Approximately 15 years ago, the World Wide Web burst onto the scene, forever altering the world of publishing. Over the next decade and a half, publishing transformed from a one-way medium in which content was created and distributed by publishers to captive audiences, to an environment in which virtually anyone could become a creator, aggregator or distributor.
Armed with easy-to-use publishing and communication tools, the audiences changed from passive recipients of information to active conversationalists. Efficient search tools helped people filter and reach content of interest from multiple sources.
This new world of search, distributed content and social and business networks placed enormous pressure on traditional publishers, many of whom focused on protecting their rapidly eroding traditional brands and business models rather than embracing change.
The old CPM media model assumed that everyone who received a publication read every advertisement. In times of economic prosperity, the ads kept coming in and the average revenue per user rose, producing handsome profits for publishers.
However, with audiences spending more time online, advertisers and marketers are now increasingly focused on direct response and measuring audience engagement.
Mass reach is now much less important that targeted and engaged audiences. The result for many media companies, as famously noted by Jeff Zucker, the CEO of NCB Universal, resulted in analog dollars being converted into digital pennies. With pressure from advertisers and reducing circulation revenues, now publishers are forced to question the cost of creating original differentiated content and having to blend in content from sources that are a lot less expensive.
Marketing spend continues to shift rapidly to online. Even in these tough economic times, overall online revenues are expected to grow by around 10% in 2009, and online’s share of media will continue to increase. However, the marketers’ spend, rather than going to traditional publishers, is being allocated to the search companies, putting even more pressure on publishers.
Advertisers and marketers are intensely focused on audience quality, their engagement and the overall ROMI performance. While many question advertisers’ overreliance on PPC advertising online at the expense of awareness and brand building, performance-based advertising is likely to be a major beneficiary in these recessionary times.
A major test facing publishers is to prove the effectiveness of general CPM brand- and awareness-building ads online, where the environment is more about the engagement of the audience with relevant, targeted information.
Transforming a traditional company to being online focused is not easy. The successful ones have realized that relying on just online advertising is a recipe for disaster. By developing additional revenue streams such as lead generation, e-commerce and even online subscriptions, b2b publishers have found online businesses that are closer to the old print models of advertising, subscriptions and newsstand sales.
Today, online publishers are focused relentlessly on overall RPM (revenues per thousand pages) and its component revenues streams, trying to reduce over-reliance on any single revenue stream. Recognizing that a rigid adherence to premium pricing while protecting the brand value is causing marketers to seek out similar online audiences from third-party networks, the more innovative publishers, such as my former employer , have developed their own vertical networks (the Technology Network) that are closely aligned with their core properties, but at the same time provide marketers with low-cost extended reach outside the branded environment.
The delicate balance of protecting core profitable print brands while dealing with the changing dynamics of digital is exceptionally challenging, and the bad news is that there are even greater challenges on the horizon.
If the transition from print to online was hard enough, the disruptive impact of mobile is several magnitudes greater.
Small Screen, Big
is the new mass media. It can do everything that can be done by all previous mass media, plus a lot more.
is nearly always on, always carried (or close by) and it’s highly personal. It operates as the remote to your physical and digital life.
With over 4 billion mobile connections in the world, compared to around 1.1 billion fixed Internet connections, the scale and potential opportunity of mobile is huge but incredibly challenging.
Print is a lean-back environment and online a lean-forward one.
is all about immediacy. Instant communication, instant information related to your location, instant consumption and creation of content—all in a small-screen environment.
It’s a world of digital snacking, not the leisurely consumption of long-form content. That’s likely to change as different mobile Internet devices appear with larger screens. The Kindle offers a glimpse of what possible for the consumption of e-books, digital magazines and newspapers—maintaining the familiar format of print but in an enhanced interactive, digital environment. The iPhone has revolutionized the smartphone market, delivering a powerful computer in your hand.
In addition to the phone features, you now have easy access to the mobile Internet plus the choice of more than 20,000 phone applications covering the gamut of entertainment and gaming to high-end business productivity.
With the other handset manufacturers developing their own mobile application stores, the consumer is going to be faced with bewildering choices.
For publishers, it’s potentially a highly rewarding environment. The challenge is to determine what content to deliver, what customer data to collect, how to design great user interfaces and experiences while finding ways to drive revenue.
Over the next few months I’ll identify those publishers who are the most innovative and successful, so hopefully all media companies will be encouraged to grasp the mobile opportunity that lies ahead.