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I’m starting to wonder whether publishers might end up in competition with their own advertisers.

Looking at the 22 reasons people go online, it’s not hard to see why publishers can’t sell their ad space the way they used to. People go online primarily to learn, have fun, and socialize, and the web gives them on-demand access to those activities, so they ignore content that doesn’t lend itself to those activities — content that they’re not looking for, such as advertising.

So what marketers end up having to do is create marketing experiences that do lend themselves to those activities — interactive marketing experiences. As Josh Bernoff of Forrester Research reports for AdAge:

[...] marketers have learned that interactive marketing is more effective, and advertising less effective, per dollar spent. While budgets for online have decreased, they decreased less than other budgets. Six out of ten marketers we surveyed agreed with the statement “we will increase budget for interactive by shifting money away from traditional marketing.” Only 7% said “we have no plans to increase our marketing budget.”

As if publishers didn’t have enough competition from an over-saturated content-marketplace, but now marketers too are vying for a slice of the entertainment pie. Of course, it makes sense for marketers to cut-out the middle-man as much as possible, but if they’ll never cut them out completel because independent publishers help legitimate the value of content consumption in the first place.

So what does this mean for publishers? Well, it means that they’re going to have to find new ways of working with advertisers without completely compromising their independence and authority.

While consumer publications can fall back mostly on a symbiotic editorial model (such as Vice Magazine has done), the model has limited potential for journalism outlets. After all, an independent editorial is part of journalism’s core product offering.

Of course, just as news journalism can’t accommodate symbiotic editorial as much as its more consumerist counterpart, marketers seem less likely to compete directly with journalism outlets. So perhaps the answer for journalism outlets is in becoming social news organizations that offer marketers better targeted campaigns through cloudvertising.

In any case, now that marketers are able to cut out some of the middle-man, advertising is never going to be the same again — but you didn’t need me to tell you that. And something else you don’t need me to tell you is that the publishing industry is undergoing a violent evolution.

The funny thing about evolution, though, is that sometimes it produces bastardized hybrids that end up changing the ecosystem they adapted to in the first place, and out-competing themselves into extinction. So it’ll be interesting to see whether marketing evolves into some kind monolithic monstronsity that cannibalizes its own young.

It probably won’t, but it sure is fun to entertain the idea.

Selah…

Credit: Gina Argentina

Considering how the New York Times is coping with the the plight of the publishing industry and news media better than most, it’s not surprising to see that they might be pursuing a more symbiotic editorial model. Granted, when it comes to weathering the storm, the NYT is a lot larger in both scope and scale (size, authority, and audience) than many of its contemporaries, so it has a definite edge. But its continual efforts to reinvent its content model are plain.

In addition to everything it’s done with blogs and Times Wire (a real time news feed), it seems to be pursuing all three facets of a symbiotic editorial model. Most recently, not only has it started thinking of its readers as users, but it’s implemented a diversified ad-revenue model to go with it. As Adage reports:

[...] Derek Gottfrid, senior software architect and product technologist at The New York Times, said the company has quit calling online readers “readers,” instead referring to them as users. [...]

“When we think traditionally about creation [at The New York Times] it was limited to people within the Times,” [said Derek Gottfrid, senior software architect and product technologist at NYT]. “We created for readers … [for whom] it was a passive experience. But as we moved online, we wanted to move people from readers to users.”

This shift to users-instead-of-readers is an important part of the transition toward becoming a social news organization. As Alan Rusbridger, the Editor-in-Chief of an equally auhtoritative newspaper, The Guardian, noted in a recent interview, there is a blurring between the reader and the journalist, so it’s become necessary to involve the reader more and create a community around your journalist core.

But more importantly, the NYT’s shift toward users-instead-of-readers is also seen in its integration of apps and what those apps might mean for its revenues. Overall, it looks to be evolving into a veritable social news organization. As the AdAge article elaborates, to coax people from being readers to being users:

[...] the company has opened up its [APIs]. The Times has taken content and data — both internally created material, such as movie reviews and best-seller lists, and external data, such as campaign-finance and legislative information — and opened up the APIs so that outside developers can create tools for its consumers.

Among the results: Instantwatcher mashes up the “Watch Instantly” program from online movie-rental service Netflix with Times movie critics’ top choices. Another app, called NYTExplorer, provides an alternative article-search function to the one that exists on NYTimes.com.

These apps demonstrate how the NYT is diversifying their ad-revenue model. The “Watch Instantly” app, for instance, seems a lot like an affiliate marketing tactic — i.e. a performance-based referral marketing model.

