Bloomberg’s Justin Smith on Japan, user-generated news and moving in on agency turf

During a visit to Tokyo last week, Justin Smith, CEO of Bloomberg Media, spoke to Campaign about recent developments at the company and bigger-picture concerns for publishers and advertisers. Bloomberg just relaunched its Businessweek print publication, but the focus of this conversation was on service innovation for clients as something all publishers need to develop to stay afloat in an age where tech platforms dominate. Responses have been edited for length and clarity.

Your partnership with Yahoo here marks the first time for you to feature Japanese-language video content. Please explain the thinking behind the move.

In a number of national markets that we deem of great commercial importance we’ve ventured into local language media activities. Japan fits the bill of a market that’s large and exciting, where we have a strong core business. The objective is to lean into those advantages and [make use of] our substantial digital video assets. We’re reaching many millions of people in English but if we want to penetrate Japan or other local markets we need to go further into local language. That’s the nature of the deal to take that segment, translate it into Japanese and distribute it on Yahoo Japan’s platform and our own Japanese platform.

You are also working on a live video channel on Twitter. How is that going to work in practice?

We’re very excited about that. The vision is that Twitter is by many measures the largest news media in the world; Bloomberg is close to being the largest news gathering organization. So it’s a marriage of Twitter’s assets with Bloomberg’s assets. Twitter is winning the breaking news game right now, because content is being generated by users. The challenge with that content is it’s not always clear what is real and what is not real. So while it may be first, Twitter has not yet become the place for truly verified content. That’s where Bloomberg’s journalistic operation comes into play. If our journalists can rapidly verify breaking content on Twitter and create packages of content around that, we can marry the speed of Twitter with the accuracy of Bloomberg. We’re building the product now and are expecting to launch in Q4. We’ll start with a focus on the US but we’ll be looking at local language adaptations as well.

Your other new service, Trigr, enables advertisers to serve different ads depending on global happenings and market conditions. How big do you see this becoming?

The notion that we can partner with advertisers to optimise messaging tied to events is really powerful. It goes to the heart of Bloomberg as a markets-driven journalistic organization. It makes sense that we would be doing something like this. Ad innovation is such an important part of being a digital publisher these days given the intense competition with Google and Facebook—the ‘duopoly’ as we call them, or even ‘troika’ if you add Amazon. When Google and Facebook are taking 75 percent of incremental digital spend, it’s essential that publishers and brands own their content, operate safe environments and innovate on the advertising solutions front.

Data from PwC just showed internet advertising spend has overtaken TV. How excited should publishers really be?

Five years ago, if you were having that conversation, publishers would be jumping up and down. The transition to digital should be an amazing opportunity for media brands to regain momentum and revenue after losing so much on the traditional side in the last couple of years. But the rise of social media and tech platforms and their role in the digital advertising ecosystem have ruined the party a little bit. The great hope of rapid digital growth has been stolen away…that’s why we’re seeing digital revenues sputter at a lot of media companies with strong brands. At Bloomberg we’ve been able to avoid that fate but it’s ideas like Trigr and other advertising innovations that are allowing us to continue growing.

Big concerns remain around ‘brand safety’. Do you think we’ve seen the worst of it?

It’s a bit like whack-a-mole. The large platforms are reacting case by case to these crises, but the issue is more systemic or structural. If you refuse to call yourself a media company—which most of these tech platforms do—and are totally committed to technology as the solution for surfacing and delivering content, inevitably people with malicious intent end up gaming the systems and the problems recur. So I don’t think we’ve seen the worst of it. I know Facebook has hired human quality controllers in the US (they won’t call them ‘editors’ because Facebook is not called a media company) and that’s a step in the right direction. But I think it’s a pernicious and ongoing problem and one that goes to the heart of prioritising technology over human judgment.

What does the industry need to do collectively to improve things for advertisers?

Someone said recently the advertisers are the conscience of media, which is a really interesting turn of events because no one thought a lot of this change would be led by advertisers. One is JP Morgan—they went from using 30,000 different platforms down to like 500 based on the quality of the environment. Then at Fox, Bill O’Reilly [who was recently accused of sexual harassment] was effectively forced out by advertisers. He became an economic liability. The tech platforms have a real responsibility to begin treating quality content players more respectfully. That means not just showcasing quality content and quality brands in feeds and overweighting quality journalism in respective algorithms, but also much more favourable economic terms between platforms and publishers. 

Which publishers do you see as being in strongest shape for the future?

There are two types. Those that because of the categories they serve have been able to generate reader revenue at scale are well positioned. They’re still going to be smaller than they were in the heyday of large traditional advertising budgets. They tend to be niches—there are very few examples of successful reader revenue from general interest publications. The only one I can think of is the New York Times.

The other type is those that are transforming their advertising business into the marketing services business. Media companies that have strong affinity with their audience, lots of data and knowledge of how to create content for that audience—those media brands can build large, less disruptable revenue streams around other services beyond just advertising. That means producing creative work for clients, moving up the value chain to brand consulting or corporate communications—a whole range of services traditionally offered by advertising agencies or other consulting firms. We just hired Andrew Benett [the former global CEO of Havas Creative]. His mission is to lead Bloomberg in this direction. We are morphing into a hybrid agency/consulting model to complement our core advertising business.

Vice has been the most successful in terms of these new companies. Vice’s model is subject to lots of debate, but what is phenomenal is that they’ve built a marketing services agency for companies looking to reach millennials and that’s a model that I think can be replicated in other areas. At the moment [this side of our business] is mostly US-driven, but you will see us doing this in Japan, Asia and around the world.