How dysfunctional media has self immolated

Profile picture for user gonzodaddy By Den Howlett September 19, 2015
The extent to which media has become dysfunctional is apparent as ad blockers carve away ad revenue for digital media.

head up ass gapingvoid
I'm splitting this discussion about dysfunctional media over several pieces. In this story I am talking about how media, and especially technology media, deluded itself into near self-destruction. In the next piece, I will outline what happens next. Taken together, this should help technology and media buyers alike better understand what needs to happen next.

The acres of coverage around the insanely successful ad blocker that was pulled from the Apple AppStore provides us with insights into the dysfunctional nature of the ad driven digital media. I am so glad we don't care about ads at diginomica and pledged from day one - 7th May, 2013 - that we would never carry ads. Here's what happened:

  1. Apple launched iOS 9 on 16th September. iOS 9 specifically allows for the use of ad blockers on iOS devices, principally the iPhone.
  2. Peace, an ad blocking app was launched the same day and almost immediately became the top selling app on the Apple AppStore.
  3. Dumb ass media used the events to crank out link bait (ad supported - sic) with titles like: "Welcome to hell: Apple vs. Google vs. Facebook and the slow death of the web." No - I'm not linking to it.
  4. Marco Arment, Peace's creator pulled the app on 18th September citing an 'ethical' dimension. Arment seems to have had some sort of 'road to Damascus' moment where he realized that some ads were OK but that Peace did not discriminate between whether an ad is 'good' or 'bad.' Ergo Peace was unethical and had to be pulled. Make of that what you will. I'm not convinced the explanation passes the smell test.
  5. Hours later and the interwebs exploded with discussion on the topic and the future of publishing.

This discussion matters, provided you can get past the hyperventilation in some media. Why? Ad blockers have been around for a very long time. Many people claim they don't see ads anyway. But when something happens around Apple, Silicon Valley led tech media goes berserk.

I prefer to view this topic through the lens of what is happening in publishing more generally. This matters to you if you place ads or consume tech media so please follow along.

Digital publishing has had a profound impact on the publishing industry as a whole. Ben Thompson summarizes it beautifully in Popping the Publishing Bubble:

The shift from paper to digital meant publications could now reach every person on earth (not just their geographic area), and starting a new publication was vastly easier and cheaper than before. This had two critical implications:

  • here was now an effectively unlimited amount of ad inventory, which meant the price of an undifferentiated ad has drifted inexorably towards zero
  • “Readers” and “potential customers” became two distinct entities, which meant that publishers and advertisers were no longer in alignment

That misalignment meant that the previous separation of publishing from editorial which was supposed to keep everyone whole no longer worked. In truth the publishing model hadn't been working well for years but it was at sufficient a low level of noise as to be immaterial most of the time. Back to Thompson: was the divorce of “readers” from “potential customers” that prevented even the largest publishers from profiting much from the massive amounts of new traffic they were receiving. After all, advertisers don’t really care about readers; they care about identifying, reaching, and converting potential customers. And, by extension, this meant that differentiating ad inventory depended less on volume and much more on the degree to which a particular ad offered superior targeting, a superior format, or superior tracking.

That led to an explosion in the number of ad networks that promised to take away the pain of ad placement from hard pressed publishers. But:

The result is that ad networks don’t really care about the readers — which is a big reason Why Web Pages Suck — and on the flip-side publishers don’t really care about the advertisers, resulting in click fraud, pixel stuffing, ad stacking, and a whole host of questionable behavior that is at best on the edge of legality and absolutely not in the advertisers’ interest.

As with any other company or industry built on fundamentally misaligned incentives, this is unsustainable.

The trouble is that despite mounting evidence, publishers continued blithely along a path that was always going to be a zero sum game. I argued this point on and off for years elsewhere before I gave up and co-founded diginomica.

My view is that while the problem was self evident to any moderately knowledgeable observer. It had been festering for years before the digital era, the ad-obsessed publishers could not get past their addiction to ad dollars. The people I worked with saw it and attempted to come up with imaginative alternatives. Their masters were blind to the problem.

The changes brought by digital meant there was more and more pressure upon editors and writers to produce content at an ever increasing pace and at lower cost. If you were in news, breaking your story 10 nano seconds before the next guy became the only thing that mattered with a subsequent drop off in content quality. It was clear as far back as 2005 that such a model would not work. It was staring many of us in the face by 2012.

The net result is what you see today. Titles that once prided themselves on quality content were drawn into producing inane copy, list driven 'features,' clickbait, linkbait and every other sort of bait. Anything to grow a claimed audience of what turns out to be mostly drive by readers and bots sniffing out web behaviors while surreptitiously shoving undifferentiated ads in your face.

It is not just the shift to digital media that matters. It is also the consumption habits which have firmly moved towards mobile devices. In the 28 months since diginomica launched, we have seen mobile traffic sky rocket from 15-20% in the early days to something around 40% today. It is that shift to mobile which is pushing the current publishing models over the cliff. Why?

As currently constructed, ads that already look horrible on the desktop are bloody awful on mobile devices. Still almost no-one was prepared to address the problem. Everything changed when the ad blockers came along this week and publishers finally saw the revenue threat for themselves.

In all of this, tech media has been particularly hard hit. Of the 27 titles I contributed to in 1998, only one remains. Titles that were once considered the gold standard for tech reporting and analysis have shrunk or disappeared. The sad fact is that as far back as 2004, my friend and ex-FT reporter Tom Foremski, warned anyone who would listen that ad driven tech media had a dark future ahead of it.

Tom was one of the first to opine that every company would need to be a media company. His words were prescient and in some sense form the basis for what diginomica stands for today.

In the meantime, what we see today is the closing of one chapter and the opening of another. What happens next will profoundly impact all who aspire to media creation. I will describe and discuss that in the next story.