An open letter to marketers: it’s up to you to save the media industry now

Alex, well written and balanced. The Advertising Stream’s are diminishing at an alarming rate the business model requires a tune up or the alternative is receivership…

The independent blogosphere does have some people putting up good-quality content but it isn’t being marketed and monetised effectively to justify keeping these blogs afloat.

It can be facilitated by one or more good-quality ad-management plugins for the popular content management systems. Here, these systems have to support different layouts to cater for desktop and mobile views.

Then advertisers could be encouraged to look for the blogs that align with their business ideals and host good-quality content. Then they could offer to run up their display-ad campaigns on these blogs and pay the bloggers directly.

Another problem that can also surface would be for bloggers to attract overseas ad spend but this may bring in tax complications such as avoiding double-taxation and being compliant with VAT-type taxes. Here, the various inland-revenue departments could work tightly with bloggers and small-time operators local to them to simplify the tax red-tape to reduce the cost of compliance even when doing overseas business.

Similarly other “small-business” efforts run by various governments can reach out to the blogosphere to help them build up their business and sell advertising directly rather than engaging with programmatic ad setups.

Not true. As an advertiser previously in control of a $30m budget, every time i insisted on doing this, my media agencies would decry my Luddite ignorance at not embracing the new era of glorious programmatic. It was an uphill battle that i won, because I controlled the purse strings. But not every client is willing to be a pain the arse to their media agency like I was,

It’s hard to invest in quality content when holding groups decide to negotiate for the lowest possible rates.

Low rates = low quality.

It is not realistic to expect an advertiser to ringfence anything, particularly money, in order to help maintain the status quo for media companies. Many media companies have for decades simply ignored the changes that were always going to take place once the internet started changing society. Arrogance, short-sightedness and lack of educated management have been in large part, a contributing factor for some media companies, who now find themselves squabbling over the diminishing pie of audiences and advertising. Many of their legacy management still carry the arrogant approach that put them in their present, vulnerable position. Marketers have many, many more quality, cost effective and targeted, high reach options than old fashioned media with diminishing returns. Why should they take the blame for it?

You cant invest in high quality content, yet at the same time buy cheapest in the market, as many clients want to do. In fact client procurement rule over client marketers in some companies (to their eternal detriment). At the end of the day the client decides if they want to go ultra cheap (low quality), ultra hi quality (expensive) or where in between. My experience is 97% of our clients are closely positioned to the cheap end of the scale.. my opinion is its not because marketers want cheap, its because they are beholden to their internal finance and procurement teams to deliver savings. Only a few clients I have seen can tell their own procurement/finance what to do.

The media is a bit like the cab industry in Sydney, attacked on many fronts. Technological disruption and social change compounded by a lack of quality. The lack of quality was accepted through necessity or simply ignorance as nothing better had presented itself.

Technological disruption is largely the internet and smart devices for the media and companies like Uber for cabs. Social change is that people have different attitudes towards the media. Journalists now are not revered and mainstream tele has been outed as the rubbish that it is (largely thanks to our good friends in internet streaming tele). The death of mainstream tele? Good, it is rubbish. Changes to how we get our news and entertainment? Good, the alternatives are much better. The flagships of old are dying, and it is up to bright entrepreneurial souls to implement the new methods and success story for news. It is evolution. Adapt or die. Whereas media was alone in safety on its island in days gone by, it is now in a sea of predators.

I do feel for the staff though in those industries, that would be tough.

great article. advertisers can be naive and fall for the promises of new shiny tools = programmatic. the solution is simple
a) boycott facebook and youtube and other social media
b) cut out as many middle men as possible, including the agencies.

and publishers need to use technology to have clients buy directly from them. technology is not a threat, it’s greedy middle men that add no or little value to a placement but charge 90%-500% markups

And the irony is that while there are millions, if not billions, of ‘publishers’ on the internet, just two of them control the lion’s share.

And you thought that the old media were monoliths – you ain’t seen nothin’ yet!

If an ad impression is unidentified it’s typically going to be placed on a low rent property and/or have a high risk of being a none human impression. And that is always reflected in the price.

The businesses that can run with these net Cpms are those whose audiences or network create the content for the business. And we’ve all read about the brand safety issues that come with those types of media businesses.

I don’t think programmatic is the problem. It’s how it’s being used. Talk to the media. Ask them to set-up a PMP deal for you. You’ll get brand safety, accountability, in most cases additional data, and certainty of where your brand will appear. All done via programmatic with the benefits that can bring. And you can place money where the quality content is.

And if the media want to stop paying 40% plus to middlemen they need to start their own desk. The media need to get a bit more bullish. It’s your content, your audience and your data. Put it together and do something with it. Nobody has better audience information than you. You’re making 20c in the $ despite doing most of the lifting. Why?

These trends are washing through the UK currently, marketeers are moving money and media are setting up their own desks. It seems as though they need bringing to Australia.

As an advertiser, I took a perfectly viable alternative revenue idea to the head of agency at Fairfax and they didn’t want it. End of story.

What you have not mentioned Alex is that marketers have changed. Today they are essentially media buyers. So the cost and measured indicators of today’s market make the whole thing inevitable. Basically aggregators get the money because they tick the boxes that are a sum of outcome and price.
If marketers were more creative and strategic they might marry their creative plan with different media and certainly not bombarded traffic metrics. But they’re not.
In any case the other cite problem is that news media and especially fairfax are totally out of touch with their value proposition. This market effectively demanded a higher standard of content and Fairfax chose to go low brow and shouty. To take the most egregious example today’s afr is like the Oz. Full of dull political dirges and commentary but hardly any actual news of business. Run by dinosaurs these products are destined for the bin.

