Wednesday, November 19, 2008

Struggling publishers continuing their investments in digital

The venerable PCMag is discontinuing its print edition - the most recent in a long string of similar announcements from other publishers. I am seeing a consistent trend in my media and publishing client base. While their overall businesses are struggling, they realize that they cannot afford to stop investing in online publishing. Instead, they are cutting back in their editorial departments and even discontinuing their print editions in order to sustain their online investment (which accounts for an increasing percentage of their revenue as advertising dollars move online).

This has been going on for a long time. Early in 2008, there was an article in the New York times that said that newspapers are reducing their traveling campaign coverage. Paper magazines have steadily been shrinking or disappearing entirely from news stand shelves. Still online investment appears to be steady. In fact, one of my clients recently sent out a letter to creditors excusing delayed payments because of a cash flow problem and they still have the go ahead for a new WCMS deployment.

This is an interesting time to be in digital publishing as companies are investing to squeeze as much revenue as possible out of their digital channels. Some companies are being deliberate and methodical in their digital strategy. Others are aggressively (and desperately) experimenting with lots of ideas hoping one will turn out to be a winner. One thing I am not seeing is digital strategies that look beyond banner advertising sales. Today's strategies are still focused on driving traffic and seeking the best CPMs. I am a little concerned about the future viability of traditional banner advertising as content becomes increasingly consumed on alternative (banner unfriendly) platforms and "banner blindness" spreads to the larger online audience. However, I do think that until that new content business model emerges, the best thing an online publisher can do is continue to invest in creating a great digital product that attracts a loyal audience.