Despite trying to reverse the direction of these market forces listed below at industry conferences, business meetings and trade columns, these forces have not veered from their original flight plan. As a result, the turbulence they create is causing the premium publishing industry to crash and burn.
Market Force #1: People won’t pay for premium (digital) content.
Millennials will never fork over money to subscribe to the print versions of the New York Times, or other traditional publishing brands the way previous generations did, and Millennials will certainly not pay for content online. Pay walls are easily climbed — and if not, users stop trying and check their Instagram instead. Subscription revenue for premium publishers is disappearing.
Market Force #2: Competition for ad dollars comes from everywhere.
I spend a lot of time with media buyers spending gazillions of digital dollars, and what surprises me the most is the ease in which sites that have no traditional publishing principles, take ad dollars away from sites that do. When I sold ad pages at Newsweek, I worried about Time and U.S. News. Today, the circle of competition for online dollars has grown so large for traditional publishers there are no campaign “gimmes,” and publishers are battling against competition they can’t see.
Market Force #3: Digital ads are about performance. Branding never had a chance.
While the industry talks about the nonsensical nature of clicks and the value of branding online, the evaluation of digital media purchased starts with one and ignores the other. Despite pundits’ protests and desires, the click is the first and easiest calculation buyers report back to their clients, the advertisers who spend fortunes developing their own sites and need to show their bosses people are visiting.
Clicks start the performance conversation through the conversion tunnel, and there was never really a lane for branding to drive through. Web pages are too cluttered, time spent on each page view is too short, mobile ads are too small, and too much of online video is smoke and mirrors. Native is not the savior, either. This “ad format” is leading a funeral procession for branding value — while so many think it’s leading a parade.
Beyond these publishing struggles to deliver branding online, the reality is that branding value never had a chance in digital because it conjures up higher prices, while performance drives prices down. In a market flush with supply, buyers hold all the cards. By focusing on ad-campaign performance metrics to determine the value of a publisher, buyers are holding aces, and publishers are folding on rates.
This last market force was always going to take down traditional premium publishing, because premium publishers expend energy and resources to obtain, nurture and hold consumer attention — while ad dollars get awarded to sites that are better at losing it.
This business is killing this business.