A LOOK BEHIND AN INTRIGUING SET OF NUMBERS TO SEE HOW SMART SELLERS CAN USE THEM TO DRIVE REVENUE.
Tony Silber interviews Todd Krizelman of MediaRadar
“A report from the Summer 2018 issue of the James G. Elliott Company’s “Ads & Ideas” newsletter.
What does it mean when more than 20,000 advertisers stopped placing ads in print media in the first four months of 2018? Perhaps it’s more ad spend flowing to digital channels and the Facebook/Google duopoly, right? You might conclude that it’s bad news for print media and part of the rise of digital.
Wrong. It’s something more complex, and it serves as a clarifying moment for print-media companies and their sales teams.
There were 151,825 advertisers in print in January-April 2018, according to an analysis by MediaRadar, down by 13 percent from the 172,155 print spenders in the same period in 2017. But the catch is that those advertisers didn’t move to digital. Rather, they stopped advertising altogether.
This intriguing analysis doesn’t support the narrative of a decline of print media. Here’s a transcript of our conversation with Todd Krizelman, edited for length and clarity.
Tony Silber: What are the important takeaways from this analysis?
Todd Krizelman: It disproves that advertisers are moving in droves to digital. But it raises a question about the quality of the overall market for advertising. A disproportionate number of companies sat out at the start of this year.
Q: Why are they sitting out?
TK: It’s likely the result of Amazon. In most years we observe normal advertiser churn, but this past year there were two categories of advertisers that were disproportionately impacted. Retail and real-estate advertising were both down sharply. The two categories represent a big piece of print advertising especially. There were about 8,000 retailers that went out of business in 2017, more than any other year in history. It was the single worst year since 2008, when the market last collapsed.
Q: So digital media is not appealing to many advertisers, at least in this particular dataset?
TK: No single media format is a panacea for marketers. We observe that most modern marketing campaigns span at least three formats. More sophisticated brands will market across a dozen formats.
Q: How can media companies adapt given the advertising trends?
TK: 2018 can be humbling. There are few barriers to entry. Almost any two media companies can compete against each other. LinkedIn and Facebook have communities of users across all audiences. Of course, you want to be prepared to sell the media formats that marketers like to buy. But really, we observe that buying preferences vary brand to brand.
Q: How should publishers seek to contextualize their ad performance given the absence of once-common tracking services like PIB, BIN, and Min Boxscores?
TK: Context matters now more than ever. We recommend measuring share on a broader dashboard of KPIs. For example, ad-sales teams should measure share of print dollars and pages, but also video, native, high-CPM ads, email, direct, and programmatic. This is a more modern way of evaluating performance. And in today’s mercurial market, it helps you identify shifts (both good and bad) that impact your business.
Q: Content marketing is hot. Are marketers moving dollars there?
TK: We see a major trend towards content marketing, also known as native advertising. An average of 2,705 brands has been running monthly, with 188 new brands buying content each month so far in 2018. Interestingly, we see penetration not just in consumer publishing, but B2B. In fact, this year B2B publishers reported that content marketing was the second-most important source of ad revenue, after banner ads.
Q: And custom-content spending would not show up in traditional ad-tracking indices, right?
TK: That’s true. But we’ve been tracking this format for five years now. The surge in spend really started to escalate three years ago. It has remained unabated. Publishers view content marketing as an effective antidote against programmatic. It’s also allowed them to get closer to brands, bypassing agencies.
Q: How are media companies capturing non-traditional spend? Is this part of the ad-ecosystem under-reported?
TK: The New York Times and Quartz are examples of companies achieving a level of success by winning with less “traditional” formats. These two successes are especially encouraging, because both companies had few intrinsic advantages. The Timesprofoundly values the separation of edit and advertising. But they’ve found a balance, where high-quality edit, written by advertisers, now sits side-by-side with their own material. It’s clearly labeled and well-received by readers.
In just six years Quartz has become a major force in the business and finance category. Quartz’s success is a helpful roadmap for independent and small publishers. They have beautiful ad units that are unique (non-standard), and perfect execution on custom content.
Q: Given all of the above, what ad-sales approaches will define successful sellers in 2018 and beyond?
* Train media buyers on how to buy from you. We work with 2,200 ad-sales teams. There continue to be complaints that buyers don’t value print. But few companies are training their clients how to buy print. This is the opposite of the digital space. In digital, employees are certified to the IAB method.
* Adopt new sales and marketing tools. Paired with all the change in the market is the introduction of innovative new services. It’s important to evaluate vendors and really assess what can drive business. Increasingly, there is a concept of “best practices” emerging for publishers.
* Be agile and open to change. The companies that have the most enduring success are the ones that correctly recognize that we are in a period of sustained interruption. Firms that stay current and lean into change are outperforming others. Atlantic Media, which sold Quartz in July, is a strong example of this.