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By Thomas Baekdal - April 2020

Read the room. Why publishers' call to advertisers is misguided

"Oh my freaking god. Here we go again" ... This was my reaction when I recently read an open letter from most of the British press to advertisers, and I had a similar reaction a couple of weeks ago when the same thing happened in Norway.

The reason was that these letters illustrated a complete lack of awareness about what situation brands are in, and this, sadly, has been a repeating pattern for the past 20 years.

In this article, I will explain what happened, and why this is so bad for publishers.

Two important notes before we start:

First of all, please keep in mind that I'm a media analyst, and it's my job to help the media become more trustworthy, more relevant, more valuable, and more successful, both journalistically and financially.

It's not my goal to criticize the press. But it is my goal to help you see the damage you are creating for yourself, so that we can fix this problem and have a better future.

Secondly, I have mentioned this several times before, but I have a unique perspective on this. Before I became a media analyst, I worked in the fashion industry for 10 years, where I was in charge of digital media for one of the largest fashion brands in my country. This meant that I was in charge of how to spend our digital budget, including what to spend on advertising, and where.

This means that I know how brands think, because I have spent 10 years in that role. And it's because of this that I react so strongly to this problem.

So keep these two things in mind.

What happened?

As we all know, the COVID-19 crisis has been brutal for the newspaper industry. As countries started to shut down, many shops were either closed or had to seriously downsize their revenue projections. Whole industries have seen a collapse of their markets, and everyone is in a bit of a panic.

And the problem isn't just that some shops are closed, another problem is that we have seen a dramatic drop in consumer confidence, which means that people are postponing spending money.

This is bad for pretty much everyone.

To give you two examples. Here in Denmark, the largest fashion company, Bestseller, has had to fire 15% of their employees, and has sent another 2400+ people home. And they are currently expecting 2020 to be the worst year they have ever had.

At the other end of the spectrum are the very small shops, like hairdressers, flower shops, or, from my personal perspective, people like my mom.

My mom runs a knitting store, and even though her webshop is still running, she has seen a 50% drop in revenue.

Think about this for a second. Knitting should be something people would do more of now that everyone is stuck at home, but because people are worried about the future and what will happen, everyone has stopped spending money.

So, the brands are hurting a lot. This is a really dark time for them, and we are seeing bankruptcies and unemployment rates shoot up like crazy.

The result of this, of course, has been a dramatic drop in advertising, and it's obvious why this is happening. It's not because brands don't want to support the news. It's because they can't afford it.

But worse than that, we have also seen a massive increase in public outrage against brands when they do still advertise. Many people feel advertising during this crisis is a selfish act.

Here is just one of thousands of examples that we have seen over the past weeks. This person saw an ad for a fashion company, and this was her reaction to that ad:

This is what is happening right now. The public don't want brands to advertise during this crisis, and they especially do not want brands to do it if it in any way relates to COVID-19.

The effect of all of this for publishers has been catastrophic. Not only has this caused a dramatic drop in advertising, it also caused many brands to blacklist ad views for any articles related to COVID-19.

However, that's not the only thing that has happened to the media. While advertising is looking terrible, pageviews and subscription rates are booming.

For instance, the Editor in Chief of Berlingske (one of the large Danish newspapers) reports that pageviews are up 350%, and that they have gained several thousand new subscribers.

We hear similar stories from most other countries. Here is another example from VG in Norway talking about their amazing traffic and subscription growth.

From a media perspective, this is great. But it also means that we are doing better than most.

Compare this to a local hairdresser or fashion shop, who has been closed for the past several weeks. They have had a 100% drop in revenue, whereas for us newspapers, yes, we are making much less from advertising, but we are also gaining more from subscribers ... and the added exposure will likely help boost us even more in the months to come.

As a media analyst, I know that these two numbers are not the same. I know that many newspapers are losing way more money from the loss of advertising than what we are gaining in new subscribers. But, from a local shop perspective, we are doing way better than them.

Their shops are closed! We are still open, and we are getting more readers.

This brings us to the real problem.

The publisher response

Over the past several weeks, we have seen cases of publishers trying to persuade brands to support them.

A few of the examples have been fairly good.

For instance, my local newspaper has been doing many good things, and asked people to support their news. And the result has been that they have maintained their subscription growth.

However, as I talked about in the beginning, there have also been very negative examples.

I will talk about three of them.

The first one was an open letter to advertisers, published by Victoria Schultz, head of sale from Amedia in Norway. It was a letter that very quickly gained a lot of support from other media executives in the nordic countries.

