INMA Study Tour on Artificial Intelligence

We had two vendors pitch: JustBaat.ai and Personate.ai. My assessment is that if you are not already, then go ahead and try out the technology.

Opportunity exists for those newsrooms that lack the “video DNA”. This technology can help bridge that gap and enable you to create videos at scale. It can also help you break away from the traditional reliance on celebrity anchors.

There is significant earning potential in video content since video eCPMs are higher compared to text. By tapping into video SEO and taking advantage of Google’s audio indexing, one can significantly boost visibility. Moreover, building brand IPs opens up opportunities for sponsorships.

Cost-saving is another critical factor to consider.

• Producing videos, especially at scale, is costly due to expenses such as shooting time, anchor salaries, and editing. This technology can help automate most of this.
• Furthermore, the capability to multi-publish textual stories in video format and to mass-create videos from automated data feeds, like air quality reports, stock market updates, and COVID-19 statistics, allows to drastically increase supply of videos.

However, risks should not be overlooked.

• The current state of the technology leaves much to be desired as the anchors, along with their expressions and gestures, can often appear artificial, though it’s important to note that advancements are being made rapidly.
• There’s a possibility that the content might be perceived as gimmicky if not executed well.
• Another concern is AI-driven marketplaces adjusting: as more publishers begin to use AI to mass-produce video content, there could be an oversupply, which might lead to a significant drop in video eCPMs. Therefore, it’s crucial to keep a close eye on expenditures and earnings from programmatic videos on a weekly basis to stay ahead of the curve.

Personally, I want to get my own synthetic avatar made and experiment deeply with this technology.

Why AI in CMS? In the past few months, integrating Generative AI into CMS has become table stakes! OpenAI’s ChatGPT APIs have made this a variable cost. Hence, we invited two CMSes.

WordPress

I deviate, but I want to spend a bit of time on why WordPress. In the last 10 years, I must have worked on multiple consulting projects to build CMS. Over the years, I’ve built a healthy appreciation for WordPress.

• Unless you have massive scale, there is limited direct financial ROI that newsrooms have to gain from building and investing in custom-built CMS. Some newsrooms are realizing it now. For example, VOX shut down its CMS and migrated to WordPress.
• Newsrooms got distracted building supply-side efficiency technology like CMS instead of revenue-generating advertisement targeting solutions.

Representing the WordPress community was Rahul Bansal from rtCamp. They are one of the sharpest WordPress agencies from Pune.

Here’s what Rahul shared:

• WordPress is a Lego-like modular system, and there are plugins for everything.
• Altis DXP provides editorial workflow assistance with ChatGPT.
• RankMath SEO, an Indian company, provides solutions to mass SEO-optimize content using LLMs.
• Elementor GUI plugin provides background removal solutions right inside of WordPress using LLMs.
• WPML integrates with different translation models.
• Akismet provides AI-driven content moderation.
• FalconAI generates outlines of articles using AI.
• etc.

Quintype

One of the most successful custom-built CMS in the market from India is Quintype. Over 200 publishers across the world use them! Chirdeep Shetty, their CEO, walks us through their AI integrations. According to him, LLMs are best left to the OpenAIs and Googles of the world, and the focus of Quintype is to get the UX right as per the workflow of the newsroom. Instead of me trying to explain what they do, I’d recommend watching the video below.

I co-founded and ran Pykih, a profitable information design studio for five years before folding it. I can say with some authority that Gurman is probably India’s most talented journalist turned information designer! She has now founded ReVisual Labs, her own Information Design Studio. She can help you build competitive differentiation with immersives!

Opportunity: In an industry as commoditized as news, Gurman’s work can help you build competitive differentiation, especially for subscriptions.

• Investing in the creation of long shelf-life visual properties could be a strategic move.
• These properties hold the potential to capture audience attention during High Traffic Events or even foster a habit of daily engagement, thus aiming to enhance daily and monthly active users (DAU/MAU).
• The measure of success in this endeavor is subscription conversions and an uptick in DAU/MAU.

However, this approach is not without its risks.

