Beyond Advertising
By now the world is well aware that display advertising revenue and spending has dropped in both traditional, print, and online media, with traditional (radio, tv) and print media taking the brunt of the blows.
By now the world is also well aware that this drop in advertising spending and revenue has been primarily facilitated by web applications (and “social media”, if I must use such language) and lower barriers to entry in terms of cost, speed, consumer reach, and scalability.
The loss in advertising revenue has forced large cutbacks, layoffs, and even closings of various traditional media agencies and has led many industry-wide to declare that traditional media is dying. While traditional media certainly is not thriving, I can’t say with great confidence that traditional media is dying. I can say with confidence that traditional media’s business model is dying.
The days of ad supported print, television, and radio will never truly be over - but their effectiveness and worth has certainly proven to be less than adequate to generate conversions. Combine that with a less than accurate system of metrics and measurement and an inventory that remains completely over-priced. For television, and perhaps radio, the dip in advertising is somewhat less worrysome as they have other backdoor income opportunities such as syndication deals, production interests, and other quite large investment mechanisms. For newspapers and magazines things are looking a bit more bleak.
I believe that traditional media is still fairly relevant. While you won’t usually find newspapers or even TV and radio breaking news before new media does, the depth of investigative reporting, analysis, and commentary produced by traditional media is still completely welcomed and valued. If traditional media is going to implement a business model that is beyond advertising, they must find a way to collect money directly from consumers rather than advertisers.
Before you tell me that traditional media already does this via subscriptions (magazine, newspaper, cable, etc.) let me remind you of something you and I both already know - subscriptions are a loss leader and only subsidize the cost of production in an effort to build a larger targeted audience for advertisers. What then does such a business model, where the media collects money from consumers rather than advertisers, look like (excluding the monstrosity affectionately called the Pay Wall)?
1) Deal of the Day/Week. This business model is a kind hybrid between advertising and direct-to-consumer sales. Business essentially relinquish part of the sales of their deal to the media outlet in exchange for the privilege to be featured in front of their audience. Surprisingly, this methodology has been in use for longer than everyone’s favorite daily deal site Groupon (or Groupon clone). In 2006, two years before Groupon launched in 2008, Incentrev began to partner with local TV and radios stations as well as newspapers to bring their consumers 1/2 off deals, discounted auctions, and other various deal-rific solutions. White label Groupon outfits are assisting traditional media to stay current and continue to sell deals directly to their viewers, listeners, and readers.
New media is getting privy to this business model as well. See: BuzzFeed Deals.
2) Merchandise. Sell physical goods relating to the media outlet. This one may seem obvious, but who is really doing it (at least, on a local level)? NBC has the NBC Universal Store where you can buy different kinds of merchandise featuring your favorite NBC brands, shows, and personalities. Fact: People love to buy novelty goods (see: Silly Bandz) Thanks to a load of different spot-customer good manufacturers and spot-publishers traditional media outlets can merchandise their personalities, memorable moments or gaffes, and put together different features or photo-books commemorating events etc. and pedal them to their loyal fans, followers, and readership.
Example: There is a local nightly news meteorologist who is best defined as just a character. He has managed to turn himself into somewhat of a local celebrity thanks to his on and off-air antics. The local station should be making tees and other merchandise. Novelty? Yes. But so are most reality TV related products and merch, and quite a few people manage to buy that merchandise.
3) Events. Events have been utilized by many different traditional media outlets as a revenue source, but perhaps not to their fullest potential. In most cases, these media outlets - namely TV and radio stations will sponsor or heavily promote some sort of concert or large public event in return for a portion of ticket sales etc. That’s cool, but what about exclusive events? Dedicated viewers, listeners, and readers will pay for special experiences. Imagine if the New York Times put together a special luncheon with NY sports figures and offered a meet and greet + Q&A for fans. Fans get an amazing firsthand experience, players and teams gain exposure and fan loyalty, and NYT collects on the tickets. What if your local newspaper food critic hosted a food sampling event for local eateries and charged the eateries for table space as well as a nominal ticket fee for interested samplers? Restaurants get exposure, people get food, and the newspaper collects the moneypaper.
Maybe you will read this and say duh! and criticize me for not really coming up with anything new or revolutionary. I guess that would be fair, but at this point I just don’t see traditional media outlets actively pursuing a business model which seeks to collect money directly from their consumers rather than maintaining that advertisers are their only option. Consumers have money. Give them something they want, and they will be happy to hand it over.
I ♥ feedback and discussion. Feel free to leave your thoughts!
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