No one knows the silver bullet that will save media companies struggling to survive in today's economy, but more than a few media execs are certain of one thing: there will be a premium on trust. Speaking at IWantMedia's Future of Media: 2009 panel, Nick Denton, Craig Newmark and Jack Dorsey were agreed that success online will increasingly depend on consumer trust. (video here)
According to Newmark, the founder of Craig's List: "Trust is the new black."
This is increasingly a concern for media companies dependent on ads for revenue for a good reason: consumers don't trust advertising.
According to Neilsen, 76% of consumers don’t think companies tell the truth in advertising. However, the fact that 78% trust the recommendation of other consumers is increasingly changing business online.
Newmark documented his own habits. He ignores most advertising in favor of opinions from people he trusts and online reviews. That's why he sees trust as such a critical survival factor for newspapers: "That's what I think people like me will pay for." The paper that he continues to read every day is The New York Times, because he "trusts them a lot."
The rise of consumer trust in the opinions of people they know and like is being seen across the web in the popularity of various social properties online, especially Twitter. Alan Murray, executive editor of WSJ.com, says that he finds Twitter more satisfactory than any news feeds he follows now. He follows "individuals I know who stay up all night searching the internet. I don't know why they do it, but they find interesting things."
So will services like Twitter, which filter content through trusted friends and sources eventually replace newspapers? Not according to the site's cofounder, Jack Dorsey: “I don’t think Twitter will ever replace newspapers. We will always need a medium that carries more words.”
But how will news outlets make money? Murray argues that "we will not have a flourishing news industry based on advertising."
The Wall Street Journal is one of the only news outlets that is currently making money with a pay sibscription model, but others have crashed and burned following a similar road. The New York Times, for instance, briefly experimented with Times Select, which put the paper's opeds and other chosen content behind a pay wall. According to Murray, that was an example of people who "mistake their most popular content with the most valuable content."
But while many media properties are experimenting with new business models, others are thriving on an ad model despite the weak market. Gawker founder Nick Denton says that his sites will never charge for access to their copy and that they will continue to use advertising: "Advertising is perfectly capable of supporting content in a large variety of areas... We make enough money from advertising."
The future of ad content that mixes with brand trust is getting brighter, with many properties experimenting with advertorial in the online world. Gawker for instance has been experimenting with different models, including a recent advertorial blog called BloodCopy that is sponsored by HBO and mimics the voice and style of Gawker's other sites.
But Gawker got into a bit of trouble over its vampire blog when readers and reporters mistook it for editorial. Online advertising is an ongoing experiment, but the key to surviving in the medium, according to the panelists, depends on bringing in revenue without forsaking trust.
A trick that Denton thinks Twitter could easily do. He suggested that the microblogging site could turn into a first stop news source if they relaxed the 140 character rule and let high volume users (like panelist Bonnie Fuller, who has 4,000+ followers) run longer pieces and charge for them.
But that's not likely to happen. According to Dorsey: "We could do that, but it goes against the entire spirit of the service."