Tuesday, August 14, 2012

Digital Dawn, Advertising Born, and Forbes to the Head of the Class

The word on the street is that About.com, purchased from Primedia by the NYT in 2005 for $410 million, will be sold to Answers.com for $270 million.  Ten years ago, About.com sounded like a great idea.  Put 500 content specialists in a room to write about every special interest under the sun from cross-stitching to how to throw a knuckle ball and you surely have a winner.  About’s entre into content farming might have seemed like a good idea until Google’s algorithm change hurt site traffic.  The company’s business model was also hurt by declining revenues from cost-per-click and display advertising, a trend not unique to this business.

Jeff Bercovici at Forbes astutely describes About.com as a company “caught between its past and its future.”  I recall at a luncheon, right before the NYT acquisition, a Primedia executive talking about the endless business prospects in the content verticals.  As someone who has cut his teeth in the verticals, I thought he was absolutely right.  The verticals would survive any digital onslaught.

Recently the NYT’s David Carr, addressing the recent dismal news from the Audit Bureau of Circulation about the almost 10% drop in newsstand magazine sales, refers to this downturn as “existential.” “Magazines, all kinds of them, don’t work very well in the marketplace anymore.”  Even Cat Fancy is down 23%!

Magazine publishers have experienced all sorts of “digital dawns” during the last fifteen years, from the dot com fantasy, to the browser wars, to the tablet age and have muddled through reasonably well, thanks in part to the power of the magazine brands.  During my stay at MPA, we struggled with the definition of a magazine that always seemed to begin with the phrase: “a magazine is branded, edited content,” as if that would be a defensible last line of defense.  But what if other reputable brands entered the content business with reputable offerings that found particular favor in social media?

It’s a natural, and perhaps inevitable, psychological bias that we view business opportunities through an existing lens.  Magazine publishers have almost necessarily been caught between its digital past/present and the future, forever enshrined in the phrase, “exchanging analog dollars for digital dimes.”  This doesn’t mean that publishers have not made huge advances in the digital arena.  It’s that the disruptions we have faced to date might pale in comparison to what is around the corner.  That is the gist of a recent article by Lewis D’Vorkin at Forbes.com: “The advertising trend that will shake up 100 years of journalism.”

According to D’Vorkin, this trend is a product of the marriage of social media and content marketing.  He defines the latter as “brands using the tools of digital media and social sharing to behave like original content publishers.  They want to break out of the silos (full and partial-page display ads, 30-second spots and Web banners) that both traditional and new media forced them into.  The idea that a company—as a brand and a marketer–can be an expert content creator and reach an audience by disintermediating reporters is confusing, threatening and scary to an entire profession that had its way for a century.”

Forbes has entered this brave new world with a product called AdVoice, “a fully transparent way for marketers to publish and curate content on Forbes.com and in our magazine.”  SAP, Microsoft, Dell, Merrill Lynch and others have published on this digital platform; Toyota, Northwestern Mutual and United Airlines have done so in print.  D’Vorkin notes that Buzzfeed, The Huffington Post, The Atlantic, and Gawker have offered content marketing opportunities.  Of course, social marketing campaigns are at the heart of the Facebook business proposition.

This seems to represent a fundamental shift in the Forbes business eco-system; and not just another platform chasing available advertising.  At the heart of this enterprise is the belief “that there are five vital constituencies in the media business, each with a different agenda.”  According to D’Vorkin, these include the voices of the Forbes brand, the journalist, the consumer, the social community and the marketer.  “In the digital era, each can produce content at will in an effort to be heard.  That leads to a corollary principle: content is content, and transparency makes it possible for many different credible sources to provide useful information.”  Go to the Forbes home page to see how this delineation plays out.

Congratulations to Forbes for an enlightened content strategy that gets us out of the church/state cul-de-sac and into our new world order.  This is a conversation well-worth having.


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