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Industry-Research

Publishers prepare for 2020 with technology investments

Digital publishers see rays of hope as they continue to monetize premium content, transform business strategies, maximize technology investments, and increase revenue diversification. Just over two-thirds (69%) of digital publishers expect to see an overall revenue growth in 2020 according to a new report, Publishers Bullish on Talent, Tech and Growth in 2020, from Folio. Of those publishers expecting revenue growth, a quarter anticipate double digits. Only 4% of participants expect revenues to decline. This research is based on 182 surveyed industry professionals accompanied by eight in-depth executive interviews.

Growth expectations

Respondents report the top three categories for revenue growth are digital advertising including branded content (58%), live events (43%), and marketing services (38%). In addition to revenue growth, audience growth is also expected in 2020. Twenty-eight percent of publishers expect a 10% growth in audience while more than one-third (36%) expect single-digit growth. 

Audience development is more than just chasing clicks on digital platforms. It’s about learning your business ecosystem and how the pieces work together. Executives cite email (54%), social media (53%), and events (44%) as the strongest performers for audience development. 

2020 priorities

Publishers recognize the need to invest in the video side (35%) of their business as well as back end technology and operation systems (34%) for content management and advertising businesses. Publishers, especially traditional magazine businesses, see video as a very lucrative way to reinvent their content strategy and distribution model with attractive advertising packages at high CPMs.

Executive interviews

Catherine Levene, President, Chief Digital Officer of Meredith Corporation, participated in Folio’s executive interviews. Meredith charted its course in preparation for 2020. Levene said Meredith is keenly focused is on innovation. This includes technology investments, including a new content management system and a first-party data and insights platform.

She also mentioned Meredith’s investments in video production and distribution and new content-to-commerce capabilities. Levene sees a win-win for their audience and advertisers, “We are creating content and experiences that drive engagement and are offering predictive advertising that achieves results for our marketing partners.”

Erin O’Mara, President of The Nation, also participated in the executive interviews. O’Mara described the digital business as more than just a website, it’s about super-serving the audience. A new initiative, “The Nation Classroom,” uses their archives to create robust teaching modules for high school student. The goal for this project is to be profitable as well as to make available to schools that cannot afford it. O’Mara see this initiative as an important step to extend a brand experience through community outreach.

As Folio’s research suggests, there is no time digital media brands to standstill. It’s essential for media companies to take the steps to identify the key business and audience strategies and investment in them.

Perspectives

DCN’s must reads: week of February 20, 2020

Here are some of the best media stories our team has read so far this week:

Featured Post | Policy

Want to clean up Facebook? Don’t listen to Menlo Park

Mark Zuckerberg is reportedly “begging to be regulated.” He has made several statements to that effect, suggesting that he supports state-backed regulation in four areas: elections, political discourse, privacy, and data portability. This week, Facebook released a white paper that outlines the company’s suggested path forward for content regulation. It does little to drive forward meaningful discussion around these serious issues. Instead, it clearly illustrates that Facebook would like to eschew responsibility for some of its profoundly negative effects in these areas while protecting its ability to continue business as usual in others.

As Zuckerberg put it in a recent op-ed, “regulation could set baselines for what’s prohibited and require companies to build systems for keeping harmful content to a bare minimum.” That said, Facebook’s plan suggests that companies like his should be required to have procedures for taking down offensive or illegal posts and to prepare quarterly reports on their efforts. If this isn’t the absolute bare minimum, I don’t know what is.

Clicky content

It is interesting that Facebook’s paper cites the European Convention on Human Rights which supports the needs of governments to regulate speech for “[T]he interests of national security, territorial integrity or public safety, for the prevention of disorder or crime, for the protection of health or morals…”

Some have argued that Facebook’s algorithms and data targeting capabilities, the same tools which have been refined and optimized for immense profits, actually encourage these sorts of activities. The argument goes like this: The algorithms promote content that gets clicks. The content that gets the most clicks is often salacious (yes, even to the point of being false) or highly targeted based on consumer data.

In this way, drug dealers target members of addict recovery groups, for example. Or false stories that reinforce specific bias, racism, or extremist views are targeted at specific individuals. Of course, those Facebook functions would remain very lightly regulated under the company’s proposal.

Competitive advantages

In his op-ed, Zuckerberg said he believes that “good regulation may hurt Facebook’s business in the near term but it will be better for everyone, including us, over the long term.” However, Facebook’s proposal clearly brings with it the added benefit (for Facebook) that the suggested regulations would build barriers and add compliance costs that entrenched companies are best equipped to overcome. It’s already a daunting challenge for a start-up social media company to break through in the current marketplace. This proposal would only increase that burden.

