How to be a profitable digital publisher
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In this presentation, given at the 2012 ICT Summit, I explore the future of media platforms. I give advice to traditional and digital publishers on how to profit through advertising, subscriptions and commerce. NB: Slide 2 does not render correctly in Slideshare. Please view the original slide here (it's slide 17): http://www.kpcb.com/insights/2012-internet-trends
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How to be a profitable digital publisher
- 1. How to be a profitable digital publisher ICT Spring, June 20, 2012 Christian Toksvig @ctoksvig 1
- 2. Good News = Material Upside forslide about digital media you will see today The most important Mobile Ad Spend vs. Mobile Usage % of Time Spent in Media vs. % of Advertising Spending, USA 2011 Time Spent Ad Spend 50% % of Total Media Consumption Time Internet Ad Mobile Ad or Advertising Spending 40% 43% 42% = $30B* = $1.6B* 30% 25% 26% ~$20B+ 20% 22% Opportunity in USA 15% 10% 11% 10% 7% 1% 0% Print Radio TV Internet Mobile With thanks to Mary Meeker Note: *Internet (excl. mobile) advertising reached $30B in USA in 2011 per IAB, Mobile advertising reached $1.6B per IAB. Print includes 2 newspaper and magazine. $20B opportunity calculated assuming Internet and Mobile ad spend share equal their respective time spent share. Source: Time spent and ad spend share data eMarketer, 12/11, Internet and mobile ad dollar spent amount per IAB. 17
- 3. Bad news: Most online media are unprofitable • Average newspaper CPM: $25.00 • Average magazine CPM: $12.00 • Average desktop internet CPM: $3.50 • Average mobile CPM: $0.75 NEWSPAPER IS 33 TIMES MORE EXPENSIVE THAN MOBILE!!! SO WHERE IS THE MONEY? • Divided among thousands of sites and publishers • Infinite inventory on the web 3
- 4. So what works in online publising? • Publishing is multi platform and 24/7 • Publishers must create rich and engaging sites • Encourage users to linger and return • Much more content per website is needed, with fewer resources to compile it • Solutions: – Content aggregation from other sites – Content APIs – automated publishing – Recommendations and discovery become more important • Examples: Kalooga, Outbrain 4
- 5. Publishing made easy with technology • Video is located here: • http://vimeo.com/40317011# 5
- 6. Dynamic content • Forbes Billionaires List • Link: http://www.forbes.com/billionaires/ 6
- 7. Advertising technology • Real-time bidding • Personal data • Retargeting 7
- 8. From advertising to commerce 8
- 9. Thank you! @ctoksvig 9
Editor's Notes
- BEFORE LAUNCH: START FORBES BILLIONAIRE PAGEI’m here today to talk to you about how to be a profitable digital publisher. Whether you are the Economist or the Huffington Post, or upload a homevideo to Youtube or a blogger on Tumblr. If you are trying to get an audience and to monetise that audience, then you are a digital publisher. A little about me. I work for Getty Images and we supply content to the publishing industry. So in many ways, our own success is linked to the success of digital media. We have a lot of deep relationships with both analog and digital publishers. As those businesses develop, we get a lot of insight into their business models and how technology is driving the industry. So that’s one reason why this is a topic that’s close to my heart. But I care very much about news and publishing on an emotional and personal level. I’ve spent a big part of my working life publishing magazines and newsapers, so I’m kind of a recovering old media guy. I’ve got regular sized thumbs.. Like many other dinosaurs, I tried hard to find a profitable existence as a digital publisher, and made many mistakes along the way. Today I will talk to you for 15 minutes only. About: Media spend is continuing to move online – onto web, tablets and mobileDespite this fact, most digital media are still unprofitable, I will examine why. So what are the requirements you need in order to have a successful digital publishing business?I will look at somePublishing technology to drive efficiency in publishing Advertising and commercialtechnologies to drive monetization
- So let’s kick off by looking at the most important slide I’m going to show you today. And here I’m already practicing two of the golden rules of digital publishing: One: Show the most important story first. Two: Steal with pride! Because this slide is downright stolen from Mary Meeker at Kleiner Perkins, who has more insight into digital media than almost anyone else.Why is this important: Because it effectively ends all discussion about the erosion of print advertising revenues and the opportunity for growth in revenues of internet and mobile players. It shows how much time people are spending on various media platforms versus how much advertising money is spent on those platforms. Look at how overexposed print is, even after almost a decade of falling revenues. It has so far to go yet. And on the other hand, look at the untapped potential on mobile. We may not realise it, but just think about how often you use your mobile and how relatively few commercial messages you are exposed to. Whether we like it or not, this medium is about to get a lot noisier, just like the internet.
