In the last year, online publishing has undergone a fairly dramatic transformation. The revolution is still underway where platforms, devices, and spending are concerned, and it's all but guaranteed that we'll see more of the same for some time to come. It's enough to send publishers reaching for the antacid.
Case in point: Online advertising is projected to soar 40 percent, surpassing all other platforms by 2016 (eMarketer), and 73 percent of online publishers saw their display ad revenue increase in 2011, versus 53 percent in 2009. However, at the same time, even top news sites have failed to push advertisers to move significant revenue online, and publishers can't seem to agree whether real-time bidding (RTB) will be their savior or downfall.
Furthermore, the "Big Five" publishers -- Google, Facebook, Yahoo, Microsoft, and AOL -- attract a whopping 83 percent of U.S. online ad spend. Of this group, Facebook is expected to dramatically expand its share. New players are attracting more revenue as well. According to Business Insider, they are dominated by a few that are not necessarily thought of as traditional "publishers," such as Hulu, YouTube, and Twitter.
Add to this the new pressures exerted by RTB and exchanges, and you'll understand why some publishers are starting to freak out. Exchange- and RTB-driven selling more than doubled in 2011, building fears of channel conflict and depressed cost-per-thousands (CPMs). Further pressure arises from the commoditization of inventory and the agency trading desks. If publishers sit on the sidelines, they would witness further transformations in the media/content business, as it becomes more multi-screen, unplugged, and platform-agnostic.
So, what's a publisher to do? For one, take tech seriously. Smart publishers dedicate people and resources to maximizing yields and to shopping around, trying out different partners, exchanges, and other revenue opportunities. But that's not all. Here is a selective menu, informed by insights from my savviest peers and colleagues across the industry, of the best practices for publishers to embrace as they move forward in this challenging environment.
Focus on what you're not doing
Examine revenue channels you haven't yet tapped. Over the years, you've invested in great content, images, slideshows, and videos. Are you fully monetizing all these opportunities? We work with thousands of premium publishers who have found vibrant sources of revenue through new ultra-relevant, non-intrusive ad units -- such as in-text, in-image, and dynamic display -- that actually enhance the user's experience by providing contextually relevant and consistently useful brand advertising. In addition, look beyond your ad units -- maybe you have data that you could monetize, for instance. With so much spend going to the "Big Five," how are you going to grab your piece of the pie? Seek network partners who have strong relationships with top 100 brands who will leverage their strengths to get you the best deals.
To find revenue from previously untapped assets, take a page out of the book of Examiner.com. This site boasts 10.6 million monthly unique visitors and a wealth of compelling text and graphical content. It wanted to monetize its heavily trafficked photo galleries, increasing revenue per page with engaging, unobtrusive ad units. The solution: Running in-image ads across the content, which brought them higher CPMs on photo galleries than traditional display. This is the publisher equivalent of found money. We are seeing this become a significant revenue source since images represent an estimated 30 percent of the average website's content.
As brands embrace content marketing and increasingly try on "publisher" hats, publishers should follow the examples set by major sites such as Forbes, Gawker, BuzzFeed, and Cheezburger. The lines are blurring between ads and content, and you too can deliver powerful engagement for brands such as IBM, Dell, and Toyota. As Cheezburger CRO Todd Sawicki says, "The difference between us and [traditional publishers] is that new publishers realize a contributor doesn't have to be on staff. If brand content is actually entertaining, then is it advertising or content? The users choose to engage with the content. We provide an environment for users to engage."
Social, data: It's all personal
Publishers need to embrace data and realize that social referral (mostly via Facebook) is overtaking search as a traffic source for major sites. Media companies have a vast trove of data and analytics at their disposal, though they've been slower than marketers to put it all to work.
Industry observer Ben Elowitz points to key strategies that publishers should use to harness the power of social and personalization. He suggests that initiatives such as The Washington Post's "Social Reader" are so successful because they put the reader in the spotlight, where they can garner accolades for sharing content among their Facebook network. The brand benefits by providing a platform where users get kudos, which reinforces the value of the content itself.
