The biggest complaint source from our users has always been the programmatic ads. We offer ad free site as one of our many perks of paid membership and when surveyed a significant percentage of our readers consistently rank that perk as one of the biggest reasons for subscribing. NOT the content behind the paywall but the fact they can avoid the programmatic ads. Our direct sold ads are actually quite popular - so much so we are working on a subscriber control that will allow some of the direct sold ads to display. I see a future where we change our ‘Ad free’ members perk to ‘Programmatic ad free’.
Ah Simon, it felt like you were writing this post just to please me. I am not a long-timer in media, as you know, but programmatic ads are anathema. Insanity. The *whole idea* of digital media is to allow a million little niches to flourish. How do they get support? By aggregating a small but passionate audience, building trust, and then gating access to that audience through well-placed sponsorships. Perhaps I'm naive -- your other readers can tell me what a n00b I am -- but I'm thrilled to be playing a sales game against machines. Very, very dumb machines.
The key issue always is and always has been - content. Content is constantly evolving and what publishers in print and TV executives failed to realize that with the internet and social media the content ballgame had changed. Newspapers had no idea and so did the executives that the material they published was out of date by the time their printed versions arrived at subscribers doorsteps they were out of date. For TV News it was an endless array of breaking news - news without context, a problem still plaguing that sector. And digital for both sectors added to all the woes. Social media was another factor that stole audiences. And despite all of that the arrogance in the executive suites continued, long used to making fortunes they had no idea the upheaval the sector was undergoing. I say all of that because I saw it first for both sectors in senior executive positions-everyone someone like me raised the alarm bells I was told everything was nothing but a fad and be short lived. There are exceptions in the print sector-the New York Times and the Guardian come to mind. In the broadcasting news sector nothing has really changed and the ever declining rating for news casts prove it. Advertisers never have been, never will the drive to make journalism successful on their own. Advertisers go where the eyeballs are - Fox News is the best example and the same applies in print. New York Times, the Economist.
i unfortunately need to agree all of these played a role. but i think youre missing a big one: flawed attribution models that reward low quality ads on garbage sites siphoning $’s. there’s a stark difference in overall website and ad experience quality of a reputable pub from the clickbait and fake news arb plays. that cleaner experience does in fact produce better real world outcomes for brands, but their attribution is rewarding correlation and low cpm’s over higher quality and higher cost ads that actually move product. if the entire ad buying world optimized spend to incrementality, i believe we’d be living in a different reality. but last touch and last click still, incredibly, rule the day.
You're spot on Simon. Where technology should have delivered efficiency, adtech took control of publisher's assets and their distribution. Today, those same cos. take those assets which they repackage and sell (at discount) in direct competition with the publisher's own sales team. The result is dilution across publisher's entire ad business. Addressing this requires bold steps (e.g Bloomberg), a rewiring of strategy and behavioural change (removing suppliers, quant to qual).
Wasn't this really driven by the buy side? Overworked (or possibly lazy) people in control of ad budgets found they could read 500 RFPs from niche sites of varying integrity and a Quantcast pixel for first party data, or press a button and reach the 18-28s who liked energy drinks and had golden retrievers like the client asked for. When this happened, publishers attempted to firewall their "premium" inventory for direct, but in time, $3 CPMs started to look better than nothing.
Can you explain what the native advertising that Meta, Amazon and Google embraced is? I need a quick explainer because this topic is new to me. This discussion of programmatic advertising was a huge help in deepening my understanding. Thank you.
Those text ads at the top of Google results when you search for a product? Native ads. Those "promoted" posts you see on Facebook and Instagram? Native ads. Those pre-roll ads you see when you watch YouTube videos? Native ads. When you do a search for a product on Amazon and the first row of results says "sponsored"? Native ads.
Ah, I get it. So in their own digital spaces publishers could have built ad spaces that are more integrated with content than display/banner ads are. Thanks!
