for his bubble theory, but commentators have also criticised Forbes pay-per-click model – essentially saying he’s trolling New Zealand and exaggerating his theory to get traffic. So I was wanting to grab your response to that.

Lewis D’Vorkin: Jesse was recruited by our banking contributor, who had been following him for a few years and saw that Jesse had built a pretty substantial audience on Twitter and that many of the people retweeting his content were people our banking reporter respected.

CK: Is there potential for your traffic-based payment model to undermine contributor’s credibility?

LD: What undermines a contributor’s credibility is inaccuracy, failing to engage with the audience, and behaviour like that.

Jesse is a bubble activist. He’s built and audience that’s interested in reading what he has to say, and his audience feels compelled to share that content across the social web.

CK: There was one tweet he did to the New Zealand singer Lorde asking if she was interested in his theory about an NZ housing and credit bubble. Was that perhaps a bit over the top in terms of social engagement?

LD:  I didn’t see the tweet so I can’t speak to it?

CK: There was a Poynter article that said Forbes.com pays contributors 10 time as much for repeat visitors. Was that stat correct?

LD: Our model is built around the notion of building a loyal following. And the best way to build a loyal following is to provide information that audiences find credible enough to come back to.

So that is correct that we reward our contributors who have a larger repeat audience on a regular basis.

[Terms vary by contributor. D’Vorkin didn’t want to go into examples of individual contracts - CK]

CK: So presumably that would punish people who use click-bait headlines?

LD: That’s the idea.

CK: Is Forbes.com making money?

LD:  Forbes Media [online + print + conferences] has finished the last two years … they’ve been the most profitable in quite some time.

The media industry at large in 2008 and 2009 went through dramatic turmoil, and in 2012 and 2013, Forbes profitability has been its strongest since those difficult times.

CK:  Have you broken out separate figures for print and online?

LD: We’re a private company … But it might interest you to know our digital ad revenues have now surpassed our print ad revenues, which is an extraordinarily unique thing in the media industry. Approximate 53% of our advertising revenue is digital.

[As with all publications, the growing proportion of online ad revenue will be in part a function of print revenue declining. Still, to get a majority of ad revenue from digital at this point in time is a stat that will impress those in the industry – CK].

CK: The incentive-based, entrepreneurial journalism – you see that as a factor in digital surpassing print?

LD: The entrepreneurial journalism model is one that we believe is very powerful given the state of the advertising industry today.

We also believe it’s a great model for freelance journalists, knowledgeable academics, and authors to be able to have a voice in a credible environment, and to be rewarded for attracting an audience.

CK: How many contributors do you have on the incentive scheme at the moment?

LD: We have about 1200 contributors on the platform. 400 of those are being paid, and about half of those 400 are journalists.

CK: I’ve read that the top-performing contributors can earn $US100,000+ a year. How many would that be?

LD:  It’s half a dozen or so.

CK:  What sort of traffic numbers would they be attracting?

LD: They attracting about a million or more unique visitors per month.

CK: Have you considered a paywall? [NBR’s argument is that as well as diversifying revenue, reader funded content means sharper content]

LD: We’re always exploring new things, but a pay model isn’t on our horizon. Pay models have their pluses and minuses. Our audience is so big that we’re continuing to pursue the advertising-supported model. However, we are exploring premium products such as e-books, and we have a premium newsletter business that’s doing quite well. So we’re looking to charge for content in areas other than the website.

ckeall@nbr.co.nz

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Comments and questions
9

If Forbes remunerates its contributors on a traffic-by-volume basis, don't expect anything prosaic and analytical, when the scribes are working from the maxim: of what is effectively putting "bums on seats". Of course, they'll be juicing-up the stories by way of parlaying "implausibility without accountability", to fatten up their pay packets.

You know, somehow Jesse 'Columbo' is an apt name for this writer of questionable worth; where life imitates art, not too unlike the TV ruffled trench coat-wearing detective, played by Peter Falk.

If our Columbo has to tweet a 17-year-old singer, that tells me the value of his credibility stocks -- right down there with the penny dreadfuls.

Just one more thing....

D'Vorkin's key point is that it's not traffic-by-volume so much as contributors being rewarded for repeat visitors and building a loyal following.

Sensational headlines will draw people in, but there's diminishing returns if you can't back it up.

Clickbait reporting and repeat visits are not incompatible. The trick is to promise a juicy follow-up report at some indeterminate date, so that people keep checking in to see if it's up yet. And oh look, that's exactly what he did.

In principle I see it as no different to most other business models. For instance you might get a flourish of sales in the short term by offering a cheaply made product that looks good but falls apart soon after. However people will learn from that, won't make the same mistake again, and your brand value will diminish. Seems to me Forbes are aware of that and trying to find the right balance between provocative headlines and credible well researched articles. Whether Jesse Colombo's article achieves it in this instance is another matter.

Really interesting and well done for doing the interview. He is offering a very viable alternative to paywalls which essentially rewards journalists for their work and creates new opportunities for advertisers.

And I note his point that their journalists' credibility is not undermined by their payment model, but rather the credibility of their work. Perhaps a reminder to focus more on what Jesse Columbo actually wrote?

QUOTE: "We also believe it’s a great model for freelance journalists, knowledgeable academics, and authors to be able to have a voice in a credible environment, and to be rewarded for attracting an audience."

Who's checking the contributor's articles are correct?

I am so disappointed to understand Forbes online business model.
Now I'm totally underwhelmed with NBR contributor Ben Kepes the cloud-guy.. I thought being on Forbes.com was noteworthy, not simply content marketing.

Just amazing that someone purporting to be a serious commentator on economic matters would message a 17 year old musician to ask their thoughts about the economy.

The annoying thing about these economists who cry warnings about bubbles in various asset classes is that they are almost next to no help in telling people when that asset class is extremely cheap and worth purchasing. There's no shortage of people who were warning about overheated property, debt products and equities in 2007. But these same self-styled predictive geniuses were scant on the ground in late 2008 and early 2009 when people should have been piling back in taking advantage of cheap prices for pretty much all investment classes.

Yet I'll bet that this highly gifted intact Columbo was not much help at all in telling people to buy back into asset classes, despite his predictive ability. Much easier to warn about the sky falling than it is to encourage people to buy cheaply in a downturn. His Wikipedia page suggests that he keeps chanting "bubble bubble bubble" even when people were making a killing buying in at cheap prices.

That was a clever headline