The death of the publishing industry has long been predicted. Ad-blocking apps topping the Apple store charts is just the latest phenomenon held up as evidence of the industry’s impending demise. But just as the industry has weathered crises over the previous decades, there are steps that can be taken to ensure the industry survives and thrives.
We have to acknowledge that the shift from print to digital has been somewhat rocky. Paywalls in varying degrees, ad-funded content and native advertising have all been explored as options upon which to build business models. But it’s questionable whether these have truly delivered the ultimate goal: consistent and sizeable revenues that can fund high-quality independent journalism.
However, one thing became immediately clear after the advent of the digital era: to survive in the open internet, publishers must attract and retain a massive audience to generate viable advertising revenues.
Fast-forward to today and some of the most successful legacy publishers have succeeded at this task: The Daily Mail, The Guardian and The New York Times, to name a few, are great examples.
Social media networks, having acted as distribution platforms successfully driving readers to publishers’ sites, have lent a "generous" hand and accelerated this process. And while this has been extremely beneficial for media brands, their future still remains quite unclear.
After years of heavy investment in building online audiences, publishers are now in grave danger of letting someone else reap the rewards.
Although the introduction of Facebook Instant Articles and Apple News may help people discover content more easily and offer them a more agile experience across mobile devices, publishers are risking diluting their brand, letting go of control of vital data about their audiences and losing their independence.
These concerns have become even more pressing since the emergence of in-app ad blocking software, which is threatening ad ecosystems previously believed to be safe.
There are four key factors that they will have to focus on if they want to ensure their survival:
1. Educating the audience on the value exchange to boost awareness of the role played by advertising in supporting great content, while highlighting the risks linked to ad blockers. People have become so used to thinking that the internet is free, that they have forgotten that behind any service or bit of information online there is the talent and time of a human being who needs an income. Hence publishers have both the right and duty to remind people that there’s no such thing as a free lunch in this world. And I am confident that if consumers were aware of the real value of what the ad-funded internet offers, they would change their attitude towards advertising.
2. Enhancing the user experience by working with creative agencies and technology partners to ensure that only the right ad formats and the most relevant ads are displayed. Not long ago, TV ads used to be the natural reminder to make a cuppa, but now they have become part of the entertainment experience and often a discussion topic on social media – think about the much-awaited Christmas ads. Necessity is the mother of invention. We’ve now reached the "necessity" moment and the advertising and publishing industries need to collaborate to create advertising for the web that truly enriches the user experience.
3. Regaining control over their data to have a better understanding of their audience and shape smart distribution strategies. Over the past decade, advertisers have invested in the most sophisticated data management and attribution analytics technologies, enabling them to gather valuable information on audiences’ behaviours. As a result, advertisers have ended up knowing audiences better than publishers do, and gaining the upper hand in negotiations. It might be challenging for publishers to invest in matching advertisers in this area, especially at a time when revenues are under pressure, but this would definitely pay off in the long-term. And greater knowledge of audiences’ behaviours would obviously help publishers shape better distribution strategies and reduce their reliance on social media.
4. Practising yield management to maximise revenues from online ad inventory. Publishers have a lot to learn from yield management systems deployed by airline companies. Like air carriers, publishers deal in a product (online impressions) that is limited, perishable, and variable in price and therefore the application of yield management would be extremely beneficial. It’s true that with publishers increasingly turning to multiple supply-side platform (SSP) and exchange partners to sell both Class 1 and Class 2 inventory, and with readers increasingly accessing content across different screens simultaneously, this is easier said than done. However, as more sophisticated technology becomes available, enabling a seamless, integrated system of data optimisation, segmentation, forecasting, floor pricing, and execution, more publishers will be able to will be able to regain control over their future.
The deployment of these four factors will certainly empower publishers, enabling them to lay the foundations for the creation of a much awaited, lasting business model for the digital age.
Nigel Gilbert is the vice-president, strategic development, EMEA at AppNexus