Many publishing and media firms think back 20 something years (depending on market) and remember the "print era" with fondness. The industry veterans reminisce of high revenues from strong advertiser relationships cemented over multiple 3 hour boozy lunches at top end restaurants. Today's scenarios for online publishers frequently is a story of reduced value and tough profit margins, can publishers turn this around?
During the "print era" the power was with the publisher, they owned unique conduits to reach their audiences. The inability to effectively quantify the value of an audience protected the published by placing all the pressure on the creative of an advert (which in most cases was not the responsibility of the publisher). The strengths of the "print era" were weighted on the publishers side, not the advertiser, there was no shared risk, the publisher enjoyed strengths such as...
- Distribution - managed by the publisher and a display of brand muscle for titles.
- Content - managed by the publisher owning authority, access and creativity.
- High entry level costs - giving large publishers a significant benefit of scale.
Over the last 20 or so years traditional publishing business models have migrated online with technology weighting the balance in favour of the advertiser. We are in the "advertiser era", it has changed the online publishing landscape which is summarised by the top 5 reasons the publishing industry must innovate...
1. Technology is an enabler and in most cases today it is a commodity, often the IP of technology in publishing is a distraction that slows publishers down.
2. Google, Facebook and Twitter own the primary distribution, the publishers has little influence.
3. Everyone can now be a content producer via blogs and platforms such as LinkedIn or Medium. Credibility from known brands is valued but to lesser extent than ever before, e.g. the immediate return on high cost investigational journalism is the same (or lower) as low cost click bait.
4. In many cases advertising has little or no direct relationship with the publishers as programmatic buying of specific users has commoditised the publisher audience. The publishers no longer owns the conduit to the audience, the ad networks and "middle man" adware does.
5. Context of advertising owned by the publisher increases advert effectiveness (i.e. Advertising Mountain Bike Clothing on a Mountain Bike site) but the increase in social networks creating high individual relevance powered by AI is eroding the value of on the page context.
In the "advertiser era" there have been different strategic approaches to succeed, often taken to extremes by startups with no journalism integrity to protect...
- Creating only content that attracts users who yield the highest in programmatic advertising.
- Different commercial models from CPM programmatic, like affiliate buying models which encourages content creation that sells product.
- Acting like a platform to reduce content creation costs through user generated content or aggregation.
Many of the above drivers are a serious concern to the future of quality journalism which should aim to inform a community to make relevant decisions.
While I am certain some of the approaches favoured in the "advertising era" will sustain and evolve, it feels the era needs to come to an end. The future of publishing needs to rapidly learn from social networks and move into the sustainable and highly exciting, "relevance era".
In the much needed "relevance era", publishers will invest and embrace product management. The "print era" delivered a value proposition of curation and accessibility. The "advertising era" focused on P&L tactics. The "relevance era" will deliver value to the user and react to their feedback to create new value not just protect existing revenue streams. There are numerous examples of online content businesses generating enormous revenues and strong profit margins, they typically operate online only, avoiding all traditional publishing bias allowing them to focus 100% on being relevant for the user.
To achieve relevance many publishers digital offerings will re-discover their user value proposition and reinvent the business model around it. I expect successful value propositions will be born from lateral innovation or hybrids with other sectors to provide true relevance and consumer value. The "relevance era" will see a widespread adoption of AI driven personalisation which will be the underlying key to success for all publishers and content platforms.
Lean product management will be the methodology that efficiently takes winning publishers on a journey of innovation. Those publishers that innovate customers first and rapidly iterate to find success will secures their future.
How many of these traditional corporations can move with the agility of startups and firms such as Facebook?