How news outlets can grow without stuffing ads everywhere
Originally posted on LinkedIn, April 11, 2017
In my last post, I proposed that media companies were hurting their chance at success with paid content by gumming up their digital products with too many ads.
I know my ad director friends are looking at their 2017 goals and shaking their heads. How will we make plan if we can't sell out the homepage pop-up push-down wallpaper interstitial take-overs with auto-play? And that's before ad ops sends them the report showing effective rates for programmatic ads are trending down again.
So, how can news outlets grow total revenue without stuffing ads everywhere? I think the answer starts with a strategy focused on delivering on what should be their version of the "World's Thinnest Notebook" brand promise (detailed in last post): best content, in the best experience.
By starting there, they have a chance of creating enough value for people to pay for, thereby growing the share of total revenue from paid content, while also improving value for advertisers.
One to watch: Quartz
In a rush to get revenue fast, many publishers load up even new digital products with industry-standard ad units and hook them into networks and exchanges that promise to instantly deliver the optimal rate per thousand. While this works well for networks, aggregators, search engines and social networks, the driver is scale -- the Ms in CPMs. For individual news outlets, which measure millions of visitors per month, not per hour, the strategy is a race to the bottom -- lower and lower rates, longer load times and sketchier and sketchier ads.
Quartz' founders said they purposefully resisted that approach and created custom ad units that fit its responsive design, selling them at a premium rate. And it's working. A $15M run-rate on 15 million monthly unique visitors in 2015, and achieving profitability in 2017, its fifth year, isn't bad for a digital-only publisher.
The advantages to advertisers include strong visibility, better share of voice, and better chance of positive brand impressions, all of which should keep rates up and reduce churn.
Individual news outlets need to shift strategic emphasis and investment, with more patience for building up value and rates. While Quartz doesn't charge for its content, there are strong signals that consumer demand is there for publishers with the best content and experience to charge for it:
- At Local Online Advertising Conference 2017, a millennial said he "misses local" news because "my local newspaper won't commit to going digital" the right way, reported Gordon Borrell, CEO of Borrell Associates, the conference's organizer.
- Overall public sentiment toward supporting quality journalism is getting a boostfrom Trump's fake news rants -- at least temporarily.
Only when the content and surrounding experience demonstrate they're worthy of consumers paying for them, will paid content models have a chance of thriving and achieving total revenue growth, in the long-term more than offsetting ad overload.