There's no doubt that the Publishing business is challenged right now. Print advertising continues to collapse with total ad pages falling 8.2% from last year, according to the Publishers Information Bureau and the audience migration to mobile devices continue to eat away at website monetization. Throw in the lack of scale and ad revenue within tablet publications and you have a VERY tough path to navigate.
So then why the heck is it a good time to be a Publisher? For a few reasons...
1. The Rise of Programmatic Buying:
What? Sounds counter intuitive right - RTB, DSP's yadda yadda yadda...are actually hurting Publisher pricing, right? Perhaps for the moment this is true but over the long term programmatic buying of audiences should be a boon for Publishers. Why? Simple...There is a TON of dead weight in each an every Publishers Sales Dept. You know exactly who I'm talking about - they're called "Banner Slingers" or "Order Takers" and they have benefited greatly from their T/E accounts and ability to send IO's to agencies/buyers that ask for it. Programmatic buying will eventually weed these folks out and leave only the top sales talent or create a new wave of sales talent that the Publishing industry has needed for a LONG time. Solution Sellers - these are people that understand the entire digital ecosystem and work with their clients in a consultative manner to drive ROI...not just sell more banners, rather, integrated offerings and campaigns that leverage all of the publishers assets, data and touch points with the consumer. And hopefully this has the same effect on the buy side of the equation with Agencies - who are guilty as ever of being lazy.
Eventually Publishers may even be able to focus in on, in real time, high value audience segments and adjust their content strategy to drive audience based on real time pricing data. A similar approach to how Demand Media and The Huffington Post leveraged Google search data to drive traffic. And while contextually relevant advertising is not always scalable for large brand ad buys - the quality of the relationship created between the reader and the Publisher will create value, with higher bids going to the better engaged audiences.
2. Content Marketing:
According to a recent AdAge survey marketers said that on average 12% of their budgets would be spent on Content Marketing initiatives. This represents $40B in annual spend according to a study by the Custom Content Council and ContentWise. Wow a $40B and growing market - how do I get in?
Well this is great news is if you're a publisher, you're already there. Publishers offering marketing services is nothing new, this convergence has been slowly happening for years. However internet technology companies such as Google, Facebook and Twitter are accelerating this process dramatically. Google and Facebook both place a huge premium on unique, original content. If you can appease them - then the algorithm Gods will bless you with loads of traffic. Brands are now waking up to this fact as well as the fact that, it is content that drives audience and builds relationships with consumers, not pushing out a new discount code every other day.
Advertisers pay for the right to be in front of the audiences that Publishers have aggregated...so doesn't it make sense that the Publisher, the one who has built this relationship, is in a better position to help the advertiser with marketing services vs. an agency? But for Publishers to truly get in the game they need to deeply integrate these marketing services into their overall sales process and value prop to the advertiser. From what I've seen a lot of the marketing services acquisitions done by Publishers in recent years have not been fully integrated or integrated at all. Long story short - there is plenty of opportunity here.
3. The Tablet:
Steve Jobs said that the iPad was a "magical device" and he was dead on. The tablet was a game changing innovation and tablet sales are accelerating faster than anyone could have every predicted. The iPad is the fastest selling device ever for Apple.
So then why the heck is it a good time to be a Publisher? For a few reasons...
1. The Rise of Programmatic Buying:
What? Sounds counter intuitive right - RTB, DSP's yadda yadda yadda...are actually hurting Publisher pricing, right? Perhaps for the moment this is true but over the long term programmatic buying of audiences should be a boon for Publishers. Why? Simple...There is a TON of dead weight in each an every Publishers Sales Dept. You know exactly who I'm talking about - they're called "Banner Slingers" or "Order Takers" and they have benefited greatly from their T/E accounts and ability to send IO's to agencies/buyers that ask for it. Programmatic buying will eventually weed these folks out and leave only the top sales talent or create a new wave of sales talent that the Publishing industry has needed for a LONG time. Solution Sellers - these are people that understand the entire digital ecosystem and work with their clients in a consultative manner to drive ROI...not just sell more banners, rather, integrated offerings and campaigns that leverage all of the publishers assets, data and touch points with the consumer. And hopefully this has the same effect on the buy side of the equation with Agencies - who are guilty as ever of being lazy.
Eventually Publishers may even be able to focus in on, in real time, high value audience segments and adjust their content strategy to drive audience based on real time pricing data. A similar approach to how Demand Media and The Huffington Post leveraged Google search data to drive traffic. And while contextually relevant advertising is not always scalable for large brand ad buys - the quality of the relationship created between the reader and the Publisher will create value, with higher bids going to the better engaged audiences.
2. Content Marketing:
According to a recent AdAge survey marketers said that on average 12% of their budgets would be spent on Content Marketing initiatives. This represents $40B in annual spend according to a study by the Custom Content Council and ContentWise. Wow a $40B and growing market - how do I get in?
Well this is great news is if you're a publisher, you're already there. Publishers offering marketing services is nothing new, this convergence has been slowly happening for years. However internet technology companies such as Google, Facebook and Twitter are accelerating this process dramatically. Google and Facebook both place a huge premium on unique, original content. If you can appease them - then the algorithm Gods will bless you with loads of traffic. Brands are now waking up to this fact as well as the fact that, it is content that drives audience and builds relationships with consumers, not pushing out a new discount code every other day.
Advertisers pay for the right to be in front of the audiences that Publishers have aggregated...so doesn't it make sense that the Publisher, the one who has built this relationship, is in a better position to help the advertiser with marketing services vs. an agency? But for Publishers to truly get in the game they need to deeply integrate these marketing services into their overall sales process and value prop to the advertiser. From what I've seen a lot of the marketing services acquisitions done by Publishers in recent years have not been fully integrated or integrated at all. Long story short - there is plenty of opportunity here.
3. The Tablet:
Steve Jobs said that the iPad was a "magical device" and he was dead on. The tablet was a game changing innovation and tablet sales are accelerating faster than anyone could have every predicted. The iPad is the fastest selling device ever for Apple.
2012 Internet Trends. Chart courtesy of Kleiner Perkins Caufield & Byers.
Not only are tablet sales going gang busters but people are using their tablets to consume even more content. The tablet, as it turns out is the perfect content consumption device as evidenced by research performed by Morgan Stanley:
Source: Morgan Stanley Research
The iPad also represents as chance for publishers to finally bring some of beauty of print ads to the web. The full page ad never really made sense for the desktop and probably not for smartphones either. But the tablet changed the game by allowing advertisers the ability to create beautiful full page ads with all the features and interactivity the web has to offer. Which is why IDC Research predicts that tablet advertising spend will out pace mobile within 3 years.
IDC, Worldwide New Media Market Model, NMMM 1H-2012.
Publishers need to aggressively invest into the tablet market in order to start reaping the benefits as print ad revenues continue their decline.
The future is a bright one if publishers can navigate today's landscape and make the right investments for growth tomorrow.
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