Digital ad revenue; the evolving B2B business model; and the aim to resolve the mission versus margin gap in association publishing: These, according to Folio’s Tony Silber, are the three key issues defining magazine media today.
1. Digital Ad Doldrums
“There are several major trends in play now that have a direct impact on magazine media. One that affects all corners of the magazine-media world is in digital advertising. This revenue source has generally increased in importance for all media brands, but not in growth from the macro perspective,” Silber told media sales consultant Jim Elliott.
He reiterates his thoughts on the Facebook / Google duopoly, saying: “They control more than 50 percent of the entire multibillion-dollar spend, and virtually all of the growth. This duopoly is an existential threat to any business that relies on advertising.”
“If Facebook and Google dominate the advertising industry, then everyone else is a niche participant. Everyone else is just like the polar bear caught on a melting piece of ice,” he warns.
2. The Evolution of the B2B Model
Silber notes that the traditional business model for B2Bs – “where media companies aggregated an audience using content, and sold that audience to advertisers” – is fast declining. It’s being replaced by a model that uses consumer behavior to offer added value to advertisers.
“The new model is for media companies to use content to develop insights into audience behavior, and then sell those insights to advertisers as part of lead-generation and nurturing programs,” Silber notes. “In short, B2B media companies are shifting from content businesses where data is an offshoot, to data businesses that use content to generate data.”
3. Mission versus Margin in Association Publishing
Finally, in association publishing, there is increased friction between association management and association media in terms of the business model and how to make money while staying true to cause.
“There’s a tension there – mission versus margin. It’s a universal dynamic, resolved only in degree depending on the organization,” Silber explains.
The Industry Responds to the Challenges
The industry, faced with these challenges, is not taking it lying down. In addressing all three of these issues, Silber seems some hopeful innovations and a continued reliance on print as a revenue driver.
“I see a new focus on the consumer, in particular on reader-side revenue,” he explains. “Subscriptions are becoming a growth driver, and there’s a whole lot of innovation occurring around that basic revenue stream, including membership models. That’s a major area for innovation.”
Print, meanwhile, still powers much of the business model.
“Packaging print with other products, premium digital access, auto-renewal, faster customer service–all those things are percolating in positive new directions for magazine media,” Silber continues, nothing the audience-first movement in publishing taking center stage.
“Magazine companies always used to put their print magazine in the center of the wheel – it was the hub, and ancillary products were out on the spokes. Now, the consumer is at the hub, and a variety of products, including the print magazine, are the spokes. That’s a huge change in understanding of the business.”