In what is quite possibly the icing on Zuckerberg’s cake, the proposal would grant global immunity to big tech platforms to carry out content moderation policies, which could also be used to shut out competitive services on their platforms. The proposal would essentially reinforce Section 230 of the U.S. Communications Decency Act globally, so that Facebook could claim legal protection for removing offensive posts and adjusting algorithms to disadvantage repeat offenders.

The last thing the world needs exported from America is blanket liability protection for Facebook. But Zuckerberg’s proposed immunity is intentionally broad to allow for all kinds of activity under a content moderation policy, including favoring its own services or certain business partners over others.

Anti-competitive landscaping

Facebook’s proposal includes an entire section about how – even with the proposed content moderation – enforcement of any guidelines will not only be a challenge; it will be imperfect.

Imagine if Instagram were still a separate company. Do you think Zuckerberg would be talking about how it’s too hard to scrub racist and sexist content from the service? Do you think he would offer only muddled, hazy responses about whether foreign governments manipulated his service to impact elections? Do you think he would be complaining that it’s hard to prevent drug dealers from targeting recovering addicts? No. He would be taking aggressive action to clean it up.

In fact, there is documented evidence that Facebook cared a lot more about these issues when they had competition. Acquiring WhatsApp and Instagram were likely a cheaper alternative to changing Facebook’s underlying and unhealthy business. Zuckerberg’s calculation could have been that turning his back on the public’s welfare was more acceptable than turning his back on shareholders.

The compliance question

As Facebook’s own report puts it, “Designed poorly, these efforts may stifle expression, slow innovation, and create the wrong incentives for platforms.” And Zuckerberg should know.  

While Zuckerberg calls for “regulation,” it’s important to consider Facebook’s track record of complying with existing regulations. Their approach to the EU’s General Data Protection Regulation (GDPR) is disingenuous and sometimes misleading. In California, which recently rolled out the CCPA, Facebook is making case the that they don’t “sell” consumer data even under California’s very broad definition.

And that’s the point: Facebook is a for-profit company with responsibility only to its shareholders. Zuckerberg isn’t offering a real plan for regulation that will benefit society and democracy. He’s offering a plan to minimize the obligations and responsibility for Facebook. And this is why the best perspectives on how to clean up the mess that is Facebook are coming from outside of Menlo Park.

Perspectives

Can your consent management platform handle today’s regulatory challenges?

Digital regulation is in the process of adjusting to a sea of change brought in by legislators at state, national, and international levels. Following the EU’s GDPR lead, the California Consumer Privacy Act took effect meaning publishers must now ensure sufficient measures are in place to protect the data privacy rights of California residents. Otherwise, they face financial penalties due to noncompliance. Many publishers turned to their consent management platform (CMP) to handle these challenges. However, due to poor consent signals, publishers are concerned about continued monetization efforts.

Data protection actions

All data privacy regulations involve three basic tenets:

  1. Data Inventory: identification of all data collected, used, shared and stored by the organization. This frequently involves questionnaires and mapping of data touchpoints. 
  2. Consumer Interaction: covers the rights consumers have regarding their data, i.e., request information, opt-in to collection, privacy policy, etc.
  3. Technology Adjustments: ability to satisfy requirements for upholding consumer rights such as consent management, digital data tracking restrictions, data tracking categories and more.

Data regulation and browser actions put targeted advertising, cookies, and other persistent identifiers under unprecedented scrutiny unlike ever before. Tracking technologies have not been of much legal concern until recent years and private right of action is prompting companies to think and work smarter. 

Even worse, CMPs struggle to send the appropriate signals regarding consent. This is particularly difficult because different markets have different requirements. These unclear signals in RTB muddy the bid process, causing trepidation among AdTech out of fear of serving an ad to an un-consented user. The result? Lowered CPMs for everyone.

Under today’s regulatory environment, the systems by which organizations have previously built their digital ecosystems could cause significant headaches for ad-supported businesses. But it shouldn’t have to be that way. Publishers that take control of their websites and mobile apps can facilitate compliance with any data protection regulation.

The DCN example

The presence of unmanaged third-party vendors and their contribution to widespread data tracking activity are the chief culprits of this digital woe.

