Digital Media: What’s coming and what to do about it
Geoff Reiss Berlin
3 November 2010
Market AssumpEons l AdverEsing revenue is poised to grow dramaEcally. Piper Jaffrey has spending growing from $8B in 2009 to nearly $15B in 2014
l Available inventory will sEll grow at a faster rate than new dollars enter the market place as the full effect of social media plaPorms are felt.
l The definiEon of what consEtutes mass is going way up.
Market AssumpEons l The buying process will change radically.
l Buys will be increasingly shiS from being subjecEve to objecEve and will target key audience and behavioral characterisEcs and not purely on the basis of site virtues.
l The inventory mix will change – straight display will lose a third of its share while video may triple in the next 5 years
l Big split in CPM’s coming
Publisher AssumpEons l Expense and investment faEgue is seYng in
l Rapid emergence of mulEple plaPorms is scary
l Publishers are sEll oriented to quanEtaEve goals that may no longer be as relevant as they once were
What’s a Publisher to do? l Declare what arena you’re playing in
l There will be two predominant approaches available to publishers: l The numbers game l PosiEon as a premium verEcal brand
Publisher Strategies l The numbers game works one of two ways
l Go mass l Go cheap
The most disrupEve brands do both
Mass strategies l The emergence of Twi]er and FaceBook will raise the bar as to what levels of traffic consEtute real mass leaving <10 players who can play the mass game
l Cheap content/traffic producEon offers some refuge but is difficult to scale for all but a few players.
Publisher Strategies l The Premium/VerEcal path
l Two approaches l Ad driven l Consumer driven
l There are some qualifiers l Need a leadership posiEon in a well defined category. l Need to be either essenEal or loved – or both
Achieving Premium Status l Established paths thus far include plaPorm diversificaEon and premium Eers
l On the sales side premium relaEonships can be achieved by l DemonstraEng superlaEve demos l Offering adverEsers highly differenEated products l Offering deep levels of integraEon that go beyond pure display and include relaEonship markeEng
What’s a publisher to do? l Most of all publishers need to think very differently
l Become audience and outcome driven
l New core competencies must be developed l Build and re-‐invest in taxonomy l Build pages users want l IdenEfy means of creaEng differenEaEon and value
AnalyEcs – the Key to Understanding Value l You can’t create value if you don’t understand how it’s created
l Integrate analyEcs into daily workflows and publishing scheme
Build a Great Technical PlaPorm l A]ack costs
l Impact on hosEng l Impact on cost of iteraEons l Ability to make traffic contribuEon
l Connect users with content
Where does this leave us? l Changes in the ad market will leave many publishers in an untenable “middle posiEon” forces publishers to be customer driven
l Increased pressure on expense management
l Publishers must become customer driven in response
l ConEnued opportunity for brands who are category leaders
