It’s an industry at the crossroads. Whether you are thriving, struggling, or somewhere in between, the publishing industry is facing a pivotal year, according to Keith Sibson in Publishing Executive.
“Everyone agrees 2018 will be a year of significant change, but few agree on the best strategy and direction,” Sibson writes. “Is 2018 to be the year of last-ditch battles for survival, or will we see the first generations in a new, evolved publishing industry?”
Much of that depends, he believes, on how well we understand and adapt to these three important truths.
Truth #1: Facebook is not your friend.
Never was, never will be. Dodgy viewership metrics, the latest algorithm announcement and dropping referral traffic make it clear that publishers should not be relying on FB to reach their audience. While they might be giving lip service to helping publishers succeed on Instant Articles, the reality doesn’t hold water.
“Chasing platform traffic isn’t viable in the long term when it leads publishers to commit to a strategy likely to be rendered irrelevant by the next Facebook algorithm tweak,” he writes. “Publishers are left with large “audiences” they can’t directly reach while being in an industry increasingly reliant on meaningful audience engagement. The reality is that Facebook has become a pay-to-play game.”
The harsh truth is Facebook is making money on publisher content – and publishers basically aren’t.
“For publishers to establish direct relationships with their audience, they must focus on direct channels—like email—and not rely solely on the platform,” Sibson advises. Relying on a third-party platform has proven to be too much of a crapshoot.
Truth #2: Ad Revenue Won’t Be Enough
“With two platforms absorbing a growing majority of ad spend, publishers with an ad-driven business model must fight for a diminishing pool of dollars,” Sibson explains. “At best, publishers have found short-term solutions to increase ad revenue, such as boosting yield with header bidding. At worst, chasing ad revenue has led to the much-maligned ‘pivot to video’.”
“When the ad dollar pie simply isn’t big enough for everyone to get a slice, publishers should look beyond a reliance on ads and diversify their revenue,” he continues. “Many publishers are doing so with e-commerce events, and lead generation. This will continue in 2018 as the major platforms take the lion’s share of ad revenue.”
We already see many publishers pursuing creative pay wall strategies, cutting their reliance on ad revenue. And it’s fantastic to see that young people in particular are turning to paid content. That’s great news. But there’s a catch.
“[I]f publishers want to drive revenue from their audience, they must build strong relationships with that audience first,” Sibson writes. And as we know from Truth #1, doing this on someone else’s platform is not the way to go. “Connecting with them outside of the platform is a good start, but it may also require publishers to face a tougher, more existential truth….”
Truth #3: Quality or Scale – Pick One
The ad-driven model, much like the mass market magazine circulation game of the last century, relies on huge numbers to work. And in order to get those big numbers, many publishers pushed scale as their priority, sacrificing quality in the process. That has to stop.
“[C]hasing scale has sent the industry in the wrong direction: when meticulous journalism (expensive) drives the same amount of ad revenue as commoditized content, the ad-supported model naturally favors low quality publishers and reposted cat videos (cheap),” Sibson notes.
There are precious few publishers that have the resources to create quality digital content at scale. “For the non-New York Times publishers of the world, the focus will be on finding the audience and building strong relationships with it,” Sibson writes.
Where the future lies
Knowing these three truths, where does that leave the publishing world? In a search for some profound truths about themselves and what they stand for as a media brand.
“The future of publishing lies with the audience—with engaging, nurturing, and monetizing that audience,” Sibson continues. “But for publishers to effectively build a strong audience relationship, they first must decide who they themselves are. Publishers can enlist themselves in the fight for fleeting attention with mass-produced content, or they can align themselves fully with a (smaller) audience, pursue subscription revenue models, and then devote themselves to creating content those audiences are passionate enough to pay for.”
The truths around our industry are inescapable. And the opportunities they present are significant.
“Macro trends in the publishing industry suggest that when the dust settles, there will be three main types of digital publishers who weather this shift in the industry: large-scale commodity publishers with low production costs, high-quality publishers with paid subscription models, and niche-content producers with small audiences that can be sold to advertisers directly,” Sibson concludes.
The change won’t happen overnight, but it will happen. For publishers in 2018, the mandate is clear: Decide now what kind of publisher they want to be.