In it she talked about how publishers should stop advertising with Google and Facebook and instead focus on Norwegian newspapers, and it wasn't just about Amedia, but also about similar messages from VG/Schibsted and TV2.

For instance, she said:

Advertisers and media agencies now have an excellent opportunity to take corporate social responsibility. [...] Focus on Norwegian and Nordic and focus on those who take editorial responsibility.

Now is the time for advertisers and media agencies to think of Norwegian and Nordic media work around the clock to create good and deep-seated journalism that orientates the Norwegian people in a difficult situation. Secondly, it is important to stand up for those who do not cheat on the Norwegian social machinery, but who pay taxes that go to the Norwegian welfare society.

She then talked about the role of journalism, and how it cost money to produce quality news, which ended with a call to action in that advertisers should stop spending money with tech companies, and instead only buy advertising from Norwegian newspaper companies.

But those who buy advertising in multinational social media companies can do something about it. If they still want to buy ads, they should demand that they receive invoices from their Norwegian company - and not from the company in Ireland. In this way, they must commit to pay tax to Norway. Which I consider to be a matter of course.

"Now is the time to pay extra attention to Norwegian and Nordic media who take on editorial responsibility. Feel free to invest in media owned by Schibsted, Polaris, Aller Media, Egmont, Amedia and many more small, medium and large these days.

It is an investment in democracy for the future. And not least, an investment in content that is significant - both in normal and abnormal times.

So, what is wrong with this, you ask? I know a lot of media people who agree with this.

Well, several things.

The first big problem is about the crisis itself, and how you conduct yourself during this time.

You see, when it comes to crisis management, there is one very simple rule that you must follow at all times. That rule is:

DO NOT try to make the crisis about you, and DO NOT try to use it to your advantage.

This is the number one rule, and it applies to everyone. It applies to brands and it also very much applies to media companies. This crisis is not about you, and you should never try to take advantage of it!

To give you an example, as I was writing this, I came across this tweet from Tara Hunt, telling brands to stop making their ads about them.

But look at what we are doing in the media industry. Not only are we using this crisis to talk about ourselves, we are using it to further our own anti-tech lobbying campaign.

It doesn't matter whether you agree with this or not, in a crisis, DO NOT EVER DO THIS!

Another problem is the 'nationalism' that is being displayed here, when they call on brands to only focus on Norway.

Again, this is not how you should behave during a crisis.

To give an example, I recently came across an Instagram post from Volvo, it said this:

This is a great post because it ties into this message that we all have to do our part and that we are in this together. It's also a pretty smart message because of Volvo's reputation for focusing on safety.

But look at what we are doing in the media industry. We are saying, look at us, don't look at anyone else, and only focus on the market we are in.

Again, from a crisis communication perspective, we are doing everything wrong in the media industry. And it is making us sound incredibly selfish. If any other industry did this, the public backlash would be brutal.

And, it didn't take long for Facebook to respond to this. On the same day that the above article was posted, Facebook replied with their own open letter to the public.

They said:

Bjørn Gunnar Rosvoll from TV 2 and Christian Haneborg from VG say in a post that social media is both a source of misinformation and generally does not make a positive contribution in the crisis we are in. We respectfully disagree.

Let's start with some facts about what we've actually done to protect our users from misinformation. Since the international outbreak of covid-19, we have done these four things:

And then they explain the different measures they have taken to make sure that bad actors are blocked, and get accurate information out.

They then go on to say (they mention Schibsted because they were the ones who started it):

There is no doubt that Schibsted's media is doing an outstanding job of keeping the Norwegian people informed - but they are far from alone in their efforts. Here's what we do:

So not only are they praising the media for their part, but they are also pointing out that this is not just about us. And then they go on to list several examples of active steps they have taken to help society, like providing free advertising space for healthcare organizations, adding information boxes on every page, and other things.

And they then conclude the open letter with this:

We recognize that this is one of the most important issues of our time, and we will always ask ourselves if our efforts are adequate. People have always been a source of rumors and bad advice - also on the Internet - and it is therefore especially important to ensure access to accurate information in times of crisis. But it would be wrong to conclude, on this basis alone, that social media is not important in situations like this.

It is precisely on social media that we see a flurry of the most amazing social initiatives on our platforms. For example, in VG we could read about the Facebook group "Oslo helps Oslo", which got over 12,000 members in just one day. The group focuses on helping those in quarantine: by shopping, walking with dogs, caring for children, and carrying medication to those who cannot go out. It now counts 35,000 members. We also see that cultural life finds a way further through our platforms. Justice Minister Monica Mæland today lifted the digital concert arena Brakksyke 2020, and there are several examples like this.

