I recently spoke at the annual conference of the Canadian Media Directors Council in Toronto. It was a good event as these things go, with an impressive speaker lineup (Bill Buxton, Microsoft’s principal researcher, was particularly fascinating), and the only reason I squeaked onto the agenda was that when they asked me if I’d do it, I was the editor of Ad Age – a job I left at the end of 2009 to come here to Breaking Media – and had just written a column on the future of media companies that someone at the CMDC found interesting.
As it turned out, the audience of 700 senior media agency and media owner executives had to listen to the manager of a small, startup digital media company that is still taking its first few tottering steps, telling them how they should prepare their considerably larger businesses for the future. I guess I’m lucky that they were Canadians – too polite to tell the presumptuous little British bloke to pipe down.
The main point I tried to get across (and I think it sort of worked), is that advertising-dependent media companies need to think of themselves as being in the business of providing marketing solutions. Don’t get me wrong. We here at Breaking Media love ads. They help pay our bills and we believe we deliver an effective suite of advertising services to a growing set of clients who love our highly-engaged, loyal and affluent audience. But a problem arises when the end-all and be-all of a company’s revenue stream is ad sales.
The media industry’s share of marketing dollars has been in decline for more than a decade now and there’s little reason to think that trend will reverse. To succeed in this environment media owners have three options: Execute so much better than your competitors that you eat their share; create content that your audience finds so valuable that they pay for it; and get into the marketing business, where the total pool of dollars is still growing rapidly. (Ideally, of course, you’d do all three.)
What does it mean to be in the marketing business as opposed to the media business? Well, it might mean helping a brand direct market to a database of your audience. It might mean helping them research, crowdsource or otherwise engage that audience that you know so well. It might also mean using your expertise in building and holding a specific audience’s attention to help brands create their own media channels or social networks (think J&J’s Babycenter, P&G’s HomeMadeSimple or Kraft’s iFood Assistant smartphone app.). What it definitely means is thinking of your ad department as a unit that meets marketers’ needs, rather than as a unit that sells enough advertising to support your content operation.
None of this is rocket science, and there are companies like Meredith Publishing – with its direct marketing, mobile marketing and custom creative units – that already operate as marketing partners for many brands. But there are still a lot of media owners out there who seem to take advertisers for granted, assuming that as long as they have a large audience the brands will automatically open their wallets. This assumption is particularly popular in internet publishing where flip-the-money-switch tools like Google’s Adsense and plug-and-play ad networks that effectively allow the outsourcing of ad sales have created the impression that audience equals business model.
Case in point: Tina Brown, former Vanity Fair, New Yorker and Talk editor, who was the lunchtime speaker at the CMDC, who is confident that as long as her Daily Beast gets enough views, she’ll have a business. She said the site, which has been running up until now without trying to make money, would soon pursue “sponsors.” “I just think that if you keep producing excellent content there’s a huge, interesting market for it,” she said. “Ultimately, it’s going to find its business model. And I’ve always followed that philosophy.”
In an era when there’s a pretty much infinite supply of advertising options, that seems just a little presumptuous. Of course as a journalist I love that Brown’s so focused on quality content, but shouldn’t she also be thinking a little more deeply about what her potential advertisers might need if she’s going to expect them to pick up the tab for that content?
