Have you ever wondered how photographers who shoot those amazing images for magazines and newspapers get paid?
What about how the writers, fact-checkers, editors, layout designers, web designers, videographers and anyone else involved in bringing your favorite content to life earns their living?
Subscriptions you say? Sure, but that’s only some of it. Advertising revenue continues to be the predominant source of digital publication revenue.
Subscription revenue for The New York Times went up 0.8% in their last earnings report, however there was a 5.8% decline in advertising overall. And while The New York Times is doing a nice job offsetting the decline in print subscriptions and advertising with online subscriptions and advertising, not every publication has the dedicated loyal fans of The New York Times that will pay for its content on a subscription basis.
I recently spoke at an iMedia conference on the topic of ad blocking and took a moment to remind the audience of the value exchange of online advertising. You see the advertising, the brand pays for the advertising, and in turn the website makes money and can continue to produce more content.
However, there is a big issue at play here. In the early days of online advertising we priced it the same way we priced magazine advertising, cost-per-thousand impressions (CPM). This was because it was a static image on a "page." Then we measured it like nothing we’ve ever measured before, on click-thru rates (CTR). In order to try to convince advertisers to start to spend money online, we promised them an immediate action on their advertising; something they couldn’t get anywhere else. And it worked, advertisers started to come on board and users clicked. Until they didn’t.
As with every new advertising medium, as the novelty wore off, users clicked less. Advertisers had to buy more advertising to get the same number of clicks. Then we started to question the validity and value of the clicks we were getting. As a result, the CPM rates advertisers were willing to pay dropped lower and lower.
For the producers, publishers and developers of these websites, the economic pressure is real. Advertisers are constantly pushing down on the price of the impression because they perceive that value exchange is being diminished. If you can’t guarantee eyeballs, brands won’t pay more than they will get in return.
Now, with the advent of ad blockers, more and more users are actively avoiding the ads and therefore not "paying" for the content they are consuming. Some have argued that this is akin to pirating music.
So now what? How do we ensure that truly quality content continues to be produced? Not just beautiful imagery, but quality content that is engaging, factual, and perfectly composed. Several factors must change.
Consumers need to understand that there is a value exchange to them consuming advertising. This is easier said than done. While a PSA campaign can tell them as much, if the advertising is still annoying who can blame them for wanting to tune it out, be blind to it or skip past it?
Advertisers need to invest in creating advertising that truly adds value to the consumer experience. The importance of granular targeting cannot be over-estimated. Brands and their agencies need to move away from a one-size-fits-all approach. We have the data to know the right customer, the right place and the right time— now we need to provide the right message. Don’t be tone deaf to the publication you are advertising in, but rather mold your message to be relevant to the audience and its needs.
Get more creative with the creative. It’s time we improve the quality of our creative, before we are tuned out completely. With advances in technology, the ability to deliver dynamic and sequenced creative is at our fingertips — we must adopt and implement these technologies to tell compelling stories in our marketing that consumers choose not to ignore or block.
Content producers, publishers, websites must continue to evolve and improve the digital medium. Standard IAB boxes on a page will only continue to be devalued over time. It’s time to reimagine how the product looks and behaves. Give consumers a reason to feel that the advertising served to them is worth viewing and "paying" for the main content they are getting for free. That it is truly worth their time.
A renewed focus on the quality, timing, storytelling and technology of advertising will ensure a true emotional exchange between brands and their audiences. The result, a growing appreciation and understanding from consumers of the role they need to play in unlocking a better content experience from the brands they trust.
Sheenan Reed is president of digital at MEC North America.