Analysis of leading DCN member websites reveals that 81% of the executing code required to render the user experience is from third parties. Other data points include:

  • 774: average number of domains executing
  • 8%: executing domains are risky
  • 138: average number of cookies dropped per user session
  • 21% of cookies exhibit lifespans greater than 1 year

With your websites and mobile apps causing this much code executing on consumer devices, you cannot ignore the data compliance risks of external code from service providers and third parties. As a site owner, you must know exactly what personal information your digital assets collect, the reason it’s collected, and who has access to the information. This will help you accomplish two CCPA obligations: 

  1. Provide users with full disclosure of what information you collect from them.
  2. Inform users in case their data has been misused or shared without consent. If consumer data is leaked or mismanaged, your company (and associated digital vendors) must accept responsibility for the incident and work to recover consumer trust and re-establish the brand’s position. 

Approximately 8% of executing, client-side code presents a controllable risk. These domains are overtly malicious, have a history of suspicious activity, or mask their ownership. Inability to verify domain ownership is a red flag; this type of obfuscation is basic tactic adopted by bad actors. Unmanaged third-party code is routinely hijacked and used as a backdoor to infiltrate consumer-facing websites and covertly skim customer data.

Throughout 2019, several big brands made the headlines and found themselves in regulatory hot water because of large scale data attacks by cybercriminals. These breaches resulted in well-known industry giants being slammed with record-breaking regulatory fines and penalties. 

Thus, it’s vitally important for companies to implement digital security measures to ensure their CCPA preparedness. 

Compliance is not a spectator sport 

Compliance is more involved than simply drawing up contracts that require service providers to comply with obligations. You must be just as concerned with ensuring that providers are compliant as you are with upholding your compliance. 

Many publishers perceive compliance to be harmful to page views, content consumption, and as a result advertising revenue. However, it has quite the opposite effect. Consumers and advertisers alike gravitate towards businesses that care about their privacy and strive to secure it. They’ll remain loyal to companies that have full visibility and knowledge over the data collection taking place on their sites. They expect companies to be transparent about and communicate all the information that will be collected during a browsing session. 

Compliance management can be burdensome and time-consuming without the right tools and expertise. But when procedures are optimized and tools with the capability to provide a broad view of the digital ecosystem are implemented, compliance management can be operationalized and streamlined to gain total control over unauthorized data tracking and take back control of the digital landscape your company operates on.

About the author

Chris Olson co-founded The Media Trust with a goal to transform the internet experience by creating better digital ecosystems to govern assets, connect partners and enable Digital Risk Management. Chris has more than 15 years of experience leading high tech and ad technology start-ups and managing international software development, product and sales teams. Prior to The Media Trust, Chris created an Internet-based transaction system to research, buy and sell media for TV, radio, cable, and online channels. He started his career managing equity and fixed income electronic trading desks for Salomon Brothers, Citibank and Commerzbank AG.

Advertising | Perspectives | Revenue

Latency: the devastating tax that publishers are ignoring

In recent years, the industry has focused a great deal of attention on the “tech tax” on programmatic spending. This refers to the fees being paid to the various DSPs, SSPs, exchanges, and other parties that sit between publishers and advertisers. Unfortunately, that’s only part of the story. Publishers are losing hundreds of millions of dollars every year to another hidden tax on their sites: latency.

Due to the volume of ad tags on today’s sites—and the slowness they inject into the site experience—publishers are losing untold impressions to ad technology that’s supposed to improve their monetization. Unfortunately, unless publishers actively address this problem, the latency tax is only going to go up. Here’s why.

Latency begets countless other ills for publishers

The true scope of the latency tax on publishers encompasses many sub-taxes. One of the most notable in this regard is viewability. Viewability measurement doesn’t start until an ad has been fully rendered on a page. Thus, laggy load times on a website have a direct impact on viewability. This, in turn has a direct impact on revenue. After all, today’s advertisers are increasingly relying on viewability metrics. This is only when selecting publishers with which to work, but also when determining the impressions for which they will pay.

With regard to latency, the viewability conundrum for publishers goes even deeper. Whether or not ads are viewable—and whether they’re appearing on brand-safe content, for that matter—is gauged by third-party ad tags on publishers’ sites. These tags, ironically enough, contribute to the latency on a publisher’s site, which in turn reduces viewability. On top of it all, thanks to ad tags that fire late or incorrectly, there’s typically a discrepancy between what’s happening on sites in reality and what these third parties say publishers can charge advertisers for. That’s another ding to publisher revenue that’s rarely considered.

