Publishers are reputedly pessimistic by nature. But if nearly two out of three of them participating in a recent online publishing profitability survey are correct, there is solid justification for their negative outlook — but also a path to regain momentum.
In the survey, more than 65% of nearly 400 U.S. publishing executives said they believe the publishing industry is in for a long, slow slog – at least two to five years or more – before ad sales will start showing some real traction again.
That’s a rather dismal outlook on one’s business.
The survey, conducted by Cxense in conjunction with Editor & Publisher magazine, took the pulse on profitability in publishing. Perhaps most sobering of all the results was that more than one-third of respondents don’t believe news media industry ad revenues will ever surpass the all-time high of 2005.
Has publishing lost its mojo?
The answer is definitely “no.” Publishers are working harder than ever – tackling 24-hour news cycles, endless competition at multiple levels, and the need to retain the quality standards that give them a good name.
It all makes the industry quite challenging. But the issues thwarting publisher profitability are reversible.
In their rush to monetise their online presence – which typically followed the rush to create an online presence a decade ago – publishers inadvertently gave the keys to the profitability kingdom to third parties. These seemingly innocuous parties agreed to share profits and drive traffic in exchange for the right to gather information on readers and site visitors.
The profit share was dismally low, but publishers thought it was better than nothing.
What more and more publishers have realised is that those third parties are sucking up much of the industry’s potential profits, while the publishers languish.
In fact, 86% of survey respondents said such sites as Google, Yahoo, and Facebook, which pull content from the publishers’ sites and use their data, are “frenemies” or “enemies.”
The publishers also overwhelmingly (78%) admitted that they have no idea how many (or even which) third-parties – such as advertising vendors and data brokers – are accessing and using their audience data. Another 20% of respondents said they believe the third parties might be earning more money from publishers’ data than the publishers themselves.
Thus, the justified pessimism.
But it’s not all doom and gloom. With a quickly changing publishing landscape – readers want content available everywhere and on any device – publishers are looking at ways to return to strong profits. In fact, many of those surveyed show they understand the importance of targeted advertising and site personalisation to help their companies regain a competitive edge.
Technologies exist today that help publishers analyse and act on the audience data they already collect, so they can shut down third parties that use it for their own gain.
By using their own Big Data, publishers can better target their readers and site visitors with relevant news and advertisements. Studies show that with hyper-relevant content recommendations, site visitors likely will remain on the site longer (“If you liked this article, you may also like this one …”).
Longer visits and more engaged readers make it easier for publishers to sell ads and convert visitors into paid subscribers.
I’m optimistic that the pessimism publishers feel today will lift when they see the clear path to greater profits. The key is to regain control of and capitalise on their own data, show the door to third parties abusing their data, and hold onto site visitors longer.
The good news is they can start today.