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Shoring Up Faltering Ad Revenue is Possible if You Are Nimble

This past Sunday, The New York Times ran an article, Media Websites Battle Faltering Ad Revenue and Traffic, discussing layoffs at Salon, Mashable and BuzzFeed. The cause? It’s two-fold:

“The web advertising business, always unpredictable, became more treacherous. And website traffic plateaued at many large sites, in some cases falling — a new and troubling experience after a decade of exuberant growth.”

Although the article goes on to blame Facebook and Google for the loss of revenue – quoting a Morgan Stanley analyst who said that $.85 out of every new dollar spent in online advertising went to one of those two companies in 1Q16 – I’m not sure the situation is quite that dire for online publishers.

Major online publishers are grappling with web-traffic plateaus as consumers spend more time on mobile devices and not all of them are well positioned to accommodate that trend. For many, the mobile experience has been a port of the web experience instead of embracing mobile as an equally valuable peer. Ad format differences and cross-platform tracking challenges are real but sometimes distract from the assessment that the mobile experience is sub-par and users aren’t embracing it, sometimes in spite of quality content. Saying ‘we’ve got an app and our pages are responsive’ isn’t even table stakes anymore.

If you’re a publisher, it’s worth your time to analyze the secular changes in usage patterns and take a hard look at your current content strategy. The article is correct in asserting that many people no longer arrive at a website via its home page, but from a link from somewhere else in the digital universe. This is the new normal in a world where Google and Facebook are so influential in driving traffic. Testing and refining edit and ad experiences that capitalize on the new behaviours isn’t a side project. This is where investments in Big Data infrastructure and an agile analytics toolset can be a huge help in turning insights into testable hypotheses.

Another strategy publishers rely on is to cram as much video ad slots into their sites as possible, since advertisers are willing to pay more for it. But as I discussed previously, video isn’t without its risks. Too many videos can weaken your brand experience for your readers at the precise moment you want them to stay and read more articles.

And will Facebook and Google truly dominate as this article asserts? Here’s what its author wrote:

“The transition from an Internet of websites to an Internet of mobile apps and social platforms, and Facebook in particular, is no longer coming — it is here.”

Among some demographics Facebook reigns supreme, to be sure, but growth in its user base has been flat lining, and by some accounts even declining, since 2014. So Facebook is the new AOL, which is to say, a company that attempted to create an internet within the internet. If so, there’s a good chance that history will repeat itself. Facebook will probably be successful in the short term, but let’s not forget how AOL fared long term with that strategy.

Now more than ever it’s more important to have a holistic view and strategy for your clients across platforms and monetization modes (e.g. direct, programmatic, native and mobile). And, expect your view and strategy to change frequently over time. The market isn’t shrinking, it’s just extremely fluid, and an ability to adapt is crucial.