Media companies with a similar business model to IDG — which publishes tech sites like Computerworld, MacWorld and NetworkWorld and is 100% digital in the U.S. — will “continue to feel pressure on CPMs,” with issues like ad fraud and ad blocking, Friedenberg said.
The future of digital display is what he calls “cognitive media,” where ads will move from “predictive to prescriptive.”
Publishers will have to layer firmographic, demographic and contextual data with “when the reader hits the site” with “the right message.”
“That’s where the market is going to have to progress. And this will accelerate as that media gets transacted through a programmatic channel,” Friedenberg said.
In other words, publishers will have to “marry data with IP addresses with the right messages.”
Friedenberg does not think digital display revenue will “completely go away,” but media companies will have to “transition to a much more scientific, data type of environment.”
Friedenberg believes that modern publishers must balance the “art and science” of the media industry to “either deepen the engagement with your readers or drive revenue and grow your business."
Going into 2017, a key issue for publishers will be transparency, Friedenberg said. He thinks It’s essential to build a trustworthy relationship with readers and advertisers alike.
“It’s really upon us as media companies... to be transparent about what you are delivering. And I don’t think you see that much in the industry," he said.
"If your business model is not transparent to the advertiser or the reader, that’s where mistrust occurs. We need to return to the fundamental basics. Maybe it’s old-school, but it’s something we should revisit as an industry. For example, at IDG we do not buy traffic.”
As a 52-year-old company, IDG has both the benefits and challenges of being an older media company. Friedenberg admitted there were issues of "legacy and culture" when IDG pubs went digital-only in the last few years.
“But I would much rather have a well-established business than try to grow in this environment,” he said.
How did IDG make the transition?
“You really need to have a digital-first mindset and learn where is your future, versus what is your past,” he said, and you end up “making hard decisions along the way,” he said.
“Someone once told me... in order to let the flowers grow, you need to pull the weeds. And sometimes over time what was once a flower is now a weed.”
Businesses that were once successful now have declining revenue streams, he said. What publishers need is the right talent, ownership and investments to make the transition happen effectively.
“It’s not easy,” he said.
For example, Friedenberg said IDG was once primarily focused on content. Now, it’s just as committed to commerce and data, as well as content marketing, video, mobile, social and native.
“We are set up nicely. If digital display takes a hiccup — which I’m predicting — our business isn’t going to crater.”
What alarms Friedenberg are the media companies that are “still 70% -80% print."
"I know where that ends. It’s not going to last,” he said.