Will there be a link to the video of your interview with Hayes that subscribers can access after the fact? Already have plans for today, but I am a subscriber to The Dispatch and really would like to hear some of Steve’s inside info on how they’ve succeeded -- and keep improving their product. If only they could pry A.B. Stoddard away from Real Clear Politics ...
I'd argue that actual news never had value. People can sense reality with their own eyes and ears.
Newspapers have never provided actual news. Each paper provided entertaining opinions in competition with the Bad Other Party's paper.
In radio's first decade it simply omitted news, recognizing that facts are not valuable entertainment. The FCC forced radio to provide news, and even worse forced radio and TV to provide NONPARTISAN news. This was always unwanted and distasteful to the executives, and they happily returned to competitive soap opera (CNN vs Fox) when the Fairness Doctrine was repealed.
In my previous job we sold ads to the tune of $3-5m/year. 50% were programmatic, 50% were direct sales. Can't comment on their numbers now but I do know that taking into account all overheads direct sales were barely breakeven, so the company had to scale down that part of the ad sales department.
No, programmatic advertising isn't the problem, and in any case it's confined to internet based news or reporting more broadly.
News media has always been free in one form or another. Turning on the TV news is still free. Print media was always expensive to produce, and it was never free.
Some news outlets have turned the corner with paid readers. It's been a long road
Some magazines, the few that survived, seen to be doing okay amongst the competing noise of a million other ways people can choose to use their online time.
There's a simple and wrong solution for everything.
The biggest complaint source from our users has always been the programmatic ads. We offer ad free site as one of our many perks of paid membership and when surveyed a significant percentage of our readers consistently rank that perk as one of the biggest reasons for subscribing. NOT the content behind the paywall but the fact they can avoid the programmatic ads. Our direct sold ads are actually quite popular - so much so we are working on a subscriber control that will allow some of the direct sold ads to display. I see a future where we change our ‘Ad free’ members perk to ‘Programmatic ad free’.
Ah Simon, it felt like you were writing this post just to please me. I am not a long-timer in media, as you know, but programmatic ads are anathema. Insanity. The *whole idea* of digital media is to allow a million little niches to flourish. How do they get support? By aggregating a small but passionate audience, building trust, and then gating access to that audience through well-placed sponsorships. Perhaps I'm naive -- your other readers can tell me what a n00b I am -- but I'm thrilled to be playing a sales game against machines. Very, very dumb machines.
The key issue always is and always has been - content. Content is constantly evolving and what publishers in print and TV executives failed to realize that with the internet and social media the content ballgame had changed. Newspapers had no idea and so did the executives that the material they published was out of date by the time their printed versions arrived at subscribers doorsteps they were out of date. For TV News it was an endless array of breaking news - news without context, a problem still plaguing that sector. And digital for both sectors added to all the woes. Social media was another factor that stole audiences. And despite all of that the arrogance in the executive suites continued, long used to making fortunes they had no idea the upheaval the sector was undergoing. I say all of that because I saw it first for both sectors in senior executive positions-everyone someone like me raised the alarm bells I was told everything was nothing but a fad and be short lived. There are exceptions in the print sector-the New York Times and the Guardian come to mind. In the broadcasting news sector nothing has really changed and the ever declining rating for news casts prove it. Advertisers never have been, never will the drive to make journalism successful on their own. Advertisers go where the eyeballs are - Fox News is the best example and the same applies in print. New York Times, the Economist.
i unfortunately need to agree all of these played a role. but i think youre missing a big one: flawed attribution models that reward low quality ads on garbage sites siphoning $’s. there’s a stark difference in overall website and ad experience quality of a reputable pub from the clickbait and fake news arb plays. that cleaner experience does in fact produce better real world outcomes for brands, but their attribution is rewarding correlation and low cpm’s over higher quality and higher cost ads that actually move product. if the entire ad buying world optimized spend to incrementality, i believe we’d be living in a different reality. but last touch and last click still, incredibly, rule the day.