And then, of course, there’s the user experience. On average, most publishers see several seconds of latency on their sites before the content loads and then ads begin to populate. The late incoming ads tend to shift content around on the site while users are already in the process of trying to consume it. That’s a bad user experience—and it has a real, tangible effect on a publisher’s bottom line. Latency results in user abandonment. Overtime, it contributes to wholesale ad avoidance, either actively (via ad blockers) or passively (via chosen platforms like iPhone and Safari). This is a direct result of the poor experiences being created by today’s ad tech and the resulting reaction on the user and browser side. 

And yes, it’s going to get worse

The latency tax is already taking a heavy toll on open web publishers’ already-razor-thin margins. And this isn’t a problem that’s going to correct itself. On the contrary, technology advances on the near horizon promise only to exacerbate the issue. Take 5G, for example. As 5G networks and devices gain greater traction over the next two years, consumer expectations for speed in their mobile experiences are going to skyrocket. Unfortunately, faster speeds are only going to call more attention to legacy ad technology on publisher sites that drags down site performance and, correspondingly, monetization via ads. 

For publishers, now is the pivotal time to be seeking new opportunities to streamline site experiences and reduce legacy latency issues within the ad experience. All the ad tech in the world isn’t going to help publishers better compete in the digital landscape if it’s ultimately contributing to a poor user experience and countless lost impressions. Publishers today need a new site-serving paradigm that removes the latency burden of today’s ad tags from their pages and accelerates the overall site experience, ads included. 

Publishers have been quietly paying their latency tax for far too long already. In doing so, they’re ignoring a fast path to revenue that’s already there. It’s time to take a hard look at their current tech stacks. Then they need to make the changes required to get back to a place of speed, good user experience, and profitability. 

Industry-Research

New research offers a method to build habit-forming news products

Readers once consumed the morning paper as regularly as their morning coffee. As well-trained hounds would retrieve that paper from the lawn, consumers had deeply ritualized routines around their consumption of news—be it a daily morning hit, the nightly news, or a Sunday deep dive. New research from Twipe examines the evolution of reader consumption patterns and the need to rebuild a “habit loop” in order to create loyal customers.

Pre-digital,  many consumers had a daily consumption pattern that, for example, involved reading the morning paper. However, when news went online, the product experience didn’t follow. In fact, most news organizations shifted from publishing any sort of “edition” to publishing a constant stream of information. To compound this, it was increasingly disintermediated and delivered on a wide range of platform and contexts. Readers developed fragmented reading habits and, as Twipe points out, publishers “failed to prioritise maintaining the habitual relationship with their readers.”

This report, which is latest chapter of Twipe’s Reinventing Digital Editions research series, was based upon interviews with leading newspaper publishers across Europe and the United States. They analyzed these insights to create “a habit formation canvas for news” and to highlight best practices for forming habits with news products.

Cues, triggers, actions

Citing Charles Duhigg’s research in the “Power of Habit,” Twipe’s research looks at the cues and triggers that foster habits in content consumers. For newspaper publishers, time is a particularly important cue, as many people crave news early in the morning. Location is another key consideration, as forming habits with commuters provides a location-optimized opportunity. Twipe also touts the effectiveness of the popular red dot, which alerts readers to updates in a given app.

Cues and triggers alone won’t form a habit, however. The research suggests that publishers then follow Nir Eyal’s advice and prompt a “very simple action… that is easier than thinking,” such as a click, swipe, or tap that is then given a “variable reward.” This is an approach well-documented in casinos and other forms of “addictive design.”

For publishers in particular, Twipe suggests that “mixing structure and predictability with the serendipity of discovering unexpected articles offers a variable reward that powers the habit loop.”

Best practices

Based up its observations of, and interviews with, successful publishers, Twipe offers five best practices for habit formation with news products (which it explores in a series of case studies in the report):

  1. Know the existing habits of your readers
  2. Your content is the key to the hook
  3. Invest in product experiences for the right habits
  4. Transform your organization
  5. Focus on the right metrics

The good news, as Twipe points out, is that “publishers have this know-how in their DNA.” Given the longevity of the news business, publishers understand how being a reliable, regular part of consumers’ lives builds a deeper relationship. With the right understanding of habit formation, combined with consistent respect for consumer needs and expectations, news publishers can leverage digital to regain their role as part of a regular media diet.

Featured Post | Perspectives | Revenue

The rise of tribal subscription marketing

“Democracy dies in darkness.” It’s an amazing rallying cry, a banner that supporters of The Washington Post flock to. As a tool for signing up potential subscribers, it has the benefit of setting out a core belief that many people share. It conditions the people who support (or profess to) democracy to consider The Washington Post an ally, by appealing to their emotions.

