Paul Rossi, the managing director at The Economist, has spent the last quarter century at the venerated publication. During that time, he has seen the industry thrown into turmoil by the shift from analog to digital media.
The big overriding challenge he sees is how media companies have become brands. That means giving value to customers wherever they are, which is increasingly everywhere. “Media companies have to think about how they manage their brand and customer beyond the printed page,” he said.
The twin challenge is making advertising fit better. Call it “native advertising” or even “content marketing,” the modern publisher will need to act more agency-like for its advertisers.
If media companies have become brands, are publishers also starting to act more like agencies?
That’s right. Over time, what you’ve found, the agency world moved toward publishing, and the publishing world moved toward the agency world. It’s a combination of both. If you think of the driver of that change, it’s traditional advertising becoming less valued by marketers, and social is driving the need for engagement for different ways. I think native advertising has always been around in the simple form of advertorial. It’s not particularly new. The role it plays in the marketing mix makes it more compelling today than five or 10 years ago.
As you point out, “native” advertising isn’t particularly new. But is it significant?
It’s significant; it’s the new hot thing. It’s significant is that it’s part of a bigger trend. If you look at the real challenge that most media companies are facing, if you look at the traditional client-agency relationship, it was based on marketers having a problem, briefing an agency and then putting an ad in front of the audience. If you look at marketers today, they are building relationships and audiences direct through Twitter and Facebook. If you’re a marketer and want to talk to your customer, you don’t need an agency. As part of this bigger trend, native advertising fits into the trend as getting close to customers, but don’t necessarily have anything to say. The opportunity for media companies is to create content that’s compelling for users on behalf of advertisers. That doesn’t mean it has to be native, but the skills in telling stories are quite valuable to marketers as they build audience themselves.
Should every publisher get into the content-marketing game?
Every publisher at one level is in it already. Let’s flip this question around. Why would you get into it if you’re a publisher? You do it because you’re seeing pressure on your revenue. There’s downward pressure coming from networks; programmatic is driving pricing down and, in fact, in many cases, bypassing brands directly. Print advertising share is declining; mobile advertising is a great thing, but inventory is booming, so prices come down. You have structural trends impacting revenue lines. Content marketing in the broadest sense: Marketers are putting more money there. So it makes sense be there.
What’s the most challenging aspect of creating custom content for brands?
The real issue is how do you make content that’s compelling to a reader that doesn’t feel like an ad. That’s the real challenge. Everything we at The Economist produce is done with the reader in mind and set with an independent editorial. That’s one extreme. The other extreme is to create a white-label product with a brand label on it. The balance is not confusing the reader. The further you get away, the more you get to B-to-C, that balance is more tricky. In a B-to-B world, if, let’s say, I’m reading Digiday, I’m more open to content around ad serving or my industry that would help me do my job. I’m more open to that commercial messaging than I am if I’m reading the Sunday newspaper sports section. Utility that helps me do my job is better.
Will 2013 be a big year for custom content, or will we see the pendulum swing toward programmatic buying?
You’ll see both happening together. Programmatic buying solves different problems than content at one level. The ability for marketers to buy at scale for the lowest possible price means you end up with machines buying from machines. I think content marketing is about brand positioning and engagement. They’re solving different problems.