The market research firm Borrell Associates predicts today that online display advertising and search advertising are both poised to peak in a few years. The report, excerpted in Paid Content, says:
“The real growth story in internet marketing expenditures is going to be increasingly focused on online promotions.”
That neatly corroborates the notion I advanced yesterday that media has to move beyond simple advertising — and simple news for that matter — to recreate a value proposition for the 21st Century subscriber. And yes that suggests media will have to demonstrate some form of buy-in from its audience.
This may seem counterintuitive when it is difficult to get Web browsers to register their to get access to archives. And let’s be clear — we cannot turn back the clock and force people to pay for online news that they now get for free. The Wall Street Journal, with the richest niche in our global village, may remain the anomaly. The New York Times couldn’t make its readers pay.
So what is the answer?
Large media companies should become computer-assisted almanacs. Today they serve up the topical information of the day. As that commodity business dies they will have to get good at answering the burning questions of their subscribers such as when and where is soccer registration. That is my brief distillation of the 108-page report (PDF) produced by Stephen Gray of the American Press Institute’s Newspaper Next 2.0 project. Poynter Institute business analyst Rick Edmonds reviewed the report and wrote that:
“newspaper companies need to redefine themselves as the ‘local information and connection utility’ in their communities . . . a suitably big and audacious goal would be to create a wiki’ed “Localpedia,” comprehensive but built with volunteered user content.”
Startup media should imagine what kind of company or publication or community would they build around interactivity. That is the novelty. Stay close to interaction and it will lead to the new ways of making money. One set of suggestions as to how comes from cyberpioneer Kevin Kelly in his essay 1000 True Fans. In short, make yourself a minor celebrity to some group of people who will support you. In a follow up guest essay musician Richard Rich tells about living just such a life: “I’m my own booking agent, my own manager, my own contract attorney, my own driver, my own roadie. I sleep on people’s couches . . . ”
Okay, so he never promised you a rose garden. The point is that one-way media and its advertising-centric business models are dead or dying. Two-way media requires engagement. With so many stars in the entertainment or information universe why does the audience frequent your outlet?
Encourage the habitual visitor by providing easy ways for them to interact (I wonder how to do that in the context of a solo blog — comments are so laborious and they expose the writer — suggestions ????).
Then think creatively about what financial support might attach to those interactions. If the Borrell report cited today is correct the market is already moving towards two-way promotional activity and away from one-way advertisements. Will profit follow interactivity? That is the hope.