Media Companies Need To Partner With Brands If They Want To Survive In The Digital Age
Many of these companies don’t have the right skills in-house to make the transition to the digital world.
Lava crackling down the slopes of Kilauea. The whispering walls of Gol Gumbaz in Bijapur. A strangely beautiful ultrasonic conversation between rats in downtown Manhattan.
When The New York Times Magazine published its “Voyages 2018” issue last September, readers could not only see the visually stunning images on the magazine’s pages, but they could also listen to them, thanks to a web-based soundtrack created by the Times’ T-Brand Studio.
The audio-zine was not merely a unique blend of analog and digital. It also represented a unique collaboration between editorial and advertising, content and commerce. And it may signal a way forward for traditional media companies struggling to survive in the internet age.
Like the Times’ November 2015 foray into virtual reality, when it shipped 1.3 million Google Cardboard VR headsets along with copies of the Sunday paper, the Voyages project was created in collaboration with GE, which contributed three audio reports of its own.
That’s a clear sign of how much the media landscape has shifted over the last five years, says Sebastian Tomich, global head of advertising and marketing solutions for the Times.
“When I started at the Times, it was your traditional media sales business,” he says. “The newsroom put out a product, you took that to advertisers, talked about how big the audience was and the various sizes of ads you could sell, and then you sold them.”
Now the Times is no longer just a newspaper and a website. It’s a sponsored content agency and a film studio. It’s an events and conference business. With the acquisition of HelloSociety in March 2016, it became an influencer marketing firm. And, increasingly, the Times is a strategic consultant for the brands that appear in its pages.
Those changes necessitated an equally dramatic shift in the Times’ culture. While editorial integrity remains the hallmark of the organization, Tomich says there’s a lot more communication between the edit and ad sides of the house. And when the Times goes on a sales call, everybody comes along for the ride.
“There’s a wholesale evolution of the talent involved,” he says. “Now we have a creative team, a strategy team, tech and product teams, and a sales team, and they work hand in hand as peers to service each client.”
Rise Of The Machines
The biggest driver of these changes is the dominance of programmatic advertising, says Raju Narisetti, former CEO of Gizmodo Media Group and currently a professor at Columbia University’s Graduate School of Journalism.
Machines can match ads to audiences with greater efficiency and at much lower cost, while at the same time providing incontrovertible evidence for which campaigns are the most effective.
This year, advertisers will spend $46 billion on programmatic ads, according to eMarketer. By 2020, more than 85 percent of display and nearly 80 percent of video ads will be bought via automated channels.
Of course, more than 60 percent of digital ad revenue still fill the coffers of Google, Facebook and, to a lesser degree, Amazon.
“I don’t envy my sales friends working on the ad-tech side,” says Jesse Math, vp of display and social for ForwardPMX. “It’s a tough environment for them. Some companies have gotten out of the media-buying game altogether and have become analytics or data companies.”
As a result, publishers and broadcasters have been forced to diversify their revenue streams. Roughly half of Gizmodo’s revenue came from display, programmatic and video ads, Narisetti explains. The rest was made up by ecommerce and custom content.
“We were able to grow our top line in the high double digits, and that’s without even thinking about events, subscriptions or syndication,” he says. “I think the sustainable media companies are discovering that if they can have six or seven different revenue streams, they can collectively grow a business without really changing who they are.”
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