An Outbrain for Newspaper: Headlines Network Launches

You can call it Outbrain for newspapers, if you want. Or perhaps a tamer Taboola. Tim Landon doesn’t particularly care how you characterize his latest network effort. Just click on his widgets – which you’ll soon see on hundreds of daily newspaper sites across the country, starting over the next two weeks – and help re-build flagging newspaper company revenues.

Nine major newspaper publishers – McClatchy, Hearst, Gatehouse, Morris, Belo, Swift, BH Media Group, Lee and the Chicago Sun-Times -- have bought into Chicago-based content aggregator Aggrego. Under Aggrego, they have formed Headlines Network, this new widget-based content network. Soon, you’ll see Headlines modules on sites from the Miami Herald to the Providence Journal to the Dallas Morning News to the San Francisco Chronicle.

First published at Politico Media on Jan. 17, 2017

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The initial aims are modest: increase some lower-end ad rates from a buck or two per thousand readers to two or three.

The larger vision, though, aims at reclaiming a world hope a world of digital re-distribution, an expansive multi-part strategy that Aggrego CEO Tim Landon recently outlined for me.

That vision starts with enticing news readers, on sites and apps, to read news and feature content from other newspaper-owned companies without flitting off every couple of seconds to Facebook or Google – or those clickbait champs Taboola, Outbrain, Zergnet and RevContent. The produce the semi-lurid sets of headlines (“Easy Trick ‘Removes’ Your Eyebags and Wrinkles”, “A Cheater Will Always Cheat – Enter Your Spouse’s Name”) that that once only lured us at the grocery checkout lanes.

Those “content discovery/recommendation engine” companies long ago harnessed behavioral targeting technology to network “content.” As partners to the news industry, they have paid out millions of dollars in revenue shares. Now, with Headlines Network, publishers test out the belief they can keep more of the ad-related widget-clicking money. More importantly, the believe they can reassert news value in the increasingly complicated era of “fake news.”

“We are trying to build out a network to support the creation of high-quality content,” says Landon. “With Taboola and Outbrain, you are getting the margins. They control the whole flow. Once you click on them, you’re off the Houston Chronicle site, and you’re in their monetization world. There’s value in controlling that whole flow. It’s stunning that newspapers gave that way. We want to take that back and to create the whole value chain.

“Everything is about getting the flywheel started. Facebook, Amazon and Google are playing the big game. They see the flow. They see the whole ice,” says Landon, using hockey as he likes to do to describe the digital business. “They’ve taken the chaos and disorder, like hockey, the chaos and disorder of the Internet and organized that into an elegant flow. The newspapers historically have been focused in the corner. They’re throwing elbows, playing chippy. We have to get the flywheel started. We have reached a point where people are willing to try something, to try to get enough traction to get some there there.”

This initiative, then, seems both logical and a move borne of these odd times, an echo of what I hear so much in these ascent-of-Trump days: The cratering of the local press, eroded by a decade of print decline, has now reached an emergency stage. Now, the search for any news sustainable revenue, as digital ad revenue growth has stalled [“How Google and Facebook have taken over the ad industry”], is a singular guiding priority.

Come next week, the Headlines widgets will begin rolling out on the 400 sites of the nine publishing companies. They’ll come in a half-dozen different shapes and sizes, as illustrated above.

Sports is one of the first big launch topics, with politics, travel and entertainment, as we’d expect, among the others. The widgets mimic the snackable headlines offered up by the Taboolas and Outbrains. While they are meant to attract, they may run less to the sensational.

Landon emphasizes the flexibility built into Headlines Networks tech. Publishers can put as much as all their content into the system, or only select stories. They can offer up longer enterprise stories just as easily as quick celeb profiles.

Similarly, on the distribution end, publishers, can pick and choose what to run, and where on their sites, says Landon. They can choose to re-direct readers to more of their own content or to other publishers in the network. Multiple filters include the ability of any publisher to flag suspect or “fake” content, addressing the fear du jour. (Landon says that Aggrego could even help Facebook and Google deal with that “fake news” problem, as it system vets content.)

“It puts more control in your hands as a publisher, or if you don't want any of those controls, says Rusty Coats, executive director of the Local Media Consortium, Headline Networks major strategic partner. “Or you're just not staffed for that, you can just drop it on there and let it run.” Adds Landon, “If they see something they don’t like, they can just point and click.”

This new original content + distribution network then offers advertising revenue shares for both putting used content into the system and displaying it. Some of the publishers should see an increase in revenue; others who have better “optimized” the Taboolas may see less immediately, but believe in the network’s longer-term value.

