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Does it come down to this: Whether you want to compete with Facebook, cooperate with them... or get out?

But first you need to understand the question. In presentations and workshops around the world Grzegorz Piechota has been arming newsmedia executives for the fight. In Bali ahead of Publish Asia in April, the focus is digital platform strategy and Piechota, a researcher at Harvard and Oxford - strictly a Google digital news senior visiting research fellow - and a roomful of delegates are devoting a day to it.

It's a massive subject, and participants - who have been given a reading list beforehand - don't necessarily come away with answers to all the questions which are uppermost in their minds. Pricing, for example - a topic of interest to SPH's Chinese team - is not on the agenda; nor is Alexa as a business model... or what to do with your print edition.

The question might be how to maintain customers when they've found a better way at Facebook, even though they merely "stumble" on news there. The problem is not about the product, but the way it's delivered, and Piechota has examples of product people will pay for that they can get "free", citing Italian bottled water as an example.

Two Australians are in the room: Seven West Media editorial technology manager Bethany Chismark is looking for ways to combat Google and Facebook and encourage growth from native and smartphone ads; NewsMediaWorks' Charlie Murdoch is also looking for an "equitable model" in which publishers and social media can co-exist.

Understanding Facebook - and there's much more in the programme than about Google, a topic which gets its own airing at the conference - means reading between the lines of its January announcement on family and friends. "We've never known them to lie, but you should read the statement carefully," Piechota says. Fundamentally, it's that brands and media are crowding out friends, resulting in people posting less. "They've found keeping it short is crucial - it's not about time on the site, while newspapers want people to stay.

Current is the issue of trust, with rating of sites to be based on what users think, not who is providing the news, set to be a problem for politically engaged sites, "such as Fox News, which will not get prioritised".

One delegate, South China Morning Post chief news editor Yonden Lhatoo, finds the arbitrary approach "highly problematic". "Who are they to decide what is reliable," he says.

But understanding is strength, and Piechota explains that a focus on local news will also get a publisher higher in feeds. "We know news media will be hit hard, but not as much if they are trustworthy or local." However, it doesn't follow that advertisers will be affected in the same way: "It depends on how they engage," he says.

Piechota introduces tools such as SimilarWeb and Alexa, amazed that most publishers don't measure the ratio between publisher posts and those by users. And the basics of "why Facebook got so big", requiring an understanding of platform business models and the organic consumer/producer value flow which underscores them. "It's Dubai mall v. the Delhi 'thieves' market'," he says. "They facilitate the exchange, removing friction and lowering costs."

Even engineers don't understand the decisions made by modern algorithms, which are "more like cooking lessons than recipes, learning what works by trial and error," he says.

"Facebook is like ancient Sparta, feeding the strong kids and burying the weak," he says postulating the option of buying ads instead of investing in engagement, which "costs more than you think. Not that I'm saying you should do it."

Least promoted are posts with links, as Facebook "likes to keep people in their garden" and now optimising for "time well spent" measured by whether a user is reacting.

"I'm sure they optimise for their business," he says. "There's nothing wrong with that and the January decision is a smart one. They need a lot of publishers, but maybe not you."

Tossing a skein of knitting wool around the room provides an opportunity to demonstrate how social networks work... as well as rouse delegates who are finding it hard. Then briefly we're into the science of virality, and Piechota urges delegates to "think a lot about why people share, if you want to be successful". And understand why Buzzfeed is different to the New York Times. "Do you want filter bubbles or to challenge people," he adds, urging delegates to distribute across multiple platforms (super nodes) rather than focussing on just one. We learn about seeding conversations - about driving comments, asking for stories rather than opinions - touch payment and nurturing specific audiences, the "new darling" of Facebook groups, and the application of micro-influencers, even paid ones, the basis of business on which Blasting News (below left) attracts 102 million visitors.

So what to do about it? Fortified by lunch, delegates get into questions and strategies. What if Facebook changes its algorithms, and do you want to commit the resources success requires?

"In the end, you compete for the same advertising money, and they're better at attracting it," says Piechota. Distribution, co-opertition, content marketing and experimentation (which "sounds better than doing nothing") are on the agenda.

