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Avoid the Predicted Digital Meltdown -- Part II

Posted on Friday, May 31, 2019 at 1:12 PM

It's time now to get your business in optimal shape.

By William Dunkerley

Amid warnings from the New York Times and Editor & Publisher magazine, Part I took up the matter of an impending catastrophe for STRAT readers: a serious downturn in the ad market. Now it's time to round out the discussion with a look at the specific trajectory of magazine advertising.

The foremost concern, of course, is to find ways of mitigating potential damage to our publications.

Part I showed graphically that while digital revenues are trending upward, print revenues are trending downward. Little media attention, however, has been given to the reality that print revenues nonetheless still tower over digital. Mainstream media seems inclined to hype the growth of digital while giving short shrift to that point.

We also presented a graph of the relative online interest in digital versus print advertising as expressed in Google searches. There appears to be a kind of correlation between revenue and online search activity. The online interest graph shows the same trend directions found in the revenues graph.

But the online search interest trend lines tell us that digital overtook print several years ago. Interest is preceding revenue reality. I'm not sure how to attribute that. It could be that publishers and advertisers are seriously looking ahead as the digital age continues to emerge and grow. Or it could just be a result of all the media hype about digital growth. Are we seeing something like the dot-com bubble of the previous decade?

Now we're continuing our analysis of interest trends for digital versus print advertising, but with another factor added: "magazine advertising." As before, the graph is based upon Google Trends research. It shows just relative activity, not quantified results.

Comparing interest in digital and print advertising with interest specifically in magazine advertising. The graph covers the period from 2004 to present.

This shows that as the declining interest in print advertising has leveled off over the past three years, so has interest in magazine advertising. But the decline from 2004 is far more dramatic that that for print advertising in general.

That leaves us to speculate on the causes. One hypothesis I'd like to offer is that the perceived need for a magazine -- i.e., a curated collection of articles -- has been diminished by the great availability of searchable information.

Back in the print era, magazines provided a unique service. Imagine if there had been no magazines back then. If a person wanted to pursue his or her informational interests, it would have required going to a library, fumbling through a card catalog, and then picking an assortment of books from the shelves. But by subscribing to a magazine, one would receive a relevant collection of articles with each successive issue. That was a great service.

Too few magazine editorial planners have taken today's shift into account. Often editorial calendars are being formulated as if it's business as usual. But the game is changing, and it's time to give that serious thought. We're competing with search, and we don't have any chance of competing on the basis of speed, convenience, or breadth. (Exactly how to respond to that is a story for another day.)

For now, I offer two takeaway conclusions that suggest how to plan for dealing with the unfolding realities.

The first is to consider that some of the rush to digital may be a hype-inspired bubble. I'm not predicting a dramatic burst. But as the industry gains experience with digital, some early conceptions may fall by the wayside or be redefined.

Take, for instance, banner ads. For many years we've been pointing out that banner ads are relatively ineffective. They lack qualities (e.g., size) that have been proven to impact the effectiveness of an ad. Now, finally, many advertisers and publishers are coming to that realization.

Reassessment of digital expectations is happening outside the magazine realm, too. A friend of mine owns a company that provides digital advertising billboards. The trend in that line of advertising has been to use a form of time-division multiplexing of electronic images. The signs present a rotation of advertising messages, usually from a variety of advertisers. Things started off with typically around eight images per minute.

But this billboard scheme also lacks an important component of advertising effectiveness: that repeat exposure does much to make an ad message produce results. In the predigital days when a commuter passed a legacy billboard every day, he or she would repeatedly be exposed to a particular advertiser's message. With digital boards the chance of repeat exposure has fallen to 12.5 percent. That surely must take a toll on effectiveness.

The market may be adjusting to that dilemma. My friend tells me that many billboards are now trending toward a rotation of six ads per minute. That may not be enough of a change to make a big difference, but it's a move in the right direction.

If you carry over this rotation concept to magazine advertising, you can put into perspective the folly of programmatic ads that rotate on your pages. Same problem. Repeat exposure is compromised.

The second takeaway is to assure that your magazine is performing optimally. That means creating a close match between your advertisers and readers. In a business sense that's the goal of any advertising-driven publication. But in many cases there is a mismatch.

Here's a hypothetical example of a good match: You want to publish a magazine about fishing. The lake and stream segment looks promising. There are many businesses selling to those anglers: fishing gear, baits, boats and motors, apparel and footwear, etc. But the density of these people is relatively low in the general public. One solution is to try aggregating readers who hold active fishing licenses. Providing content that caters to their interest will attract them as bait, so to speak. That's a good match. Your readers will be happy to see ads from sellers with products and services that are of direct interest. And your advertisers will enjoy exposing their messages to an audience of active buyers.

Come to think of it, these two takeaways are worth focusing on whether or not a recession, slowdown, or meltdown is on the near horizon. They're just good business. I suggest you use the threat of a possible downturn as an impetus for doing something with them sooner than later.

William Dunkerley is principal of William Dunkerley Publishing Consultants, www.publishinghelp.com.

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