Full Sale Ahead: Give Marketers What They Want
When the economy improves and marketing dollars come back, will your organization be positioned to take advantage? The drop in marketing dollars over the past few years has hidden deeper changes in what marketers will want to buy from publishers when the budgets return.
Marketers are looking for different things. Here are three questions to see if your organization is keeping up:
Question #1: Are you Web-first, but interactive-second?
"Web-first" can be a very good thing, but can also imply that a publisher will continue delivering content with the same business model as ever. This familiar formula is to create quality content, use it to attract eyeballs and sell advertising based on the number of eyeballs attracted. The only change is that instead of delivering the content in print, it is delivered "Web-first."
But this approach misses opportunity because the Web is more than just a different transmission media. Its dynamics are different because eyeballs and advertising on the Web are becoming a commodity.
A recent study by Bain and Co. documented how the ever-increasing number of websites offering advertising was turning the banner ad into a commodity. The study documented the number of ad impressions offered to advertisers in 2005 to be just over 200,000 million. By 2008, that number had grown to about 900,000 million. In those same three years, the average CPM (cost per thousand) of an online banner ad dropped by half. Ouch!
If you think this commoditization by over supply is over, think again. According to website monitoring solution Pingdom, in 2008, there were about 160 million registered websites worldwide; by December 2010, 255 million.
Think about your niche. Online, you are not just competing against other magazines. There are Web "pure plays," blogs, and even the websites of your own advertisers—some of which are offering premium content.
As a premium content provider you need to do more than just deliver eyeballs, you need to deliver interactivity. Whereas exposure is fast becoming a commodity, the ability to create interactive experiences for customers is commanding a premium. If you can create online or mobile products that encourage your advertisers' potential customers to interact in a meaningful way, you can charge a premium for the sponsorships you sell.
Content that motivates potential customers to register, comment, download sponsored content, sign up to receive a newsletter, take a webinar, participate in an online dialogue, or interact in any way, helps you move quickly out of the commodity advertising game. Consider this:
• Do visitors think about your website as a place to read about stuff, or interact?
• Do visitors think about your blog as a place to read the ideas and thoughts of its writer, or a place to share opinions?
• When people visit your Facebook page, are they looking for the latest information, or a discount, special offer, insider's view, or special treatment?
Advertisers see interactivity as a means to touch their customers in ways that simple "exposure media" cannot do. They will pay a premium for it.
Question #2: Do you ask, "Is social media profitable?" or "Is user participation essential?"
In publishing, launching digital media products are often evaluated in terms of monetization. The conversations can go like this:
• Should we launch a newsletter? How many ads you think we can sell?
• Should we start a webinar series? How many sponsorships do think we can sell?
… and so on.
Social media fares badly with this "how much can it make" kind of analysis because building a social media destination takes a lot of time and effort. It can take 6 months to a year to build an online social media community with enough traffic to support sponsorship sales. I have heard of cases where it took several years.
While the long-term goals may be about sponsorship sales, many short-term benefits also exist. Social media can:
• Create user-generated content, which is both extremely close to the reader's interests and almost free to create. If readers help you create content, you can create a lot more content on the same budget.
• Motivate the top thought leaders in your market to contribute content through your brand. When thought leaders post on your social media platforms they are making spontaneous editorial contributions that require less supervision and expense.
• Provide informal research to help identify trends in your market. Want to know what your readers are thinking? A well-constructed social media program can reduce external research expenses.
• Create content that builds traffic for your website. Search engine optimization experts charge a lot of money to help you build website traffic. But adding some blogs to your website can help build your traffic as well.
Finally, Dan McCarthy, CEO of Network Communications Inc., has a great definition of social media: "Social Media Tools are simplified publishing tools for content creation and distribution."
Simply put, if you don't use social media to invite content participation in your market, someone else will. There may already be a blog roll website, forum, wiki or private networking site in your market started by an individual or company. If you are to protect your position as the leading content provider in your market, you need to cover these bases.
Question #3: Are you in the business of distributing information or data?
Trick question. Hopefully the answer is both.
Data is the new frontier for publishers. In the past, the core publishing business model was using content to attract eyeballs, and then charging for exposure to those eyeballs. Try this new formula: Publishers use content to attract data, and sell the data to the same marketers and advertisers we have always served.
The kind of data a publisher creates and distributes is not random. It falls into two specific categories:
• Information on the location of a potential customer. This could be an e-mail address, a physical location, or a phone number.
• Information about the potential customer. This could be their age, sex, political affiliation, brand preference or level of income. It could also be information about their buying preferences, buying patterns over time, expectations of when a new purchase might occur, and how they make decisions.
Readers often will "opt in" and share data about themselves if they feel they are getting some kind of benefit in return. Publisher swap the content in a magazine subscription, webinar registration, or registration of a social media site to win data.
Are marketers interested? Yes. A recent state-of-the-industry survey conducted by digital media and marketing site DigiDay found that the top concern among marketers as they look at year ahead is "targeting customers." Data is the essential piece of this business.
This is an exciting time to be a publisher. The new digital landscape provides many opportunities. But publishing companies who see their basic mission as simply moving from distributing analog content to distributing digital content, and charging for eyeballs along the way, will miss many opportunities. PE
Josh Gordon is president of Smarter Media Sales (SmarterMediaSales.com), where he helps publishers monetize their content assets. Visit his blog at AdSalesBlog.com.