Truth is the first casualty of politics in the digital age
September 23, 2016
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We are on the precipice of a revolution—a content revolution. Now more than ever, we are close to a world where the fair market value of information can be unlocked and put at the forefront, a world where freedom reigns and consumers can access the quality content they want, when they want it. Amazon has done it for physical goods, Spotify for music, Hulu and Netflix for video. It’s content’s turn. The online information ecosystem is the largest and most active market in the world. It touches our lives on a daily basis and it’s singular in its liquidity, yet no one has found an accurate way to price and model this market in a sophisticated manner. There’s a missed opportunity to capitalize on impactful, well-written content and what’s more to instil an appreciation of value in consumers who expect online content to be “free.”
The Right Approach
In order to posit dynamic valuation as a way for publishers to address these challenges, first we must discern whether unscheduled news can carry an intrinsic value. Unscheduled news (for example, Company X filing for bankruptcy) is distinct from scheduled news (such as IBM’s 8:30am Earnings Release) in that it is disseminated at a non-routine time. A poignant example of unscheduled news’ ability to influence economic markets is a fallacious 2008 Tweet from the APs hacked Twitter account: “Breaking: Two Explosions in the White House and Barack Obama is Injured”. Following this spurious Tweet, the S&P dropped by 14 points, the equivalent of $136 billion. The power of breaking news (even when it is untrue) to influence our world culturally and financially is succinctly demonstrated in this example.
It is key to develop a system of valuation that not only takes into account the natural decay or half life inherent to news media, but also responds dynamically to shifting environmental drivers and user consumption patterns. Price should also be predicated on a diverse array of contributing editorial and environmental factors and shaped in real time by the abovementioned consumption patterns. What’s needed is a self-learning, adaptive system that increases in richness, accuracy, and scope as more and more content it input, analyzed, bought and sold. Dynamically shifting price will increase both interest and motivation to buy, according to good, better, best, pricing ideologies and prospect theory’s loss aversion or “fear of missing out.”
If the idea of intelligent estimation as a starting point in developing a sophisticated and accurate system of valuation seems untenable, consider the lack of understanding of the value of an online advertisement prior to Google’s rise to power and the revolution of AdWords and AdSense. A similar revolution, driven by a set of algorithms centered on valuation and consumer behavioral science, is necessary in the world of online content.
Valuation can be used as a comprehensive guide for setting pricing and packaging strategies for pay-per-view and, subscription experiences alike, effectively establishing a rate card for online content. It’s important to remember that valuation is not a dictator of price, but rather a tool that can be used to leverage value and improve returns on quality content.
The Goal of Dynamic Valuation
To state it very simply, the goal of a dynamic valuation system is to instantly connect people everywhere to original content providers, fostering quality journalism and writing, and enabling faster, more effective decisions. Endemic to this connection is a better appreciation on the part of consumers for the value of the content they consume, and a more judicious return on investment for content creators.
The opportunity exists in the information market for a technology that enables publishers to reclaim control of the value of their content, rather than see it dictated by programmatic advertising algorithms. Valuation technology should enrich businesses rather than disrupt them, all the while giving readers a clearer appreciation of value and a freer, more attractive way to consume the content they are passionate about.
If we can get to a world of quality content valuation that provides consumers with fair market value, it will enable creators and publishers to find new means of monetization, as well as new advertising models. An ecosystem where a value exchange is embraced.
— Michael Miller, CMO, qbeats