If there is one thing that is important in critical situations, it is that we stand together. The truth is that social media and editorial media still have to work side by side on what they do best. And where social media really contributes is precisely because this is where Norwegians actually meet, stand together and help each other through a difficult time.

Ouch... no really. Ouch!!!

Think about what just happened here.

We, in the media industry, posted an open letter, where we basically just said: "Me, me, me, me, me, me, me, me, me!!!"

And then Facebook came out saying: "We are all in this together, and all trying to do our best. And here are some of the steps we have taken to help others."

Obviously, as a media person, you most likely disagree with Facebook. And I'm not a fan of Facebook either. I think there are a lot of problems with Facebook, and some of the steps they have taken to make sure the advertising is accurate are things it should do at all times.

But, as a media analyst, what I see here is a media industry that just completely shot itself in the foot.

We in the media industry tried to take advantage of a crisis to lobby against Facebook, and Facebook completely won this one. We failed in the worst way possible!

This is so bad. We made ourselves look like idiots.

But if you think this is all, I'm not done yet. Because there is an even bigger problem.

It's one thing to look at how we talked about Facebook, it's another thing entirely to look at how we talked about brands. And here we made an even bigger mistake.

In the letter, Amedia wrote this:

Advertisers and media agencies now have an excellent opportunity to take corporate social responsibility.

What is wrong with that?

Well, what's wrong is that we are telling the advertisers that what they are doing today is irresponsible. You are being negative towards the same people you are trying to sell something to.

This is a really crappy way to try to convince anyone to buy from you.

And then, they went out and said this:

These days, Norwegian and Nordic editorial media are getting extra traffic, be it viewers, users, readers or listeners. When it is serious - then the Norwegians know where to turn. We are seeing traffic records in local, regional and national media. [...] But the problem is that the advertising market more or less disappears when we have a crisis.

I have had many people in the media say things like this over the past several weeks, and many people seem to think that it's a good argument.

It's not.

Remember, I used to work for a big brand, and if I was in a meeting with newspapers and they tried to use this argument to sell advertising space, what I would hear is this:

We have more traffic (good), but it's because of a crisis (really bad), and usually that means advertising goes away (uh oh).

In other words, you just told me that your advertising doesn't work, because whenever this has happened in the past, other brands are usually not advertising in newspapers.

So the 'best practice' for brands is to not advertise during a crisis. That's what you are actually telling me with this.

This is the worst way you can possibly sell something.

And then, the letter ends with this:

It is an investment in democracy for the future. And not least, an investment in content that is significant - both in normal and abnormal times.

This is the final failure of the press. Because, remember what I said in the beginning about the situation that brands are in. Their revenue is down, many people are fired, shops are closed, and some of them have gone bankrupt. ...and here you are talking about how brands should be spending money to support their local newspaper because it's an investment in democracy.

I'm sorry, but this just screams a total lack of situational awareness. And it shows more than anything, that the press have not even spent any time trying to think about what situation the brands are really in.

You are asking brands to give you money for a cause that doesn't help their own financial struggle. Money that they don't have!

Read the room, people!

Meanwhile in the UK...

The next open letter I want to talk about is the one from Newsworks, which was co-signed by most of the UK national press, and this too has been shared widely by people in the media industry as well as most media associations.

This letter has all the same problems, but on top of that, it focused on the problem of blocklists.

As I mentioned in the beginning, brands have two problems. First, whenever there is a crisis, the increased exposure that a crisis creates does not result in a good return on investment for advertising, which is why brands usually avoid advertising during these times.

And secondly, we are seeing an increased level of customer backlash from people getting outraged when brands advertise.

The result is that brands are now blocking their ads from showing up on any page related to COVID-19.

This, of course, is very damaging to newspapers, especially these days where newspapers cover almost nothing else. Suddenly all those news articles have no ads to show.

So, the media industry has started a campaign called 'Back don't Block'.

I understand why newspapers do this. Your revenue is suffering, and you wish things could just go back to the good old days before the internet, where newspapers were an institution and where brands would advertise no matter how bad the things you were writing about were. Because back then, brands didn't have a choice, and there was no way for them to selectively target their exposure.

I get it.

And as a media analyst, I too think this is a problem. However, what publishers are doing here is not the solution at all. Instead, it actually makes things worse.

The main problem, of course, is that you are still not listening, and you are showing no interest in the needs or concerns of brands. Instead, you only focus on yourself.

In the letter above, it starts out nice.

They say:

These are challenging times for all of our businesses no matter the size, sector or region we operate in. However, working together we can help reduce the devastating impact of this virus.