Creating that sense of belonging to a club is a key component of most subscription and membership marketing. You see it across most of the general news titles, from the offers made to “our readers” to the appeals to shared values. It’s even more obvious in the transition to membership rhetoric being offered by news titles, which have made that sense of belonging the central tenet of their marketing messages.

However, as digital subscriptions become the default primary revenue stream for many newspapers, the marketing messages they use to create that sense of kinship is changing. Driven by competition and an electric political climate, some publications are inverting that message. For many, the strongest sales pitch they can make to subscribers is not by setting out the values they stand for – it’s the values and people they stand against.

The changing nature of newspaper subscription

We’re entering the second stage of digital subscriptions. Many publications are altering their membership and subscription marketing messages as more people become habituated to paying for news online. The Guardian, for instance, made a considered decision to move from a message of survival to one of sustainability when it hit one million paying supporters.

Where once it was the sole preserve of the specialist B2B and information provider, now the viability of consumer-focused subscriptions is well established. As a hangover from those early days of B2B success, however, some newspapers still make the exclusivity of their articles and analysis the central focus of their subscription marketing.

John Barnes is the managing director of Sloop Media and a veteran of B2B publishing. He explains: “There’s been a swing back to quality journalism, which doesn’t happen by accident. It has to be funded everybody in the media is benefiting from that.”

Support quality

The Times & Sunday Times in the UK, for example, was an early entrant into the subscription space. The paper has always made the case that readers can only be assured of news quality by paying to support its journalists.

Even for publications without the prestigious history of The Times, the message that information must be directly funded through subscriptions is widespread. The Information, a tech-focused publisher that charges $399 annually for access, justifies its high price that way. Founder Jessica Lessin told the New York Times: “I’ve said this from the beginning, and I continue to say this, but you can’t give away what you expect the reader to find valuable.”

However, due to their positioning and the nature of their content, many news publications have found it difficult to justify using the exclusivity of their content as the selling point for a subscription. After all, in the age of information overload you’d be hard pressed to find a generalist newspaper that isn’t covering the same beats as many free-to-access online outlets. Consequently, they have made their political affiliation or stance the core of their proposition – for better and worse.

In the UK, for instance, The Daily Telegraph recently ran an advertisement for its subscription options that used its close ties to the UK government as the primary message. The current prime minister is a former Telegraph columnist.

Enemy of my enemy

Therefore, many newspapers have decided to lean into tribalism, making it clear that the best reason to support them is that they provide a bastion for a particular way of thinking. You see this most clearly in the messaging of the single subject newspapers, like the UK’s pro-EU The New European and Scotland’s pro-Independence The National. However, it’s equally true at many of the larger titles as well. Nobody’s abandoning the ideal of objectivity, but they’re making a particular slant central to their identity.

Barnes explains that “The big newspapers – the Guardian, The Washington Post – you know, the media organizations that have almost been singled out by Donald Trump… I think they definitely are playing that card of ‘who’s going to hold him to account unless we’re here?’”

The “Trump Bump” has been a boon for left-leaning papers, with the NYT in particular being singled out as the paper of choice for the swathes of the public who oppose him. (Though arguably, the publication has parlayed that into some smart investments in future subscription growth).

In a sense, what those publishers are doing is just an extension of what they’ve always done in print. After all, a particular political niche is practically a prerequisite in an incredibly competitive landscape. What’s changing is how explicitly some titles are making opposition to their competitors and politicians their sole marketing message.

In the UK, the 10-month-old Byline Times is a newspaper defined by opposition. It has made criticism of most other UK titles the way it appeals to disenfranchised readers.

What the others won’t say

Its executive editor Stephen Colegrave told me: “That’s a very strong part of our positioning. We launched originally with the positioning, which is on our masthead, of publishing what the other papers don’t say. So, we’ve had quite a strong position in terms of getting subscribers by actually welcoming people back to newspapers and acknowledging, like most of our audience, that we stopped reading newspapers a long time ago because we didn’t trust them.”

In particular, he singles out the fact that a handful of billionaires own the vast majority of UK newspapers as being of concern to a large enough proportion of the public to be worth launching a newspaper that explicitly is not billionaire owned. The recent outcry over the mere suggestion that a member of the Murdoch family might be about to take the role of Director-General at the BBC would seem to back up that assertion.

Adversarial positioning

That move towards more adversarial positioning isn’t just cathartic for the journalists at a title. There’s a commercial consideration too. As the latest Digital News Report from Reuters demonstrated, people are more likely to trust and (therefore pay to support) the titles with which they share political leanings. Freed from the need to chase scale, but now yoked to the need to create community to aid conversions, publications are fostering tribes.

