Pubs Need to Get the Performance $ignal
There is growing debate about the future of journalism and to a greater extent publishing in the digital age. The axis of the conversation is revenue generation or lack thereof. The problem in this space is one that frustrates me enormously because the answers are there. We know how to make money on the web but old mindsets continue to impede progress and have consistently over the past decade allowed upstarts to control both the delivery and revenue generation associated with digital publishing of news and information.
One core issue I continue to witness is the fundamental misalignment between the advertising publishers want and the advertising that works in a news and information medium, be it digital or analog. To this end the OPA (Online Publishers Association) and the IAB have been vehement that it is lack of creativity preventing brand money bags from flowing into the space. I couldn’t disagree more.
The fact of the matter is that when prime-time television CPM is $12, your audience is 12 million and your ad runs for 30 seconds this offers more ad value (and will continue to) for demand gen than online. Also, despite grasping at straws for excuses (clicks don't matter, we're not using the right attribution metrics, etc. etc.) branded display ads don’t work. The facts are:
- Unit performance sucks for everyone
- Any demand gen created goes right to Google
Look at AM Radio - maybe the most comparative medium in user behavior to web publishing. Commercial AM is primarily focused on news, information, gossip & opinion. It is programmed for shorter bursts of attention due to the nature of how people interact with the medium (weather on the 1’s, Traffic on the 8’s, etc.). The web is quick twitch just like AM. Our click behavior online closely mirrors our switching radio stations trying to get the information we desire.
AM is not an immersive medium like its high fidelity sister FM. Rather, AM tailors its content and it’s advertising to audience behavior. As any listener of AM radio knows, direct response (DR) dominates the medium. DR radio ads often play off the trust factor with the station and/or host – both great ways to leverage ad performance non-existent in display advertising (but interestingly present it social media and search).
Direct response radio is a huge business and one dominated with much the same offers that people on the web respond to. The optimization methodologies also closely mirror each other. Interestingly direct response ads are also the ones growing to dominate online. More interesting is this growth is based on performance. Publishers ignore this audience response at their own peril.
This begs the question will there be two webs -- The AM web and the FM web? The answer is yes and it already exists. The FM web is where we go to for rich media experiences - videos, gaming – where we go to have fun. Because these experiences immerse us, the type of marketing should be different. The AM consumption behavior to ‘get what we need and move on’ lends itself much better to DR where in more immersive digital experiences brand messages should wash over so we recall them as we walk through the supermarket.
This brings us back to the misalignment. Revenue starved publishers and budget hungry advertisers have been infatuated with demand gen dollars for display and have gone so far as to rip DR a new one (while gladly taking their ad network backed money). This desire for more media budget has also manifested a false and unaccountable sense that DR ads diminish the publishers own brand value. It’s all a bunch of crap both from a user sentiment perspective and performance perspective.
The lesson is that understanding the way people consume media is paramount to optimizing it for revenue generation both with your original content and your advertiser content. There is much we can learn from Amplitude Modulation.
The solution is a major paradigm shift. DR needs to be embraced, it needs to be “legitimized” and the revenue captured with the publisher’s audience, content and data needs to be distributed in a more equitable manner. The problem is not one of revenue generation. The dollars are there, they just need to be shifted.