We are open and ready to support you, so please let us know how we can best do that for your people, your customers, and your business.

That's great! ... let's work together.

They then go on about how much money newspapers are losing, how important journalism is, how it's providing accurate information, and how advertising is used to pay for all that.

From a brand perspective, this is irrelevant.

I have talked about this before. Back in 2017, the Press Gazette published a similar call to brands to advertise in newspapers, and their argument was this, using Channel 4 as an example:

In the space of a decade the share of the UK advertising market going to UK regional and national newspapers has declined from nearly a half to little more than 10 per cent.

Money which had been spent on journalists holding those in power to account, particularly at a local level, has been transferred to two US-owned digital platforms which exist purely to exploit content rather than create it.

Channel 4 News has generated literally billions of video views for Facebook - much of it for work created at great personal risk by journalists working inside Syria. By way of financial return it gets almost nothing, while Facebook banks the advertising income.

I'm sorry publishers, this is the most idiotic argument that you can possibly make.

It doesn't matter whether your videos or articles have thousands, millions, billions or even trillions of views. If the videos are about really sad things about something that is happening in Syria, no brand would ever want their ads to show up with this.

If you are a fashion brand, and you are trying to sell your next spring collection, the single worst place to advertise that would be next to a video about people dying in Syria.

You are telling brands to do this.

Sure, your journalism is great, and you are doing important work for society, but from an advertising perspective, this is total crap!

Again, it doesn't matter that you are generating millions of views. As a brand, you don't want to create this association if you don't have to. And it's exactly the same today with COVID-19 coverage.

The fact that so many publishers (and news associations) don't seem to understand this is exactly the reason why advertising is moving to other platforms.

You think that saying these things will encourage brands to come back. But they don't. Saying this will actually cause more brands to stop advertising in newspapers at all. Because if all you have to offer is deeply negative stories about all the problems in the world, maybe the best solution for brands would be to not advertise in newspapers at all.

And then, the letter above ends with this:

Our unified industry appeal to you, our valued advertisers, is incredibly simple: back, and don't block British journalism. Please remove 'coronavirus' from your blocklists.

I'm sorry, what happened to the first part? In the beginning of the letter, you said that we should be working together.

There is no working together here, there is just you. As publishers, you want advertisers to give you money, and in return they will have poor advertising performance (because of the focus on the crisis) and potential damage to their brand image (due to people getting upset by the ads next to stories about people dying).

That's not working together! That's just newspapers, once again, not listening at all to anything around them or, even for a second, considering the challenges brands face.

Brands should not even have a choice...

A few days after this open letter, another news association joined the campaign, this time it was the News Media Alliance in the US.

You might remember my earlier critique about how they are acting in "The problem with the $4.7 billion that News Media Alliance say Google makes from News".

So, on April 3, 2020, they posted their own open letter, and it was even worse than what we saw above.

Alliance President & CEO David Chavern said:

News organizations are working tirelessly to provide reliable and trustworthy information to their communities; a life-saving service at this unprecedented time. Keyword blocking serves to punish publishers for this very same coverage, with potentially catastrophic effects.

Digital Content Next President & CEO Jason Kint said:

At the same time newsrooms have necessarily shifted coverage towards informing the public on this global pandemic, immature tech platforms are blocking the funding of this journalism. We repeat our call for the advertising technology and verification platforms, including Google and Oracle, which have a strong history of reducing friction, to dedicate urgent resources towards solutions here, including exempting or encouraging trusted news organizations as a default.

This is even more insane. Not only do they make the same mistakes as all the other letters, but they are telling ad tech companies to completely remove the feature for newspapers.

In other words, they are saying that brands should not even be allowed to do this at all, and should just be forced to have their ads displayed in newspapers regardless of the impact on ad performance or how it might impact that brand's image.

It shows a total lack of understanding about what situation the brands are in.

But more than that, think about this from the perspective of a brand. You are saying that, in newspapers, brands should have no control, and newspapers should not have to be accountable in any way for how the ads work (or don't work).

If I was still working for a brand, this would make me want to stop advertising in newspapers altogether.

This type of narrative is actually turning brands away from the news. You don't tell brands that they should have no control over how their money is being spent!

Again, as a media analyst, I understand the frustration that you feel, and I sympathize. I too am worried about what this means for the future of news. It's clear that blocklists will have a lasting impact on news revenue, and it's clear that as newspapers focus more and more on hard-hitting journalism, we will become a less attractive platform for brands.

But please, stop making it worse for yourself by not listening to brands. What I see is a collective media industry who have completely lost touch with the world around them, and who are now an even worse platform for brands to partner with.