Purusing this kind of ad-revenue diversification and the technology to implement it is 2/3 of the symbiotic editorial equation. The reaming third is integrating a full-sevice marketing agency into your organization (as Vice Magazine has), and as the Nieman Journalism Lab recently documented, the NYT has an advertising R&D lab that seems poised to evolve into just such a full-sevice marketing agency.

Credit: OliverAlex

First, a publication provides two products: content and a medium. The content is for your readers/consumers/users, and the medium is for advertisers looking to reach them.

Your editorial becomes symbiotic when you cross-sell those two products, and you do that by strategically develop content items that complement the offers of advertisers that you proactively scouted. But it’s not about churning out biased content that will help advertisers sell their products. Rather, it’s about having an editorial format, knowing your readers demographics, and understanding what kind of consumers they also happen to be. So a big part of it is making sure that your advertisers actually have product offers that appeal to your readers’ consumer interests.

This, of course, raises the question of how you figure that out. It’s one thing to replace your ad-sales department with a fully integrated marketing agency, like Vice Magazine does, but it’s quite another to analyze your readers in a non-intrusive, non-obstructive way. And that’s where understanding them as users comes in.

Credit: Alex Glickman

But then there’s the technology side to treating your readers as users. Basically, if you’re going to provider your readers with the content that they each find most relevant, you’re going to have to collect data on them. And you do that by becoming a social news organization (or just plain-ol’ social content organization).

By leveraging popular APIs so that your readers can seamlessly aggregate, syndicate, and share your content, you achieve so much more than just increasing page views. You also gain insight into their behavior as users and consumers. Integrated with personal profiles/logins within your portal, this allows you target them with the most relevant content.

More importantly, it allows you to target them with offers that actually appeal to them. And when you do that, you not only increase conversions and value of your ad-space; you also build trust with your readers by demonstrating that you understand and appreciate their interests (as consumers and users). In a word, you use your users to target advertisers.

Of course, doing so effectively require that you (1) have a fully integrated marketing agency in-house (like Vice Magazine) that can (2) help you understand your users, (3) collaborate with your editorial to develop symbiotic content, (4) scout appropriate advertisers, and (5) diversify your ad-revenue stream so that you’re not relying on a single, limited model that might coax you into compromising user-experience. In other words, your in-house marketing agency has to market your editorial product first, and your advertisers second.

"Discarded Vice" by Henry Faber

This would, of course, entail a much more proactive approach than offered by traditional ad departments. In fact, it would require that publications have their own “in-house agencies” that are capable undertaking database mining, sourcing sponsors that are appropriate for their audience, and managing a much more precise and diversified revenue model than is offered by current impression- or print-based ad models.

Well, it seems that the full-gloss, free hipster publication, Vice Magazine has already started moving in this direction. As Andrew Adam Newman of the NY Times reports:

Vice magazine has its own antonymous agency, Virtue, which serves as an advertising firm, Web site developer and branding partner. In what may rankle media traditionalists who favor a bright line between advertising and editorial, Virtue’s approach includes using editorial staff at Vice to help develop marketing plans for clients.
[...]
Vice, which started humbly as a free newspaper in Montreal, is now a publishing juggernaut, a glossy magazine based in the hipster center of Brooklyn’s Williamsburg neighborhood. It publishes editions in 13 other countries, including Germany, Italy, the United Kingdom, France, Japan and Australia. During the next two years, it plans to introduce editions in a dozen more, including Brazil in June and Argentina in September.

So while so many other print-based publications are struggling and folding, Vice is actually expanding, with plans to enter a dozen new markets. Part of this, of course, has to do with what Vice co-founder, Shane Smith, calls a “recession-proof demographic” (aged 18 to 30, and 65 percent male). But there are a few other cues the rest of the print-based publishing industry could probably take from them (and adapt to their own audiences).

First, and foremost, is their brand of “symbiotic editorial.” Journalism outlets obviously have a lot less leeway here than a lifestyle publication such as Vice, but that doesn’t mean they couldn’t make vast improvements in their efforts to (1) build databases of user info, (2) mine them, (3) more proactively target sponsors, and (4) diversify and refine their ad offerings.

Second, Vice‘s physical print product is free and entirely ad-supported. More tabloid-like newspapers such as Metro News and 24 Hours are already doing this, so there’s no reason why top-tier local papers shouldn’t be competing on this front with a “free edition.”

Third, Vice has used their print product to drive online traffic. In addition to advertising online-exclusives in their print edition, they also offer expanded and supplemental content online.

Finally, once Vice brings a reader online, they keep them there. As the NYT article pointed out, their video site, VBS.tv, was realized through a partnership with Viacom, and now draws 3.5 million monthly unique visitors, who spend an average of nearly 15 minutes on the site. That is mother f**king stickiness, my friend, and I’m sure that their “own antonymous agency, Virtue,” is working on technology to target these users with engaging offers.