Elowitz believes this focus on personalization firmly embeds the user at the center of everything a media company does. Harness the data, build social engagement (leverage that social graph), and remember the following: "Each member of your audience -- no matter how vast it is -- has to become the most important person in the world to you. Or, looking at it in a slightly different way, you have to become deeply involved and digitally intimate on a global scale each and every day."
Put this into action by building your data tools and analytics. Focus on social strategies as a core component of your distribution efforts. Follow the lead of successful content curators such as Jason Hirschorn and The Huffington Post.
Top media analyst Ken Doctor points to the example of the Financial Times, which he says has set the standard for thought leadership and being ahead of the curve on execution. According to Doctor, the Financial Times has "created a new business model for themselves and the rest of the industry. The Financial Times got a handle on analytics and big data crunching before anyone. They have developed a real understanding of consumer behavior, advertiser behavior, advertiser wants, and real effectiveness. If you can improve your product and deliver real satisfaction, then you can keep ramping up the price for readers -- and they have a substantial digital-circulation flow and all-access flow. At the same time, the Financial Times is getting an incredible amount of data about those reader habits and reader wants -- both editorial and commercial -- and this of course then sheds light on what kinds of advertising will be most palatable to and effective for brands. And so advertisers are happier with it because they are getting high-value audiences."
As eMarketer and other companies report that our consumption of content on smartphones and tablets is soaring, every publisher needs to put multi-screen strategies at the center of their business. Look to personalized curation interfaces that allow you to surface your content and respond to the relevance and context that a modern consumer demands from media interaction.
Curation apps such as Pinterest and Flipboard combine social preferences and networks, with an awareness of the context in which you are engaged with your content. As Flipboard CEO Mike McCue has said, "It's a mix of what's going on in the world and what's going on in your world, fused together. And it might seem weird that I'm looking at a picture of my daughters, and then the next flip I'm reading a story about Iran. But to me as a reader, when I'm standing in line waiting to get my coffee, those things are what I care about."
Relevance and user-centrism are indeed critical for publishers. As Tim Carmody wrote in Wired, "In order to build for this [untethered, multi-screen] world, media companies, software developers, advertisers, and even users have to think about context differently. Context is no longer 'simply' the background to a story or stories or advertising immediately flanking it. Context is now a multivariable function, dependent on medium, location, time, social, and identity."
Build it and they will come
While mobile ad revenues may be taking off, they are spread around a vast ecosystem of apps, platforms, and types of content. What can smart publishers do to try to grab a slice of the pie? Recent data from Adobe suggests that consumers are more willing than ever to pay for digital versions of their favorite publications. So take a cue from The Wall Street Journal and a few others who have led the charge, and create a welcoming stage on which brands can play. The Wall Street Journal's wonderful, immersive iPad format -- with its engaging display and accelerometer functionality -- allows brands to experiment with completely new user experiences. A publisher's app should take advantage of this platform's remarkable potential, allowing new content-plus opportunities and truly immersive, engaging brand experiences that are native to the device and content.
As Ken Doctor has said, regarding this new type of interaction pioneered by the Journal, "These ads grab the potential of the tablet and run with it -- joyously. They move beyond what we've known as 'advertising' and sprint into a new field of commercial conversation. These aren't ads that simply take you away to a separate brand page when you touch it. They offer more useful information, within the app. They are the fruit of The Journal's partnering with top agencies and advertisers to build applications that take advantage of the tablet. They begin to understand what the target audience wants beyond being 'sold.' This is information-as-advertising, advertising as a gateway to connection beyond simple pitch and simple impression. Brands are important here, but their ability to tempt engagement is the key."
The road ahead
It has been a bumpy few years for publishers, and the roller-coaster ride will continue with the buffet of new ad formats and new ad technologies. I think that if we look creatively at solutions that deliver for audiences, publishers, and brands, opportunities for all of us will abound in the year to come.
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