Why Media’s Broken (And How to Fix It)
The Problem Isn’t Really Scale, Attention, or Traffic. So what is it?
Everybody’s abuzz lately about the perilous plight of media. Buzzfeed, the New Republic, Mashable, to name just a few publishers struggling. In media today, success isn’t growth. It’s just no decline, survival. Here’s the inconvenient truth: media’s badly broken.
Publishers think they’re caught between the Devil and the deep blue sea. Either they become FaceGoogle’s minimum wage content serfs, or they go bust. But in fact the problem is deeper and broader.
You can create the most perfect and awesome platform in the universe. It can garner billions of views. Hey presto! We saved media, right? Wrong. It never seems to work that way. Even Buzzfeed and Mashable couldn’t make megascale work. Why not?
No matter how awesome, perfect, wonderful, a platform is, even if it gets trillions of views, there’s a Big Problem that’s causing media to get blown to bits, go broke, bust, despite all that attention.
Digital ads keep deflating. Each of those viewers, readers, whatever, is worth fractions of pennies — at best — to begin with. And they’re worth fewer next quarter, year, etc. So the result is that unlike most other industries, publishing has to grow faster just to stand still. Tomorrow’s millions are worth today’s thousands. And that’s not an economics that offers a future for anyone.
What does deflation mean practically?
The problem isn’t platforms, it’s ads. Digital ads are little like subprime assets. Advertisers are buying them dear from an ad industry that buys them cheap and sells them high…but then discovering they have a lot less value than they thought…and so the industry is facing a Big Problem. Deflation, assets that are worth less tomorrow than they are today. Unless you’re either Bernie Madoff or Kim Jong Un, you probably can’t build a working business model for long on that.
Welcome to the adpocalypse. In the age of Mad Men, a good ad was worth millions, maybe billions. Today, it might not even be worth thousands. And while you might cleverly sell it for hundreds of thousands, the next one’s probably going to be a lot harder to sell.
What’s the limit of this deflation? There is no limit. Digital ads can deflate all the way to zero…past zero…because they’re essentially worthless.
All Advertising Sucks, But Some Advertising Sucks Less
All advertising sucks. Nobody really likes it, loves it, adores it, wants it, respects it. At best, it’s a minor titillation.
But. Some sucks less.
There are some ads that have value. Even in markets that don’t have “captive audiences”, aka hostages, like TV. To understand what makes ads valuable, we probably have to learn from them.
Which publications are still managing to eke out a living? Mostly, fashion mags. Why? Because branded ads still work. You know: high-fashion ads with heavy investment in photo-shoots, etcetera. They still command relatively decent revenues because they’re not a complete waste of time, nuisance, malinvestment for readers. Readers get something from them: not just information, but ideas, inspiration, taste, elevation.
But that’s exactly what digital ads aren’t. Strategically, they’re liabilities for consumers. We play whack a mole with them on our screens, right? They suck up time, attention, motivation, valuable screen space — and give readers less than nothing in return. Let me put in corporate-ese so you can’t make an excuse for getting it. Their “ROI” to consumers is less than zero. It’s negative. Have you ever met a digital ad that didn’t a) annoy the daylights of you b) steal your attention c) give you nothing in return? I haven’t.
That’s the problem, genius. You can’t keep make people eat crap unless they’re tied down and their mouths are pried open. On the internet, at least, they’re not. Hence, a downward spiral of desperate tactics to grab, steal, intimidate, extort attention.
The Junkyard in the Sky
So. You can build the perfect platform. But it won’t save media. What do we really have to do, given the simple economics above?
Create better ads. Ads that have real value again, instead of deflationary liabilities that don’t.
In fact, let’s stop seeing them as ads altogether. Instead, let’s see them as simple economic “goods”, things that can and should offer people some kind of benefit, gain, real-world outcome. You can think of Nike Plus as a simple example. It doesn’t just advertise to me. It helps me accomplish, attain, live something.
Let me put all that a little more formally. Every dollar of marketing investment must be put to fundamentally better than use than ads which don’t create any real value for anyone. It must flow into stuff that does, whether that stuff is feeds, apps, bots, or (heaven forbid) real human interactions.
The real challenge for those who want to create the future of media isn’t just building “better” platforms. Whatever that might mean in the first place. It’s creating platforms which can experiment with, evolve, and create the ad formats a dying industry so desperately needs. Because without them, there probably won’t be much of an industry left.
