Each week someone will email me asking for assistance with an idea they’ve had. They’ll be looking to bring to market something cool, useful or interesting and generally I’ll agree that it makes a lot of sense. Then they’ll have a ‘how to monetize it’ conversation with me. My response? “Not with advertising”.
My view is that launching a digital business in New Zealand with a revenue model of ‘advertising’ is not a viable business model YET. The reality is that pure-play digital publications cannot survive today.
This is not because online doesn’t work or isn’t worthy. It’s also not because it’s not where consumers are spending the vast amount of their media time or making the vast majority of their purchase decisions.
It IS because the consumer market is ahead of the commercial one.
It’s a big call and likely to draw criticism, but with 15 years under my belt running my own digital businesses, I can tell you that the market has always operated in this manner.
But it’s worse now than it’s ever been and it’s highly frustrating. Daily I hear from businesses that have exceptional communities, excellent voices, and brilliant engagement and who are just surviving. I’ve just got off the phone from another one right this second.
For those of you who have been brave enough to see the opportunity, identify a gap and risk all to jump into the digital content publishing world you’ll be reading this with a nod of (a very weary) head.
It is highly frustrating.
Conversations frequently start with, “We know we need to, but….”. That’s some good news. A few years back talking about digital fell on deaf ears. Clients have made way for honesty and will admit that they know they need to be in this space – where their consumers are – but they don’t know how to go about it. Some have invested heavily in social, but now that’s changing again and they’re not too sure where to move to next.
Also restricting progress is the confusion that reigns in amongst their agencies. The typical medium-to-large business has a multitude of representation – from PR, experiential, direct, media and creative. Some with a number of others on their rosters as well e.g. social, brand, digital.
Each of these agencies is also trying to comprehend the implications of digital. It has fundamentally changed their businesses and they’re grappling with how to accommodate, morph and invoice as a result. Or work with each other. I have a number of clients who have one agency that will create content for a Facebook post, another that will post the content on Facebook and another that will promote the post on Facebook. Efficient, eh?
Each understands intrinsically (even if only from their own point of view) that digital has fundamentally changed the way that consumers buy, act, and interact and, as a result, know they have to adapt or die. But the entrenchment of the model they’ve operated within underpins their fear and stops them from moving forward in new and innovative ways. Even their behaviour IN digital is stagnant, they’re comfortable in Facebook, but they’re really uncomfortable outside of it. They’re applying the same “doing as they’ve always done” approach, with adjustments, at best, to suit the “new media”.
But yet, I challenge that view. It’s not “media”. The reality is that online has moved on from where it was once considered a “media” platform in its purest form where creatively driven concepts could be delivered in the form of a banner ad. Today, it is about recommendation, connecting customers, developing relationships and closing the gap between a brand and a consumer. But that’s a whole new educational piece to understand how to create it, buy it or price it.
Or worse, measure it. When the most common measurement is either a vanity metric (how many people liked you) or a click (how many people made an immediate decision to act), it’s not hard to see why it’s difficult to showcase things like purchase intent or brand likeability.
How do you explain to the budget makers in the organisation that while the Internet is so infinitely measurable there isn’t a market standard for assessing the impact it can have on the decision making process?
Oh hang on, kind of like TV. Or Mags. Or radio. Or billboards. None of which have ever had pressure on them to immediately prove their ROI impact.
Here’s what we have to start measuring – “the moment of truth”, as I like to call it. It’s that moment when the customer is trying to decide between the 25 different variations of deodorant they have in front of them. It’s THEN we want to know “what was the last positive interaction you had with this brand that led you to pick it off the shelf?” or “what were the other interactions you had – recommendations, positive reinforcements that sealed the deal for you?”
Because the simple truth is that connection is everything. My god, it might not happen in the time frames that we want but it is going to happen. It will become standard and commonplace that brands must connect with people (on some level) in order to get a sale.
It can be infinitely frustrating when you work so hard to create connections to see how much money is wasted on immeasurable, declining environments with zero interactivity or connectivity.
The reality is that there will always be a disconnect between consumer and commercial markets. This is the first time in history that things have changed at this pace and it is exceptionally hard for entrenched businesses to make change. Or for new ones to survive while change takes place.
So from one publisher to another, your job is to evolve and educate. That’s it. Keep innovating, keep investing, keep moving things along and take your clients with you for the ride.