At the Stifel Nicolaus Wiesel Partners Internet and Media Conference in sunny New York. Some things that people said that made me think, Part 2.
Next Generation Publishing and Advertising
Listening to a very high-powered, high-quality panel discussion about next generation publishing, one thing really struck me. While the future of publishing is obviously digital, this isn’t necessarily good for readers.
I don’t disagree with anything that the panelists are saying – the discussion is about traffic, ‘engagement’, working with platforms including Facebook, Twitter and LinkedIn – the usual stuff. These people are super smart and highly focused. What I find a little bit depressing is the utter focus on advertising as the driver of the business model.
These were the leaders of significant digital publishing businesses:
- Tyler Goldman, CEO, Buzz Media
- Deanna Brown, CEO, Federated Media Publishing
- Peyman Nilforoush, CEO, NetShelter Technology Media
- Greg Strakosch, CEO, TechTarget
- Ben Elowitz, CEO, WetPaint
Together their businesses have well over 200,000,000 unique visitors a month and by any measure, engagement is significant Federated Media for example has over 1,600,000,000 (1.6 Billion) page views per month. It was a pleasure listening to them debate the issues they face. I learned a huge amount but it also left me feeling down on the future of publishing from the perspective of the consumer.
All of these businesses are almost completely dependent on advertising. Of course, they can profile their users better as they engage and they get to know them better and this will drive up the price of the advertising that they pay but the primary driver for each business is basically volume of traffic.
I asked the panel what they were doing, if anything, to explore other business models – subscription, ecommerce etc – that might encourage the generation of higher quality content that they could make higher margins from. It sounds like the traffic driven advertising model is just going to get stronger and stronger and this will of course incentivise the production of ‘quality content‘ where ‘quality content‘ is measured in terms of the number of people that view, engage with, and link to the content.
Apart from some comments about looking at using some of the data that they are generating, there didn’t seem to be a great deal of perceived value in other business models.
One panelist, paraphrased, summed up the general feeling quite nicely:
“We think any publishing business should consider multiple revenue models but the advertising opportunity is so huge, we would be silly to focus on anything else.”
For now at least, the prevailing digital publishing orthodoxy seems to be that ‘quality content leads to engagement and eyeballs = revenue. As anyone that has ever accidentally stumbled on the Daily Mail Website can attest, traffic and advertising revenue do not incentive the production of quality content.