Publishing Needs New Revenue Models to Survive

According to Pew’s annual State Of The News Media report, revenues from print media have declined almost 10%. At the same time revenues from digital media have grown, however they have not grown enough to cover the losses from print.

This discrepancy between the growth of digital revenues and the fall of print revenues suggests that two things are happening.

First, digital is a more efficient method of advertising that print, so it makes sense that digital would be growing while print shrinks. However, the second thing is that while digital evolves into a more efficient advertising tool, the legacy print revenue models that surround digital advertising remain outdated and inefficient.

As the inefficient revenue models from print fail to capture the value from digital, the shift in spend from print to digital exposes a massive market inefficiency. 

The great thing about market inefficiencies is that they represent opportunities. The goal of digital advertising should be to measure and monetise information and the transmission of that information between peoples.

In order for that measurement and monetization to occur we need to know three things. 1) who shares 2) what they share 3) with whom are they sharing. Once we know these three things we can build a marketplace which values the different types of actors and activity and empowers advertisers to purchase influence and attention from exactly the right people at the right time and for the right reasons.

This marketplace of influence will exploit the inefficiency in the digital advertising buying process and, counter-intuitively, cause prices to increase since the results should improve with more precise information.

As prices increase and results improve advertiser spend should also increase thus closing the gap between digital and print and perhaps even causing the curve to go the other way. 

If we look at other markets where inefficiency has decreased such as finance and retail we saw corresponding growth in both those markets as consumers we more easily able to transact. The important thing to remember is that the growth came not from incumbents but rather from the innovators. 

Marketers always want to spend more money when their money can be profitable turned into growth. The goal of publishers should be to seek out the innovators who can effectively exploit market inefficiencies for the benefit of all. 

 

 

Can you sustain a moral mission at scale?

"The interesting thing about the New Albion was that it was so completely modern in spirit. There was hardly a soul in the firm who was not perfectly well aware that publicity – advertising – is the dirtiest ramp that capitalism has yet produced. In the red lead firm there had still lingered certain notions of commercial honor and usefulness. But such things would have been laughed at in the New Albion. Most the employees were the hard-boiled, Americanized, go-getting type to whom nothing in the world is sacred, except money. They had their cynical code worked out. The public are swine; advertizing is the rattling of a stick inside a swill bucket. And yet beneath their cynicism there was the final naivete, the blind worship of the money-god,"

George Orwell, Keep The Aspidistra Flying

"Do the right thing. It will gratify some people and astonish the rest."

Mark Twain 

How do you want to be remembered?

What’s our number?

As we build our product and refine our mission the question we ask ourselves is what should we measure. The choice seems to be between two things. 

1. The number of times people share
2. The number of people sharing

If one person shared a million times that would be useless, but if a miillion people shared once that might suggest we had a great story and a complicated product.

Somewhere in between we’ll find the right answer and our journey will take us towards a solution as we test our product.

My suspicion however is that maybe this combination of shares and people isn’t really what matter most. What if a million people share a picture of their foot. That’s a lot of sharing and a lot of people but not a lot of real value gets created.

Maybe we need to add a third component to this question and look at how to assign value to content by how much social good it creates. That combination of the value of the people sharing, with the value the brand is willing to add to join in the conversation, creates a way to score content that is authentic and measurable.

This project to define our number starts with the people who want to share for good, then it detours through the number of times those people share and ultimately ends up at a place that assigns a value to content based on how much social good that content creates.

As an example lets look at someone who shares once a day. Initially they might share something they find interesting or funny because it fulfills a social ambition to be noticed. Once we add the ability to create social good while sharing, the user can now add another component to their sharing which is the ability to align their social ambitions with their social conscience. 

Very much in the same way that someone might purchase a Toyota Prius to fulfill their transportation needs while at the same time fulfilling their social responsibilities, our user will share content that meet these two objectives. They will choose whether or not to share not only based on the quality of the content but also on the social good that content creates. 

Now that we have the ability to quantify the number of shares, the social reach of the user and the value a brand assigns to the opportunity to sponsor the share action, we can assign a useful value to each piece of shared content.

So the answer to our number question becomes clear. First find some people, second get them sharing and third see how much good we do. It’s the good we do that really matters and I feel like that’s going to be the number that we want to use to define our success.

Why We Share

The very first time I suggested to my 2 year old that he should share, he quite reasonable looked up at me and asked: “Why?”

The question caught me off guard since I’d never really thought too much about why sharing mattered. It was just one of those things that I had always assumed people did and had never really taken the time to question.

So I thought for a few seconds and answered: “Because sharing is how you make friends.” That answer seems to satisfy him and we moved on.

The arrival of social media over the past decade has given rise to a tremendous amount of sharing. As we share, and as what we share gets passed around various feeds on Twitter, Tumbler and wherever else; more people see what we like and just as my two year old does, we make new friends.

It seems to me that brands have tried to involve themselves in our stories in the same way that a really drunk person takes over a room during a cocktail party. You notice him; you don’t approve; but then once you figure out you can’t really do anything about him; you learn to ignore him. Most advertising on social media makes us feel the same way.

So how can a brand join the conversation without sounding like the obnoxious drunk guy at a bar?

That’s the problem we’re looking to solve. Thanks for joining us as we explore some solutions and do our part to make the world a happier place with fewer obnoxious drunks crashing the party.