• by Tobi Elkin , Staff Writer @tobielkin, January 12, 2017

Earlier this week, I wrote about Medium’s job cuts and its decision to retool its ad and monetization model. Keith Sibson, VP of Product and Marketing at PostUp, a provider of email, social, and mobile tools for publishers, doesn’t believe that programmatic ad revenue alone will solve Medium’s or other other digital publishers’ problems.

Sibson told RTBlog that Medium should consider email, an older, less sexy channel, that could help it generate a number of revenue streams from subscription promotions to sponsored ads. Granted, he has a stake in advocating the channel, since his company markets email marketing solutions. But Sibson said now’s not the time to be building a platform based on programmatic display ads.

RTBlog: What lessons can be learned from Medium’s situation?

Sibson: Programmatic ad revenue is in large part the cause of publisher woes. It started off well. For advertisers, programmatic aggregates and provides enormous reach, as well as powerful targeting capabilities that deliver click performance.

For publishers, it's turnkey: put a small piece of code on your site, and the money starts to flow. However, now publishers don't need an ad sales team, and the barrier to entry for new publishing businesses has dropped dramatically. There’s now an oversupply of ad inventory, and CPMs are compressed as a result.

For many, the solution to preserve revenue was to show more ads, which in turn, helped precipitate the rise of ad blockers, which further compressed CPMs (per page view). I like to say that BuzzFeed took $10 billion of publishing industry revenue, and converted it into $1 billion in revenue for BuzzFeed.

RTBlog: Why should a publisher like Medium consider email: email newsletters, subscriptions, etc.?

Sibson: Email is not in itself the answer, but is arguably the best channel for content distribution. It sidesteps ad blockers, and takes back control from platforms that try to own and sometimes subvert the audience relationship (e.g., Facebook). Email is the audience relationship that the publisher owns directly, and that the publisher can reach at a time of its choosing.

Whatever Medium (or any publisher) decides to use as its revenue model, email is an often overlooked channel. We have clients that generate more than 60% of their revenue directly or indirectly from email. You can sell ads within email, do dedicated promotional mailings, native ads within content, invite subscription signups, trigger micro-payments, and even charge for the email content itself. Publications like The Information and Stratechery, are examples. Email is more strategic than any one monetization system.

RTBlog: Why shouldn’t publishers be building platforms based on programmatic display ads?

Sibson: Publishers, and especially those with legacy cost structures, need to find another way to monetize if they are to survive. I personally think that in 10 years, the industry will be split into two: those with a low-cost structure and low quality publishers funded by programmatic, and publishers with metered pay walls and an audience willing to pay for high quality. The wild card is the extent to which Facebook and others will control distribution, relegating publishers to the role of producing low-margin click bait.