Think about it this way. If ads are deflating and you don’t create higher value ads, yiy have only one choice: gain attention faster than the rate of deflation. By any means necessary. Grab it, snatch it, steal it. Clickbait, tricks. You’ll enter a downward spiral of ever shadier tactics – because you’re playing a game that can’t be won. Deflation can go to zero. But attention can’t go to infinity.
Congratulations. Now your perfect platform is a junkyard in the sky. Full of clickbait, algorithmic content, and other worthless junk.
You know Mashable’s “rentrenching to entertainment” instead of news? Exactly. Business models that depend on deflationary assets produce downward spirals. They might begin with noble aspirations, but they end by desperately trying to eke out pennies. That’s the only way they can survive. But that in itself devalues what they were. How many people are going to visit a junkyard in the sky? Are they going to be people anyone wants to reach? Not many, and probably not.
Junkyards in the sky might look like gleaming towers from a distance. But they usually end up crumbling. You don’t have to look very far in today’s tech industry to see a million examples thereof.
So what kinds of ad formats do tomorrow’s platforms have to create, invent, evolve to not become junkyards in the sky?
Advertising is a Dinosaur Trapped in the Matrix
Let’s think it about in historic perspective. The world has changed. We’ve got supercomputers in our pockets. But ads haven’t. The ads on the supercomputers are more or less the same billboards as a century or three centuries ago.The billboards are just made out of bits now, not paint. But they’re still billboards. It’s kind of absurd when you think about it, right?
Advertising is a dinosaur trying to survive in the Matrix.
Nobody cares about billboards in a world of cheap information. If I was really interested in your latest XYZ, the truth is, in a world where information flows more easily than water, I’d probably already know about it. My fake digital friends, my so-called fans, the people I’m an ardent admirer of, would have probably already told me about it…way before your marketing agency ever could.
That’s not to say marketing can’t build awareness. It can, a little bit, for totally unknown brands, by “leveraging social dynamics”. That is bribing Totally Cool and Authentic Social Media Influencers to talk about stuff. C’est la vie. But you can’t grow companies, especially ones with gigantic bulging ad accounts, that way anymore.
Dinosaurs in the matrix might not die. But they probably do stay lost forever.
Don’t Talk About Stuff That Matters. Do Something That Matters
So perhaps you see where this is going.
Tomorrow’s platforms have to reinvent branded advertising. Think of the aforementioned stuff in fashion mags. That’s what publications have always made the most money from, apart from classifieds. Because they are what’s worth the most to readers and advertisers alike.
What might a “branded ad” look like now? Not a billboard, dummy. Not talk. Action. Let’s think of a makeup “ad”. A branded ad in cosmetics is something more like a mini-app that helps you master makeup techniques. It doesn’t just entrance you. It helps you, guides you, shapes you.
It does stuff. Stuff that matters. And so it creates real value for you, instead of just stealing your attention, and giving you nothing in return.
The low end of the market is already saturated, mature, done: commodity ads, which are just pure information. Who does it belong to? Google, of course. But Google’s beginning to struggle precisely because this market is mature, and won’t grow much.
Here’s a caveat. When I say “reinvent” branded ads, I mean exactly that. I emphatically don’t mean: stick those annoying YouTube video ads on everything. That’s one way to stave off media decline, or at least slow it down. But the long run effect will only be to kill media faster. Because people probably aren’t going to click on content full of that kind of junk very much unless they don’t have a choice.
There’s No Way Out. But There is a Way Through
Reinventing the high end of advertising is the only real way out of media’s decline, which is really just the other side of tech’s bubble. The truth is that this shell game isn’t sustainable. Much of tech isn’t creating new value so much as it is merely extracting value from media. For every tech startup or business that booms, a dozen publishers go kaput. It’s an industry eating itself — not growing as much as subsisting by cannibalizing its weakest.
Maybe there will be a brave publisher, agency, network, that reinvents ads. Maybe there won’t. One thing’s for sure.
Unless there is, media as we know it is pretty close to doomed. Not just free media, but even subscription media, because even that business model depends on advertising revenue to break even. Media might survive as celebrity gossip and political extremism and troll forums. But that’s not the future as much as it is the anti-future. A thriving media is vital to democracy, freedom, and equality. So we’re all better off if the industry rises to this challenge.
There’s no way out. But there is a way through.
To rise to it, we’re going to have to do a lot more than drink our own Kool-Aid, and pat ourselves on the back for we’re reinventing media when we’re not. We’re probably going to have to actually do it.