Brittanie Chludzinski

Publishers face challenging future as digital audiences diversify

Even before the digital transition began in the media, publishers have always faced the pressures of generating enough revenue to thrive and stay competitive.

Legacy publications are navigating new approaches as they diversify content and new digital media startups must be prepared with various revenue options when entering the market.

While the media’s goal is to inform, communicate and tell stories, the success of any legacy or emerging publication comes down to one thing: Ad revenue.

As we learned in our readings this week, the conversation on ad-supported content within the digital space is incredibly divided.

In one Recode article by Kurt Wagner, Medium CEO Ev Williams described current ad-supported content as a “broken system” because it depends on clicks and views to measure success rather than considering the real impact of the article itself. As a result, Williams claims the company is creating a new model that will be based on the “value writers are creating for people.”

Social Media
Creative Commons. Flickr.

Whether one agrees with Williams or not, I think this really speaks to the fast-paced and forward-thinking mindset that any digital publication must have today.

On the other side of this conversation, another Recode article discusses WhatsApp CEO Jan Koum and her new rhetoric toward ad revenue. In 2012, Koum saw advertising as a disruption and refused to utilize it on the app. While the company still doesn’t show adds to users, Koum now shares data with Facebook (after the acquisition in 2014), simply because the distribution site can suggest ads that are better targeted toward the WhatsApp audience.

In the Recode Media podcast with Peter Kafka and Deep Focus CEO Ian Schafer, Kafka brings up this “war between publishers and the ad tech community” (Facebook and Google in this case) that has been going on for five or six years now. In his mind, publishers are losing.

According to Schafer, roughly 60 percent of his clients’ advertising dollars go to Facebook and Google. I think this ties back to our class discussion about the significant impact that Facebook can have on digital media success, simply because the distribution site has unparalleled insights and data on the people/consumers that these publications are trying to reach. Schafer says this as become the Facebook sales pitch.

Audience is the main factor that continues to require adaptability in today’s market and challenges publishers to stay afloat. In the podcast, Schafer said, “As audiences get younger, it becomes increasingly harder to reach them where everyone else can be reached.” In this sense, many audiences become commoditized, which ties back to our class discussion about value proposition. How can you differentiate yourself so that your “audience isn’t replaceable anywhere”as Kafka claims for Vox Media.

Similar to Facebook and Google, the NeimanLab article on the growth of the podcasting industry talks about the “big guys” of audio (including Apple, SiriusXM, Spotify, Amazon and NPR) that will determine the next phase of  podcasting.

Like any digital media company today, this article mentions that podcasting relies on the same factors for success: Fast advertising and targeted audience growth. With a potential market of 231 million, the future seems promising.

However, as this new medium continues to evolve among the industry leaders in targeted advertising like Facebook and Google, podcasting could very well encounter similar challenges as discussed above. In time, it will be interesting to see how digital media companies align and leverage themselves among these changes.

 

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