Article appeared on ndtv.com
We all know that advertisers need to pay for clicks to keep the web spinning. But what does it mean when publishers start paying for them as well?
I'm not talking about some seedy click-mills in the Far East where drudges press buttons to gin traffic, but a far more transparent and audacious strategy in which a publisher pays for content that he knows will be irresistible.
We're talking about Nick Denton, the entrepreneur-chief provocateur behind the Manhattan-based Gawker Media. Last week, Denton gleefully bought an iPhone prototype left behind in a California bar and then cracked it open like a raw oyster for all to see. He then carefully doled out the story on Gizmodo, the gadget blog, until 3.6 million of us, four times the site's normal traffic, had dropped by to see what all the fuss was about.
He paid $5,000 dollars for the phone. What was it worth? Some reports about the scoop have speculated that based on the site's ad rates, the 3.6 million unique visitors were worth as much as $200,000, but all of the advertising on Gizmodo was presold. (Eastman Kodak was the lucky winner on Monday, when the exclusive ran, having bought out the site for the day.)
Denton himself estimates that all-in - legal fees, traffic bonuses to the writers, and the cost of extra bandwidth for all the yummy traffic - it actually cost him $20,000.
The price could be higher than that: The New York Times reported this weekend in the Bits blog that local authorities are considering whether to file criminal charges in the sale of the phone.
"Any surge of traffic is either a waste or a bonus to the advertiser," Denton said in an instant message chat. "The real value is in marketing."
That part went pretty well. Last week, Brian Williams, Katie Couric, Diane Sawyer and Whoopi Goldberg on "The View," along with a host of others, all wrapped their lips around the word Gizmodo. David Letterman found himself wondering aloud why in the world he was talking about it in the first place when he leaned into a Top 10 list about mislaid phones.
"Honestly, this comes under the category of things I couldn't care less about," he said. "Does this affect my life? No. Does it affect the lives of people here? No. It doesn't affect anybody."
That's not technically true. People do care, hence the payment. It's not the first time Gawker Media has plunked down cash for information - in 2007, Jezebel, the women's site that it owns, offered $10,000 for proof that women's magazines altered cover images and found a taker and an exclusive.
Denton didn't take the usual route of dissembling about the pay-for-play news. He crowed about it.
"If a news organization is open about its methods, what's the criticism?" he said to me and others. Other media organizations, he added, "only get into trouble over checkbook journalism because they're so preoccupied with respectability - and they contort themselves."
By this point, we have become inured to the fact that The National Enquirer greased some palms to bring down John Edwards, that TMZ, the gossip blog owned by Time Warner, will pay for news and that weekly magazines pretend they are paying photo fees when they are actually paying or celebrity news. Denton said that as exclusive news becomes an ever rarer commodity, the tactical aggression will grow in all corners.
"It's hardly surprising that Web journalists should be fast, competitive, ruthless, sensationalist - and willing to do most anything for the story," he said. "It will be messy - and fun!"
I buy the messy part, but I'm not sure how much fun lies ahead. What kind of world would it be if, in addition to laptops and notebooks, reporters needed a bag of cash to bag the big story? Web news is a hit-driven business, and theoretically, each time a site has a big spike in traffic, some of the news visitors hang around and add to what would be called a rate base in more traditional realms.
How obsessed is Gawker with traffic? It has a Big Board, a name conceived in now-lost irony, in its Manhattan headquarters where individual writers and their posts are monitored for real-time heat, which at Gawker is all about unique visitors.
"When a writer's byline is on the Big Board, you see them sometimes just standing there in front of it. Even though nothing is changing," Denton said. You can almost imagine Alec Baldwin roaming the room, offering steak knives to the second-place finisher.
"Denton has been clear about the fact that news has value, that it is a commodity, and in a way, paying people who help you get that commodity becomes the right thing to do," said Choire Sicha, the founder of The Awl blog and a veteran of Gawker Media.
And it's not just Gawker. Many large media companies have so-called engagement editors and even, ahem, The New York Times now has a "most viewed" column on its home page that is followed by readers and staff members alike.
Ratings helped make television a dominant ad medium but probably made it a lot dumber than it might have been. And ratings are also what made television news outlets pursue the big get, often throwing inducements around to make it happen.
As a scoop, the iPhone story had some legs and certainly some interest for Apple's competitors. As a piece of journalism, it didn't make the world a better place, or even a much more interesting one. In fact, by the end of the week, the phone, which may or may not have been stolen goods, depending on your perspective, seemed a little beside the point.
"Any other news organization would make this a story about, you know, the actual phone," said Rex Sorgatz, a veteran blogger who runs Kinda Sorta Media, a consulting company. "But the phone itself is a boring piece of hardware. ('Oh, look, an iPhone with square corners and two volume buttons.') In Denton's hands, it's a story of intrigue: How did they get the phone? Where was it found? Did they pay for it? How much?"
So millions of us showed up for the phone but stayed for the intrigue. And Gawker squeezed the grape for every bit of juice there was. Stories began to pop up about how Gawker bought the scoop - beating out Endgadget, another tech blog, which refused to pay - and then lot of kerfuffle over whether it was legal, moral or just canny business.
Oh, and then the call from Apple to get its phone back and Gawker's insistence that Apple send a formal letter, which Gizmodo then published. And finally, a published plea to not fire the poor guy who lost it in the first place.
That last touch was really heart-warming.
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