Commentary
An Open Eulogy For Premium Publishers
- by Ari Rosenberg , Op-Ed Contributor, October 24, 2013
Premium publishing isn’t dead, and Simon Dumenco of Ad Age makes this point compellingly clear. He ends his recent column noting that while a brand like Elle is flourishing, both Friendster and MySpace are essentially dead and buried.
So a eulogy for premium publishers is certainly premature or even misguided, but I can’t help but think one will be needed as long as premium publishers continue to sell off unsold inventory on the exchanges (open and private). As much as people explain why this “barbell” strategy makes sense, I can’t stop seeing it as a dumbbell.
“We need to maximize revenue from each impression” and “it’s better to get some money for unsold inventory than none at all” are solid reasons. So is the fact that “these dollars come from a separate budget and a different buying group at the agency.” “Besides” as I so often hear, “this train has already left the station.”
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I understand the rationale, and yet I can’t stop thinking premium publishers are being sold tickets to get on the train -- but instead, will be run over by it.
Last Friday, I sought more answers. I had lunch with two people I don’t know well, who are well-regarded in this industry. They are a couple of heads and shoulders above me when it comes to understanding every aspect of the digital advertising landscape. So when this question came up at the table: “Should premium publishers place their inventory onto an exchange, either open or private?” I anticipated even smarter reasons why publishers should be doing it, and felt my head instinctively bow. My worst fears would soon be realized -- that I don’t know what I’m talking about.
Instead, I picked my head back up and listened intently to their views. Their answers surprised me, amounting to “F, no” and a funny joke about unknowingly digging one’s own grave.
What came next was the simplest explanation of why premium publishers continue to ignore the ramifications of this strategy. According to one at the table, premium publishers don’t recognize their competition.
I can concur. I often hear premium publishers talk about gaining market share against traditional brands they are used to tracking. No one ever says they are losing share to the Google or Facebook Exchange.
Competing for a spot on a media plan starts with communicating a clear point of differentiation and hence, unique attributes that complement the entire media plan. The exchanges are long on targeting, inventory, and cheaper prices but short on premium brands. So a premium site can easily point to that as a key reason why their site should be added to a plan that includes exchange inventory.
But now, when a premium brand salesperson is challenged on why a buyer should buy them, knowing that brand’s inventory can be bought through an open or private exchange, the answer is such a struggle. Overcoming this problem can includes labor-intensive custom site integration, which is great, but not easily replicated.
The clearest point of differentiation a premium site has versus inventory available on an exchange is its brand itself. Placing that asset on an exchange is like an NFL football team, while on offense, giving their best defensive player to their opponent. That defensive player is “unused” at that time, right? Why not make extra money leasing him out, instead of sitting on the bench?
This whole issue of direct selling versus programmatic comes down to trying to do both at the same time. You can feel the conflict this dual approach creates in hallways and conference rooms. Premium publishers should, instead, step back and look at what their business would look like if they chose one or the other. Then decide which picture they like better and hang that one on the wall -- not both.
The barbell strategy works for sites (like portals) that are weak on brand and strong on volume. It doesn’t work the other way around.
Take me to church Ari!
How Sad Ari...That after all of these years..SO many premium publishers have walked away from the mission critical focus of building and training strong sales teams. What I see in the market currently is a cross between order takers and rate/deal negotiators. Very few if any true salespeople that understand how to represent the true value that premium publishers have in terms of engagement between premium content and their audience. As such...we are watching the commoditization of inventory...remnant and premium slogged together to create rate deals. Shame on all of us in the publishing industry that we don't have the chops to put an end to this and regain the strength and position that we once had in the market. A time when clients truly respected the relationship between great content & advertising environments.
As a small but premium publisher on line for 18 years I agree with you thoughts, the only problem is that the agency buyers are now virtual and there is no one to speak with to pitch the value of your audience.
I seen it coming and now its here...
We small guys can't change anything it has gotta be the big guys with advertising negotiation experience and the balls to stand your ground...
