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There’s a Digital Media Crash, But No One Will Say It

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Re: There’s a Digital Media Crash, But No One Will Say It

#31

Post by eli »

acdha wrote: post #22
eli wrote: post #19

There are plenty of extremely profitable and growing ad-supported digital media businesses. It's just not the Vices and the Buzzfeeds of the world. Spending a ton of money up front to generate a huge volume of largely undifferentiated visitors and then selling their ad impressions at very low CPMs is not a winning strategy. And building it on top of the whims of Facebook's algorithm was worse.

Do you have any examples of those profitable businesses?

Well, you can check my profile for one :)

Skift is another (and if you've been following digital media for a while you may recognize its founder Rafat Ali)

These are B2B examples. Consumer media is a lot harder because you have to figure out a way to carve out a niche audience that is attractive to advertisers, but I think it's possible. And I think success is a lot more likely if you bootstrap something rather than load up on VC and debt in a moonshot.

Re: There’s a Digital Media Crash, But No One Will Say It

#32

Post by soared »

Everyone not in the ad industry loves to make claims about how its going to fall apart, but no one I've seen has the expertise and data needed to back up their claims.

Maybe the author has a point, but this article is incoherent. There is no sources and the entirety is predicated on baseless assumptions and some analogy.

No sources or even attempt to prove any claims:

- There are too many publishers

- There is a fixed amount of 'revenue seats'

- Google/fb/etc take a portion of that fixed revenue

- etc.

I don't even know what 'too many publishers' really means, but there is undoubtedly not a fixed amount of revenue (double digit growth every year in digital ad spend), and google/fb only increase that total amount of ad revenue by acting as a ssp/dsp/exchange.

Re: There’s a Digital Media Crash, But No One Will Say It

#33

Post by eli »

marrone12 wrote: post #28
eli wrote: post #24

Earlier quoted context omitted.

How did you determine that most clicks are bots? Savvy marketers aren't measuring clicks, they're measuring conversions and they tie their marketing spend to sales leads and to revenue generated. Ads that generate clicks but no sales don't last long.

You're coming at this from a SaaS point of view. Imagine if you're a rather large brand like Fedex. You can't tie your digital ads directly to a conversion because the conversion happens offline. But their advertising department is supposed to make it seem like they're spending money and driving "brand awareness". So getting fake clicks, fake ad video views -- all of that can get reported up so they can make themselv…

I'm actually coming at it from an enterprise sales side.

And sure it's harder to measure a branding campaign in any medium (though people certainly still do it). You don't necessarily care about clicks at all in that scenario. Brands have been figuring out ways to measure the effectiveness of campaigns on offline sales since long before the internet.

Click fraud is an issue for the industry, but it's a small one. It's simply not true that "most clicks" are fraud. And, in any event, digital ad spend continues to grow. So if Buzzfeed and Vice are in a slump it's not because advertisers are shying away from digital.

Re: There’s a Digital Media Crash, But No One Will Say It

#34

Post by bradleyjg »

tboyd47 wrote: post #3

I agree, but my question is, why hasn't the crash happened yet? Doesn't everyone know most clicks are by bots?

It has happened. The digital media companies haven't all closed, though some have most recently gothemist and dnainfo, but many have been hollowed out with fewer reporters putting out many more much worse articles (often re-written press releases at best).

Re: There’s a Digital Media Crash, But No One Will Say It

#36

Post by hirsin »

bkeroack wrote: post #26
curun1r wrote: post #10

Earlier quoted context omitted.

Perhaps one of the reasons that a lot of the struggling media outlets are on the progressive end of the spectrum is that they mostly need to be profitable through advertising whereas the conservative side can be run at a loss while their backers recoup their investments through deregulation and tax cuts. If someone could figure out a similar way to profit from Democratic government, that could solve most of the fundi…

> they mostly need to be profitable through advertising whereas the conservative side can be run at a loss while their backers recoup their investments through deregulation and tax cuts This is insane. Show me one conservative-leaning media startup that was saved (or turned profitable!) through "deregulation and tax cuts" without reliance on other streams of revenue. Unless you somehow mean that a better, faster-grow…

Arms distance. It's not the startup being profitable, it's Breitbart being funded by people who make more money off the influence Breitbart has on national discourse than they spend on Breitbart.

Re: There’s a Digital Media Crash, But No One Will Say It

#37

Post by jacobolus »

soared wrote: post #32

Everyone not in the ad industry loves to make claims about how its going to fall apart, but no one I've seen has the expertise and data needed to back up their claims. Maybe the author has a point, but this article is incoherent. There is no sources and the entirety is predicated on baseless assumptions and some analogy. No sources or even attempt to prove any claims: - There are too many publishers - There is a fixe…

The author is a career journalist/digital publisher with lots of professional contacts in the industry. He has spent lots of time investigating digital media business models and the financial health of digital media companies. His own company has transitioned from being mostly ad supported to being mostly directly reader supported in the past few years.

He is just making a blog observation, which can be best read in the context of the rest of his site/blog, which have been talking about similar issues for years. Much of his evidence is scattered through tiny posts, which blog readers are assumed to have been following. It’s not supposed to be a deep carefully cited research article.

Re: There’s a Digital Media Crash, But No One Will Say It

#39

Post by wils1245 »

slap_shot wrote: post #11
tboyd47 wrote: post #3

I agree, but my question is, why hasn't the crash happened yet? Doesn't everyone know most clicks are by bots?

This is anecdotal but I feel it's much more common than we talk about: when I was in ad tech, I saw first hand how advertisers would spend money on impressions for the sole purpose of being able to report to their higher-ups how many impressions and click they got. Particularly for brands where conversion attribution was difficult to impossible. The media agencies spending on be half of the brand also have virtually…

I remember the first time I actually got raw logs of where my ad agency’s impressions were ultimately going. It was just so blindingly obvious that it was all a waste.

I came to the same conclusion you did. You’d have to go several layers up into the client’s org to find anyone with incentive to do anything but tell the most optimistic story they could.

That old agency is still around, surprisingly. My best guess is that whoever is actually holding people accountable for the money spent just has a number in mind that sounds reasonable, and has no expectation of seeing evidence that it’s well spent.

Re: There’s a Digital Media Crash, But No One Will Say It

#40

Post by wils1245 »

marrone12 wrote: post #28
eli wrote: post #24

Earlier quoted context omitted.

How did you determine that most clicks are bots? Savvy marketers aren't measuring clicks, they're measuring conversions and they tie their marketing spend to sales leads and to revenue generated. Ads that generate clicks but no sales don't last long.

You're coming at this from a SaaS point of view. Imagine if you're a rather large brand like Fedex. You can't tie your digital ads directly to a conversion because the conversion happens offline. But their advertising department is supposed to make it seem like they're spending money and driving "brand awareness". So getting fake clicks, fake ad video views -- all of that can get reported up so they can make themselv…

Have you noticed how many brick and mortar stores ask for your email or phone number at the register during a purchase? They absolutely can tie offline purchases to online activity with that information (not to mention your credit card).
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