The great incentive shift
What happens when citations are more valuable than clicks?
Good morning.
I hope you all had a good holiday week and weekend. The Eagles beat the Ravens on Sunday evening and it was a confidence-instilling victory. One of those wins that has you thinking Super Bowl.
Of course, when you start feeling that way, it can only mean that a humiliating and completely demoralizing loss in January is not far away. When you start feeling that way, it can only mean doom.
Anyway, let’s get to today’s newsletter!
Last week, the piece that had me thinking the most was a story from The Media Copilot about how AI summaries will require media outlets to start playing a game for inclusion in AI summaries vs. discovery in Google.
The gist of the piece is that the idea of media bias toward “the left” has happened as more journalists identify as either Democrat or Independent than they do Republican. This happened, according to Pete Pachal at The Media Copilot, because of incentives.
Before the internet, broadly speaking, advertising made up the bulk of revenue for newspapers and magazines, so the incentive was to keep advertisers happy by appealing to as many different types of readers as possible. There’s nuance there, as Pachal, points out but that was the general idea.
As digital media came to prominence that remained the same, generally, until Google and Meta and Amazon ate up all the advertising dollars. So, starting in the late 2010s media outlets turned toward subscriptions, which meant keeping your known audience or highly qualified prospective audience happy. That resulted in outlets wanting to keep the customer happy.
Or, as Pachal says, “these altered incentives turned a media that already leaned left into one that moved off the fence. Predictably, alternative and right-leaning media sources have thrived as a result — to the point where many now argue they are more influential than the legacy media. But either way, it's all partisan, all the time — something nobody wanted, and almost everyone agrees is probably bad for discourse in the country.”
But as the piece goes on, Pachal explains that AI is changing that equation.
Much has been made of the fact that AI summaries are going to take Google traffic from publishers. Instead of trying to get to the top spot on the SERP (search engine result page), you now hope to be one of the cited links in an AI overview. Or, you hope that Claude, Chat GPT, Gemini, or Perplexity include your coverage as a cited link (or links) in their answers during a session someone has with a Chatbot.
A key quote from Pachal: “Now, instead of the clickbait headline, the eye-catching thumbnail image, and confirming your readership's biases being the most important factors, a story must convince an AI system it’s worthy of inclusion in a broad summary, incorporating elements from many other articles on the subject…New and unique information counts for a lot, so scoops (and ‘scoops of insight’) will be even more valuable than before.”
This is a fascinating way to frame a shift in incentives for publishers. Because, as Pachal points out, every media company has done a deal with an AI company or a company that is trying to build their AI products. They are, ostensibly, being paid for good, unique information that can feed an LLM.
As Pachal says, “these deals are typically worth tens of millions of dollars a year, and they're generally not exclusive, meaning a single publication can make deals with several AI companies. If most publishers end up making numerous deals, revenue from AI news-summarization engines could eventually become an important line item of media balance sheets.”
He suggests this may move the incentives for publishers to a better place.
I’m still not so sure. While it's true the deals companies have struck with OpenAI or Meta or Google have provided injections of revenue—that revenue isn’t really enough to support quality journalism especially as subscriber and advertising dollars are harder to come by.
Plus, until Google completely goes away, plenty of places are going to continue to play the Google game. Now, they could do it in a way that is in the best interest of the user and that delivers quality, original content. But I have a feeling people will continue to look for get rich quick schemes via Google as long as they can.
Either way, it's an interesting idea.
I’ve spent more and more time using Perplexity and ChatGPT and Claude and the interface is way more enjoyable than a social feed or Google. The information and results you get back are still hard to trust, but so is Google and so is any content you encounter on a feed.
But it points to a future where the primary surfaces we’re used to on the internet are eventually going to shift. And the incentives content creators have in order to get the best real estate on those surfaces may just change as well.
And it's time to start thinking about that.
One (long) good “you are the media” quote
“The framing of ‘you’ vs the mainstream media is convenient but inaccurate. I think of news as a combination of play-by-play announcers and color commentators..Reporting out stories fairly and impartially, with an infrastructure to support that, is still mainly done by mainstream media. It’s the color commentary that’s been overwhelmed in the Information Space. Interpreting the news has shifted decisively away from mainstream media and decentralized across the Information Space.
Substack is an important part of the future of color commentary. It has already made a major impact here. Nate Silver couldn’t build a sustainable media business as part of mainstream media, but in the indieverse, he has a thriving business. What Substack has not produced is a ton of original reporting.
The economic incentives lie in color commentary. The Information Space currently rewards… pumping out provocative takes, stoking us-against-them emotional responses and playing to tribal loyalties and resentments. The surveys may indicate that people thirst for ‘unbiased news,’ but the marketplace does not reward that. Slate and The Guardian are racking up subscriptions and memberships on the back of resistance positioning. Fox News is getting a bigger share of the shrinking cable news market.”
This is from Brian Morrissey’s The Rebooting newsletter last week where he looked at the spat between Elon Musk and Axios CEO Jim VandeHei over the importance of “mainstream media,” which really boiled down to one person placing the importance on professional newsgathering vs. the widespread ability to give opinions on the news.
More good links
Speaking of the importance of journalism, The Washington Post ran an op-ed about how ProPublica’s success deserves more attention as a new model for reporting.
Axios reported on how younger people are consuming information in snippets vs. longer form and focused reading. As I covered, this isn’t just happening to young people—it’s happening to all of us. We don’t really read articles anymore. And a place like Particle is trying to capitalize on that.
On Puck’s The Grill Room podcast, Dylan Byers talked to Jack Sherman and Anna Palmer about running PunchBowl. Great listen about how to actually run a media business today.
Oliver Darcy covered the Washington Post’s “win back” strategy for all the subscribers who cancelled their subscriptions, but are still technically active subscribers, after Jeff Bezos pulled the paper’s endorsement of Kamala Harris. Win back campaigns are any kind of messaging you get to renew your subscription or to purchase a product again after a long period of inactivity. Chances are you’ve seen tons of these delivered to you but not been aware of their formal name or strategy. This is important work at any company and I love that Darcy dedicated a lot of space to covering this.
Evan Shapiro posted one of his trademark graphics to LinkedIn to display how 18-29 year olds get most of their news from Social Media. Once again: “Social media” is no longer a mechanism to drive traffic—it is a way to spread organic storytelling and brand marketing.
On the People v. Algorithms podcast, the guys talked about the current state of Google.