Media companies big and small have embraced diversification. But now they have to figure out how these competing priorities fit together while continuing to evolve them at the pace that the media industry demands. At the Digiday Publishing Summit down in Key Biscayne, Florida, executives discussed their struggles with talent, with competition, and diversification both on stage and in person. Aside from the on-stage presentations, the events were conducted under Chatham House Rules.
What we learned
Revenue diversification requires focus
Many publishers have been testing out new lines of revenue over the past couple years as they seek to make up for declining print and competitive digital advertising dollars. But building them often means balancing competing priorities, some of which can be quite foreign to smaller publishers.
- Revenue diversification often strains sales teams, who often have trouble understanding the costs associated with the newer products they are selling. Some publishers have begun hosting regular informational sessions to keep sellers informed.
- Setting metrics and defining success in the early stages is essential for publishers that are trying something unfamiliar, such as creating commerce content or trying to drive subscription growth. Teams will keep focusing on what’s familiar if they aren’t given clear guidelines for what they should build on.
BOTTOM LINE: Developing multiple lines of revenue is difficult, and whatever balance is struck must come from the top of a publisher’s organization.
Media’s pivot to privacy is picking up steam, and few publishers are prepared for it
After months of sticking their heads in the sand or simply focusing on other things, publishers have woken up to the fact that the California Consumer Privacy Act goes into effect in about three months. Separately, they are scrambling to figure out how to deal with the collapse of third-party cookies, which could dramatically limit the amount of money publishers can earn in open programmatic exchanges.
- CCPA requires that any California resident is entitled to get a copy of what kinds of information Multiple publishers down in Key Biscayne said their legal teams do not have the infrastructure or resources necessary to comply with those requests.
- Several publishers, including CNN, The Washington Post and The New York Times, have been using machine learning to assign qualities like sentiment and user intent to their content in hopes that advertisers will revert back to contextual, rather than audience-based targeting. Yet most publishers are still deeply reliant on third-party cookies to help power audience targeting.
BOTTOM LINE: Changing strategy and workflow for a privacy-focused future will take time and resources.
Media companies have a talent problem, and it is getting worse
As media has migrated into digital, publishers have been fighting a losing battle with tech giants, marketers and top agencies for data, development and engineering talent. Publishers’ moves into video, programmatic advertising, consumer revenue, commerce and events have only compounded the problem.
- Much has been made of the concentration of journalists and writers in cities including New York and Los Angeles. But that coastal concentration applies to the business side too: Multiple publishers in attendance complained that it was difficult, if not impossible, to find programmatic specialists outside of major markets.
- Pursuing consumer revenue requires publishers to add new specialized talent to their organizations. But most publishers don’t have the resources necessary to hire specialists in customer acquisition, retention, consumer marketing and data science, forcing them to hunt for people that can do a little bit of everything at once. Those that do have the resources have to compete for people with these emerging skill-sets with brands, agencies and direct-to-consumer startups too.
BOTTOM LINE: Publishers have to sell these sought-after workers on the mission each publisher is pursuing.
Sebastian Tomich, global head of advertising and marketing solutions, The New York Times, spoke with Digiday president and editor in chief Brian Morrissey about the changes the Times has made to its advertising business.
– The Times has embraced marketers’ preference for fewer, bigger partners to the point that the Times’ and its partners tech roadmaps are intertwined
– The Times has also slimmed down and simplified its offering, rolling its influencer agency Hello Society into Fake Love, its experiential marketing arm
– It is focusing less on positioning itself as a purveyor of creative services. “If you have David Droga saying he cannot compete against the Accentures of the world, as an investment it’s probably not the right one,” Tomich said.
Mark Howard, chief revenue officer of Forbes Media, gave a solo presentation about the ways that the business publisher is tackling revenue diversification, both at the site design level, where it is looking to capture more first-party data, and through newer product and business development. Three takeaways:
– An addressable market does not need to be large if you can monetize that audience effectively. A planned membership product for 30 Under 30 inductees is unlikely to attract more than a few thousand members, but a high price and premium ad opportunities give it the potential to become a seven-figure revenue business
– Diversification starts with a clear understanding of what readers are consuming and how. Forbes overhauled the way it tracks readers to get a clearer picture of who reads what.
– There is an opportunity to build enterprise-level, recurring revenue products out of programs that started as things that were sold at a campaign level. BrandVoice, a paid content offering that Forbes launched 10 years ago, now offers brands a SaaS-type service that gives them unlimited publishing through Forbes’s platform
What’s in a name?
“When you’re building out inside sales, you don’t call them call centers.” — Kevin Gentzel, CRO, USA Today Network
Not everybody understands how desktop notifications work
”We get a lot of emails from people who say, ‘Why are you in my computer?!’”
Everybody is under pressure. Except some people.
”Editorial teams are a little insulated from accountability, especially compared to the duress that the product or marketing group is under.”
Scale is out. Except it’s not
“The threat is not getting consolidated. The threat is competing with the companies that have been consolidated.”
Invest your video money somewhere else
“We basically took all our money out of video and put it in audio.” – Charlie Kammerer, president, Slate
Challenge board confessions
“Google taking too much”
“Cost of brand safety on broad category domain”
“Which programmatic managed service provider to trust?! Anybody got a list?”
“Measuring ROI of digital platforms”
“Unified pricing rules”
“Branded content margins”
An earlier version of this report misquoted Charlie Kammerer.