Consequently, even as Byline Times moves into paid-for marketing, Colegrave believes it would be folly to change tack on its adversarial messaging. “We have to maintain the same positioning. It’s very, very important for us because that’s what Byline is, while also maintaining the newspaper as a central part of that message. So, it’s more about how we communicate that positioning to people who don’t know anything about us.”

It remains to be seen what will happen to that marketing message if the incredibly polarized political landscape cools down. Until then, however, the fact that newspapers are prioritizing converting smaller numbers of like-minded supporters over appealing to vast audiences across the political spectrum means that adversarial marketing is here to stay. If creating a community is key, then it’s as easy to do that through defining what you are against as what you stand for.

Perspectives

DCN’s must reads: week of February 13, 2020

Here are some of the best media stories our team has read so far this week:

Revenue

Subscription motivation and acquisition tactics

As the art and the science of acquiring digital subscriptions has progressed, the use of advanced analytics to profile potential subscribers and target them with subscription offers has become standard practice. The early days of 20 articles-per-month metered access have given way to hybrid Freemium models that offer premium content to subscribers in addition to metered access to free content for non-subscribers. And certainly, balancing advertising and subscription revenue remains paramount to many publishers. This is particularly true for those with advanced programmatic advertising revenue capabilities.

My last post discussed the tactics for maximizing total digital revenue, audience, and advertising revenue, by using an intelligent paywall strategy. This post builds on that discussion with additional insights on how audience analytics add value to the subscription revenue model. The goal is to help publishers refine their acquisition strategies to reflect the motivations of different customer segments for subscribing. These same analytics can help publishers take steps to retain customers once they have taken the leap of subscribing.

Propensity to subscribe

Our recent work with publishers developing propensity-to-subscribe models has identified several reasons why individuals subscribe to digital content products. These factors have also been written about by the American Press Institute in their research on reader revenue that used surveys of recent subscribers.

These factors are often cited by many subscribers as their reason for subscribing:

  • Community – Refers to a reader’s interest in local news and events. 60% of the API survey respondents mentioned local news as a reason they subscribed.
  • Cost – Receiving a discounted offer at the right time is also a common factor in subscription decisions. 45% of the API survey respondents mention discounts or promotions as a reason.
  • Content – The desire to read content that the reader finds interesting. 40% of survey responders gave this as a subscription reason.
  • Contribution – Supporting local journalism, whether the reader is actively engaged with the publication or not, was mentioned by 31% of survey responses.

Key variables

In our econometric models of subscription propensity, these same reasons were identified as important for predicting customer behavior. Local news content is consistently one of the significant drivers of subscription purchases.

Offer price is also an important factor in our models of propensity to subscribe. Variables that are correlated with interest in content, such article page views, average time on site, and frequency of visits are important predictors. These statistical results developed on observed customer purchase decisions validate the stated subscription reasons in the survey data.

Harder to measure empirically is the influence of the contribution motive on an individual’s likelihood to subscribe. However, we do observe a consistent proportion of digital subscribers that have very low engagement following their subscription purchase. This behavior supports the belief there is a large audience segment that wants to support local journalism despite low engagement with the product.

Understanding value

As an interesting aside, there are precedents for people placing economic value and paying for resources that they do not use. Environmental economists measure the value individuals place on the fact that certain natural resources exist, such as the Everglades or Redwood forests, even though they may never see those resources or use them directly.

Understanding the motivating factors for subscribers is helpful for selecting acquisition and retention tactics to implement, and it helps explain why freemium models are replacing metered models at many publishers. For those readers motivated to subscribe by interesting content, premium content is an effective acquisition tactic as readers motivated to access a particular article will accept a subscription offer. Premium content also gives those wanting to contribute to the journalistic mission a low-friction path to subscribe relative to a multi-article metered strategy.

Pathways to subscription

For publishers that have had a premium content strategy, the trend is to increase the proportion of content categorized as premium. Le Monde recently shared they now have 35% of their content as premium, even though it may negatively affect advertising revenue. Schibsted in Norway has also increased the percentage of their content designated as premium.

We often find that less than half of new digital subscriptions are sold via a paywall. The other subscription sales come from newsletters, emailed promotions, and the “subscribe now” option on the site. Personalized newsletters and email promotions can focus offers on those readers who have hit the meter one or more times but not subscribed at the standard offer. Paywalls can provide this type of offer targeting, but there is a risk in having dynamic pricing on a site itself as many customers find this type of targeted acquisition pricing confusing. It is also hard to implement since many customers come to a site from different devices and browsers.

