2011 and beyond - 5 strategies for survival in the digital media world
DESCRIPTION
Publishers face an unprecedented array of choices and pressures as they look for their investments in digital businesses to translate into meaningful profits. In the midst of continuing change in the sector, the most successful leaders will apply new thinking to both the pursuit of revenue and cost management. “2011 and Beyond” will discuss five key methods of aligning product and revenue strategies against the backdrop of ever-increasing pressure to manage expenses. Geoff Reiss, Digital Media Thought LeaderTRANSCRIPT
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