The transition from an analog to a digital world has been difficult for many companies, but perhaps no company has destroyed its business model as quickly and completely as the media industry. When readers switched to the Internet, publishers were slow to keep up, though most lost revenue from print advertising — and continued to see them. Digital-priority publishers have less legacy overhead, but they quickly realized they face the same challenges as traditional media companies. The consequences were dramatic: a series of gaps between historic brands and low traction in the vast majority of new ones.
Few editors can afford to stay longer. Most people know they need a new business model, but many don’t know what that change should look like. Continued reliance on ads often only highlights their vulnerabilities.
Both Facebook and Google still earn a large and growing share of advertising dollars. According to the Interactive Advertising Bureau, digital advertising revenue in the United States grew more than 20% last year to $72.5 billion. But Facebook and Google together accounted for most of the growth, and some experts believe that nearly all of the advertising dollar’s growth is consumed by these two platforms. Meanwhile, on-demand platforms have significantly reduced the CPMs publishers can charge.
Publishers have had access to the solution to this problem for some time, but are just now learning how to use it. The solution lies in the data in the first part. These are data publishers who have been collecting information about their users for a long time but are increasingly playing to advertisers so they can better target the publisher’s audience.
Publishers have no choice: they must use their data to create a better user experience for both loyal members of the audience and newer brands. An improved user experience allows for deeper relationships with readers and opens up a new universe of business models and monetization options.
And if it sounds like a challenge, look at the alternative: a steady slide into irrelevance