The current state of the art is deciding what content is premium to each reader at what time. There are a growing number of publishers using predictive analytics to assign content as premium based on its expected subscription conversion performance. However, most often the editorial staff are making these premium content decisions. Combining this tactic, dynamic premium content decisions, with an intelligent paywall can maximize subscription sales while still protecting advertising revenues.

My next article will describe how retention tactics that reflect these subscriber motivations can be applied to each customer segment to minimize digital subscription churn.

Perspectives

Defining the publisher of the future

Since the dawn of the printing press, publishers have been navigating the forces of technology. From the advent of newspapers and magazines in the 17th century to the more recent emergence of electronic media like radio, television, the internet, and mobile devices, content creators have needed to continuously adjust their business models to adapt to new technologies, channels, and consumer behavior. 

Today, the pace of that change is accelerating. This year, for the first time in history, digital advertising is set to surpass all offline advertising mediums combined. Analysts estimate that advertisers will spend almost $130 billion on digital media in 2019 in the U.S. alone.

Yet even as digital dominates and content creators are leveraging new and exciting media for storytelling, publishers are looking toward the future and preparing themselves for the next set of opportunities and challenges on the horizon. To succeed in the hyper-speed world of the modern digital economy, publishers should focus on three large issues that will help determine their success or failure.

1. Bring the focus back to media quality

The trailblazers of digital advertising have always been pushed and pulled by centrifugal forces, especially those on the sell-side. As hundreds of millions of people first moved online, advertisers raced to get their messages in front of those digital audiences. And an immediate income stream was born for anyone who could drive traffic or, more important, capture attention.

At the dawn of the programmatic era, increasing complexities came into play. And this may have pulled the pendulum too far toward scale and away from media quality. These days, consumer choice at an all-time high and publishers face increasing competition from walled gardens. So, it is vital for publishers of all sizes – from big cross-channel players to digital-only hubs – to regain that focus on media quality. 

Beyond the big three issues of brand safety, viewability, and fraud, publishers need to realign their thinking and their metrics to better match consumer behavior. For example, in the fight against non-human forms of traffic, questions such as “did a person ‘see’ our content?” sometimes override the more important question of “did a person actually ‘read or watch’ our content and for how long?” Let’s swing that pendulum back to consumer-focused media quality.

2. For publishers, media quality is the top job

Publishers must keep their focus on what truly matters: engaging their audience through compelling storytelling. This includes building an advertising experience on their properties that puts the user experience first. This must include integrity around validity, viewability, and brand safety.

When it comes to demanding higher quality ads and organic content on the web, publishers have a huge opportunity to move the needle. Publishers have the advantage of providing consumers and brands with a curated platform that offers a more  controlled experience, enabling them to tell their story and reach consumers in an impactful way that drives an emotional connection.

This level of command over content allows publishers to control the conversation with their advertisers, share peace of mind with their partners, and better demonstrate the value of their media and audiences. 

3. Valid, viewable, and safe is only a starting point

How can publishers tell if their efforts to build a better ad experience are successful? New and nuanced forms of measurement hold the key.

While consumers may never love all forms of advertising, we know from research that they  find certain types more tolerable. The job of providing better advertising that meets those can’t fall on publishers alone, of course. It will take buy-in from advertisers, agencies, and all industry players.

More important, when publishers themselves measure media quality only in terms of things like brand safety, viewability, and invalid traffic, they are missing out on other relevant signals. A publisher that is achieving a holistic view with their metrics is able to see if their content is connecting to a brand’s message or if it’s engaging an audience.

This holistic view comes from more sophisticated measurement, offers answers to questions such as:

  • Is there ad clutter?
  • Who are the returning users?
  • Which formats are in play? (i.e., infinite scroll vs. photo galleries vs. sticky player)
  • What is the site experience? (i.e., navigation or content discovery, which can be especially valuable for full-page branded content campaigns)

In short, valid, viewable, and safe is just a starting point. The publisher of the future will set a higher bar. Through a better understanding of performance, monitoring context, and applying more advanced ad quality metrics, the industry will be able to launch ads that resonate, are viewed and interacted with, and, ultimately, serve the interests of both advertiser and viewer. All because the entire ecosystem better understands what the audience wants.

The publisher of the future is now

More than ever, as attention spans continue to shrink in the modern digital landscape, publishers need to understand what truly influences attention, quality, and engagement. By focusing on these signals, publishers will not only delight their audience, but they have the power to make brand advertising more effective.