Aggrego as a SaaS (Software as a Service) provider takes a share of revenue moving through the new ecosystem, and can sell certain fixed ad positions (website, mobile, native) of its own. “Eighty-five percent of the value creation goes to the publisher,” says Landon.

Fifteen Chicago-based staffers, a mix of editors and techies, will drive Headlines Network, but the real power of the network, says Landon, derives from the power of Aggrego algorithms. Those algorithms will increasingly customize what different readers are shown, depending on their own trackable histories. Machine learning – applied to news – is now ready for prime time, says Landon, a point multiply reinforced to me by other tech leaders in content businesses.

Landon strains to emphasize that Headlines isn’t an exclusive “newspaper network”. It’s a local media network.

“Local media,” in Aggrego’s vision, will quickly come to encompass local TV sites, Spanish language sites in the Americas, individual blogger/journalists and others. In fact, LMC, its strategic partner, has now grown well beyond its own newspaper roots. About 30% of its 1700 local media title websites grew from something other than newspapers, and that percentage may well increase early this year. LMC – which can claim a U.S. digital audience of 155 million, fifth by one Comscore tally – generated $64 million in ad revenue for its members in 2016. The LMC ad network revenue could grow as much as 50% this year.

Aggrego leverages much of that LMC network at its start-up and plans to add additional content beyond that of its initial strategic investors as well. Both the Associated Press, especially around archives, and Tronc are also in discussion with Aggrego about participating in Headlines Network.

LMC’s Rusty Coats buys the flywheel analogy: “It can be a small thing. If it's a small thing, it's a lovely thing. It is built so it can scale into a big thing. By small thing, it's could replace or supplant or augment, Taboola and Outbrain, with our own content and our own monetization. It pays multiples what you would get off of the other models because you don't have as many bites on the apple. It's just really simple math.”

That simple math means more page views with more ads and data controlled by local media companies, rather than by third parties.

“Timmy, let’s go get a sandwich”

Landon’s Headlines Network may seem like a creature from another age, and indeed the idea of birthing a newspaper content network played – out – almost exactly 20 years ago. Landon, at that point, one of the then-fat-and-happy Tribune Company’s top dealmakers, participated in the rough-and-tumble of New Century Network’s efforts at networking.

That’s where I probably first met him, as I helped represent Knight Ridder newspapers, at what I came to call NCN’s Last Supper, held, I believe, a mile high at Denver’s Brown Palace. There, in the thin, non-cannabis atmosphere of 1998, met the masters of their print domains – among them the New York Times, Washington Post, Advance Publications, Cox Newspapers Inc., Gannett Co., The Hearst Corp., Knight Ridder, and Times-Mirror Inc.

It was on March 10, 1998 that NCN announced its closing, and the puncturing of that newspaper content network dream, as reported by Marketwatch: “This is the third, and final, downsizing for NCN, which in past weeks shrank from its original charter to aggregate the best and boldest content [itals mine] from its 140 newspaper affiliates on the Web to an advertising representative sales service.”

“Headlines Network is basically Cars.com for content,” says Tim Landon, who left the Tribune Company in January, 2008, after a 23-year career.

In the long, tortured history of newspapers moving “online”, that move to network ad content – but not news content – should occupy a central place. Landon tells a great story on that topic.

In 2010, a couple of years after Landon, and others in the old Tribune guard had been dispatched by new owner Sam Zell, he found himself in Washington, D.C, and was given an office by then-Post owner Donald Graham, as Landon pursued new ideas. Ben Bradlee, the esteemed Post editor of the Watergate age, kept an office right next to Landon’s, though he had retired some two decades earlier. The two got to know each other.

“He would say, "Timmy, let's go get a sandwich," remembers Landon of the ambitious, clear-minded editor who died in 2014 at the age of 93. At some point, Landon described to Bradlee his work building out the big digital classified ad networks for Tribune and the rest of the industry. Taking that in, Bradlee turned to him and he asked, "Why didn't you ever do that for news?"

The simple answer is that decades of profits had led the industry’s leaders into believing they would be successful forever. That belief, in addition to some outsized egos at that Last Supper torpedoed that early NCN, and other, efforts to capitalize on the collective strength of newspaper content.

