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Ride the Wild Surf: Dow Jones and
Premium Publishers Try to Catch the Online Ad Wave |
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24 January 2005 |
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Today marks the official closing of the Dow Jones
acquisition of the MarketWatch investment portal, a move
that will give Dow Jones lots more pages in which to place
ad inventory in a surging marketplace for online
advertising. It's better to have a big board than a small
one when the surf gets tall and wild, but when you're
defining your wave as "real" content it's going to be hard
to capture all of the wave that's upon us.
Traditional publishers are scrambling to catch up with this
powerful new force in their marketing mix, adding weight to
the idea that indeed there can be too much of a good thing
if your competition gets a hold of it before you do. |
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Today Dow
Jones
announced the closing of its USD 528 million deal to
purchase
MarketWatch,
Larry Kramer's surging investor portal spawned without the
backing of a traditional print news publisher. As
noted in The New York Times' piece on Internet news sites
today, Dow Jones' Gordon Crovitz says that a strong motivation
behind the acquisition was the need for more pages in which to
place its surging online ad inventory: There's only so much
space on the typical Web page in which to squeeze a premium ad
and limited user tolerance for more TV-like techniques. The
simplest solution: get more pages. Recent research from Merrill
Lynch cited in the article predicts that online U.S. ad budgets will surge 20 percent in 2005, up from
about 3.7 percent in 2004. Traditional publishers are
struggling to get surfboards big enough to catch this wave of
revenues being steered away from their traditional print and
broadcast outlets. Dow Jones is criticized by some as having
overbid for MarketWatch, but when you know that you're
outgunned by the surf the right equipment is everything.
The larger question that remains, though,
is whether traditional publishers will ever catch up in the
online content creation game when the leading inventories of
ad-worthy content are held not by individual publishers but
rather by today's search engines. With Google, Yahoo! and other
major Web search engines having access to billions of pages of
content that can be contextualized for ads by individuals, it's
an uphill fight for many publishers to acquire a reasonable
share of the inventory that is absorbing online advertising.
The view of publishing as self-contained content islands worthy
of ads in a sea of unworthy content is now challenged by a
tsunami of ad revenue going to service providers who are more
adept at getting content of any origin to find its own niche in
the hands of individuals and institutions away from its roots,
be they Web site, book, multimedia or library.
So kudos to Dow Jones for getting bigger
lumber on the job, a trend that we're likely to see repeated by
others as the Consolidation part of
Shore's 4Cs for 2005. But
it's not realistic to think that every publisher faced with
this approaching revenue dilemma is going to be able to go out
and acquire huge amounts of publisher-derived content to sponge
up this wave of advertising: there's just too much other
content not for sale that's going to take it on. For those
contemplating how to ride this wave here are a few things to
consider while you're waxing up the board to do battle:
- Rethink the what, when, where and
how of advertising. For many publishers selling placement
of online ad inventory the "what", "when," "where" and "how"
of placing ads still revolves around the initially published
item. Once archived the "it" of what was published remains
alarmingly consistent for most publishers, with little
repurposing or repackaging for reuse. If Nabisco was selling
Oreo cookies this way they'd be off the supermarket shelves
by now. Intelligent repurposing of content for multiple
contexts in and away from its home Web site is probably the
number one factor that professional publishers can take under
their control to get content into more contexts that can have
ad revenues associated with a given item of content. Some
publishers translate this into the "rich data" context of
greater indexing and contextualization, which is an important
step, but with greater use of Web services to drive content
into useful contexts away from a portal it's hardly the only
road to new objects of content that are suitable vehicles for
advertising dollars.
- Outblog the bloggers. While the
editorial content of weblogs is open to question their
ability to span multiple sources of content with an editorial
outlook is a key value point that's overlooked by most
publishers. An intelligently edited real-time digest of
what's happening with specific areas of interest and stories
that I need to follow on a daily basis can come from any
source - not necessarily just a single weblogger. Editors
used to primping and preparing their own content have to get
used to considering everything that's available for
publication as fodder for the editorial process. In the
process of doing so many new opportunities for placing ads in
highly valuable contexts are likely to surface. A click from
a Dow Jones editor may be worth far more than a click from an
anonymous search engine.
- Rethink your business model.
While Gordon Krovitz' rationale for Dow Jones purchasing
MarketWatch is certainly sound, it kind of sidesteps the
issue of what their long-term business model will be in a
world where open-ended inventory for ad placement becomes
more important than a coherent and singular publication. From
one angle in this scenario Dow Jones could become an ad
placement network for high-quality business content of many
origins. From another angle it could become a repackager of
business content for individuals and institutions looking for
answers to a wide variety of investment questions and
concerns - more than a search engine and more than a single
publication. As suggested in our paper on
The New Aggregation, choosing specific attributes of
publishing that complement those that have been subsumed by
new aggregators such as Web search engines will be the key to
profitability for many a publisher in the years ahead.
The good news is that good times are here
for those trying to reap online ad revenues: the bad news is
that strategies that have evolved timidly in the online space
will be struggling to catch their fair share of them. With each
new wave more revenues will be flowing to those who have been
savvy enough to recognize that good content worthy of
advertising is where individuals and institutions find it, not
self-referential publications that ignore where the lion's
share of content lies. Get ready to ride the wild, wild surf of
today's online ad content - it's not going to get any easier
for a long time to come.
-
John Blossom
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