The publisher of the future looks forward with optimism and a strong conviction for storytelling. The publisher of the future recognizes they have the opportunity to deliver entertainment and experiences the world truly desires. It starts with helping marketers connect with their audiences sustainably and ethically, protecting an ecosystem that citizens rely on every day.

You are the publisher of the future. And the future is now.

About the author
A person looking at the camera Description automatically generated

Dave Constantino is the Senior Director of Client Development at Oracle Data Cloud, where he is responsible for driving revenue across the full measurement solutions suite encompassed by Moat Analytics, Contextual Intelligence, Moat Outcomes and Moat Reach. He joined Oracle with the Moat acquisition in 2017, where he focused on scaling the sales team and revenue for the business with strategic publishers and platforms. Prior to Oracle, Dave has held various roles as a SaaS leader and in sales.

Perspectives

The impact of Accenture’s exit from the media auditing market

One of the world’s biggest consultancies, Accenture – home to arguably the largest media auditing operation – has announced it would be leaving the business. Presumably, this is because the firm sees more opportunity on the media buying side of the equation, which it has pursued in earnest via acquisitions and other investments in recent years. For media companies, the implications are varied and sometimes conflicting.

Pro: one less watchdog on the job

For too long, Accenture was able to play both the “objective” auditor and media buying provider. However, the tension finally became too much, in part due to the refusal of some of the world’s largest ad agencies to be audited by the company any longer. And, with a media buying operation that generates more than $10 billion annually, it just didn’t make sense to run the comparatively smallish auditing operation any longer. Media companies benefit by having one less aggressive and well-known watchdog lumbering around the marketplace. And, let’s face it, no one likes auditors. 

Con: more pervasive data-driven media buying themes abound

Companies with roots in management consulting that buy media for advertisers apply rigorous, data-driven methodologies to their offerings. That’s why digital media buying was so appealing to them in the first place, because it played to their strengths. Accenture Interactive is arguably the largest digital media buying operation in the world today, and will now have no reason not to invest even more aggressively in its ad buying activities moving forward. This in turn will spur others in the category like Deloitte Digital or even IBM to think about bolstering their media buying chops as well — after all, if Accenture is doing it, it’s at least worth consideration. Media concerns will need to respond by continuing to bolster the quantitative benefits of their products in packaging, promotion and delivery — something the duopoly excels at. 

Pro: strategy and planning priorities can be streamlined

Accenture has more than 500,000 employees roaming the world and counts 75% of the Global 500 as customers. Though the company isn’t literally everywhere, it covers more ground than just about any other non-government, non-retail company on the planet. (By comparison, IBM has 350,000 employees. And WPP, the largest advertising agency, has 130,000.) Accenture’s staff is also well-trained to identify opportunities to cross-sell different services into the client base. With media auditing off the menu, media companies can focus their efforts exclusively on figuring out how to deal with Accenture’s ad buying operation. That, of course, is a no small job in itself.

Con: Accenture’s media buying advantages will accelerate faster

Media buying has always been a tricky business, which is why so many big advertisers opted to farm out the activities to agencies like WPP, Omnicom, and Publicis. The introduction and rapid growth of the digital channel has increased complexity substantially, and emphasized the reliance on data and analysis. This, in turn, opened the door for newcomers like Accenture and Deloitte to enter the sector.

Formed in 2009, Accenture is by most accounts the largest digital media buyer in the world today, employing more than 25,000. Having been a major player for a decade now – as well as auditing the operations and books of likely dozens or even hundreds of large global advertisers – Accenture is ideally positioned to understand the weakness and pain points of media companies in a unique and disruptive way. Without having to worry about conflict-of-interest concerns related to the soon-to-be-defunct auditing business, media executives should be on the lookout for inventive new media buying negotiating tactics.

Net positive

At the end of the day, Accenture’s exit from the media auditing game should be a net positive for media companies, if only because of the ability to focus on one aspect of Accenture’s offering moving forward: the media buying operation. More predictability typically results in fewer surprises and better outcomes.

That’s not to say the media auditing business overall will contract much. Media buying remains a volatile segment and not long ago was the target of an FBI investigation. Indeed, most market analysts agree that the explosion of the digital channel has resulted in more inefficiencies in the marketplace, many of which remain unaddressed. If nothing else, this event is yet another reminder that traditional media companies need to continue to invest in packaging products and their features and benefits in a data-centric manner, as the impact of quantitative-based buying methods will become increasingly pervasive in the future.

About the author

Tim Bourgeois is a marketing advisor who helps brands optimize ROI on advertising, technology and agency investments through digital marketing audits and strategy engagements.” 

Perspectives

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