- Online spending is still way behind the audience curve. This is evident when we look at the cost of reaching print versus online users. [CLICK THROUGH EACH LINE]NEWSPAPER IS 33 TIMES MORE EXPENSIVE THAN MOBILEThis is down to two factors: Legacy pricing. Print was always expensive. Internet wasn’t very effective in the pastThe web has infinite inventory and the marginal cost of producing an extra webpage is zero.
- Given these conditions, what should you be doing in order to be an efficient and profitable digital publisher?Publishing is multi platform and 24/7 – this means publish to both desktop, mobile and tabletPublishers must create rich and engaging sites – this means have a lot of content on your siteEncourage usersto stay and go on a path of discovery, both of the new stuff and the long tail of content. Enable users to participate and form communitiesMuch more content per website is needed, but there are fewer resources to compile itSo the solutions are - technology: Content aggregation, this means that you link to content on other sites. You’re never going to have every story that matters, so link to those who do. It works to the benefit of both parties.Content APIs – this means automated content that publishes and refreshes itself. For example, we at Getty Images have to make our content available to be embedded straight into other people’s workflow and on their sites. This means content that is created on demand when a user clicks on a link. Recommendations and related content become more important – this enables users to discover more content and stay longerExamples: Kalooga (looks for related stories on your own website – surfaces the long tail for the userOutbrain – refers to related content on other sites and pays you, the publisher, a traffic referral fee
- When resources are limited, publishers will have to use smarter ways to create content with very little involvement. We can’t wait for some designers to create a page, the editors have to do it themselves!I promise, this is NOT a sales pitch but we actually own a share in this company called Daylife. It is a web publishing software that makes publishing just too easy. I’m going to play a short video, because you have to see how easy this is, especially if you’re into web design or publishing.
- Another way is automatically curated content. Here’s an example from Forbes Billionaires ListWe go to a person on the list, and the page is built for me, in real time with fresh content pulled from a set of defined sources across the web. So this page is never static, always shows something new.
- OK that’s a bit about publishing technology which allows you to make more with less. Now, we’ve also got to make some money here, so there are some advertising technologies that are absolutely crucial for publishers who want to get their cost per thousands, and revenues up. The first one is real time bidding: This is a technology that auctions off the ad space on a page the moment you click on it, based on your browsing profile. In theory this means that your click goes to the highest bidder – in real time, and the ad you are shown is the “winning” adSecond one is personal data: I know the Dutch have taken a robust approach to personal privacy and I understand why people are worried. But from a publisher point of view, the more we know about you, the more relevant we can make the content AND the commercial messages you get. Third one is retargeting, also a controversial technology. This is the technology that lets an advertiser follow you around the web. You’ve probably tried breaking off a transaction on the web, for example for a hotel room. You then get followed by ads for that very same hotel room on other websites. There clearly needs to be work done to protect people against misuse of their personal data and browsing history. But all of these technologies are necessary if publishers are to understand their audience and monetise it better.
- Advertising is a step on the way to commerce, but it is not an end in itself. It’s actually a clunky invention: you create some content, put an ad next to it. You hope the ad is relevant to the content and the user will click on the ad. The user then goes onto the website. Or you’re a user reading something on a publishing website. You then go to google to look for that thing. Tragedy! You just paid Google some more moneyWhy not allow users to go straight to the deal?Luminate – ad based image overlaysKiosked – connecting products in images to e-commerce sites
- You don’t have to do all of the things I’ve mentioned here. But if you’re not doing at least some of them, then you have a problem. And I hope that I have given you some confidence and ideas to a profitable future in publishing. Thank you!