So... what now?

The problem we see here is, of course, not a new one.

In fact, it was the same mentality that caused the newspapers to lose the classified markets 25 years ago. Back then, newspapers were so focused on their journalism that they never listened to what people actually wanted. They just expected them to keep coming back and paying for their classified ads, and then as a newspaper, you could just do whatever you wanted to do.

But look at how that turned out.

When someone wants to sell their used bicycle, they are not interested in supporting their local newspaper's ability to keep the local council to account. They just want to be able to sell their bicycle in the most effective way possible.

Newspapers did nothing to facilitate that, but Craigslist, eBay, Finn.no and others did.

This is the mistake the media is making again and again, and even after 25 years, we still haven't learned anything.

So, what should we do?

Well, right now, we are in the middle of a crisis, which has turned the world upside down. So, right now, we have a short-term focus and a long-term focus.

In the short-term, we need to accept reality. As I said in the beginning, this crisis is causing massive problems for brands. Their revenue is down, they are having to fire people, their shops are closed, people are not spending any money, and there is an increased level of customer backlash against any brand who tries to 'sell' anything.

There is nothing that I, as a media analyst, can do about this. I can't give you some magic trick that will make advertisers come back. This is just how it is right now.

Sure, you can try to do some optimizations and maybe change some of your programmatic categorizations, and I'm sure your ad team is doing exactly this right now.

But remember what I said before about how we in the media are actually better off than other companies because of traffic growth and subscriptions? The local hairdresser is closed and is making no money at all, but we are gaining traffic, building audiences, and seeing dramatic increases in subscriptions.

So, this is where you should focus your efforts. As I said in a previous article, this is your time to shine. And this is your time to create a direct relationship with your readers.

But how do you do this? Well, I have written three long articles about this.

First of all, I recently published: "Why is it important that we do not give news away for free during a crisis?", which talks about the need for publishers to establish their journalism as something valuable and worth paying for.

Secondly, I wrote about audience engagement, in "How important is audience engagement for publishers?", which is exactly what you need right now to build that direct relationship with your audience.

And finally, before this current crisis, I wrote "A guide for how to do entrepreneurial journalism", which is about how you as a publisher start to build real solutions and publishing products for people to use at this time.

These three things combined are what you need to come out of this crisis in a much better way.

So, this should be your focus in the short-term.

What about the long-term?

Well, all the things I mentioned in the short-term obviously also apply here, but in the long-term we really need to look at the larger trends around news consumption.

The role of newspapers is changing, and the news itself is becoming much more focused on hard news. The result of this is that we will become less valuable for advertisers in the future, and brands are likely to shift their spending to other platforms.

This is obviously not a good thing for the revenue projections, but it is the choice we are making journalistically. For instance, over the past months, as a newspaper you have chosen to focus almost exclusively on COVID-19. This was journalistically a very good choice and I commend you for doing this, but it also means you have become much less valuable as an advertising platform.

So, in the future, we need to adjust our business model to this journalistic choice that we have made. This means focusing less on just being a random platform for random things, and more on being a high-value journalistic platform that is relevant and useful to people.

Secondly, the media industry needs to dramatically change the way they think about advertising, because we have completely failed to adapt our model to this market.

Think about it. The way newspapers do advertising today is by using banner ads that you have just slapped onto your pages in a way so that it doesn't fit into anything else that you do.

This is exactly the same model we had in the 1990s when banner ads were first invented. Just publish something, and put a banner ad somewhere on the page.

This is a stupid model, and it has always been stupid. And every other industry has moved away from it a long time ago. Google search doesn't use banner ads, Amazon doesn't use banner ads, Facebook doesn't use banner ads.

So we need to stop this nonsense that we are doing today by trying to use an ad format that doesn't really work that well, and where we are at the complete mercy of third-party ad networks.

In the long-term, I want publishers to completely drop the banner ads. I want newspapers to stop thinking that 'exposure' is all that brands need, because it's not.

We need a model where the value we create can be used specifically by brands to target specific outcomes. Today we are not doing this. Today, the only thing we have to offer is exposure next to articles of people dying. That's not a good ad platform.

But most of all, what I want publishers to do in the long-term is to listen. If we want to get brands or the public to support us, we need to focus much more on listening to what situation they are in.

 
 
 

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Thomas Baekdal

Founder, media analyst, author, and publisher. Follow on Twitter

"Thomas Baekdal is one of Scandinavia's most sought-after experts in the digitization of media companies. He has made ​​himself known for his analysis of how digitization has changed the way we consume media."
Swedish business magazine, Resumé

 

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