Avoid the Predicted Digital Meltdown -- Part I
Posted on Tuesday, April 30, 2019 at 12:23 PM
Pundits are sounding the alarm about a digital meltdown. How can you
safeguard your publication?
By William Dunkerley
Last
year a New York Times headline warned readers of "The Looming
Digital Meltdown." Now, in April, Editor & Publisher
brings things closer to home with its headline: "Digital Media
Meltdown" (emphasis mine).
Googling around, you can find a
lot of meltdown stories connected to digital. Columbia Journalism
Review focused on one publication in particular with this: "BuzzFeed
and the Digital Media Meltdown."
This furor certainly
deserves the attention of all magazine publishers.
What's wrong
with digital media? What can be done about the alleged impending
meltdown?
Emarketer.com took that up in a story titled "Dealing
with the Media Trust Meltdown" It explains:
"The entire
digital ecosystem is in crisis -- a crisis of trust. From issues of
brand safety associated with the murkiness of programmatic,
audience-based buying, to growing cries of 'fake news,' to undisclosed
sharing of consumer data by unknown middlemen, to a slew of personal
data breaches across the Web, consumers have lost trust with marketers,
media publishers, and social platforms."
Medium.com sums it
up simply: "Digital Media Is a Wasteland."
Job security
is already at stake. BuzzFeed's "meltdown" cost a lot of people their
jobs. It was "depressingly grim," reported E&P,
adding that many in the industry viewed it as "yet another sign the
promise of a digital media oasis was nothing more than a mirage."
MSNBC
host Chris Hayes recently mused on Twitter, "What if there is literally
no profitable model for digital news?"
While Emarketer.com
focused on trust and integrity, the Times story highlights the
role of privacy and security. This has been a topic in the news with
regard to Facebook and related user concerns about privacy. But the
Times homes in on possible technical precipitants of a meltdown. "Modern
computing security is like a flimsy house that needs to be fundamentally
rebuilt," the article reports. It also comments on the impact of
technically intrusive advertising practices. The scripts that are used
"wreak havoc as they try to track your activity online." They slow down
the online experience for the users by making their computers process
the scripts.
So what's ahead for magazine publishers?
PriceWaterhouseCoopers
(PwC) has analyzed the prospects. It reports, "Magazine circulation
revenue will likely fall particularly sharply, as consumers favor free
content... Consumers have proved reluctant to spend money on digital
magazines."
We're now seeing many online publications
putting up paywalls. If PwC is right, that may not be a good move.
Micropayments for individual articles may be more consistent with the
online culture. Users have already accepted the practice of making small
expenditures for iTunes and similar services.
The PwC analysis
deals with the global magazine market. In some emerging economies
digital may not have gained the strength that's seen elsewhere. That may
skew the PwC outlook in a minor way. Nonetheless, the statistics PwC
presents show much greater strength in print than one would gather from
mainstream news reports.
Comparing print and digital revenues from 2015 through projections
for 2020.
Many of the claims of digital growth are deceptive.
For one thing, a lot of statistics are couched in terms of growth as a
percentage. A large percentage increase in a relatively small number can
leave you with a number that is still relatively small.
E&P
adds that "the large majority of those [digital] advertising dollars are
being spent on search (Google), social display (Facebook), and video
display (dominated by YouTube, which is owned by Google). All told,
Google and Facebook sucked in slightly less than 58 percent of all
digital ad spending in 2018, with Amazon coming in a close third with
about 4 percent."
Google Trends provides some additional
data that casts a shadow upon the boastful predictions for digital
publishing we've seen over the past several years. We researched the
terms "digital advertising" and "print advertising." While the results
don't report on revenue, they are representative of trends in the
interests of online users. That's adds an element of context.
What
we see from 2014 to the present is a definite downward trend for print
advertising and clear upward movement for digital advertising. Note,
however, that both curves, when averaged over the past three years, show
that things have leveled off.
Online interest in digital and print advertising from 2004 to the
present.
The interest in advertising that's plotted above
isn't magazine advertising alone. It includes all forms of digital and
print advertising.
There's more to this story.
In Part II
we'll pick up on the specific trajectory of magazine advertising. We'll
delve into the business factors that make magazines vulnerable in a
digital meltdown. And we'll conclude with recommendations on how to
avoid being hurt by the impending meltdown that's rumored.
William
Dunkerley is principal of William Dunkerley Publishing Consultants, www.publishinghelp.com.
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