How publishing disrupt itself responding to changing consumer needs

March 24, 2020

Global publishing leaders are forced to take a creative approach, moving away from traditional media platforms when transforming their business models

The corona crisis has forced the majority of citizens to stay at home creating a window of opportunity for the publishing industry. An opportunity to tactically re-position themselves to keep up with non-traditional competitors in B2C and B2B. Consumer behaviors are changing fast as emerging technologies, such as immersive media, Internet of Things (IoT), augmented reality (AR), virtual reality (VR) and the fifth-generation (5G) is triggering new kinds of consumer behaviors.

“This new way of interacting is extremely powerful. It enables an entirely different emotional connection with both consumers and employees, creating opportunities for a disruptive brand awareness experience for everyone engaged in your company”

This new arena has become an “all (wo)man’s land” where borders have been erased between digital media publishing and B2C/ B2B services – all trying to grab the attention of consumers and their employees.

5G networks and compatible smartphones are accelerating mobile consumption, enabling total disruption of the brand experience. 

How will global leaders position themselves to leverage on these vast technological opportunities, while managing their historical heritage, including ancient technological infrastructure and a cultural mindset struggling to innovate?

The disruptors who are leading in the forefront, already have explored the potential to reach consumers through smartphones and smart demographic targeting across multiple social media platforms and they are now exploring new growth channels. This includes; connected TV (CTV), augmented reality (AR), virtual reality (VR) and the unexplored opportunities with the fifth-generation (5G) wireless technology for digital cellular networks. All of this enables the total disruption of the (employer) brand experience. 

  • Augmented reality (AR) – adds digital elements to a live view of the physical world, i.e. by using a smartphone camera. Some famous examples for the general public are Snapchat filters and Pokemon Go. Innovative Swedish founded companies such as Volvo Cars, Skanska and IKEA, have used the technology to create groundbreaking solutions.
  • Virtual reality (VR)  – takes place in a completely virtual environment and offers a fully immersive experience.
  • Both AR and VR can be mass-distributed – This is achieved using powerful cloud computing. With many companies moving towards cloud storage, it also becomes more cost-efficient. 
  • The Internet of Things (IoT) and connected devices – enables the adoption of new voice technologies and contextual targeting and is part of the new SEO portfolio strategy. Together they bring plenty of insightful actionable data about when, where and why products are being purchased and how they are used to personalize every consumers’ unique experience and needs. This increases the conversion rate and shifts advertising costs directly related to performance and impact.
  • Interactive ads – This is powered by 5G technology and publishers can create interactive and personalized ads to improve one-to-one marketing tactics. 5G creates new opportunities for launching dynamic, multi-layered user-centric solutions.
  • Programmatic advertising – Automated buying and selling of online advertising is designed to replace human negotiations with machine learning and AI-optimization, making transactions more efficient and effective.

Understanding and leveraging opportunities with new regulations and standards

Publishers need to have access to first party data to provide better intuitive decision-making for their consumers. The added value is becoming more critical as disruptive technologies can have impact on consumers’ judgement – beyond our imagination.

The EU took the first step introducing the General Data Protection Regulation, that went into force in May 2018. The U.S. followed by introducing the California Consumer Privacy Act (CCPA), that came into force in January 2020.

Both laws are said to empower the individual consumer to take control of his/ her data, making informed decisions in how to handle Personally identifiable information data (PII). At the same time, new business models are being shaped, such as Value exchange programs, offering consumers to sell their personal data in exchange for products and/ or services.

  • The IAB Technology Laboratory has introduced technical solutions and standards to improve the transparency, security and operational efficiency of programmatic trading, with emphasis on the supply-side of real-time bidding and programmatic buying. 
  • The OpenRTB Supply Chain object – allows buyers to see all parties who are selling, or reselling a given bid request.
  • sellers.json –  lets buyers have access to identify both direct sellers and intermediaries who are selling digital advertising. 
  • Authorized Digital Sellers (Ads.txt) – a method for publishers and distributors to increase transparency in programmatic advertising through public declaration of their authorized suppliers. They act as digital inventory sellers.

Marketeers are required to share metadata to leverage on these new solutions and standards.

Do leaders in publishing companies have the ability to disrupt the status quo in thinking, acting and doing, leveraging on shifting consumer needs due to the corona crisis?

How disruption of the consumer experience is shifting revenue streams. 

In 2016 desktop and mobile digital advertising revenues surpassed linear TV for the first time, capturing roughly US$72.5 billion revenue, up 22 percent from the year before. Source: IAB’s digital ad revenue report 2016.

 Rising mobile digital advertising total revenues increased 6.5 percent between 2018 to 2019 (from 62.5 to 69 percent).

While desktop revenue has been on a declining curve since it peaked to US$9.9 billion in 2015, mobile revenues took off; from being very low in revenue in 2011 to US$29.9 billion in 2019. Currently less than 69 percent of all internet advertising is targeted to mobile. And Its forecasted to grow in the future. Source: IAB’s digital ad revenue report 2019.

The European digital publishing dragons in 2018 by revenue

Source: Statista, Digital publishing revenue, European countries digital market outlook 

Compounded annual growth rate (CAGR) between 2010 to 2019 of 19.1 percent – largely driven by the sustaining growth of mobile. 
Mobile specific CAGR since 2015 of 47.2 percent – with the saturation of mobile smartphone devices having a major impact.
Source: IAB, Internet Advertising Revenue report

Consumer usage and ad revenue growth continues despite the fragmentation of cross-channel measurement.

The rollout of 5G with accelerated speed and access to real-time live video will continue to trigger growth in mobile advertising revenues beyond 2020.

Shifting revenue streams breeds new pricing models

Internet advertising revenues since 2016 have been driven by a performance-based pricing model that is continuously being refined as we add new media content; to attract and convert the audience into paying services and subscriptions. 

Revenue by pricing model

  • 62.1% were priced on a performance basis, slightly up from 2018. 
  • 35.7% were priced on a CPM basis, slightly up from 2018.
  • Only 2.2% were priced on a hybrid basis, a significant decrease from the 4.6% in 2018.

Definition of pricing models 

  • CPM (cost per mille) – The advertiser is charged for impressions. 
  • CPL (cost per lead) – The advertiser pays a commission whenever visitors submit information into a form on the website or landing page.
  • CPV (cost per view) -The advertiser pays per watched ad, or video by visitors.
  • CPC (cost per click) – The advertiser pays by click from visitors. 
  • CPA (cost per acquisition) – The advertiser pays a flat rate compensation, or a percentage of the amount spent by the visitor for a product/ service. 

We have tracked behavior towards migrating to multichannel video programming distributors (MVPDs), including streaming and social video platforms.  

Moving forward, business models will increasingly include freemium- and other ad-supported streaming services. It puts pressure on companies to engage and increase their awareness about their consumers to understand who they really are?, their aspirations and future plans? 

What is your potential to disrupt, before becoming disrupted?
Have you conducted a competitive analysis and have the right team in place to secure your organizations future survival?

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About the author(s)

Johanna Green is the Chief Disruption Officer at Disrupt Synergies’ Nordic region.