Opinion

HuffPost: Where did it go wrong?

Yesterday HuffPost and Fairfax Media announced its joint venture had ended. Zoe Samios looks into why the international publisher struggled in the Australian market and how it fits into a digital media crisis.

‘In trouble’. A ‘cloudy’ future. ‘In doubt’. Those were the words being bandied around about US-based HuffPost’s venture in Australia before the news broke yesterday the publication had ended its joint venture with Fairfax Media and scaled back its local operations.

And now, what began in the US as a left-wing alternative to the Drudge Report, has essentially given up on its local arm after just two years. Not a surprise, if you ask the publishing industry.

It could be argued the brand took a turn for the worse last year, when  Arianna Huffington stepped away from the company she founded, and those at the top took it in new editorial directions, moving away from it’s political focus.

Huffington said Australia was “fertile ground” to set up

As Huffington began to lose control of HuffPost – which was owned by AOL –  problems arose. Prior to her departure, a story from William Cohan in Vanity Fair revealed the relationship between Tim Armstrong, chief executive officer of AOL and Huffington began to burn

Then when Armstrong tried to sell AOL to Verizon – a global telecommunications company – Huffington was not involved in the discussions.

This year, Verizon also completed the acquisition of Yahoo, which saw Verizon combine AOL and Yahoo to form Oath – Huffington Post’s new parent company.

Months later there was high-level speculation of sizeable global redundancies at the new parent company. HuffPost’s US operation alone lost almost 40 journalists following the deal.

There’s just over 30 staff in the offices of HuffPost Australia. That’s set to be drastically reduced before the end of the year, effectively closing the local operation with the exception of a handful of skeleton staff.

With the US owners trying to scale back, there is no value for a legacy publisher like Fairfax – which has spent its year trying to rebuild its own product – to continue in the partnership.

So where did it all go wrong?

It’s important to consider the Australian media industry into which HuffPost entered.

When HuffPost first landed on Australian shores, the likes of the Daily Mail, BuzzFeed, Guardian Australia and even Allure Media’s Business Insider were already here.

There was a massive hype when HuffPost launched in Australia, but it didn’t attract the audiences it needed

That’s not to mention legacy publishers such as Fairfax Media and News Corp who were covering the same news and topic areas, and more thoroughly.

When HuffPost entered the Australian market it faced a major challenge; differentiating itself in an already cluttered digital publishing market.  

It was simple: Australia didn’t need another publisher covering local news content, particularly if it couldn’t offer a genuine point of difference.

Arguably, HuffPost’s local appeal came from the international content out of the US – which was politically focused, as was Huffington’s intention. And that all changed anyway when Huffington walked last year and Lydia Polgreen, former editorial director of the New York Times global joined in December as editor in chief of the title.

The content here did not have the same impact, despite all efforts.

But Huffington was adamant Australia was “fertile ground” when she first entered the market.

The hires started with local MD Chris Janz (now boss of Fairfax Media’s metro operation). Then editor Tory Maguire – who had also been on the launch team of News Corp’s short-lived comment-led venture The Punch. And after the appointment of editor-at-large Lisa Wilkinson it was clear HuffPost was not lacking in budget.

Tory Maguire, editor-in-chief HuffPost Australia was one of a number of hires by the company as it set up shop in Australia

However, in a market full of new digital publishers establishing their own audiences and legacy publishers catching up to the changing media landscape, HuffPost was going to struggle to build a strong brand – something Australians value – in a market it had never been in, without strong investment.

The publicity surrounding the local launch of the Huffington Post failed to offer much improvement on the traffic the international site was already getting from Australia. Traffic rose from 1.039m in July 2015 to 1.058m in its first month with a local operation.

And although HuffPost’s numbers are strong enough, there has not been any consistent growth over the past year.

Facebook’s diamond but a curse of its own

An area where HuffPost did excel at times was on social platforms, be it Twitter or Facebook. I’m certainly not the first person to see myriad of HuffPost articles scattered across my social feeds.

That success was recognised by JJ Eastwood, CEO of HuffPost Australia, at this year’s Mumbrella Publish, where he argued it was possible to build audiences off-platform.

And earlier this year, as part of the Senate inquiry into Future of Public Interest Journalism, the HuffPost boss said his company’s revenue came from taking advantage of SEO is the early days.

“Huffington Post has always has been a digital innovator and took advantage of SEO in the early days and was one of the first publishers globally to take advantage of digital and social media, and that’s something that we’ve adopted locally, we look at the platforms as partnerships in a lot of ways,” he said.

Eastwood also agreed that Google and Facebook do take money out of industry’s ecosystem but said “they also drive a lot of traffic to our owned and operated sites”.

But he also spoke of the challenges in staying afloat in a competitive digital environment.

JJ Eastwood acknowledged some of the challenges HuffPost was facing earlier this year

“It’s a challenge to make money in this digital landscape, we are coming from a much smaller base, we don’t have a legacy business, we don’t have newspapers support,” he said.

Later this year, Facebook admitted it was paying publishers around AU$126 a day. The acknowledgement of how little Facebook was paying those who used its platform reinforced the challenge publishers were facing with actually making money from the relationship.

If your audience is coming directly through Facebook, therein lies the problem. While there was benefit to being highly viewable on Facebook, drawing people back to the publication itself – where display ads can be monetised – was a challenge, especially since the brand did not have an Australian history.

As a result, Eastwood’s stated aim to become a top five publisher in Australia slowly slipped away.

Lack of interest from the US counterparts

But HuffPost Australia’s biggest problem wasn’t coming from its local arm’s sluggish audience growth.

When Huffington left the title last year, interest in expansion and global investment faded.

And despite all of Fairfax Media’s cuts in other parts of its business, the company was heavily invested in the title. After all, the former managing director Janz now runs the Fairfax Metro business.

But that wasn’t enough. The stakeholders in the US just weren’t interested anymore and with a scale back on operations – the business lacked value.

But HuffPost’s struggle can ultimately be understood if you accept the digital media crisis is at a peak.

Digiday calls it the “pivot to reality” for digital media, after BuzzFeed and Vice missed revenue results. Now BuzzFeed is scaling back its operations too.

A further piece of evidence comes from The Guardian’s editor in chief Katharine Viner (who also launched the title in Australia back in 2015), who described Facebook as the “richest and most powerful publisher in history”.

In a period of time when digital media is facing challenges, you can see why HuffPost felt the need to strip back its operations in markets that weren’t as successful as home.

And HuffPost Australia rested on its laurels – hoping the international brand which had built its reputation in the US could work here. That strategy failed.

The rebrand from Huffington Post to HuffPost this year also did not appear to make an impact.

Add that to a lack of investment from its US counterparts, a failed attempt to build a loyal Australian audiences as others like The Guardian found their niche, and the ongoing struggle for digital publishers globally, HuffPost’s scale back became a necessary and logical exit.

For the US owners who had incredibly high hopes for its Australian operation, it was best to return home.

ADVERTISEMENT

SUBSCRIBE

Sign up to our free daily update to get the latest in media and marketing