Media and news are struggling. So how do news apps continue to grow? Vincent Wu, COO of News Break, shares News Break’s growth strategy (the one that got them to #1 on the app stores) as well as his predictions for where news apps and the industry as a whole are heading. Tune into the podcast or read the edited highlights below.
Growth through the times
1:25 Vincent - “One interesting thing I’ve seen changing is that the growth objective is changing too, in the past 5 years. In the past, people were thinking about growth or audience development simply to just bring in more users to the website or property. At that time it was too early to tell what’s the actual loyalty, retention. The quality of the user is more about the number: how many UV, how many page views you can actually bring to the websites. Especially at that time, the website doesn’t have much funneling. The active subscribers, the VIPs, or the loyal users, people, just most of the time, are competing on the Comscore to see how big they are.
Things change a lot, of course, especially when Facebook and all those sort of platforms joined the game, starting in 2014 and 2015. People started to realize that social platforms and tech platforms have a lot of power in terms of driving audiences so the growth, tactics, strategy and media companies also changed along the path to work more from the warring game to more high quality, loyal audience development.”
3:14 Vincent - “Everyone now, including News Break and my previous employer, are all focusing on not just the acquisitions on the top of the funnel, but also how to move the users, in terms of growth, through the funnel eventually arriving at the bottom of the funnel of truly loyal users and regular users long term.”
Trouble in paradise
4:25 Vincent - “It’s a consensus right now that the media and news is struggling. They’re already struggling and will continue to struggle. There are many reasons for that. One of the key factors is the disruption by the tech companies, the tech platforms like Google, Facebook, or Twitter… A lot of people are saying, ‘Maybe, the media companies will eventually just become dependent on those tech platforms’... I actually don’t believe that. I don’t think that’s a healthy and stable situation or end situation of the media industry. To some extent, I believe content is king and content is also a commodity to some extent too. Right now, the content supply is a lot. There’s so many supplies of content and in tech companies and tech platforms, you usually only see a definite number of platforms and that’s the core of the dilemma right now. There’s so much supply on the content side but the platform actually dominates the process. On the other side, I don’t believe that because the platform also realizes that without actual high-quality content creation, without enabling the media and news companies to develop their brand and actually have their own property, this is not a sustainable long term vision.”
6:43 Vincent - “I think there are two predictions going on from my observations. One is that I believe in the big brands, big news brands, big media brands, there will be some industry consolidation. In the past they tried to form some consortium or some group to back better negotiation power. That trend is still continuing and, eventually, some of the big brands, big groups, will form those consortiums to actually become a platform too.
Another prediction from my viewpoint is that on the business model, I don’t believe in quite a few media companies and news companies trying to have subscriptions models… That may help for the entertainment side, like Netflix type of content, but for the news industry, I don’t believe that will save the world because, at the end of the day, I don’t think most consumers will be willing to pay for just news.”
What to do with news
8:08 Vincent - “The answer could be some kind of shared economy model. Platform would help but the platform shouldn’t take over everything. Right now, most of the media companies are concerned that if they build too much content on Facebook, the user will eventually just recognize the Facebook brand and they will just go to Facebook to find the content, which is already happening… That model should be more like an infrastructure, more of providing all of the tools and all of the necessary services for you but the media companies should still build their brands, have the property, and actually get the consumer… That platform is essentially lowering all of the costs of the media industry.”
It’s a growth and growth world
11:04 Vincent - “News Break has a pretty unique culture and structure. We don’t necessarily have, like any other company, departments and teams that are running this and running that. We are very fat and we are very project oriented. One thing I see and find it very intriguing and I believe it is one of the success factors for News Break and why we have achieved so much growth in the past two years, is that we have a very dynamic culture. We are project based, and growth is one of the key parts of it but growth is also integrated in each of the projects. For us, it’s more of growth, product, content, monetization, operations, and every component of the user lifecycle is tied together in different types of projects.”
13:13 Vincent - “I think the structure is one thing, the second thing is I don’t think we have a very secret sauce here… Then, I think is how we actually optimize it and how to operate it and one philosophy and one thing we have in News Break is that we don’t believe in secret sauce, we don’t believe there’s something that other people haven’t tried but we believe in operational efficiency or excellence. For example, growth or the connection between growth and content, growth vs. monetizations. It’s about the far view and the connection between different focuses and how to actually optimize to the very extreme level… Also, one thing we gain a lot of success and see a lot from is how fast we can react to the market change.”
“Everything we are doing is about local. On one side we do the news, going deep and going very vertically deep into the news content, but on the other side, we are also constantly expanding to other types of content.”
Who are the News Breakers?
