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Is Display Revenue Becoming Passé?

Posted on Saturday, September 29, 2018 at 9:23 PM

Text-based advertising is gaining in popularity. But is it a sound strategy?

By William Dunkerley

Are you struggling to hold on to traditional display ad revenue? Or looking for new ways to capture a better share of digital? If so, did you ever consider that you may be barking up the wrong tree for revenue?

Survey Says

A respondent raised that surprising question in a recent survey by our sister publication, Editors Only. The survey sought to gather insights from editors on the roles they might legitimately play in their publications' advertising sales efforts.

Here's what one respondent had to say:

"Candidly, I think talking about 'advertising' is a little out of date. Advertisers have fled print and, in terms of digital, look to Google and Facebook. As an editor I see our revenue opportunities in paid subscriptions and native content.

"The greater opportunity lies in native content. Here I believe editors have a strong role."

At the same time I came across a survey conducted by Target Marketing magazine. It asked a cross section of marketers from around the country about the directions they are taking for their 2019 marketing budgets.

Of particular interest to me was how respondents indicated how they would be realigning their expenditures across different marketing channels. This part of the survey looked at the multitude of available alternatives, from TV to billboards to direct mail.

The survey wasn't asking how much money they would reallocate; instead it just questioned each marketer as to whether they would be increasing or decreasing their budgets in each area or maintaining the status quo.

So, for example, for online marketing (excluding social networks and search) the survey showed that 95 percent of the companies would be maintaining or increasing their budgets. Only 5 percent envision a budget cut.

That's good for online magazine publishers.

On the print side, the picture is not as rosy. Twenty-five percent of companies anticipate reducing expenditures for print advertising. While poor in comparison to online, this is not as bad as some soothsayers have been predicting. After all, 75 percent are either holding the line or increasing their budgets for print. In fact, it's practically a wash. The number of companies reducing print expenditures roughly equals the number that are increasing them.

Search Engine Marketing, Social Media Advertising, and Content Marketing

Three other advertising channels would seem to be our direct competitors for ad dollars: search engine marketing, social media advertising, and content marketing. That's generally consistent with what the Editors Only survey commenter had to say.

Only 5 percent of marketers using search engine marketing expect a decrease in that budget item. Ninety-five percent of budgets are staying the same or increasing. For social media advertising 7 percent are planning a cutback; 93 percent are staying the same or increasing. Facebook is the largest player in that category. The cutbacks may be related to the large amount of negative publicity Facebook has been getting lately.

The flight from content marketing is the lowest of all. Only 2 percent are cutting back. That leaves a commanding 98 percent of marketers that are either maintaining or increasing budgets in that area.

I view companies spending more and more of their budgets on content marketing as the greatest competitive force for magazine publishers to address. The two other competitive categories, social media and search, each have problems of their own. With social media there are growing privacy concerns and distrust on the part of users. With search there are troubling, unanswered questions about click fraud. And the jury is still out on the long-term value of the clicks.

Content Marketing: A Text-Based Advertising Modality

So we face off against content marketing. That hearkens back to the EO survey respondent's comment about native advertising. Roughly speaking, they are both variants of the same thing: advertising that is basically text based.

It's worth asking why text-based advertising has arisen as a significant modality. Social media and search are based on technological developments that were not available to publishers in earlier times. But what's really new about text advertising?

The next question to ask is whether it is really efficacious. Text has been around for a long time. If it were such a great way of advertising, why was it not discovered and exploited before now?

I've worked with many publishers who have from time to time produced supplements that contain mostly advertiser-furnished content. Often those supplements are theme or event oriented. But I've never seen them produce really outstanding results for the advertisers. In many cases the pitch for selling that kind of advertising appeals more to the vanity of the advertiser than to any expectation of a concrete result.

Maybe I'm wrong, and I invite readers to correct me if I am, but I see no time-tested evidence to support the newfound enthusiasm for text-based advertising.

If that's the case, it leads to the final question here: Why are advertisers moving in the direction of text-based advertising, whether it be content that they develop and distribute on their own or native advertising that appears in the pages of our magazines?

I'll suggest an answer to that question in a future issue.

Add your comment.

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