The state of digital media is a tale of two cities. On the one hand, these are go-go times of eye-popping growth stats and an endless array of new possibilities with mobile and tablets. On the other, there’s a familiar tale of oversupply, commoditization and the feeling that publishers can’t get by on ads alone. That twin narrative is likely to play out further in 2012, as the biggest tech players jockey for position and the industry continues to live up to the mantra of Heraclitus: the only constant is change.
Time for a Facebook backlash
Facebook is really big, if you hadn’t noticed. And it’s starting to throw its weight around. Time and time again, it has seemed like CEO Mark Zuckerberg has overreached (Beacon, privacy), only to see users scream and then love the site more. Meanwhile, media companies have fallen further in love with Facebook because they value the site as a non-Google-traffic source. But a backlash from both sides in 2012 is likely. Timeline seems destined to turn off a significant number of users, with Google Plus poised to offer a less creepy alternative. Meanwhile, Facebook’s Open Graph is the will-they-or-won’t-they question for nearly every major digital publisher. Do you give in and let Facebook take such a prominent role in your distribution or consumption? Some publishers are resigned to give in, but the lack of participation thus far speaks volumes. Facebook may finally feel humbled in 2012.
The struggle for brand dollars
The endlessly cited disparity between time spent on the Web and money allocated to online advertising will continue to be endlessly cited in 2012. And that’s because despite yeoman efforts from groups like the IAB and the OPA, the industry can’t get out of its own way. While a few publishers may take bold steps, like ditching their four-ads-on-a-page approach to employ a monetization model much like AOL’s Project Devil, most are afraid to. Why? Because they’re in love with the fools gold of data and DSPs and ad targeting magic. And mostly, they do what brands tell them to do — and brands fundamentally believe the Web to be a direct-response medium.
Paid content, not pay walls
What do Glenn Beck, The New York Times and Louis C.K. have in common? Not much, other than the fact that they’ve all figured out how to get people to pay for content online. Louis C.K. recently pulled in about $500,000 by selling access to stream a recent concert in New York. Meanwhile, the former Fox News host Beck has already signed on 230,000 subscribers to his online network, while the Times subscription pay wall is working surprisingly well. Expect lots more premium paid-content plays — anybody with rabid, well-established fan bases makes sense — but not more pay walls. Publishers are too scared to go the pay-wall route (they would have already). The Times, the Wall Street Journal and The Financial Times are special cases.
Starting in early 2012, Yahoo, AOL and Microsoft will start selling each other’s inventory as part of a much-dissected alliance. Yahoo has also been aggressively shutting down retargeting companies and ad networks. Meanwhile, GroupM is said to be looking to band together top video publishers to create some sort of sales platform designed to improve rates while making brands feel more comfortable. Expect lots more push back from publishers in 2012, and maybe even more alliances as the climate shifts away from secondary selling forces toward more control and strength in numbers — given Google and Facebook’s growing clout. Ironically, we could see a host of publishers interlocking their private exchanges in an effort to elevate CPMs — through the help of Google’s newest acquisition, Admeld.
Publishers buy voices
Early in 2011, AOL shook the industry with its acquisition of the red-hot, venture-backed Internet newspaper The Huffington Post. The move has yet to turn around AOL’s fortunes. Just a few weeks ago, Disney snatched up the fast-growing hipster parenting site Babble, which has cultivated a distinctly non-Disney voice. 2012 might be the year that big media grabs up a ton of Web native publishers– vertical companies like Babble that have mastered the power of creating distinct voices that attract users’ loyalty and, just as important, foster community. These companies have figured out how to publish for the social Web — something many traditional media companies have yet to crack. Think Bleacher Report (maybe Demand Media, or even Time Inc.) Cafe Mom (Yahoo?), WetPaint (NBCU?) B5 Media (Meredith?).