• You might not be able to prove profit on a per-story basis. Hence, information design might not work for short-term, tactical stories.
• Moreover, integrating immersive stories into your current content management system (CMS) may prove to be complex and problematic.
• It’s also important to consider that immersive stories typically yield little in terms of search engine optimization (SEO) benefits, which can be a significant drawback for online visibility.

Thus, carefully consider if immersives works for your audience and if it does then invest big in it to get that competitive differentiation.

Programmatic and direct digital eCPMs are facing significant challenges, especially when it comes to the Hindi market where eCPMs are as low as Rs. 10.

• This scenario becomes even more problematic when considering the revenue distribution model, where ad networks, including giants like Google, claim as much as 50% of the top line.
• Google primarily operates on a performance-based buying mechanism, utilizing cost per click (CPC), whereas media purchases typically hinge on impression-based models (CPM). This dichotomy leads Google to reverse calculate CPC to CPM when making payouts to media, which invariably affects the bottom line.
• Additionally, the situation is compounded by the involvement of Supply-Side Platforms (SSP) and Demand-Side Platforms (DSP), which are in the business of constantly trading ads. These platforms further erode the margins, taking away a significant portion of the revenue in the process.

Based on the discussion within the cohort, we’ve come up with some rough estimates regarding India’s digital advertising market.

• It is valued at approximately Rs. 30,000 crore, which translates to about $4 billion.
• A substantial majority of this market, about 85% or Rs. 25,000 crore, is dominated by digital behemoths Google and Meta.
• In contrast, news publishers in the digital space have a much smaller slice of the pie. Their total digital advertisement revenue potential through direct sales stands at around Rs. 1000 crore, with a more optimistic estimate reaching up to Rs. 2000 crore.
• This estimation aligns with insights from Ashwin Padmanabhan of GroupM.

Changing scenario: With third-party cookie deprecation, Google’s revenue is expected to drop, and so is that of news publishers.

The direct sales pie is degrowing.

Ad Networks are AI-driven marketplaces owned by BigTech. These AI models are optimized to maximize revenue for the BigTech company. These models keep pushing the boundary of what is the lowest eCPM they can pay out. So if Hindi eCPMs are at Rs. 10, they will keep pushing the floor to Rs. 9.90 across a couple of months.

Hence, it is critical for news publishers to invest in AI to reverse push the boundary of the floor price up until the sell-through drops. By playing on buy and sell, you could see a 25% increase in programmatic revenue. Revenue from advertisements is seasonal. Hence, of course, do this during high-demand months (Oct-Nov-Dec) and play it conservatively from Jan 1.

Users spend 10x to 20x more time on social media compared to the time they spend on news media. Given that, it is recommended to invest in both native (on-platform) and social footprint and sell both as part of direct ads.

• Direct sales. Micro-celebrities can charge brands anywhere from Rs. 30,000 to a lakh for a social media post. Top cricketers charge a couple of crores for a post on their social media handles. This is especially true for videos.
• Subscriptions. Referral traffic from Twitter tends to give much higher subscription conversions compared to traffic from other sources like Facebook.

If brand marketing or display advertising were only a matter of recency and frequency at the lowest possible cost, then brands would advertise on low-cost conspiratorial or explicit sites. However, this would negatively impact the brand of the business.

On the upside, brands want the credibility of the publisher to transfer to them. At a minimum, by advertising with credible publishers, brands avoid unnecessary public backlash. This is why businesses prefer advertising with credible news products over any random blog. This is also the reason why celebrities get ads but not everyone else. However, on news sites too, brands would not want their advertisements next to sad news — crime, rape, death, war, etc.

Below are some of the factors that contribute to premiumness:

• Medium’s Exclusiveness: An advertisement on Super Bowl night is more valuable than on another media providing a similar set of impressions.
• Quality of Content: Determines if the media is considered premium by audiences. For example, the stories on The Ken are much more well-researched and nuanced than those on say, a local entertainment gossip news website.
• Platform: Mobile apps tend to have higher eCPM than websites.
• Adherence to Cultural Norms
• Fact-Checked
• Content Strategy: Make news more meaningful, help people make money, save money, become fit, choose the right gadget, plan travel better, know about the future of the country!