17:12 Vincent - “First of all, we believe local news is for everyone. There are some certain steps in terms of early adopters like later adopters. But, news is for everyone, especially local news…Some people would say, “I don’t care about local news.” But that to us is more like a hidden interest. To some extent, even if they care about national news, entertainment news, lifestyle news, everyone has their interest to know what’s going on around him or her in real life because everyone lives locally.”
“There are some early adopters of local news. Some people are very aware that they like local news, they want to consume local news every time they wake up in the morning. And some people will be a bit hesitant and they need some education. They need to see the product and need to use it for a while to realize that they actually find the local news useful to daily life.”
“Another angle we are currently evaluating and doing is local vs. national news. It’s relatively less digitized for local news, but for national news people go to all the platforms, CNN, Fox, and it’s very crowded. In the past, people would buy local newspapers, watch local TV stations, and go to church to get the news about what’s going on around the neighborhood. In the longer term, our targeting is really targeting those real people and, today, are not using a digital way to find and consume local news.”
The changing channels
21:10 Vincent - “The channels change all the time. In my last ten years, I’ve seen it go up and down many times. Facebook, sometimes, went up really high and later pulled back a bit, not a bit but quite significantly because of all the reasons, and Google would become the number one source of traffic for most of the news companies. When you say the most lucrative user acquisition channel, it eventually comes down to the objective or the key metrics. It’s, of course, the price or cost of it, whether it’s actual paid acquisition cost or more like your internal cost, how many people you got staffed to actually do it.
Let’s say you're paying and actually posting organic content on Facebook. Even though you don’t actually pay that, you need to staff a pretty decent sized team to edit and that’s also cost. Cost is one thing. I think scale is also very important. Some of the channels, even if the cost is low, it’s very hard to scale up and that’s also another key thing all people in this role and similar roles would consider. The third is of course the quality. Some of the channels, the cost is good and very scalable, but eventually it comes down to the quality of the audience, whether retention rate is low, or the monetization is low. Those are the quality considerations.”
“Facebook is still the largest one, I would probably say. I know a lot of performance marketers, growth teams, and audience development teams still happily using Facebook. I think it’s because of the scale they have... especially for news.”
“Things have changed a lot. It’s really about the content format, the actual targeting tactics, how do you actually set your campaigns, how to do targeting, how to bid on the pricing. Things are changing all the time.”
“For news, it comes down more to the consumer journey. How do consumers discover the news and consume the news and react to the news? There’s actually a trend going on right now over the last few years. Facebook, for example, is an engagement platform and a lot of people go to Facebook for discovering the news in the beginning, like when they wake up, because there’s so much news out there. A lot of people don’t have time to consume other news because it’s so overwhelming so they choose to only see news that is shared or referred by friends and family.
The second step on the news journey is that a lot of people, especially those target audience segments, we call them news junkies, spend a lot of time on reading news and digesting news and go very deep and then read article by article. When they finish reading one article they like to see a debating article about that. Those are usually very high value news users for news companies. They don’t necessarily stay on Facebook for that. After they find out there’s some breaking news or some big event happening, they will go to Google and search for the full coverage of it and then Google becomes a pretty good channel for engaging with those news junkies and that’s another very typical funnel of news audience.”
“The last thing I want to mention is the partnerships with players like ironSource or other carriers. OEM is also very important for news companies because some users will choose to only go to CNN or only go to Fox or only go to Yahoo because of their preference, political views, or they’re just into a certain type of content from a certain type of channel. But there’s also a big chunk of users that want more aggregation of all the news and actually want one single place to get all the news stories from different sources, different POVs, and different outlets … That is why Apple News is getting a lot of market share because they’re pre-installing it … My point is, the partnerships with the consumer touchpoints and mobile phone is also a very critical channel for news. News players can capture the audience that has a very heavy daily habit on news consumption.”
Where to go from here
29:50 Vincent - “We are going all-in growing our users. We are number one, but we are not as happy about being number one on the news. Our vision is to become the default destination for everything about local. So, we are going beyond just news.”
“We’ve been pretty successful in driving, particularly in performance marketing, new users. We would like to go deeper and invest more in brand marketing cause we do believe there’s a connection between brand marketing and side performance marketing. We have to build a brand and use the brand to reach out to audiences that are very hard to reach out to with performance measurements.”
Out of the box marketing
32:39 Vincent - “I’ve seen very out of the box tactics and strategies. I feel like marketing is so advanced right now and there are very good marketing campaigns but I’ve seen some, not necessarily from the news industry, but from some of the product industries do very straightforward marketing tactics: ‘This product is good. This app is good.’ A very simple message and maybe going to the local area and telling people, ‘Don’t look around. This is the news app that’s going to meet your needs and try it.’ Very straightforward marketing messages sometimes are more powerful.”