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Plus Report - By Thomas Baekdal - August 2016

How Publishers Can Beat Facebook and Google ... or Join Them

When you look at the future of advertising for publishers, the trends are rather depressing. And it's not just one trend. It's a multitude of trends that all look pretty bad.

Meanwhile, the tech companies are winning big, which shouldn't really come as a surprise when you look at what they are doing. Their ad product, combined with their scalable platform focus, gives them a competitive edge that no publisher can match.

The result is that the newspaper industry has lost 71% of the market, at least if we look at the US. But it's kind of the same thing all around. That's pretty scary.

And also look at the future projected by Bloomberg for what level they think will be at in 2019. That's a 90% drop in only 15 years.

Or ... game over!

As an analyst, I don't like writing this, because I want the industry to win as much as the rest of you. But the reality is that the trends are so crystal clear and so devastating in their future outlook that we have stop trying to change the little things, and instead dramatically rethink how we do advertising altogether.

You can't save this by cutting costs or by optimizing how the ads are shown while not changing anything else. As publishers, we need an entirely different type of product that we can sell to brands.

So in this article, we are going to talk about the models that will fail no matter what (which is pretty much what all old media is doing today), and which models we need to focus on instead.

Two big problems that we cannot ignore

There are two major elements that are completely obliterating the future of advertising for publishers.

The first element is the concept on which most advertising is based, in that publishers are simply offering random advertising for random people at random moments.

This is nothing new. This is the model of advertising that has dominated throughout the past 200 years. TV commercials, newspaper ads, billboards, radio commercials; they are all based on random exposure.

 
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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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