Ad-centric Revenue Models Will Always Create a Race to the Bottom

The role of advertising in publishing has been placed under increasing scrutiny over the last few years, mainly because it’s not working any more. Every couple of weeks it seems another big name has thrown in the towel, unsustainable even by the standards of magazines and newspapers.

Before the rise of the internet, advertising was the saving grace. The rates were good. In fact, they were so good that the price of publications could be reduced to far below what they would cost otherwise. Newspapers and magazines could stay in the black, more people could afford to buy them. Happy days. That setup had its own problems (I’ll leave that tangent to Edward S. Herman and Noam Chomsky), but at least it was sustainable.

In the digital age, advertising has taken on a more aggressive, almost cancerous form. Unprecedented access to data has made it a pure numbers game. As soon as a website opts for advertising as a primary source of income it’s on shaky ground. Any shmo can hook their website up to Google Analytics and start harvesting data. Not unreasonably, advertisers are going to want to see it.

So publications start chasing numbers. Traffic, page views, clicks. You know what metric doesn’t get a look in on these spreadsheets? Readers. We’re all familiar with the practices this approach leads to, because we’re sick of them. Clickbait; thin content; articles spread across eight pages when one would do. We all know it. I imagine most of us hate it. It’s a sickly, hollow world.

And it’s possibly even worse for writers and journalists. Imagine being inside that monster. When publishers are scrambling to generate as many marketable metrics as possible for the lowest possible cost, well paid content creators start to look like big fat burdens. So they’re paid poorly, if at all, and the quality of inevitably suffers.

Online ad revenue has gone up in recent years, but outside of the duopoly of Google and Facebook the amount of ad money available to online publishers is in decline. Google and Facebook alone have almost two thirds of the market share, and it’s growing. Everyone else is left fighting more and more desperately for smaller and smaller returns.

It bears mentioning here that there are no nefarious players in this game, it’s just the nature of the beast. Advertising can be, and remains, a valuable option, but in the analytics age it can get grotesque pretty quickly. Money talks, and an ad-centric revenue model will always push a publication away from its readers and towards data points.

Perhaps I’m naive, but it seems to me that readers are the lifeblood of any publication. Readers are people who value a publication’s work and return to it because they trust a certain standard will be maintained. Readers can be counted upon and engaged with. Cultivate enough readers and you might even graduate to having an audience.

A reader is not the same thing as a user. One is viewed as a person, the other as a number. Once you notice this you’ll start seeing it all the time.

There is a place for advertising. Multiple revenue streams are healthy. The problems come when advertising is the primary source of income. It’s one thing to slap a banner ad in the sidebar. It’s another thing to churn out as much content as cheaply as possible in the hopes of tricking advertisers into thinking they’re getting a good deal. It winds up being bad for everyone.

Slowly, tentatively, alternatives are presenting themselves. Some old heads like the New Yorker and the New York Times have recommitted themselves to nurturing strong subscription bases. Some newcomers like Quillette have pioneered crowdfunding models where content is freely available to everyone, with enough patrons contributing to keep the publication afloat. The Guardian has taken a hybrid approach and this year recorded an operating profit for the first time since 1998.

In short, publish work people are willing to pay for. Seems like a good standard to me, though bad news for some.

I don’t like seeing the industry struggling like it has been, but the enforced move away from advertising will be good in the long run, especially for those who lead. The clock is ticking on the old ways, and those who dither might not live to regret it.

It’s terrifying to take the plunge, put those who don’t will be pushed eventually.

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