Publishing and advertising both need to bend back toward where they came from, and what works. I see hope for that in the news today.
In Refinery29 Lays Off 10% of Staff as 2018 Revenue Comes Up Short, by Todd Spangler, (@xpangler) of Variety reports,
Digital media company Refinery29, facing a 5% revenue shortfall for the year, is cutting 10% of its workforce, or about 40 employees.Digital media company Refinery29, facing a 5% revenue shortfall for the year, is cutting 10% of its workforce, or about 40 employees.
Company co-founders and co-CEOs Philippe von Borries and Justin Stefano announced the cuts in an internal memo. “While our 2018 revenue will show continued year-over-year growth, we are projecting to come in approximately 5% short of our goal,” they wrote. As a result of its financial pressures, “we will be parting ways with approximately 10% of our workforce.”
The latest cuts, first reported by the Wall Street Journal, come after New York-based Refinery29 laid off 34 employees in December 2017.
Refinery29, which targets a millennial female audience, is going to cut back on content “with a short shelf life,” according to the execs. “While this type of content has been driving views, it has not yielded a great monetization strategy to justify the same level of continued investment.” Von Borries and Stefano wrote that they see sustainable growth in “premium, evergreen” programming, and plan to produce more video (both short- and long-form) on that front.
I’ve boldfaced the important stuff. To explain why it’s important, dig this, from Refinery29 Lays Off 10% of Its Staff, Unifies Sales Team, by Melynda Fuller (@MGrace_Fuller) in MediaPost:
As part of the restructuring, Refinery29 will also unify its sales teams into a unified Customer Solutions Group, in addition to a Sales Planning and Operations Group.
This suggests that Refinery29 is becoming a high-integrity publication, and not just another content pump and eyeball-shooting gallery for adtech (tracking-based advertising). (This Digiday piece by @maxwillens may suggest the same.) If that’s so, then there is new hope: not just for publishing online, but for the kind of brand advertising that actually sponsors publications, and which has worked for both brands and publications since forever in the offline world.
By now pretty much all of online advertising is adtech, which doesn’t sponsor publishers. Instead it uses publishers to mark and track eyeballs wherever they might go. It does that by planting tracking beacons (mixed like poison blueberries into those cookies sites now require “consent” to) on readers’ browsers or phones, and then shoots the readers’ eyeballs with ads when they show up elsewhere on the Web, preferably on the cheapest possible site, so those eyeballs can be hit as often as possible within the budget the advertiser has paid adtech intermediaries. (To readers the most obvious example of this is “retargeting,” perfectly described by The Onion in Woman Stalked Across Eight Websites By Obsessed Shoe Advertisement.)
Advertising, real advertising—the kind that makes brands and sponsors publications—doesn’t do any of that. Here’s how I explain the difference in GDPR will pop the adtech bubble:
- Advertising isn’t personal, and doesn’t have to be. In fact, knowing it’s not personal is an advantage for advertisers. Consumers don’t wonder what the hell an ad is doing where it is, who put it there, or why. The cognitive overhead for everybody is as close to zero as possible.
- Advertising makes brands. Nearly all the brands you know were burned into your brain by advertising. In fact the term branding was borrowed by advertising from the cattle business. (Specifically by Procter and Gamble in the early 1930s.)
- Advertising carries an economic signal. Meaning that it shows a company can afford to advertise. Tracking-based advertising can’t do that. (For more on this, read Don Marti, starting here.)
- Advertising sponsors media, and those paid by media. All the big pro sports salaries are paid for by advertising that sponsors game broadcasts. For lack of sponsorship, media—especially publishers—are hurting. @WaltMossberg learned why on a conference stage when an ad agency guy said the agency’s ads wouldn’t sponsor Walt’s new publication, recode. Walt: “I asked him if that meant he’d be placing ads on our fledgling site. He said yes, he’d do that for a little while. And then, after the cookies he placed on Recode helped him to track our desirable audience around the web, his agency would begin removing the ads and placing them on cheaper sites our readers also happened to visit. In other words, our quality journalism was, to him, nothing more than a lead generator for target-rich readers, and would ultimately benefit sites that might care less about quality.” With friends like that, who needs enemies?
- Adtech is built to undermine the brand value of all the media it uses, because it cares about eyeballs more than media, and it causes negative associations with brands. Consider this: perhaps a $trillion or more has been spent on adtech, and not one brand known to the world has been made by it. (Bob Hoffman, aka the Ad Contrarian, is required reading on this.)
- Adtech wants to be personal. That’s why it’s tracking-based. Though its enthusiasts call it “interest-based,” “relevant” and other harmless-sounding euphemisms, it relies on tracking people. In fact it can’t exist without tracking people. (Note: while all adtech is programmatic, not all programmatic advertising is adtech. In other words, programmatic advertising doesn’t have to be based on tracking people. Same goes for interactive. Programmatic and interactive advertising will both survive the adtech crash.)
- Adtech spies on people and violates their privacy. By design. Never mind that you and your browser or app are anonymized. The ads are still for your eyeballs, and correlations can be made.
- Adtech is full of fraud and a vector for malware. @ACFou is required reading on this.
- Adtech incentivizes publications to prioritize “content generation” over journalism. More here and here.
- Intermediators take most of what’s spent on adtech. Bob Hoffman does a great job showing how as little as 3¢ of a dollar spent on adtech actually makes an “impression. The most generous number I’ve seen is 12¢. (When I was in the ad agency business, back in the last millennium, clients complained about our 15% take. Media our clients bought got 85%.)
- Adtech gives fake news a business model, because fake news is easier to produce than the real kind, and adtech will pay anybody a bounty for hauling in eyeballs.
- Adtech incentivizes hate speech and tribalism by giving both—and the platforms that host them—a business model too.
- Adtech relies on misdirection. See, adtech looks like advertising, and is called advertising; but it’s really direct marketing, which is descended from junk mail and a cousin of spam. Because of that misdirection, brands think they’re placing ads in media, while the systems they hire are actually chasing eyeballs to anywhere. (Pro tip: if somebody says every ad needs to “perform,” or that the purpose of advertising is “to get the right message to the right person at the right time,” they’re actually talking about direct marketing, not advertising. For more on this, read Rethinking John Wanamaker.)
- Compared to advertising, adtech is ugly. Look up best ads of all time. One of the top results is for the American Advertising Awards. The latest winners they’ve posted are the Best in Show for 2016. Tops there is an Allstate “Interactive/Online” ad pranking a couple at a ball game. Over-exposure of their lives online leads that well-branded “Mayhem” guy to invade and trash their house. In other words, it’s a brand ad about online surveillance.
- Adtech has caused the largest boycott in human history. By more than a year ago, 1.7+ billion human beings were already blocking ads online.
By focusing less on “content-production” (that stuff with a short shelf life) and consolidating its sales staff, Refinery29 appears to be re-making itself as a publication that can attract actual sponsors—real brands, doing real branding—and not just eyeball-hunting intermediaries that deliver lots of data and numbers to advertisers but nothing with rich value.
[Later…] This Digiday piece may support that t
If that’s the case, online publishing is starting to turn a corner, led by Refinery29, and heading back to what makes it valuable: to its readers, to its advertisers and to itself.