You're spot on Simon. Where technology should have delivered efficiency, adtech took control of publisher's assets and their distribution. Today, those same cos. take those assets which they repackage and sell (at discount) in direct competition with the publisher's own sales team. The result is dilution across publisher's entire ad business. Addressing this requires bold steps (e.g Bloomberg), a rewiring of strategy and behavioural change (removing suppliers, quant to qual).
Wasn't this really driven by the buy side? Overworked (or possibly lazy) people in control of ad budgets found they could read 500 RFPs from niche sites of varying integrity and a Quantcast pixel for first party data, or press a button and reach the 18-28s who liked energy drinks and had golden retrievers like the client asked for. When this happened, publishers attempted to firewall their "premium" inventory for direct, but in time, $3 CPMs started to look better than nothing.
Can you explain what the native advertising that Meta, Amazon and Google embraced is? I need a quick explainer because this topic is new to me. This discussion of programmatic advertising was a huge help in deepening my understanding. Thank you.
Those text ads at the top of Google results when you search for a product? Native ads. Those "promoted" posts you see on Facebook and Instagram? Native ads. Those pre-roll ads you see when you watch YouTube videos? Native ads. When you do a search for a product on Amazon and the first row of results says "sponsored"? Native ads.
Ah, I get it. So in their own digital spaces publishers could have built ad spaces that are more integrated with content than display/banner ads are. Thanks!
I don't disagree with what you've written, but I think it's a symptom of the original sin, not the sin itself. The sin itself is innumeracy.
Will there be a link to the video of your interview with Hayes that subscribers can access after the fact? Already have plans for today, but I am a subscriber to The Dispatch and really would like to hear some of Steve’s inside info on how they’ve succeeded -- and keep improving their product. If only they could pry A.B. Stoddard away from Real Clear Politics ...
Yes! I'll be sending out the recorded version in Friday's newsletter. Also, I keep an archive of all the recorded Office Hours at this link
https://simonowens.substack.com/p/office-hours-video-archive
I'd argue that actual news never had value. People can sense reality with their own eyes and ears.
Newspapers have never provided actual news. Each paper provided entertaining opinions in competition with the Bad Other Party's paper.
In radio's first decade it simply omitted news, recognizing that facts are not valuable entertainment. The FCC forced radio to provide news, and even worse forced radio and TV to provide NONPARTISAN news. This was always unwanted and distasteful to the executives, and they happily returned to competitive soap opera (CNN vs Fox) when the Fairness Doctrine was repealed.
In my previous job we sold ads to the tune of $3-5m/year. 50% were programmatic, 50% were direct sales. Can't comment on their numbers now but I do know that taking into account all overheads direct sales were barely breakeven, so the company had to scale down that part of the ad sales department.
Wow, that’s incredible
Wait, how is it possible that your sales team was barely breakeven? Sounds like a terribly inefficient sales engine.
There were several issues:
0. It was travel industry
1. A small addressable market (it was not in the US where brands have open budgets for clicks and CPMs)
2. The advertisers were mostly skewed towards CPC/CPL rather than CPM - this explains the high volumes and low revenues
3. Long sales cycles and customizations of campaign materials (our designers had to produce creatives, etc.)
I'd guess in the US/UK this would've been a madly profitable exercise, though.
... to add to that - ad sales were less than 10% of our revenue base, so this wasn't a major blow to our P&L
No, MSM isn't a monolith.
No, programmatic advertising isn't the problem, and in any case it's confined to internet based news or reporting more broadly.
News media has always been free in one form or another. Turning on the TV news is still free. Print media was always expensive to produce, and it was never free.
Some news outlets have turned the corner with paid readers. It's been a long road
Some magazines, the few that survived, seen to be doing okay amongst the competing noise of a million other ways people can choose to use their online time.
There's a simple and wrong solution for everything.