According to Cheyfitz, American newspapers had lost $22 billion in total annual ad dollars by 2009, while magazines also experienced a 35% drop in ad pages in the last three years.
Newspapers and publishers alike did close to nothing to address the collapse of advertising revenue, instead, ‘charging readers for online editions, erecting digital paywalls, “fixing journalism” and other non-productive, nonsensical tasks’.
”Publishers, whether in print or online, desperately need to reinvent how they generate ad revenue [because] the audience is screening out traditional ad messages, publishing their own opinions through social media and, generally, taking charge of their media instead of passively consuming what the media companies offer.”
Bottom-rate ad revenue translates to potential catastrophe for the publishing world: massive cuts in journalism employment, fewer newspapers, (already on the roll), and, much to the annoyance of many, a new laxness in original reporting and editorial standards, like this gem).
So what does it amount to? Well ad agencies still clearly hold the key to buying most ad space in newspapers and magazines. But what is evident now is that despite the fractured relationship between publishers and agencies, publishers still have the arsenal of people who know how to not only manage but create content that is relevant, new and engaging.
In his article, Cheyfitz discusses a number of publishers who have in recent years taken up arms themselves to counter back the affects of revenue collapse. The example of Meredith Magazines, in buying up marketing services agencies and integrating them into its magazine operations, has heralded a new era of large (and small) publishers branching out into marketing services in order to survive. This transformation has a 2-fold effect of paving a path for the resurgence of publishers’ profits, and also dealing a blow to ad agencies, whose services, contrary to thought, might no longer be needed after all. Meredith’s success can be seen in not only the proof that a large company has not toppled after taking such risks, but more importantly, became so successful that it has had spinoffs in the form of Hearst and Time as well.
In the meantime, smaller publishers have also been good, if not better, at delivering marketing services and content as a primary way of producing revenue from advertisers. On the promotional front, not all publishers will be able to afford to follow in Meredith’s footsteps and make a sweeping acquisition of whole specialist marketing agencies, but that is where smaller companies like the Sacremento Press have been ingenious in killing two birds with one skill set. As mentioned before, publishers, unlike ad agencies, already possess the know-how around content creation. Combining that with a new system of engaging consumers ‘face-to-face’ by enabling reader commentary, shareability and 2-way dialogue may sound simple, but it has proven to be a vital way in which publishers can overcome the chasm left by advertising revenue drops.
On the other hand, we can look at it the other way. What if publishers don’t have the problem of having to fill up those ad pages to generate revenue? This article last week highlighted how things are a little bit different in the fashion world. Fashion brands needed to have a feature spread or so much as a quarter page ad published in order to get their face (and products) out in the public, and many clamoured for the attentions of publicity that came in the form of publishing barons like Vogue and Esquire magazines. Consumer reach was just that much further. However, that is certainly changing now that brands are cutting out the publishing middlemen entirely and getting straight to the consumer. Net-a-Porter may be a decade old now, but it faced initial rejection and disdain in the fashion industry as it endeavored to stand up as an online luxury retailer, the first of its kind. Last year, however, the company got acquired for a neat little half a billion dollars, indicating precisely the new tension that has risen between publishers and brand marketers.
Why the interest in the success of a rags-to-riches story of a high-end fashion line? Net-a-Porter deals with some of the highest names of the fashion hierarchy, many of whom still look to big publishers for an editor’s commentary that could cement their brand. But now, with more examples like Net-a-Porter’s embracing of the digital age, consumers get instant access (both visual and purchasing) at the click of a button. Other niche stones are also being turned; One Kings Lane is an e-company focusing on designer home decor, for example. What is so interesting about these brands turned e-commerce houses is that they are taking on the very specialty areas that traditional publishers used to offer from a lofty position: editorial skills. Certainly, the likes of Vogue and GQ still won’t be brushed under the digital carpet–if anything, it’s noteworthy that these publishers are also themselves trying to evolve their product especially with last year’s launch of the iPad. But what the onslaught of digitization of brands brings is something that cannot be ignored any longer: they might not possess the credibility of long-reigning editorial magazines, but it certainly won’t stop them from trying.
Now, what ad agencies should also probably be trying, if they are to survive in the long run, is read from the same cheat sheet. It is essential for them to start investing in editorial content. The benefits are tremendous: improvements on natural search rankings, the readers feel more engaged because they are informed, entertained, and perhaps even eager to click again soon. This article is right on the money when it gives the illustration of how the successes of sites like Agent Provocateur, Bang & Olufsen and Oasis are not due to being the ones with ‘the biggest marketing budgets but with the largest investment in content’.
Content creation + investment in user/reader + digital creativity = happy companies and happy consumers.
What is this? Something that publishers, brands AND ad agencies could implement? What a lesson to learn.