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Q&A: Felix, putting Ai-driven content discovery at the heart of audience development

When social platforms own the customer journey, they can deliver the traffic; but they also get to own and monetise the data and insights. Enter Felix, a startup founded this year by two SaaS and digital marketing veterans from the south of England whose aim is to help brands and publishers cut a few cords from their dependency on Facebook et al. WNIP met with Felix’s Roger Warner in the heart of Shoreditch, London, to find out exactly how publishers can reclaim their readers’ journey.

Can you give us some background about your company?

Felix’s goal is to help publishers to become a destination again.

We’ve been working in and around the publishing business for fifteen years or so, with big international brands like the Reed Elsevier Group and Hachette, and also with platforms like Facebook and Google, and with big ‘brand-as-publishers’ like Virgin. In amongst all these companies, there’s real tension. On one hand, they need to happily co-exist: each one enriches the other in terms of content, advertising and the user experience.  On the other hand, nobody is happy because everyone is battling to control the user journey and people’s time and attention.

It’s the platforms that are currently winning on the latter score, and it’s almost wholly detrimental to the health of the publishing business. Ad revenue and attention have swung so dramatically in the platform’s favour that it’s putting many publishers on the edge.  And yet ad-based consumer publishers have become almost wholly reliant on third-party platforms for the daily traffic that supports their business. For some major news publishers, over 80% of visitors come via the ‘back door’ each day; and every day they lose this traffic and have to start all over from scratch the next day.

This trend looks set to continue. Facebook is hoovering up brand advertising spend thanks to its growing portfolio of apps and services that cover all the key usage trends: messaging, mobile, etc. Their exposure on ad revenue is pretty slim, even if engagement on Facebook itself starts to wane.

So what we want to do is help publishers to cut some cords on their traffic dependencies from social media and Google – and help them take back ownership of their customer journey.

Ultimately, publishers need to start innovating again; both in terms of the content services they generate and the user experiences that they offer, so that they have something at least as compelling as the platforms that they acquire their users from.

If they can do that then they have the opportunity to keep hold of that ‘back door’ traffic and convert it into a more loyal, direct audience who will return to them for their daily diet of content and news, rather than the dominant social or search platforms. This is the only path towards more subscriptions, donations, sponsorship and a higher value CPM model for their ad business.

What business problem is your company addressing?

The key challenge is that publishers have lost the attention of their audience to social media – and, as a result, they’re bleeding ad revenue fast.  Social media (and Google) owns the customer journey for news, and whoever owns that journey also owns all of the best data and the advertising partner spend.

(Some stats: average Facebook dwell time is 40 mins; the average number of Facebook sessions per day is x8; the volume of brand advertisers using Facebook is 93%; the proportion of people finding their news on Facebook is 62%.)

This ‘bleeding’ effect has been continual over the past five years or more. Today, it’s critical. If publisher’s don’t change the way they deliver their content and acquire their audiences then many of them will be out of business – as all of the consumer attention and ad revenue will be elsewhere (like, Facebook).

We see this problem growing rapidly.  It’s fuelled by many publishers themselves.  Standard tactics involve pumping large volumes of content onto 3rd party platforms in return for short-term traffic.  This activity has become hardwired into editorial newsrooms via page-level metrics that create a Groundhog Day effect: each day the slate gets wiped and the race is on to generate 500k page views for a piece of content. This does little for their longer-term brand value, loyalty and audience development.

What is your core product addressing this problem?

We have an Ai-powered engine called ‘Scout.’ It helps publishers retain their hard-earned traffic by giving audiences more compelling opportunities to discover more amazing content; and use this as a means of serving better advertising and better pathways into revenue-generating outcomes like subscriptions, sponsorship, sign-ups and donations.

Scout is SaaS-based and designed for rapid implementations around topic-based communities or for ‘Event Publishing.’  It enables publishers to capitalise on traffic acquisition from third-party platforms around key public events (like the World Cup, the Royal Wedding, etc) or interest areas (like ‘buying a new car’), and turn that casual traffic into something more serious and commercially valuable.

How does your product/solution work?

Scout works by rethinking and remixing a publisher’s greatest asset: their own content.  Our tech enables the creation of user experiences that go beyond a standard page format to deliver new interfaces that drive deeper content engagement (for recirculation metrics) and a smarter use of ad inventory.

Scout is powered by a Graph Database, some smart search technology and a little bit of Ai.  It indexes everything, so that publishers can activate all of their content – across all of their web estates, regardless of where it lies; including multiple CMS’, social feeds, 3rd party data, location data, flat file docs and more.

Basically, we create a ‘rabbit hole’ of event- and topic-related content that captures traffic and keeps it on the publisher’s property via a dedicated interface for much longer periods of time.  Once people are in this environment, we prevent the ‘bounce back’ effect: we keep hold of the user’s attention and encourage them to dive in for more publisher content, rather than hit the back button and return to their social newsfeed or search results page.

What are other people doing in the space and why?

We see other approaches to this challenge that look and feel something like the recommendation engines that you find on Netflix or Amazon. These solutions tend to be priced on the basis of page impressions rather than more commercially valuable metrics like engagement and acquisition. (ie, they serve content on pretty much the same basis as an ad network for no concrete result.)

Our approach is different: Scout is designed for slooooooow, not fast. The main thing we care about is dwell time. We encourage audiences to spend more time in a broader content environment before they bounce around onto other pages (or back to the newsfeed). Recommendation engines are designed to get people from A to B as fast as possible. Scout wants you to stick around for a long, long time and discover more content from publishers and their ad and sponsorship partners: related context; contextual content; content from different sources; affiliated content from partners; pertinent advertising content and promotions, etc.  Like I say, we like to think of our solution as a series of rabbit holes for users to disappear down and discover more of the good stuff.

Pricing?

Pricing is performance-based: on monthly average users and recirculation numbers.  Our goal is to deliver x5-10 times more engagement from non-direct traffic sources (ie, publisher traffic drawn from social, search and referrals – the stuff that tends to have the highest bounce rate and lowest CPM).

This is done on a per-event or per-topic basis.  As a SaaS solution, Scout is pretty easy to spin up quickly at multiple times throughout the year, or as new top-based communities are identified (eg, ‘home buying’ whenever the annual mortgage data trends are released).

How you view the future?

We’re bullish.

We know audience development is a number one concern for every publisher: delivering more ££ value out of each user – be that from ad inventory, sponsorship, subscriptions or donations.  Our solution is simple: do smarter things with your content so you can get more from that audience.

This is a no-brainer, obviously, but we feel the challenge for most publishers is to get all of their operational teams working off the same page.  The editorial goals must align with the commercial goals. Chasing page views isn’t the smart way to run it; but finding greater levels of audience engagement and goal conversions are.

 

 

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