Don't Be 'Hypenotized'
If nothing else, the industry of online advertising and its ever-growing tentacles is interesting. So much news and innovation, though, is clouded by so much hype injected by press releases from those companies that benefit from the use of these publishing product extensions. As a publisher, it's hard to sift through it all -- and yet these headlines materially impact how you guide your internal resources.
So for today's column, I thought I would fight the hype and provide my two cents on how or if you should spend time and money integrating the following products or services into your publishing business.
1. Podcasting. If an over-hyped platform falls a hundred miles short of expectations, can anyone hear it? The issue here is and has always been measurement. You can only count the "drops" of those who downloaded the podcast, but it is unclear how many listened to it. If a solution to this issue has arrived, it has not helped resuscitate this massively over-hyped online extension.
Having this offering is a nice bell if you think your core audience wants to hear it, but I would plan to use the "impressions" generated much like how email is used by many publishers: as a low-cost/no-cost line item on your RFPs to help significantly increase the value of your proposal, while lowering the effective CPM of the entire package proposed.
2. Online video. What percentage of video plays on the Web are not suitable for product managers and directors of marketing of any age or brand?
I bet that number is north of 70% -- which leaves a nice business but not "the business" those driving the online video hype bus would like you to believe. Before you invest in the creation of video content, ask yourself, "What percentage of my audience visits my site from an office computer between 9 and 5?" People at work have a difficult time listening to video, so if a bulk of your site's users visit while at work, you will be disappointed in the volume of video inventory created relative to your investment.
If you do get into this business, don't accept pre-roll ads -- look at what Yahoo is doing with its morning videos and how the funny folks at the Onion handle video ads. Both properties offer a 3-second bumper ad prior to the video content and then run a post-roll ad. This combination is a nice compromise that ensures less of a drop-off between video content started and video content viewed to completion.
3. Social networking. Believe the hype. Well, except for MySpace, whose biggest problem is itself. The bulk of its inventory is generated on pages that are literally hard to look at. Advertisers don't want to see their ads in unappealing environments, no matter how crafty you are at targeting their message.
Facebook has it right -- its templated design makes it easier for advertisers to see their own advertising. The bigger picture is that social networking tools, which enable your users to creatively communicate one-on-one or one to a group of likeminded individuals, should be part of your site's strategy.
Building these tools looks hard. I read that Facebook is looking at other revenue streams beyond advertising -- so here is a perfect marriage. Facebook should get into the business of "Facebooking" other sites, so you as a publisher can offer these communication toys they have already built but customized for your content and your audience. A solution like that would be worthy of a rev share or an outright investment on your part.
4. Ad networks. Ad networks deflate prices, increase emphasis on performance, commoditize brand value, and oh yeah, they combine your inventory with those of other publishers, and then call on your clients and offer access to your audience at a cheaper rate then what you are selling at. Now tell me why this is a good move for your business?
If you have your own sales team, I recommend cutting all ties with ad networks and either running fewer ads or eating your unsold inventory in order to protect your premium prices. Forbes, ESPN, and others have it right.
Hype is a natural part of external communication from third-party producers and can hypnotize you into solutions that make more sense for them than for you. Use common sense to fight through the hype and determine if there is something you need to buy into to grow your business.