Chapter 1: Introduction to Conversational Media

As I embark on this lengthy and link-rich piece of musings, I encourage you to settle in with a beverage of your choice—whether that be a glass of something spirited or perhaps a delightful cannabis pairing.

With the upcoming launch of The Recount's live news streaming service, I have found myself reflecting on the current landscape of digital marketing—a topic I have delved into extensively over the years. To put it plainly, the industry is facing significant challenges. While we may believe we are innovating, we are, in reality, repeating the missteps of traditional media companies that struggled with the internet's rise over a decade ago. Before diving into that, let me provide some context regarding my perspective.

The Recount is set to unveil a unique live streaming news product this spring. After nearly a year of hard work, we are taking calculated risks that are essential for startups. We have reimagined almost every element that constitutes "good television" within the context of a digital-first information environment. Although The Recount boasts a substantial and engaged social media following—accumulating millions of views and interactions weekly—there's no certainty that this audience will transition to our live streaming platform. Our mission is clear: we must construct a service that captivates, engages, and provides value. This endeavor is fraught with risk; success hinges on creating a service and brand that resonates with our audience, encouraging them to share it with others. Ultimately, we must cultivate a community, as no media brand can thrive without one.

Section 1.1: The Importance of Community

The term "community" has seen better days, marked by its association with platforms like Facebook and the toxicity found on Twitter and YouTube. Nevertheless, community remains a cornerstone of a successful media brand, pivotal to our potential triumph or failure. We consider it so vital that we are launching our stream on Twitch—a platform that offers a stark contrast to traditional news environments in its community-centric approach. Historically, news has struggled to gain traction on Twitch, so why are we making this leap?

This is a valid question. In weighing the implications of launching a crucial new service on a third-party platform, I was reminded of writings I shared over fifteen years ago during a similar transition in media. Back then, blogs and "user-generated content" were emerging phenomena, largely misunderstood by traditional media professionals—much like the complexities of live streaming and "connected television" today. I compiled my thoughts into a series titled "The Conversation Economy," which began with an insight that now seems obvious: much of the media produced at that time was still rooted in a "packaged goods" mindset. With the advent of Web2, I argued that this approach would soon be overshadowed by a more community-focused format. Blogs, at that time, represented a pivotal moment in the evolution of media. The era of Packaged Goods Media was waning, giving way to what I termed "Conversational Media."

#### Subsection 1.1.1: The Decline of Packaged Goods Media

In my initial post, I noted how major media companies—Viacom, NBC, Time Inc., NewsCorp, etc.—were reconfiguring their "interactive" divisions, appointing new leaders who were more traditional in their thinking. This was back in 2006—Twitter was nonexistent, Facebook was still in its infancy, and Google had just acquired YouTube. The "winners" of Web2 were still being determined.

I questioned why these major media firms treated digital media as merely another variant of packaged goods. Weren't they aware that this time, things were different? To genuinely succeed, they needed to radically rethink not just their product formats, but also their community engagement strategies and business models.

Section 1.2: The Current Media Landscape

Fast forward over fifteen years—AOL and Yahoo! are now under private equity ownership, Viacom is struggling to scale and preparing for sale, GE has sold NBC to Comcast, and Time Inc. is under the stewardship of a billionaire philanthropist. NewsCorp has relegated its digital initiatives to a secondary role, while doubling down on polarizing politics through its Fox News subsidiary.

Meanwhile, the digital advertising sector—once dominated by those same media giants—has ballooned from approximately $17 billion in 2006 to nearly $500 billion last year. The lion's share of this growth has gone to the triopoly of Google, Meta/Facebook, and Amazon—entities that do not wish to be labeled as media companies.

Reflecting on this, I wondered: whatever happened to the principles of The Conversation Economy? If the digital giants triumphed over traditional media, did they deliver the conversational media landscape I envisioned?

Chapter 2: Defining Conversational Media

To answer that question, we first need to clarify what I mean by conversational media. In my earlier writings, I identified five key characteristics:

1. Conversation over Dictation: Traditional media often adopts a one-to-many approach, with authoritative figures delivering news. In contrast, conversational media encourages audience engagement and fosters a collaborative discovery process with journalists.
2. Platform over Distribution: Conversational media thrives on network effects and the platforms that facilitate them, while packaged goods media relies on tightly controlled distribution channels.
3. Service over Product: When media is viewed as a discrete product, it aligns with packaged goods media. Conversely, when it's treated as a service, it falls within the realm of conversational media.
4. Iteration and Speed Over Perfection: Packaged goods media focuses on delivering polished products, while conversational media emphasizes ongoing iteration and improvement.
5. Engagement over Consumption: Conversational media fosters active participation and interaction, as opposed to passive consumption. For instance, successful Twitch livestreams hinge on real-time engagement with the audience.

