Corporate events will often risk being safe with subjects that might drag the conversation away from their main message. They group together people of similar opinions to keep the conversation on a pre-planned track.
But at a recent Digital Publisher conference held by Marfeel, a roundtable incited an honest discussion that challenged accepted standards of digital advertising. Finding effective and sustainable ways to diversify formed the basis of the roundtable that ended the eighth edition of the publisher event, Marfeel-Con.
Xavi Beumala, Co-Founder & CEO of Marfeel was joined by Christian Cochs, Digital and Programmatic Director for Godó Strategies, and Paula Ortiz, Legal Director for the IAB Spain. The panel was moderated by George Slefo, Technology Reporter from AdAge.
The panel was set up to be put under scrutiny from an entire audience of publishers, who were invited to challenge the panel with hard-hitting questions. With stakeholders from every stage of the online advertising lifecycle and conflicting strategies, there were always going to be a clash of opinions.
George posited a theory that the Washington Post is actually a 137-year old technology company with a sideline in news publishing. They develop their own technology and license it to other publishers, creating an entirely new revenue stream.
Leaning on Christian Cochs, from Godó Strategies, he came back with a simple, yet definite response, ‘We don’t have the resources’. The timeline for development and investment in creating bespoke monetization technology that can be licensed is a long-term strategy when publishers need to show immediate results. It’s not suited to general publishers and the majority of publishers don’t want to split their focus away from their content.
Xavi used an example to show how much of an outlier case this is, ‘10 years were newspapers building the printers, or were they renting them? You need to know what your business is and do it well. You don’t have to do everything else.’
The Washington Post is an extraordinary case. Remarkable, and effective, yet not applicable across all publishers. Not everyone has the resources or wants to divert their attention away from their core business of publishing content.
Leading away from direct monetization, George drew the panel to the concept of reader attention.
Not mentioning video was a specific caveat—a go-to answer for any question relating to the future direction of mobile content.
The non-committal answers from the panel revealed that there doesn’t seem to be a silver bullet in terms of format for content. Not only is it hard to measure where our attention is on the screen, but it’s also impossible to know how much of the attention we are realistically capturing when a user is engaging with content.
Xavi described the paradigm, ‘We spend more time on mobile than ever before. But in reality, the time of a person is tripling. You swap tasks time and time again. Attention is split and somewhat duplicated across the TV screen, the mobile screen, and the environment around you.’
He then described a future in which our attention would be even more piecemeal.
‘Mobiles will have a pop-out screen so when you’re reading an article, and you watch a video, you detach the video to the top of your screen, at the OS level, allowing you to split your attention, however many ways. My 24 hours are becoming more like 3 days.’
The conclusion was a simple question that couldn’t easily be answered: ‘So, where is my attention?’
With no clear conclusions by this point, video had become the elephant in the room. This leads us onto why video, the answer to all problems a number of years ago had failed to materialize.
A few years ago, publishers didn’t seem to care exactly what video, but they knew they wanted video content.
This was met with a murmured agreement that the video revolution had not quite materialized as anticipated, and Facebook took the heat for some skewed publisher results.
‘It failed because publishers invested in creating video and relied on Facebook to monetize. There was a legal issue. Let’s put the numbers on the table. The numbers Facebook were reporting back, were not real. All the demand decreased. All of the publishers that positioned themselves to produce video suddenly found themselves out of pocket.’
The lack of a clear winner in the video battle points to a wider issue: the struggle to effectively monetize video and how much video content users really want.
One of the main barriers to adoption discussed among the panel was the interruption to the scrolling lineup of content. We’re absorbing information, clicking a video is then a stop, an interruption, and an investment of time that may not justify this micro-outlay.
Video is not a dead model but the idea of it being the sole future of online content and monetization did seem to die on its feet amongst the panel.
The example of the New York Times was used. Xavi explained, ‘They rely on micro-formats and micro-segmentation. They go all-in on these segments. They have different monetization for each of these segments. Video is one of them.’
As Christian Cochs put it, ‘There is specific content that builds subscribers. There is a lot of money available, but there’s also major room for improvement.’
Drawing on people’s complicated relationship with video as content and the struggles to monetize video, George changed tack and closed the session with a subject everyone on the panel has a stake in, regulations.
Speaking from her perspective as Legal Director for the IAB Spain Paula Ortiz, explained that GDPR is not the end of the conversation regarding regulation. ‘GDPR is having an impact on the whole advertising ecosystem. The publishers had the responsibility because they have a direct relationship with the users. We’re more worried about e-privacy. Avoiding all cookies, no cookie-walls. Thank god, it was stopped.’
Not letting GDPR go unquestioned, Xavi interjected with a pointed question, ‘Was the GDPR a law created to protect users? My feeling was that this was the initial intent but from the user experience, it’s terrible. From a publisher perspective, you can’t do anything, just lose money.’
Paula defended the intentions of the regulation, if not their execution, ‘The law was created because the former law was from 1996. From a technology perspective, this is like a law from another century. It was created to comply with a standard. One of the good points about the regulation is that is applied to everyone and is income-dependent.’
This lead to one of the unifying points across the board— although GDPR was created with honorable intentions, the regulators failed to understand the far-reaching consequences it would have on the industry.
The muted user response towards GDPR showed us that users are broadly accepting of giving over some data for the content they are interested in. What they bristled against were the byzantine rules they have agreed to, the lack of recourse for misuse, and the inability to see how companies were using their data.
With the panel in broad agreement, they started to take questions from the audience, of which the vast majority were global publishers.
One publisher announced that subscription models were working very well for them – in fact, 65% of their revenues come directly from their readers through a subscription model. They are finding that their readers are enjoying and happy to pay for content, as long as they keep the quality standard high.
George Slefo liked this approached, responding that as long they were creating content that couldn’t be made elsewhere, then he saw no potential downside. Comparisons were then drawn to the New York Times’ subscription model, and The Guardian’s donation model, with both publications making quality journalism that can’t be found elsewhere. George then posited the question: what’s the downside to this?
Xavi responded with some realities: the total amount of business you have for a subscription model is capped, and you can’t scale it ad infinitium. The New York Times, in comparison, is an internationally known and read brand, and the USA has 330 million inhabitants which gives it another scale. Xavi also disagreed that implementing this kind of business was simple. Huge publishers have micro-teams who are cross-selling certain packages based on the audience. The pricing models can get very complicated.
He finished with an important statement: that when choosing how to use a paywall or hybrid subscription model, you need to know who you are and appropriately dimension the potential investible market you will have from an audience perspective.
With revenue diversification the broad topic, the conversation revealed that publishers are really fighting against the division of attention, the difficulty of attribution, and making sure that technology develops in pace with regulation and user expectations.
Effective monetization and revenue diversification rely on audience segmentation and sustainable strategies that think user-first but are also adaptable to regulation and changing technology. We can’t say that all the answers were found during this session but this issue will be a continuing debate for years to come.