Over the past year, there's been an ongoing discussion in tech circles about the emergence of workable news media models. With many players—including Vox, BuzzFeed, and Mic—raising venture capital in 2014, news media is emerging as a locus of attention.
For those of us who love journalism, this development should be cheered. However, product deficiencies still abound. They are the result of a business model problem: display advertising and programmatic content discovery is such a bad business—and one that's only getting worse with increasing supply and dropping CPM—that the compromises necessary to hit revenue goals lead to a lack of customer focus and a degradation of the reading experience.
Here are the problems that result from business models based on display advertising and programmatic content discovery:
Interestingly, native and content advertising may solve all of the above problems, largely because it may end the reign of excessive display advertising. Eschewing display advertising speeds up page load times and allows for cleaner, more reader-friendly designs. It also eliminates the direct incentive to chase traffic at the cost of pulling a bait-and-switch to get readers to your website or possibly getting a story wrong.
Native and content advertising is also a more lucrative business than display advertising or content discovery, at least currently. Native and content advertising may allow news media companies to accrue the revenue neccesary to invest in a high-end product, featuring a custom CMS, quality design work, and original stories by talented writers and editors.
Notably, Vox, BuzzFeed, and Mic—category leaders mentioned at the start of this piece—all rely heavily on native and content advertising. BuzzFeed and Mic are free of display ads. Although Mic does do content swaps—content discovery deals made directly between publications—they're thoughtfully curated and on-brand.
Native and content advertising do come with their own costs, including an investment in data analysis and branded content creation and the potential for PR disasters by taking on the "wrong" clients (see, e.g., the Atlantic's native advertisement for the Church of Scientology). However, the near-term future is clear: native and content advertising is the direction the new news media is going, and it's a positive development for publishers and readers alike.
Tags: advertising, media