March 3, 2020
At Forrester, we talk a lot about the age of the customer — a 20-year business cycle where empowered customers are shaping industries.
Within the media industry, publishers usually have two main types of customers:
Publishers have been burned in the age of the customer
Historically, publishers have made most of their profit and revenue from selling ads.
Some publishers also rake in money from subscriptions or newsstands.
But in the age of the customer, technology has completely changed the way that we consume news, TV shows, movies, music, et cetera. And it has also changed the way that advertisers buy ad space from publishers.
The result for publishers? Their bottom lines have been squeezed on both the advertiser side and the consumer side.
As publishing has gone digital, advertisers can buy ads for a fraction of the price compared to print ads. And consumers have largely grown accustomed to accessing content for free.
So publishers have been forced to rethink their business models to find cost savings and make decisions on how best to win, serve and retain customers in this new age.
Now, publishers are prioritizing consumers over advertisers
There is evidence in the earnings statements from premium publishers that they are choosing consumers over advertisers as the path forward. They realize that vying for consumer attention is harder than ever, and if they lose these consumers, then they lose advertisers, too — a smaller audience size means fewer impressions for advertisers.
Rather than try to appease advertisers, publishers are investing in producing quality content and luring in new subscribers.
A few points of evidence from recent earnings calls:
Collin Colburn is senior analyst at Forrester Research, Cambridge, MA. Published with permission.