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2011 and Beyond - 5 Strategies for Survival in the Digital Media World

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Publishers face an unprecedented array of choices and pressures as they look for their investments in digital businesses to translate into meaningful profits. In the midst of continuing change in the ...

Publishers face an unprecedented array of choices and pressures as they look for their investments in digital businesses to translate into meaningful profits. In the midst of continuing change in the sector, the most successful leaders will apply new thinking to both the pursuit of revenue and cost management. “2011 and Beyond” will discuss five key methods of aligning product and revenue strategies against the backdrop of ever-increasing pressure to manage expenses.

Geoff Reiss, Digital Media Thought Leader

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2011 and Beyond - 5 Strategies for Survival in the Digital Media World Presentation Transcript

  • 1. The  Next  Big  Thing  and  what   Publishers    can  do  about  it   Geoff  Reiss   Chicago   10.14.10  
  • 2. Market  AssumpDons     AdverDsing  revenue  is  poised  to  grow  dramaDcally.  Piper  Jaffrey  has   spending  growing  from  $8B  in  2009  to  nearly  $15B  in  2010     Available  inventory  will  sDll  grow  at  a  faster  rate  than  new  dollars  enter  the   market  place  as  the  full  effect  of  social  media  plaNorms  are  felt.  
  • 3. Market  AssumpDons     The  buying  process  will  change  radically.     Buys  will  be  increasingly  driven  by  targeDng  key  audience  and  behavioral   characterisDcs  and  not  purely  on  the  basis  of  site  virtues.     The  inventory  mix  will  change  –  straight  display  will  lose  a  third  of  its  share   while  video  may  triple  in  the  next  5  years  
  • 4. Market  AssumpDons     “Average”  CPM  will  become  a  misnomer;  the  delta  will  widen  between  the   two  classes  of  ads  appearing  on  sites  based  on  source  of  sales  –  directly  sold   v.  network  fills  
  • 5. Publisher  AssumpDons     Expense  and  investment  faDgue  is  seUng  in     Rapid  emergence  of  mulDple  plaNorms  is  scary     Publishers  are  sDll  oriented  to  quanDtaDve  goals  that  may  no  longer  be  as   relevant  as  they  once  were  
  • 6. What’s  a  Publisher  to  do?     Declare  what  arena  you’re  playing  in     There  will  be  two  predominant  approaches  available  to  publishers:      The  numbers  game     PosiDon  as  a  premium  verDcal  brand  
  • 7. Publisher  Strategies     The  numbers  game  works  one  of  two  ways     Go  mass       Go  cheap   The  most  disrupDve  brands  do  both  
  • 8. Mass  strategies     The  emergence  of  Twi]er  and  FB  will  raise  the  bar  as  to  what  levels  of  traffic   consDtute  real  mass  –  Wal  Mart  goes  digital  –  leaving  <10  players  who  can   play  the  mass  game     Cheap  content/traffic  producDon  offers  some  refuge  but  is  difficult  to  scale   for  all  but  a  few  players.    
  • 9. Publisher  Strategies     The  Premium/VerDcal  path     Two  approaches     Ad  driven     Consumer  driven     There  are  some  qualifiers       Need  a  leadership  posiDon  in  a  well  defined  category.       Need  to  be  either  essenDal  or  loved  –  or  both  
  • 10. Achieving  Premium  Status     Established  paths  thus  far  include  plaNorm  diversificaDon  and  premium  Ders     On  the  sales  side  premium  relaDonships  can  be  achieved  by       DemonstraDng  superlaDve  demos     Offering  adverDsers  highly  differenDated  products     Offering  deep  levels  of  integraDon  that  go  beyond  pure  display  and  include   relaDonship  markeDng  
  • 11. What’s  a  publisher  to  do?     Most  of  all  publishers  need  to  think  very  differently     New  core  competencies  must  be  developed     Become  audience  and  outcome  driven     Create  leverage  in  the  marketplace  –  close  the  informaDon  gap     Move  out  of  purely  subjecDve  means  of  page  display  and  assembly     Create  plaNorms  that  reflect  buying  criteria  
  • 12. What’s  a  publisher  to  do?     Commit  to  being  product  driven     What  does  that  mean?     AnalyDcs  and  performance       IdenDty     Marketable     Repeatable/create  scale     Why  is  it  essenDal?     Premium  posiDoning  depends  on  it     Why  is  it  so  hard  to  do?  
  • 13. Diversify  DistribuDon     Rapid  emergence  of  new  plaNorms  introduces  both  opportunity  and   expense  to  publishers.    A  product-­‐driven  brand  with  meaningful  scale  will  be   able  to  cut  Dme  and  expense  to  market  when  considering  new  plaNorms  
  • 14. What’s  a  Publisher  to  do?     A]ack  costs     Tech  PlaNorm     Impact  on  hosDng     Impact  on  cost  of  iteraDons     Ability  to  make  traffic  contribuDon     Content  costs     Volume  of  content     Cost  of  producDon     Value  of  content  
  • 15. Where  does  this  leave  us?     Changes  in  the  ad  market  will  leave  many  publishers  in  an  untenable   “middle  posiDon”     Increased  pressure  on  expense  management     Few  publishers  will  be  able  to  cover  the  table  with  bets     ConDnued  opportunity  for  brands  who  are  category  leaders