AI, Media, and Cookies – A Venn Drawing

We’ve always loved Venn diagrams. They have a simple way of illuminating potential connections, overlaps, and combinations. They also can be quite funny.

Sometimes Venn diagrams show obvious relationships, but other times, they can be used to highlight an odd overlap from seemingly unrelated stories or concepts.

This last week, three stories and articles came together in a very interesting way. Venn Digital Media futureThey are:

  1. The OpenAI blog post about better language generation models. This story caught fire as the company, backed by Elon Musk and Peter Thiel, is electing not to release a product that freakishly can write fiction and non-fiction stories.
  2. An adExchanger submission article about how privacy initiatives impact the value of first-party data, but also how the cookie-less browser will impact adtech.
  3. The battle gearing up between Apple and their new news subscription business plan and traditional media and news companies.

These three articles do not bode well for the digital media industry, as currently designed. We have to be clear that this is really just the discussion of what the future might look like, but business models need to adjust.

First, AI authorship is coming. It will be a heaping mess when it first really gets going, but feeding some facts into a machine will likely deliver a highly consumable stream of content that is “human-enough” in the next 2 to 3 years. The world was scared to hear about OpenAI this week and how their algorithm for machine-created fiction and non-fiction is probably already better than your high school English teacher. Unfortunately, we really have to question the manner in which OpenAI was being hyped. There are literally dozens of brilliant teams researching AI and authorship (as this Twitter feed demonstrates) and we don’t need mild hysteria to cloud the amazing growth and responsibilities ahead for this exciting area.

Second, the concept of ad targeting across networks by operating out of cookie pool data is going to take a fall. People have discussed this, but this article in adExchanger is one of the first to really explain that this could actually be good for first-party data holders. First-party data is where the user or consumer has directly engaged with your site and has given you their email or purchased a subscription to your service. In other words, you are engaged with them in a first-party way.

Third, Apple is planning on eating into the inevitable move away from advertising revenue toward subscriptions revenue that has to happen as cookies are blocked and first-party data isn’t enough to support large media outlets. Apple is also proposing that they will not share the user data (citing privacy) to the media partners that join this new subscription service.

What does this all add up to?

The landscape for quality media content is getting significantly harder (just ask BuzzFeed). “No Mercy/No Malice” author Professor Scott Galloway outlined the many challenges facing traditional (and even new) media companies. The opportunity to earn your revenue from third-party ad exchanges and platforms is heading south because cookie pools and “co-ops” won’t survive the next round of GDPR interpretations nor will the concept of “data-brokers’ survive Apple’s lobbying effort. And the ability to maintain first-partly relationships with consumers of content through channels like Apple (yes, Apple is a channel) will become more difficult.

The Future of Media

So, to sum up, machines are going to write many of the “news” streams. Cookies are going away, as is much of the current adtech business model. And channels that deliver media will block your access to user data and demand heftier commissions.

So what’s the bad news?

oh no what GIF
There’s more?

In some instances, many of these changes will be heralded in by demands for more privacy regulations. Unfortunately, the more media holds onto adtech approaches that track consumers, the more they will look the villain part in the new privacy-focused regulatory environments. This means that you need to seriously rethink your future as a media business if your focus is strictly ad-based revenue. And please, can we stop saying this data is “anonymous”? It’s not really anonymous, and everyone knows that.

One bright spot in all of this is that if you ask most media and journalism professionals, they have been advocating for less ad revenue and more subscription models for years! And even “less ad revenue” isn’t accurate. Everyone agrees that ads that are specifically purchased directly for first-party audiences that have agreed to be shown these ads by signing up for your newsletters and content are fine. But the third party data model was never the preferred choice of those who believe in quality content.

The people most likely to solve these pending issues are the ones that write the best stories, provide the most insightful content, and ignite the most interest in consumers. When that is combined with engaging models like subscriptions and communities and events, you end up with a far superior experience for both the producer and consumer of the content.

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