That’s because the moment it became evident to the advertising industry that it would be living with COVID-19 for many months, billions of dollars in pre-booked advertising suddenly evaporated. Execution method be damned — programmatic or direct — it didn’t matter, the money vanished.
What’s more, despite the nonstop news cycle that has characterized the past few months and digital media consumption at all-time highs, stalwarts of the open web are seeing massively compressed revenue. Google, Amazon and Facebook haven’t been immune to the downturn either, but have since said revenue has stabilized.
Advertisers have been in retreat mode over the past few months, but there are ways publishers can solve that issue.
Nationalizing supply chains
The struggles of global supply chains in the midst of the pandemic have been well-documented. Namely, America’s dependency on others for protective equipment, ventilators, medicine, et cetera, which have made procurement and speed a major challenge. This has prompted calls to re-nationalize supply chains. At the same rate, it’s important to balance the need to mitigate prices for consumers while avoiding problems with getting access.
In the advertising ecosystem, many top publishers are overly dependent on the tech stacks of the tech giants and do not own enough of their respective supply chains to control prices, while delivering the best experience for the consumer. That’s because digital media is one of the few environments where supply does not dictate price, since there is infinite supply. Floor prices do not set the price of inventory versus supply; they are a shadow mechanism to avoid driving price too low, not to create fair market value for that ad space.
Clunky ad experiences contribute to “analog dollars to digital pennies” trend
Often, we hear about “premium publishers” or “premium programmatic”, and that is largely a fallacy. Name recognition is not enough to be considered premium anymore. If your content consumption and advertising experience are miserable, then your name recognition will never drive organic and reoccurring traffic for you, or performance for your advertisers.
Video ad units covering content and sticky billboards that swallow up half the page can completely torpedo the concept of premium. It isn’t the fault of the publisher, which specializes in creating content. The problem is, when the advertising doesn’t match the content experience, newspaper dollars do become digital pennies.
Who is getting it right
Looking beyond the scale and addressability of Google, Amazon and Facebook, subscriptions were expected to power the new revenue and added addressability publishers sought. This has worked for a handful, but it will likely plateau with just a few publishers seeing truly meaningful results. It is not the panacea.
Improving the advertising experience could get publishers a lot closer. Google improved the search engine experience by making it faster and more accurate. Facebook improved content consumption with Newsfeed, and Amazon helped us get anything in two days.
Publishers must define what native is to their property. Native is not just about less intrusive advertising — it’s about how to deliver content and how advertising fits into it, not around it. Content owners need to reassert control over the process of bringing the ad from the buyer to the webpage via the same types of ad units and video players currently used — but tweaked to work in harmony with content and readership.
Vox and TheWashington Post have been standouts in this area for the past few years by building technology for their properties supporting both content delivery and advertising solutions. However, what makes them unique is they made these platforms available to other publishers. With a goal to create a network of partners controlling these same attributes on their properties, the open web could begin to democratize the influence of the triopoly.
The open web publishing community is a critical component to the Fourth Estate in driving powerful and truthful information to the masses. Subscription services have been helpful to a select few in supporting quality reporting, but there is money being left on the table — and readers left behind. More time must be invested in creating better advertising experiences to help bring consumers back to premium publishers. And that might mean supply chains have to be nationalized along the way.