Take a good look at the media landscape and publishing as it stands. Take note of the big print titles and long-established brands, because many of those you see now may be confined to memories and Wikipedia pages by the time another festive season rolls in.
The oft-spoken-of publishing crossroads has arrived. And it’s taking no prisoners.
If you’re in the publishing game, these can be scary times, especially in the self-obsessed and, in reality, marginal market that is South Africa. Hardly a week goes by without the announcement of yet another print title biting the dust on the back of circulation and ad revenue dropping faster than the Eurozone GDP. From late entrants like NewsNow to stalwart titles like Sports Illustrated, the inevitable shifting of the tectonic plates of traditional publishing has begun gathering momentum.
Internationally, the rumblings are being felt at the highest levels. Newsweek has announced it will no longer offer a print edition come the end of this year. And across the pond in the UK, rumours abound that the even the mighty Guardian is contemplating the termination of its newspaper in favour of a digital-only strategy.
It would be wise to take note of these moments, because Wikipedia will soon refer to them as the day the print music died. But to sit back and expect the riches of print revenues to flow seamlessly and expectantly into digital publisher’s pockets is still naïve and severely misguided.
In South Africa, growth in digital ad spend has lagged international norms by a wide margin, mainly owing to two factors.
Firstly, the poor state of internet and broadband penetration, as a result of the poor state of telecoms ministry, has seen us lose to other African countries in a speed and penetration race we should have been leading from the start.
Secondly, large publishers have been dreading this judgement day for years, and dug their heels in by not investing in digital properties for fear of killing the goose that lays the golden ad revenue eggs. Indeed, why would anyone worth his/her MBA or CA move clients from rate cards of R70 000 full colour page insertions to R650 per thousand impressions (CPM)?
Still, in so doing, and thanks to a multi-year unpreparedness that sometimes borders on criminal, these publishers allowed the commoditisation of digital ad inventory to occur, reducing the digital display advertising spend to bottom of advertising food chain. A place where brands would fear to tread and campaigns were dominated by product-based advertisers, the likes of which tend to use washed-up Hollywood actors for their TV commercials.
So who could blame the luxury brands for staying away from the promiscuous pages of the internet?
When giving presentations about online display advertising and digital publishing, I try to emphasise two important and closely related features about the current state of digital media.
The first one I put forward to the audience in the form of a riddle, asking what would be the most effective manner to single-handedly ruin the TV advertising market, overnight. The answer is simple: take the online approach to advertising and apply it to the TV programming. By this I mean to squeeze back the programming content and then proceed to run five simultaneous, blinking adverts around the edges of that content. If we believe that scenario would result the death of TV advertising, why do we accept those principles in digital advertising?
Which leads me to the second feature of digital media, that kind of answers why publishers deem it acceptable practice to bombard our screens with advertising messages. Digital publishing, in its current format, is as screwed as print. No viable business model exists for sustainable digital publishing, because of the commoditisation that has happened from the early days of digital publishing when online publishing was an afterthought and ad space was treated as value-add to print editions.
So we all now find ourselves in something of a pickle. The death of (some or most) print is accelerating and digital has yet to find a viable business model. In South Africa, unless you have a minimum of one million readers per month, it is unlikely you can sustain yourself as a digital publisher, especially if you intend to provide any sort of unique or quality content.
And even for those print publishers whose website equivalents achieve those visitor numbers, I’d bet a large percentage of my household debt that those digital revenues don’t even flirt with 50% of the break-even required to run the businesses as they stand. It is a travesty to think to we have screwed the digital model to such a massive extent that we need those millions of ‘eyeballs’ – and even then struggle to bring you the same quality news that a print circulation of paltry 30 000 could achieve in ad sales.
So we shouldn’t be really surprised to hear that Naspers is rumoured to be closing up to six more magazine titles, or to see BDFM begging the JSE to revoke its ruling revoking regulatory enforced print advertising. As publishers, we seem to be caught standing on the edge of railway tracks, staring into the precipice, with a fast-approaching steam train hurtling towards us.
So what can we do? Is this the end of formal private-sector journalism as we know it, leaving the good fight to citizen journalists, tainted government-funded media and cheap newswire copy? Jesus, I hope not, because then we’re really screwed. Luckily, some quality weeklies like Mail & Guardian and the City Press are bucking the declining print trends, so they’ll be around for a long while more. As will the tabloid dailies who service the bottom of the pyramid without access to expensive devices and internet, and who would, in all likelihood, be the last to go. Unfortunately.
For most of the rest, it seems a digital-only strategy is inevitable. But under a different guise, if it is to succeed. And no, I’m not referring to paywalls. Paying for digital content will only succeed if the content and reader experience is unique enough to warrant whipping out the old credit card. And very rarely can we find both those qualities in sites designed for desktops and laptops.
Instead we have to rather stop the rot of commoditisation that has taken place and reclaim digital display advertising back for the big brands to want to embrace it. Sure, there will always be space and a need for the mass volume advertisers on the general purposes media sites – that end of the scale needs to be catered for as well. But for premium publishers, we need to revert to the principles that worked for brands in traditional media: exclusive space beside great content for premium slots. We should never forget the biggest brands in the world got to be the biggest brands before digital advertising came to be.
We need to create online ad space that is consummate with the needs of big brands by creating quality, uncluttered and exclusive ad spaces that will drive up the CPM rates. And while we’re at it, lets just get rid of CPM as a pricing model. Lets charge advertisers for the time their ads are displayed to readers, like they do in TV and radio with 30-second slots. Again, why did we think we needed to change something that worked so well for brands since the time of Mad Men? And to really drive home the message, we need to combine all this with the use technology to make advertising more focused, more effective and therefore more valuable.
We simply cannot stop the digital tide from coming in; that would be like sellers of horse-drawn carts proclaiming the automobiles will never catch on. Instead of clinging to the medium, we need to embrace the change and innovate our way through this challenge. We need to stop thinking in terms of print or digital; they are not media types but rather just distribution channels. And that means the principles for advertising should remain the same. In order for the new school to succeed, we need a bit of old-school thinking.
Styli Charalambous is CEO of Daily Maverick.