Relying on external forces and chasing shiny objects

As I’ve written about before, we’re living in uncertain times for media companies with business models that rely on traffic to their website. If you are to read the mainstream news, you understandably might think the entire online publishing industry is doomed. Recent headlines include the fire sale of Mic to the suggestion that the VC-backed cohort of companies including Buzzfeed, VOX and Refinery29 should merge in order to have a better chance of competing with Google and Facebook. Long-overdue charges for criminals exploiting technological gaps erode consumer confidence and make advertisers, who foot the bill for much of the professionally-created content on the internet, wary of the value they are getting for their investment. Under this backdrop, it has probably never been more difficult to build a scaled digital publishing business. I have been fortunate (or unfortunate depending on how you look at it) to have worked for or with publishers large and small, across various categories, some of which have succeeded and some of which have failed. A common theme for those that have struggled is an over-reliance on outside forces for traffic, revenue or both.

Over the past several years, many publishers have ridden a social-media fueled roller coaster in which they sought (and many still are) to reverse-engineer the algorithms that reward winners with a high volume of clicks. Similar to an obsession with search engine optimization in the early days of the web, these publishers pour over engagement data and double down on what works, pouring resources into creating more of that content. More often than not this results in a degradation of the quality and standards that the brand has become known for and users start to notice. Traditionally, more clicks equals more page views which equals more ad impressions which equals more revenue. Once you become accustomed to these sources of traffic and build goals around them, it is all but impossible change course.

Other publishers may find that their revenue mix is dominated by a single platform. As the incumbent adserver for display and video advertising, Google is the most common of these given their demand is built into the system. That Google yields the lions share of a publishers revenue is understandable as it is incredibly easy simply to turn on Adsense or Adexchange and let the dollars roll in. There are two risks in allowing this to happen to an extreme degree. First, the publisher is undoubtedly leaving money on the table by not including a greater diversity of demand. In the absence of sufficient competition, Google will simply deliver the lowest CPMs required to “win" the impressions. Second, Google is notorious for changing policies and algorithms without warning, leaving the publisher stranded without other options. For example, they may require the publishers to remove Google ads from an entire section of their site (user generated content perhaps) that has historically been a reliable moneymaker. A better approach is to diversify the revenue mix by adding unique demand. When the pie chart displaying different programmatic revenue sources becomes more colorful, external changes within individual platforms will have much less impact on the business.

Despite the aforementioned headlines, I continue to work with digital publishers every day that are thriving in the current environment. Among this cohort, there are some common threads. They have often chosen to remain lean and are extremely judicious about hiring. They evaluate new vendors and partners carefully and only add ones that will truly create value. They set realistic goals and clearly articulate the necessary steps for achieving them. They control their own destiny wherever possible. Most importantly, they create good content in their brand voice that resonates with their audience. By following this playbook, success is not guaranteed but the odds become much more favorable.