There are other options: Piechota says Buzzfeed is moving to "shoppable" products, the Guardian wants donations, the NYT is looking for customers with whom it can have a monetisable relationship.

He urges participants to look for alternative markets, assessing where there might be a lot of traffic - "if you want water, you need to look at the size of the lake" - and leads an exercise about online and social habits in different countries. Participants learn about the 48 minutes Japanese users spend on social media compared to twice that in Indonesia, and that mobile is faster than desktop internet in Australia.

It's also hard to ignore what is being called the "Cambridge Analytica scandal" and participants are led to a "short personality test" on a Cambridge University site with little knowledge of where their data will end up.

The Trump campaign, we learn, was driven with 5000 data points on 200 million citizens in the US - where "laws are different" and data was bought "from everywhere" - something Piechota says would not have been possible in Europe.

Data was used first to identify those who might make a campaign donation, with customisation on political preferences secondary. Then different messages on each key issue - attitudes to Bernie Sanders, "get ready to secede", patriotism, Sharia law and "'like' if you want Jesus to win" accompanying a picture of Hillary Clinton. Piechota says he "doesn't know" whether the campaigns were coordinated with those of the Russians: "It's possible they weren't".

He says a lot of fake news is "made for money" and supported by Facebook 'likes' bought for perhaps $20 a thousand, with an estimated one-third of traffic created by bots.

Into the digital marketing eco-system, with a chart of the buy and sell side and the uncomfortable (but familiar) statistics that publishers "maybe get 30 per cent" of the cost of a programmatic ad, with the rest going to the agency, trading desk, DMP, DSP, ad exchange and SSP/ad network. Google/Facebook's share of new ad spend, he currently puts at 95 per cent.

So why work with them? Piechota says the biggest reason is for growth, but publishers need to know what they are choosing, continuing that it's consumers that are disrupting their business, "not just Facebook and Google".

And if there were no Facebook, "there would be something else."

"Many are pretty mistaken about Facebook," he says, adding that the alternative to working with it is to find a way to respond to the needs of your consumers, "and collect the money".

He discounts lobbying government as a response, and says analysis shows the money "has gone elsewhere" with not all lost classified revenue going to Google. And launching platforms to build marketplaces "may be good for first movers", but even some of these are having difficulties. Two options include building alliances to share data, technology "and even customers", and "making users love ads".

We muse collectively on who might pay for content? I venture the telcos who are reaping the benefits of bandwidth use, but Piechota and others added consumers, governments (the "Chinese view"), advocacy groups, sports clubs, restaurants, cultural centres, celebrities and even advertisers. "They will always be there," he says. India, for example, has newspapers that don't mention celebrities that don't pay for exposure.

"Newspapers used to be so rich that they never tried to get money from these sources... but don't abandon your ethics. There's a difference between a Nobel Prize winner and a celebrity." But even the New York Times has Wirecutter, a review site from which the publisher gets a cut of ecommerce takings.

And of course, there are donors - people willing to help fight fake news by sponsoring subscriptions. "One person gave $1 million last year."

"All these are bigger than revenue from social, and are new".

While subscriptions provide a short-term solution, ecommerce is long-term, based on relationship. Publishers need CRM software and to evaluate willingness to pay. "Most publishers just had relationships with advertisers.

"We need more business model innovation," he says. "Product innovation is not enough, and publishers are starting very late."

Perhaps one is the recollection from his past on a Polish newspaper, which diversified into cinemas. Ninety-eight per cent of profits now come from sales of popcorn and water... demand for which is enhanced by the salt in the popcorn.

And collaborate, compete, or exit. The former on tech standards to help the industry grow, quality to boost demand, and create tools to improve productive efficiency

How to make people pay? Just try. "Disruption is a fact, but there are plenty of opportunities," Piechota says.

As the workshop draws to a close, it would be hard to say whether participants leave confident of the path ahead - I left resolved to encourage more sharing - but at least they have a much greater understanding.

Piechota knows it's tough, and he signs off with a flourish, wishing participants "all the best". Could be they'll need that.

Peter Coleman

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