Feature

How Jeff Bezos built a tech business within the Washington Post

In 2016 the Washington Post entered a new era of growth and profitability, an impressive feat against a backdrop of falling print revenues, rising competition and the challenges associated with operating in a digital ecosystem.

Where other publishers have been introducing disinvestment strategies for their print operations, the Washington Post has hired “hundreds” of journalists to maintain the quality of its newspaper.

It has built its own adtech company which includes over a dozen products such as custom ad units and its own “turbo” ad server. The Post also builds software that it sells to other publishers through its software-as-a-service business (SAAS), Arc Publishing, and has employed new technologies including artificial intelligence (AI) to expand its newsroom and advertising capabilities.

In short, over the past four years the Post has become both a technology business and a journalism institution, a mix it believes is essential to succeed in media in the future. Its silver bullet? Jeff Bezos.

Before the ink had even dried on the $250m cheque Bezos handed to former owner Don Graham to purchase the Post in August 2013, traffic at the paper’s site had spiked. The Post had 27 million unique views in the US and under 10 million uniques internationally at the time of purchase. Those views had doubled less than two years after purchase. Notably, points out chief revenue officer Jed Hartman, this spike happened before Donald Trump had even announced his entrance into the world of politics.

“Jeff Bezos has been far more influential to our growth than Donald Trump,” Hartman tells The Drum, when asked if the publisher has experienced a ‘Trump bump’. However, he does add that the president is “fascinating” and has made politics “pop-culture”, with a higher proportion of both US and international audiences consuming political news as a result.

“I do feel that has put more of a light on the Washington Post,” Hartman says. “We get more individuals that sample the Post because of the increased palace intrigue – whether it is through social or search – but then they realise there is another world of the Post and they stay and become more of an engaged user.”

Don’t walk away from your legacy

Crucial to the Post’s ability to increase its readership in a newspaper landscape plagued in declines has been its continued investment in its journalists, both in print and digital. In fact, where many publishers have been ushering journalists out the door, the Post has been welcoming hundreds of them in. It means the newspaper covers Washington better than any local paper covers its community, Hartman claims. At the same time, it is outpacing the industry when it comes to print ad sales. For Hartman the reason is obvious, if you disinvest in your journalism, the core product worsens, and the appeal wanes for advertisers.

“One thing that has hurt the print industry is yes there is a viable alternative: digital. But that meant people divested investing in print so it has gotten worse. And they start curating rather than creating. That is not very good for your brand. Ours has not gotten worse; it has gotten better,” Hartman says.

He’s also critical of a growing trend of publishers ‘pivoting’ to new content forms and walking away from their legacy business, believing the pendulum swings all over the place in the industry and swinging too hard in one direction is “not a good idea”. Instead, the Post sees video, audio, VR and the like as an “and” not an “or”, a companion to the written word rather than a replacement.

“The written world is remarkably powerful, it has won many Pulitzers and it is not going away. So it is vital that we do both; that is more of a focus than leaving one towards the other,” Hartman adds.

It might still be investing in its print product, but Hartman admits circulation is on an inevitable decline: “We are very comfortable with the pace we are on; we understand it is the reality.”

Which is why Hartman was hired from magazine giant Time Inc in 2014 to turn the Post’s “modest” digital ad business into one that is now well into the nine-figures. Hartman reveals the Post has “more than doubled” its digital advertising sales, significantly contributing to its growth and profitability, and sees this trend continuing.

Building rather than outsourcing

It’s also why Bezos has been spearheading a technological revolution at the publisher that has seen it become a tech vendor as well as a publisher.

“Our owner Jeff Bezos certainly believes that if something is core to you, you build it,” Hartman says. “Google wouldn't outsource their search business.”

It started out as a simple solution to there being no “great” products for publishers on the market.

“There are a bunch of solutions that are the least common denominator solutions that are good for everybody but great for nobody. They haven’t been invested by the companies that own them as much because publishing is a challenging industry – why deeply invest in a product for them? So we made our own,” Hartman adds.

For Bezos it's also about creating a “frictionless customer experience”, which has been crucial to Amazon’s growth. For example, when ad blockers first started gaining momentum, rather than seeing a doomsday scenario the Post looked internally to see what it was doing to drive the demand, and instead created products that reduce ad load time and make the browsing experience faster.

“All of that comes out of Jeff’s involvement with the Washington Post,” Hartman reveals.

So far it has built over a dozen products including a custom CMS that incorporates viral predictors and headline testers that it has licensed to Tronc (formerly Tribune Publishing), a patented “turbo” ad server, Zeus, that can compete with the speed of blazing browsers like Google’s AMP and PWA, plus first-of-their-kind ad units that focus on user experience and speed.

These products are built by the company’s internal adtech ‘company’, Red (research, experimentation and development in advertising), which was formed by Hartman shortly after he joined to bridge the engineering gap between editorial and advertising. Red is headed up by Jarrod Dicker, VP of innovation and commercial products at the Post. Dicker’s charge upon joining the company in July 2015 was “not to fix broken things, like IT will do at a company, but build the future”.

“I think we have found our sweet spot in everything we do which is the combination of technology or engineering and great content,” Hartman says. “That is our unique position.”

“There are many companies that do incredible engineering and technology; our owner’s other company Amazon, Google and Facebook. Then there are some wonderful journalism companies; the New York Times, CNN. We are stronger at journalism than these technology companies, and we are stronger at technology that journalism companies,” he adds.

For Hartman, this hybrid model is the blueprint for the media business of the future and explains why traditional tech/telecom businesses are snapping up publishers, such as Verizon’s purchase of AOL and Yahoo (now Oath) and AT&T’s bid for Time Warner, and why Facebook and Google have been working with publishers to create products with more favourable terms.

The impartiality question

While Bezos may have set up a sustainable media business in a troubling time for news, his purchase of the paper did not come without its critics. Free speech advocates – and indeed the president who calls the paper the ‘Amazon Washington Post’ – have questioned how involved Bezos is in the Post’s editorial output, and whether this affects its ability to hold Silicon Valley giants such as Amazon to account.

Hartman believes Bezos’ involvement is “completely appropriate”, and is focused on the tech founder’s expertise in product development and customer experience, rather than editorial. The senior management team have a call with Bezos every two weeks, and refer to him internally as ‘chief inspiration officer’.

In fact, Bezos’ reasoning for buying the Post was fuelled by his belief that having a powerful, independent, journalistic operation that holds the powerful accountable is a vital part of democracy worldwide. Does this include holding himself, and Amazon, to account?

“100%” says Hartman, “It doesn't mean we don’t have relationships with Amazon but we are very separate.” The Post uses Amazon products, including Alexa and its affiliate marketing program Amazon Associates. But editor Marty Baron confirmed last month that Bezos “doesn’t get involved” in coverage “at all”, including negative stories about Amazon.

Douglas McCabe, chief executive and director of publishing and tech at Enders Analysis, believes Bezos has done a good job of evading the potential downsides of a tech entrepreneur buying an impartial news organisation.

“The downsides could have included: interference; technology innovation at the expense of investment in journalism; an Amazon strategy shoehorned into the publishing business; too much distance, that is, money without intelligence,” McCabe says.

“None of these outcomes have emerged because Bezos has evidently not interfered with the Post’s content at all. He has applied a strategic framework and some tactical elements to generate a means of investing more in journalism in the short and medium term.”

Not the guardian of Amazon, after all.

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Jessica Goodfellow

The Drum's media reporter covering everything from publishing, TV, social media, radio and technology.

All by Jessica