The Revenue Streams of 2018

As I contemplate my annual look ahead to the promising revenue streams that media companies will chase in the coming year, the horizon looks stormier than usual. The concentration of digital ad and marketing revenue around the triumvirate of Google, Facebook, and Amazon is daunting. The disenchantment among many marketers with traditional display advertising techniques worsens matters. And the brands are tending to look inward at their own first-party data, customer relationship management (CRM), direct-to-consumer channels. One global media buyer for a major entertainment brand told me that if her budgets go down as a result of her company’s data/customer-focused approach, that is a good thing. Chilling words for traditional media and another cue to look for alternative streams.

The Trump bump—Certain familiar tactics for surviving a post-advertising future will continue apace, of course. Paid content/membership models got a boost from the last election cycle. Consumers seem incrementally more willing to pay for quality.

In the purchase path—Likewise, publishers are looking for more direct compensation for their role in consumers’ ultimate purchase decisions. I expect to see more product-focused email/web/event content in which affiliate marketing relationships monetize publications more laser-focused on consumption itself.

Duopoly resistance—Scale and data are driving ad revenue to the duopoly. So publishers and data providers will try to fight back with quality and transparency. Digital Content Next’s new TrustX ad platform pools quality programmatic inventory from major media and offers buyers higher levels of data, delivery, viewability, and cost transparency. The Association of National Advertisers (ANA) recently endorsed the platform, suggesting that even advertisers are looking for more and better alternatives than a consolidating media market offers them. Expect more data and tech vendors to partner up and position themselves as anti-duopoly alternatives.

New BFFs—Beyond consortia, expect media brands to partner in increasingly interesting ways. Big Data reveals many new patterns, including unexpected audience overlaps between publications from different categories. Publishers must and should consider how they can co-market their respective audiences to reach new eyes.

Data is the new (fill in the blank)—Oil? Electricity? Any analogy to essential resources will do. Google and Facebook built their empires on all the content you built for them, as well as on the data they captured as your audiences coursed through them back to you. Publishers can’t beat duopoly data scale, but they can tell their clients and partners things about discreet audiences that the duopoly can’t. Passions, paths to purchase, influences, allegiances, and more are the domain of more targeted media. Publishers are rethinking how they deepen, standardize, and centralize audience data so that they can sell and combine this core asset with both clients and partners.

Video is the new text—Pivot to video became a bit of an industry joke this year, but don’t laugh too quickly. While Facebook, Verizon, and others are waving big bucks in front of publishers, the real transformation is taking place at the lower level of everyday content. Ever more consumers, especially younger ones, prefer to consume news, how to’s, and simple update information in a range of animated and video formats. Eventually, ad formats will catch up, and we will see (or hear) instead of reading stories. The disciplines of quick video turnaround and telling stories via headline overlays and streaming media (text plus video) will be rewarded. Sure, a select few will win in the longer-form video and over-the-top (OTT) spaces. But for the rest, the post-reading age is upon us.

Can you hear us now?—While podcasting remains a niche medium that draws more attention and use than revenue ($220 million projected for 2017), the audio channel is migrating to a host of other formats. The in-home voice assistants Amazon Echo and Google Home are effectively interactive radios, and they demand new disciplines not only in audio content but in conversational interfaces. The Flash Briefing format of short, on-demand audio updates will become both interactive and sponsored. Consider this the first step in the march toward ambient computing. The hands-free interface will evolve quickly, as it becomes the most obvious way to interact with a connected physical world. Content that insists on interacting with its users only on screens will miss out on the next generation of digital.  

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