Digital update - the flawed quest for attention and business models

Profile picture for user jreed By Jon Reed December 13, 2013
Summary:
Several pieces hit the wires that shed light on the state of digital media. I'll review the upside and downside of each.

Retro news broadcast and microphone.
Digital media is a moving target. The quest for monetization - to paywall or not to paywall - preoccupies pure media companies. Content consumers (that's you) are on a quest for entertainment or relevance, dodging the pop-up ads, interruption marketing and tedious slide shows that weakly support the precarious 'free' model. Meanwhile, corporate marketing departments, flailing with their own media transitions, struggle to put out content that engages and expands their audience.

Fueling these trends is the never-ending quest for attention: how to get it and how to keep it. For the enterprise, that quest takes on more nuances: how to get the right attention from the right audience. Then: how to build relationships with that audience based on perceived value rather than the off-putting 'always-be-closing' mentality. In the last week, several stories hit the wires that shed light on the state of digital media. I'll do a review and offer the upside and downside of each.

Facebook outs itself to page owners: pay for play

For years, business gurus and Facebook apologists advised page owners like me to create personal, engaging content and find the payoff: a big new audience. Now we learn what the cynical have long believed: Facebook is not in the business of providing page owners with a free content platform. The plan was to get page owners to pay to get their content into users' feeds. Tom Foremski's piece Social Media is Not Free - Facebook Wants to be Paid summed it up:

Big or small, the Facebook strategy for most brands has been to collect as many “likes” as possible. Facebook is now planning to monetize that strategy by charging companies for newsfeed distribution. For much of this year Facebook has been gradually cutting back on distribution of a brand’s messages to Facebook users that “like” the brand. Now, it’s offering a way for brands to regain that distribution by paying for it.

Upside: Facebook lured many page owners into naively wasting time hand-crafting content few people were consuming. Now the terms of the bargain are at least clear, and with Facebook's near-alarming amount of demographic data, paying for targeted readers may be a viable option.

Downside: Facebook-dependent strategies are always dependent on the dreaded tweaking of the newsfeed algorithm. I have long recommended that given Facebook's fluctuations, enterprises should build their own content platform and view Facebook as a content 'outpost', a place to experiment and perhaps target users via paid promotions - but not to be centrally relied upon.

Verdict:  A stern warning of the dangers of 'content is king.' Platforms are king. Content keeps users on the platforms, but sometimes the content they are seeking (e.g. celebrity gossip) is beyond the scope of even the most adventurous enterprise marketers.

Can paid subscription tech sites work?

One of the most interesting tech site launches is The Information, which doubles down on the much-questioned practice of the paywall. Founded by former Wall Street Journal writer Jessica Lessin, The Information's launch model is $399 per year, or $39 per month for content access.

Lessin's Letter from the Editor dissects the problems of tech journalism:

Technology news needs a reboot. There are more stories and outlets than ever, but a troubling cycle is playing out: The race for pageviews and ad dollars is causing publications to focus on quantity over quality. Coverage is consolidating around attention-grabbing topics, like the latest hot startup or celebrity CEOs. Publications are wasting time writing and regurgitating the same stories again and again.Media outlets are relying on sensational headlines or idle speculation, not original reporting, to make their versions stand out.

Lessin strikes chords and, incidentally, hits on some of the reasons we launched diginomica last May, albeit with an enterprise focus and a different business model.

Upside: Web sites free of intrusive advertising are not just pleasant to read - they also present a better opportunity for the web site's editorial leadership to craft stories that resonate rather than chasing eyeballs with celebrity preening and riffing (and/or blatant stealing) the winning themes of other sites.

Downside: Paywalls have a way of dampening conversations and reduce the reach of any content placed behind them.

Verdict: I'm of two minds on this one. On the one hand, I strongly support experimentation in media models. As a firm believer in intellectual crafts, I also believe readers should take some responsibility to finance the work they want to see. However I think the only working model for readers funding content is via seamless micropayments on preferred platforms (example: genre fiction on Kindle). Art needs a paid reader model, but information thrives on free distribution.

The biggest downside of paywalls? They prevent the best thing about social: discovering great content and sharing it - without friction. There's a caveat here: sophisticated enterprise marketers can find uses for a wall, just not a paywall. Instead, a registration wall. The most effective content marketing combines free and what I call 'free premium' content that represents a fair exchange of contact information for quality.  Lessons on what readers consider a fair exchange, money or not, are valuable indeed.

TV's dominance as an advertising medium is fading

A recent Financial Times article (behind a paywall) confirmed the expected: television's grip on ad budgets is loosening on a global level after several decades of growth:

Television is expected to capture 40.2 per cent of the $532bn global ad market in 2013 before falling to 39.3 per cent of the total market in 2016, according to Publicis’ ZenithOptimedia. WPP’s GroupM is also predicting that TV’s share of the global advertising market will decrease slightly in the coming year.

Upside: For those with a stake in Internet business models, this is a marker that consumer content habits are changing. As mass consumption gives way, we should see more content dedicated to our needs and less generica.

Downside: As advertising effectiveness deteriorates, new business models have not solidified. For television consumers, that means you can expect a far greater blurring of the lines between content and commercials, with plenty of gratuitous product placement and incessant mentions of advertisers during the content segments.

Verdict: The struggles of mass advertising reflect the rise in niche audiences. If you create the best content for specialized constituents, opportunities abound. However, for pure media companies, monetizing smaller audiences remains a monstrous challenge. The temptation to broaden reach with viral videos and overwrought infographics to please click-obsessed paymasters is almost overwhelming. 

But those media outfits that stay the course and earn attention through relevance, craft, and even some good old fashioned entertainment may yet find their way. Enterprises can learn from such efforts as they evolve from brand promoters to media publishers to purposeful communities. People don't like to be pitched and pimped, but they do like to buy from those whose expertise they trust. Establishing that expertise is where enterprise media can excel - or not.

Image credit: Retro news broadcast and microphone. © RTimages - Fotolia.com