But the only place you can find these kind of professionals is on Mad Men...
The worm will turn though,, as "results" from the billions and billions of impressions continue to disappear, some smart marketing guy a a client will suggest that maybe they can buy ads in content that attracts their audience... what a novel thought.
Todays INTERNET adversing is like fish spawning... shoot out the sperm shoot out the eggs and hope that the tide allows them to meet to do their job...this arbitrary ad universe is what is making all of the data guys happy with bullshit dreams of controlling the reproduction cloud
Not that this isn't all true and that Mr. Rosenberg has written an insightful and valuable article; I question the perception that I consistently find in articles dealing with music, film, literature, in this case publishing, and the arts.
In a media/marketing world dominated by positive positioning, rarely do we see a story or an ad that reflects the "value" of magazines or other creative content, Where is the joy as expressed by the connection with the printed word. What are you going to give for Christmas? An e-book or book, a link to a download or a CD, better yet an LP, which are making a major resurgence incidentally.
After swimming in these waters for nearly 3 years, it has become evident; what we need is new conversation about the "value" of art and support for artists of all genres and their work.
William Buckley Jr. Founder / President FarePlay
Great post, and a frequent hand-wringing conversation that is taking place daily in the halls of premium publishers among the increasingly empty sea of cubicles. One aspect you didn't touch on (perhaps your next article) is whether or not premium publishers should create a new revenue stream by selling their data. If I attract a very unique niche audience, and I can reach, or empower others to reach that same audience across the entire web, I can create a business model where my "data stream" revenue is larger than my premium inventory revenue by several fold. In an audience-bought world, where is the value? In the context of premium content or in the data attached to the audience that defines the "premium" in premium publisher. We call them premium publishers, but they are really premium audiences that the publisher has done an excellent job of attracting. Are they not?
@RJ
Yes that is happening but no I won't write about it -- don't know enough about that end of the market to do it justice -- why don't you cover it/submit a guest column!
@ Everyone
Thanks as always for hearing me out and weighing in.
No one investing in a quality editorial product (and in their right mind) would sell inventory to an exchange for pennies on the cost of producing the product. Or junk up their pages with job boards. Participate in affiliate programs. Run Google AdSense. Yet, all are commonplace.
Publishers need to start thinking of themselves as "premim" if they want to be "premium." Rule of thumb: don't sell inventory to others less expensively than your sales team can sell it.
And...the most effective way to begin competing with Google, Facebook and the resellers is to deny them access to your audience. You can't beat them by joining them.
@Chris -- "You can't beat them by joining them" is a brilliant line -- here is a virtual beer -- enjoy and thanks for chiming in.
@Ari -- Thanks for sending over that cold one. Sending one your way too. Not many people have the courage and common sense to tell the Emperor he has no clothes.
The industry has become so wrapped up in the impending storm of exchanges and programmatic, yet in most cases the definition, let alone the implications, are not even understood. Even with the options of exchanges and bidding, which are mainly based on price, premium inventory is always saved for the in-person sales. Although it may be a viable method for remnant inventory, this is not the way to run quality, brand-relevant outreach to audiences. There is no replacing the value of direct sales and all parties involved are well aware of that. Would any smart jeweler put diamonds and similarly cut crystals in a bowl and charge one set price for them all? That would be an outrageous insult to the value of the diamond and what the jeweler deserves – and as a buyer, is it worth the risk?
@ Jason Witt -- not so fast (and yes I remember meeting you and respect you of course) -- but it's more like a Jeweler who sells Rolex watches at his store, and then when he is bummed looking at his unsold watches, he dumps them off on the black market -- it's the same watch/product -- remnant inventory and premium inventory is the same product -- they are both "ad impressions" -- the ad tech stack just loves to define these impressions as "remnant" as if they're defective or something -- the products are the exact same -- it's how they are priced that creates the difference -- let's continue this over coffee some day -- have a nice weekend.
It's the CYA mentality of publishing in the ivory towers and a very destructive to the business and the future of the business.