This was at a time when all debate was around maximising reach -- an era of talking big numbers that were supposed to lead to huge revenues. Of course, the simple economics is that the more opportunities there are to advertise, the lower the cost per thousand (CPM) will be. So a huge disparate audience would always have problems scaling up, in terms of maintaining CPMs. Then, of course, we have the massive growing issue of first, desktop -- and now, mobile -- ad blocking. The IAB UK estimates around one in seven are blocking ads and that the proportion is on an upward trend, thanks to mobile browsers now readily working with ad-blocking extensions.
Clearly, something has to give, and yesterday's news that the FT has has a controlling stake in digital content producer and marketing agency Alpha Grid shows one very plausible direction. The FT was obviously in a fortunate position of having a highly desirable audience that feels the need to subscribe to its unique content. So a subscription model wasn't that much of a leap in the dark. However, the realisation that news brands need to open up to native advertising more wholeheartedly is clearly an interesting new direction.
I'm not aware of another major news brand buying a content marketing agency, such as Alpha Grid, although most have native operations. Each will allow a brand to sponsor a hub of relevant content or become more involved in the content and become a native partner, where the involvement is clearly acknowledged. News brands are doing this because it is dawning on all publishers that huge readership numbers for free sites become meaningless when ad blocking keeps on growing.
Going the full hog, however, and taking a controlling stake in a content marketing company, takes this to another level. It means brands without content assets can come to the FT to not only buy the space to have native promoted but to also get it made in the first place. So it's a very shrewd move for the FT to get involved with how content is generated and to take a slice of the action at the same time. Here's the other very clever bit you can see developing. Not only will the FT charge to generate text, audio and video content, and then get paid for promoting it -- it will almost certainly generate a virtuous circle.
The huge brands that will engage with Alpha Drive and FT.com are likely to have massive marketing efforts of their own with blogs, newsletters, email lists and large social followings. When a new piece of content is generated, it will doubtless be promoted across these channels and guess where all those embedded links are going to head -- straight to FT.com's native pages. I can't think of a more virtuous circle for publishers to protect themselves against display's growing woes.