So, did the marketing industry's champions—Google, Facebook, Amazon—create a utopia of conversational media? The clear answer is no. They have delivered yet another iteration of packaged goods media—feeds designed for consumption. While their platforms may function as services, they have largely replaced traditional media models with machine-driven systems where consumers are treated as products. The sense of community integral to effective media brands is largely absent. We find ourselves as consumers, mindlessly scrolling through feeds. It's disheartening, and awareness of this reality is increasing.

Nonetheless, this does not imply that conversational media is extinct. In fact, I would argue that the characteristics outlined earlier provide a solid framework for many thriving media businesses today—Substack, The Athletic, Twitch, The Information, and even Discord—all prioritize their communities.

Chapter 3: The Role of Marketing

Interestingly, many of these platforms do not rely heavily on advertising. While some incorporate limited ad units, the core business model of conversational media often hinges on subscription-based services.

Why is that the case? I attribute it to marketers, plain and simple. As Facebook and Google ascended to prominence, marketers began to retract their "innovation budgets"—the portion of their media spend earmarked for exploration and experimentation. In the mid-2000s, many major brand marketers allocated 10% or more of their budgets for innovation. However, by 2012, when Facebook integrated programmatic advertising into its main feed, those budgets began to dwindle.

In my 2006 writings, I speculated on how marketers could leverage conversational media and what might be necessary for it to scale. Brands require safety, quality, and scale, but at that time, these elements were scarce in the nascent conversational marketing sphere. Despite this, brands were funding a range of innovative efforts—from Dice's "conversational banners" to American Express's Open Forum. The outcomes of these initiatives were promising and suggested a potential renaissance in brand marketing. Perhaps brands would learn to "join the conversation" and engage more authentically with communities—after all, a brand is defined by what others say about it in its absence.

However, history reveals that the past fifteen years have not been characterized by customer engagement, particularly in supporting news innovation—it's been eerily quiet. Innovation budgets have nearly disappeared. One senior media buyer overseeing billions in annual ad spend recently shared that they hadn't allocated funds for media experimentation in nearly a decade. A quick survey of other marketing leaders yielded similar responses. While they were open to testing platforms like Snapchat or Pinterest, investing in innovative startups was not on their agenda. Like their counterparts in established media firms, marketers abandoned the pursuit of conversational media. So, what did they do instead?

Once again, you guessed it: most of their budgets funneled into Google, Amazon, and Facebook. These platforms have honed their data-driven marketing services and offer brands a tempting proposition: invest in our finely-tuned systems, and we will generate the desired outcomes. From 2012 onward, marketers have learned to navigate these algorithms, but they have neglected the one aspect that should distinguish them: meaningful engagement with actual customers. They mistakenly believed that these platforms would facilitate direct customer interactions, only to find themselves disintermediated by the very systems they relied upon.

This is not a trivial observation. In recent years, leading CMOs have begun to publicly question their relationships with these platforms. While they cite concerns over moderating unsafe content, they privately acknowledge an uncomfortable truth: they have become overly reliant on an intermediary they do not fully understand, and they fear becoming irrelevant. They are also genuinely worried about the impact these platforms have on public discourse—highlighting the loss of countless journalism jobs and the proliferation of misinformation.

Their concerns are valid. The algorithms of these platforms excel at pinpointing potential customers and delivering marketing messages, yet they lack context about the engagement of those customers. The result is impressive KPIs, but an increasing disconnect between major brands and the customers they claim to understand. Marketers have become overly fixated on media buying at the cost of innovation. Previously, media buyers had roles that encouraged creativity and risk-taking, but now, savvy CMOs are investing in building their own sophisticated media-buying mechanisms, complete with first-party data and machine learning algorithms. It seems that the answer to their dependence on large platforms is to replicate those same systems within their organizations. While I support independence, true innovation demands exploring entirely new avenues.

Chapter 4: The Future of Media

The media landscape in 2022 is far more chaotic, intricate, and unsettled than it was in 2006. Television—the most substantial and influential sector of traditional media—is undergoing a digital transformation, and once again, the winners and losers are yet to be determined. If there was ever a time to experiment, to learn, and to innovate, it is now. To put it bluntly, there is only one way to drive innovation in any industry: allocate resources to initiatives with uncertain outcomes. Therefore, I call for the reinstatement of innovation budgets in media and for media buyers to reclaim their profession. Our industry cannot afford to repeat the mistakes of the last fifteen years. If you share this sentiment, I invite you to reach out—I have some exciting ideas I'd love to share. A few courageous individuals may just illuminate the path toward change.

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