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Why advertisers don't value online engagement

Why advertisers don't value online engagement Ben Elowitz

Nieman Journalism Lab recently posted a very provocative piece on the eight trends to watch in 2011.
Taken together, the eight trends reinforce the fact that digital publishers have been forced to abdicate their relationships with customers. It's a big change from our offline legacy, where news and magazine publishers built long-term customer relationships by offering a branded collection of content.
But in our current digital world, content is no longer oriented toward delivering on an existing relationship. Instead, every published piece is a marketing vehicle. The content itself has become the bait for customer acquisition, with each new item the means for catch-and-release fishing for more unique users.
With this practice, the basis of customer acquisition has changed: Digital media publishers acquire audience by the item -- not by their collection. We all see it play out with the bad content around us all the time: An inflammatory headline earns clicks. Keywords garner search rankings. And sensationalist pieces generate social distribution and links.

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But the obsession with acquiring audience article by article has had serious consequences and, in the end, the holistic sense of a "publication" as a product -- one that builds a long-term branded relationship with audience -- has gone out the window.
How did this happen?
I chalk it up to the perverse system of online media buying that takes place with advertisers and, particularly, their agencies. This system places such a high priority on maximum momentary reach that it totally overlooks any question of relationship.
The net (and short-sighted) result of this focus is that digital publishers spend all of their energy acquiring customers. But acquiring them to what end?
There's no reward for keeping customers anymore. Having audience return daily is a nice-to-have -- a "supporting statistic" on a page of a PowerPoint media kit -- while almighty reach drives ascent through the comScore reports. Given the opportunity, publishers would gladly double their reach while halving their engagement; then they'd wonder why no one came back. Customers today are met for a moment, and then discarded -- then publishers go out and acquire all new viewers the next month. And, to fill this hole, publishers too often appease Google's search algorithm as their evergreen source of new eyeballs.
But as publishers get on the customer acquisition treadmill, an increasingly smaller percentage of their consumers connect to their greater collection or brand. Instead, a user comes for one piece and, more often than not, leaves right after. The whole process is all about churn-and-burn, rather than relationship building.
Once you accept this digital advertising dynamic and how it has shaped publishing behavior, you realize some pretty interesting things about your online audience.
First, there's the inner-circle audience that has a strong branded, destination relationship. These people come back frequently -- several times a month to every day. They type the URL into the browser bar, or use a bookmark, or type your brand name into their favorite search engine, or maybe they have "liked" you enough to add you to their Facebook feed. You are a habit to them, and they are your loyalists. These folks know you well. They have a relationship with you. And they come back over and over for your collection -- for the entirety of what you have to offer, all wrapped up together and labeled with your brand name.
Then there's the outer-circle audience. These people don't visit for the collection at all. They might know your brand well and, if so, that might have helped them make a decision to click. But they aren't here for you; they are here for your content. And when they are done with that content, they'll leave.
Gut instinct would say that those loyal inner-circle users are the ones who should be prized most highly. After all, the outer-circle users, who come for one short visit once a month, at most for a page view or two, should pale in value to a loyal user.
But the real problem is that publishers are rewarded by advertisers for the combined size of the two circles. The No.1 driver of ad revenues is unique users, and it is totally dominated by the outer circle. Given this reward system, no matter what the buzz might say, "engagement" obviously isn't valued by advertisers with any sincerity these days.
And yet my view is that digital media companies must now -- more than ever -- convert customers to loyal, brand-loving audience. In the long term, these readers are the ones that an advertiser has the greatest ability to impact, since they can leverage a real -- rather than fleeting -- relationship with the publishers.
It might be difficult and daunting, but that's the only true path to sustained publishing prosperity. The current advertising model is broken, and it must be fixed.

Ben Elowitz is co-founder and CEO of Wetpaint.

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Ben Elowitz is co-founder and CEO of Wetpaint, a web publisher, and author of the Digital Quarters blog. Prior to Wetpaint, Elowitz co-founded Blue Nile, the online retailer of luxury goods. He is also an angel investor in various media and...

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to leave comments.

Commenter: Michael Wade

2011, April 19

Great article and just goes to show why the digital ecosystem needs some big changes.