Now, though, in a much-weakened and more humbled industry, Landon’s cars.com metaphor is a potent one. If there were a Hall of Fame for newspaper network builders, Landon would be one of the first inductees. His big wins: the newspaper network-built CareerBuilder and Classified Ventures, which runs Cars.com. Both companies still can be counted as top “digital classified” sites, within an industry seeing its own roil and consolidation.

Due to the corporate newspaper broadcast/print asset splits of recent years, the newspaper equity built into those brands has largely devolved into the hands of TV broadcast companies (TEGNA and Tribune Media); in September, TEGNA announced that it was pursuing still another split, selling cars.com and possibly CareerBuilder. Along the way, Landon served as an architect of ShopLocal and Topix as well.

More recently, Landon served in the House of Ferro, as he built first Aggrego and then the Sun-Times Network, beginning in 2012. There, Michael Ferro – who burst quite fully into the limelight in 2016 as the takeover artist who seized Tribune – first invested in his own digital makeover ideas for the newspaper industry.

Landon built Aggrego as a master of feeds. He understood, building on the central principles of digital publishing from Facebook to Patch, that singular content management technologies and platforms formed an essential of the modern business. Working off a relative shoestring of a budget, Aggrego first powered a group of Chicago hyper-local sites. Then, as that small effort failed to gain traction, the tech was applied to what was called the Sun-Times Network.

Though the mobile-first tech principles were sound, I was skeptical [“The newsonomics of the Sun-Times national/local network play”] of the chances of success of what was billed as a network of 70 city sites at its 2014 launch. The network shut down in mid-2016 [“The Sun-Times Network, once a digital dream of Michael Ferro, dies”]. The problem wasn’t the tech, at least as far as I know. It was the content, which was generic. With little funding for original journalism, the network played the aggregation to the hilt, and its readership – who happened about the site via search – saw quickly through its pretense of “local.” A Chicago-created Atlanta site read exactly as thought it would.

“We now have the content to make it work,” says Landon, who played out the cards he then had. Now, Headlines Network provides a new deck.

Content isn’t much of an issue for the U.S.’s 1375 daily newspapers. Despite massive staff reductions [POLITICO: “Covering the Trump Era, with shrinking newsrooms”], newspaper companies produce tens of thousands of stories -- news stories, business stories, celebrity stories, stories – every day.

Is the third time the charm for Aggrego?

To be sure, this is a small bet – in dollars -- on the part of big, if financially struggling, publishers. Given Aggrego’s early products failed, the small valuation of Aggrego didn’t present a major hurdle for participation.

Each of the eight newspaper companies joining up has invested $250,000. Collectively, they’ll own 25% of Aggrego, as majority partners Wrapports (the holding company of the Sun-Times) and Denis O’Brien’s Digicell ("Denis O’Brien, Ireland’s version of Mexico’s Carlos Slim, sells mobile to the masses"), a mobile provider hold the rest. A second funding round is planned for spring. Within a year, the newspaper partners have an option to buy control.

Can it work?

Will Landon’s third bite of the Aggrego apple be a winner?

Many questions abound at launch.

The biggest one is how big a difference Headlines Network will make to local media traffic and to revenue. Clearly, readers will click, just as they do on those Outbrain modules. How many?

In part, that’s a question of placement and presentation. Each company, or site, will decide where to place which modules, just as they do with the Outbrain/Taboola ones. That’s a positive for flexibility and local control, but will diminish the branding of Headlines Network as a go-to consumer service. Of course, that’s not its primary aim, but remember that cars.com metaphor?

Creating a single go-to place car buying, with simple, single memorable brand enabled that. Headlines Network, as configured at launch, doesn’t. The 20-year-old fact remains: There’s no single easy-to-use place to go to get all newspaper, or local media content, personalized or localized as it could be.

Then, of course, there are questions about how well video may work within the format, and how accurate Aggrego’s artificial intelligence customizing tech will be.

Meatier enterprise stories that could carry value from one market to another may not fit comfortably in the widget-based snackable-centric format. Yes, sports celebrity content makes sense, but much of that me-too journalism is already done by others. I’d hope Aggrego doesn’t underestimate the number of still-serious news readers out there, and the high level of solid, serious journalism – some of it portable from city to city, region to region – written every day.

Finally, might such a system finally unearth the non-immediate value of news? For a long time, news companies have largely undervalued their archives, which contain so much relevant content to today’s news – if presented contextually.

LMC’s Rusty Coats agrees. “There’s a great spotlight on our content because it can be this snackable content, but – and people have heard me say it many times – we have to “frack our archives. We can really breathe new life into all of this content that basically gets no audience after 48 hours.”