So your in the publishing and content creation business and all your revenue eggs pre-Covid were sat in one basket which was 'advertising'.
You've spent years building up your audiences only to now see most of the advertising revenues that used to support your journalist, content editors, back office staff and all those fixed overheads pre-Covid going over to the duopoly of Google and Facebook.
Throw into that heady mix the myriad of middle men in Ad Tech land taking their slice ahead of you, the unabated rise of ad blockers, and advertisers becoming even more aware of the abusive ad fraud industry, it's no wonder that you're finding it difficult to keep going - Woe is me!
You don't need a reminder from me that if you worked in agency land things are not what they once were, especially as some huge global brands are now looking to boycott social media 'paid media' campaigns and spend due to concerns around which piece of content their brand message will end up against.
I write quite a lot of blogs, they vary from my focus on the digital intrusions from the advertising industry, to how social media and content discovery is transforming companies of all shapes and sizes around the world who have realised that it's not just a place to 'advertise and promote' themselves.
A couple of years ago (pre GDPR) circa 86% of ads were using behavioral targeting, a practice which is now becoming more difficult to do as the public grow more aware of how ad tech, and social media companies are using personal data without any real visibility of its value and end use.
This has had the effect of squeezing out non-targeted display ads, such as those that rely on contextual factors to select the ad — e.g. the content being viewed, device type or location.
The latter are now the exception; a fall-back such as for when cookies have been blocked.
To be honest one of the reasons I stopped visiting most of these websites was down to the overload of ads that slowed pages down, it simply made it very difficult to see any of the news for ads. Try visiting 'Forbes' or any other news websites and you will experience the same wait whilst all those ads get loaded.
The truth is that the Television, magazine, and news paper (publishing) industries are not in the business of content, they're in the business of audience aggregation.
The production and creation of content is a means to an end in order to drive bigger audiences from which they can monetise those eyeballs via advertising, to do this they need to produce and serve us content that captures our attention.
The media agency model that's been around for decades has been in decline since the birth of the internet, in the early days they simply added the digital media inventory into the roster of services to sell into existing clients, and utilise it as a way of attracting new ones.
And just like every other industry that was too slow to adjust to changes in behaviour it seems that ad land has had its demise further accelerated by Covid-19.
The biggest elephant in the fraud ridden digital intrusive ad tech driven advertising room pre Covid was the erosion of quality in favour of quantity, reach over engagement was the modus operandi in every media buying agency.
Many people confuse building a brand with building awareness, and making the right people aware of you is a big part of brand marketing, of course, but it’s not the only thing you have to achieve.
When an advertiser’s $1 in media spend starts and ends with Google tech, publishers receive 69 cents of every dollar, or 69%. Google takes the other 31%, according to 2019 aggregate data.
Google’s DSP, DV360, takes an average of 13 cents of every $1 an advertiser spends. Then, Google Ad Manager charges an average of 18 cents to the publisher.
f you do the math and add into the above numbers that somewhere between 50% - 75% of every marketing dollar also goes into a fraud bots pocket you have to agree that even without Covid this is not sustainable business logic?
Rationalisation within the industry has now led to significant staff reductions and a return to a more narrow range of services, this is also being impacted with companies taking control of a lot of those digital services in-house.
Furthermore, very few, if any have a ‘business focus’ based on practical ‘client-side’ experience of developing and delivering marketing strategies within a multi-channel organisation.
We often see the same thing with organisations that have an outsourced approach to social media, this is because the strategic value is yet to be unlocked and understood by the leadership team.
So it's still just another channel to 'advertise and promote' our products and services in the same way we've always done.
It's a good job your competitor isn't thinking that way isn't it?.
Agencies’ fee-based business model hasn’t evolved in decades — and that may be a significant factor in the industry’s struggle to manage costs. With clients suppressing fees, asking for longer payment windows and seeking more project work, rather than long-term relationships, agencies may need to reimagine their business model.
https://digiday.com/marketing/fee-model-not-changed-agencies-biggest-problem-business-model/