For many publishers — both online and off — content runs their business strategy. As Rupert Murdoch recently said, “Content is not just king. It is the emperor of all things electronic.” But a good point came up at Digital Hollywood's Media Summit in New York this week: it's consumers that you're trying to reach with that content. And businesses need to pay a lot more attention to the consumer if they want to increase revenues and find successful ad models today.
For publishers, producing good content is the most integral way to attract consumers. Carolyn Everson, executive vice President of ad sales at MTV Networks, expressed the point of view that many publishers have:
"We start from the premise of content and how content is consumed. You can’t always think about what’s next. You have to think about “do you have the right content?”"
But for advertisers, good content is often a way to access the audience viewing it. As Jeff Lanctot, managing director of Microsoft Advertising, puts it:
"A significant trend in the marketplace is that increasingly, marketers are buying audience directly. The notion that marketers will not just buy content, but audience and not care as much about content as they did in the past, is an important issue to address."
Meanwhile, purchasing advertising in a publication to get access to their audience is not new to the digital age. As Lee Doyle, CEO of Mediaedge:cia says:
"We’ve always been buying audiences and the content was just a way to predict what the audience would be."
However, the cost structure isn't quite there yet. Doyle continued:
"Right now we’re in an awkward phase with pricing models. We want to follow the consumer. If new platforms present an opportunity to deiiver ads that are more relevent, then that has value."
But right now, consumers aren't responding to online advertising the way that many businesses would like.
"Consumers can have what they want, when they want it, where they want it. That’s disruptive to everyone else who’s not wanted at that particular time," says Current Media CEO Mark Rosenthal. "We’ve trained a generation to think that content should be free. That’s a bad thing if you’re trying to run a business. It’s something we all have to deal with in different ways."
Many businesses right now are thinking about their bottom line, and how to close the gap after the ad market deflated last year. But that's not the right approach.
"The objective should be to give consumers what they want, not make the consumser do what we want," says Saul Berman, global lead partner at IBM Global Business Services.
Finding the sweet spot of ad quantity online is going to be tricky. Says Everson:
"We’ve assumed as an industry that people can only handle a pre-roll. Maybe they don’t want any of it and they’re willing to pay a fee. We’ve assumed a model that says much less adertising and the model doesn’t work. Maybe the consumer can handle more."
While advertisers, publishers and consumers figure that out, the key to sustaining revenues for many online businesses is diversification.
There can’t be one revenue stream," says Lanctot. "We don’t believe anything’s free. Someone’s paying for it in some fashion. There was a presumption that the ad dollars will come. Maybe they won’t."
That can be a disturbing thought for many in the industry. Everson suggests another approach:
“Think about it from a consumer centric point of view. How am I consuming content? The ad models will follow.”