I agree with the problem. The solution? It’s essentially charity from advertisers. If that’s your “solution”, I wish you the best of luck – you’ll need it.

I was wondering if anyone actually scientifically calculated the tipping point where correcting the advert saturation problem becomes impossible? Is it 5% adverts, 10%, 45%? The “genius” business experts say it is always far more expensive to acquire a new client than to keep (or not piss off) an existing one. If you piss enough clients (viewers) off with huge percentage of adverts and shitty content, then they leave. Hell, even the shopping channels have adverts in the middle of their adverts… go figure! What is the critical “piss off mass” before the costs of getting new clients (or winning back old ones) makes the whole death spiral irreversible? I bet we are pretty close because as with other industries, when the “corporate knowledge” (workers) walk out the door, they are very hard and expensive to replace. It’s easy to destroy but very hard to build. Perhaps we should all get used to the rancid kardashitians… not! I have personally gravitated away from commercial TV as it is just boring. It was no conscious decision on my part, it just crept up on me and I realised that, shock horror, I am not really missing anything!

Great work Alex.
I’ve seen these media companies gut their creative departments to support mediocre managerial and sales departments.. Guess what happened? All the people who could ‘put on a show’ are on the street and all the bean counters scrape the bottom of the barrel for the last lentil.
OK, so what are we going to do about it?

Good points Alex and I love the comments coming back. For my part I find it frustrating that Marketers still want to take this route to the consumer. The money wasted in the hope of connection is huge. I can take a marketer directly to where the herds congregate, putting their message straight in the hands of their target market. Yet still they persist in doing it the way it has always been done. Happy to chat to anyone that thinks differently.

As a founder of one of the businesses on Denise’s Programmatic Landscape above, I have struggled with this topic for some time. Without quality inventory, we are in a downward spiral. The digital inventory we can buy in SSP’s is extremely diverse but when I can sell Ch7 Catchup TV cheaper than the 7 Sales Reps themselves (even when there’s SSP and DSP fees and the apparent 4,000% Margin that we make included), what’s an advertiser to do?

For a long time I’ve lamented that I don’t see a day when a long-tail website blogger is able to invest in the journalism to ‘protect me as a citizen’ by exposing Police Corruption or Scandals in the Church or similar research driven exposes, so the Ad money should stay as much as possible with the big boys who can carry those wages needed to do public good – but then I look at the HP of News.com.au today and the only article about the landmark French Election is one leading with how good looking Macron’s wife is…… so what chance have we got?

And I love watching the NRL of a Friday night or Sunday arvo with my young Son…. am I going to have to pay for that privilege soon? At worst, the gambling Ads give us a chance to talk about percentages and times tables for some real life schooling….

Alex, I reckon there’s probably only one person at each major media owner deciding how much inventory they send out programmatically and how much they retain for premium sale with engaged Marketers – and I don’t reckon they have connected the dots on what role they’re playing in this demise. Us Programmatic people can only sell what’s there to be bought. And I reckon there’s more than just my business who’d love to have even more great quality inventory to sell, regardless of the (cost) price. Surely we all sell on Value?

Thanks for opening up the discussion even further.
MP

Media like SMH still give their product away for free. How often have I bought the weekend paper and found myself thinking, ‘I’ve already all this’ except for one review article in Good Weekend – and usually that’s online on the same day.

Just not worth it.

Great article.
But the big question is how do you make money when and entire generation has learnt to avoid ads, whether it’s through recording and fast forwarding, using ad blockers – or just switching off when a pesky ad break comes on and going onto another device?
Very troubling times.

Thanks for this insightful piece Alex. As owner of a small media company that publishes a well-known print title and its online presence, I’ve been swimming against this current for a while now. As a small business owner with full control over every aspect of publishing, I have had to make some hard cuts, but I have never made cuts that affect our readers. I live in the hope that when the dust clears, there will be a small but nimble pocket of media companies out there that refused to dumb down their product and still enjoy healthy and honest relationships with their advertisers. Where possible I seek out the visionary marketers at companies and bypass their small minded agencies, and in those cases, I’ve forged relationships that are almost unbreakable. I urge other media owners to do the same. Switch off your programmatic advertising and let’s start doing some real business with marketers that we can all be proud of!

On the niche publishing side, selling inventory on programmatic channels is the path to revenue suicide. Quality media (and/or niche) is not a volume game. Advertiser clients do pay reasonable rates for direct buy quality/niche campaigns, they don’t for programmatic buys.

Fairfax is still large and strong enough to phase out cut-rate programmatic sales. But I bet they don’t bite the bullet.

“There’s an unspoken contract between the media and their audiences which is being fundamentally betrayed”

Yep. But the execs were warned about this a decade ago, and didn’t do anything about it and frontline staff failed to stand up for their professional ethics…..so….too late now I’m afraid.

When I worked at Network Ten (circa 2007-09) the general consensus was that ‘the people’ should not be given any power to choose what they wanted to see nor to input into the show. If this model you propose was going to work it would be interesting to test whether the big networks still feel that the audience should not be the arbiter of quality or entertainment value. If the funds are promised up front, the clever people are inspired and the audience gets a say we might see something interesting.

Marketeers could begin by stopping the funding of hate. If you are a marketeer, have a close look at some of the gutter press, in print / online / TV and decide whether these media / publishers are helping our society. If you think they are being hateful: pull your money with them. #stopfundinghate