Looking at the media landscape, it would seem that the move away from print to online continues to pose problems for the mainstream publishing industry.
Indeed, printing and distribution costs are eliminated by moving online. With increasing momentum in work-from-home and the gig economy, the cost of producing content is getting lower.
It also helps publishers that the world is full of recently redundant journalists, all of them trying hard to survive and hang on to their careers. With labor supply so high, publishers can afford to pay contributors less.
All of this, however, is not as significant to the most pressing problem in creating a successful online publishing business model that delivers results for all parties. In this project, many publishers have failed their advertisers.
Secret pact unbound
The number of community and regional newspapers which have stopped printing and moved to online-only has hit triple figures during the COVID-19 pandemic. But those titles that made the switch did so to slash costs and survive. There was no real strategy on how they can monetize their digital footprints.
Once upon a time, publishers and advertisers were bound together through a mutual need. In the current disrupted market, the balance has shifted, and many advertisers do not see that publishers are critical to them in getting their message across.
The publishing model can only be successful if readers are prepared to pay for content, or if the publisher can create a product which is a successful vehicle for advertisers to reach consumers.
Expanding data privacy regulation, the declining use of third-party cookies, and the rise of the walled garden are putting all the players in the advertising and market ecosystem under pressure.
Cutting the cookie
The demise of the third-party cookie is one key reason for the problem. Around 40% of browser inventory is now cookie-less, and this breaks one of the links between publishers and the value they deliver to advertisers.
The implications are that publishers need to increase the use of authentication to recognize their readership. It can, in turn, drive data-driven advertising that can yield better results.
There is a nirvana here, and it is direct advertising to defined demographics where deals are pitched to people who qualify as seriously live leads.
The ideal is for a fully qualified readership base, which trusts the publisher and engages with the advertising they deliver because it is so well targeted and appropriate in tone.
It is also where programmatic advertising can take over. With a lot of guesswork about the consumer group removed, the automation of advertising, and the confidence in its appropriateness becomes more and more possible.
Fighting the resistance
Consumers, however, have so far been resisting to join this authentication model. Trust and privacy issues, combined with media fatigue and laziness, have stopped many consumers from going through authentication.
Web browsing and news consumption patterns are such that many people move on to another page when asked to fill in any form, while others will actively resist doing so.
The danger for advertisers is that they are not seeing sufficient return on investment and will come to the conclusion that they are spending for little result.
Their problem is that there are limited options because bypassing publishers and going directly through social media also has some issues with engagement.
Australia’s Sensis business services company conducts research and found that brands spend AUD 9.4 billion on social media digital ads in 2019 in Australia. But 51% of men and 46% of women take no notice of them.
The survey also found that a third of men (33%) and 27% of women are actually turned off by brands on social media and actively resist these ads.
While the delivery models are in a state of flux, there are a few trends. One is that mobile advertising is leaping ahead.
According to a recent report by PubMatic, mobile advertising globally jumped by 71% in the second quarter of 2020. While it fell in the early weeks of the COVID-19 pandemic, it then recovered faster than desktop advertising.
Mobile header bidding increased 20% over last year, pushing the mobile share of total header bidding to 59% in the first part of this year. In-app advertising showed the most significant jump, rising 26% and faster than the 18% increase for the mobile web.
One key finding from the research was that private marketplace advertising ad spend grew across all platforms.
These private marketplaces have proved popular during the pandemic, partly because they offer the value and flexibility to use programmatic advertising.
The blurry future
The conclusions to draw from these trends are that mobile advertising and private marketplaces are the future of advertising, along with advertising in-app. These are the channels that advertisers will use for programmatic delivery, with or without publishers.
The problem for publishers is to understand where that leaves them, and where they might have opportunities to insert themselves into these growth areas.
As it stands today, there is no clear path, and that means ongoing pain for publishers as advertisers look for other alternatives.
Photo credit: iStockphoto/tomozina