When I think back to 2003, early in my AOL days, I can vividly recall the level of interest in broadband. There was none. I sat in many perfunctory meetings about the dawn of the high-speed Web. Most (myself included) rolled their eyes. The sentiment: "We'll worry about that when it happens." Dialup was humming. Those annoying discs still produced paying members (30 million and counting). The money was rolling in. We all know how that worked out. As a business, AOL still hasn't recovered from that negligence -- or was it arrogance? Even today, what's now called "subscription services" (2.5 million customers) is the portal's only profitable division, as hard as that may be to believe.
I learned my lesson. That's why each morning I check the prior day's mobile traffic, drilling down to usage by post and device type (iPhone, iPad and Android's longtail of cell phones and tablets). It's the reason I make sure a day doesn't go by without talking about, reading about, or better yet doing something about video. And it's what prompts me to bring up native advertising in meetings with channel editors and hallway chats with our chief revenue officer. Like broadband ten years ago, mobile, video and native aren't hugely monetizeable today, but some combination of all three is the trifecta of moneymaking for tomorrow's news business.
What's it all mean for FORBES? Here's my candid take on where we are:
Video: We have an eight person full-time team that focuses on our popular lists, magazine and online stories, exclusive interviews and FORBES conferences. In the last year we improved our shooting and editing style, visual graphics and the pace of video storytelling. We produce around 100-120 videos each month. In August, we upgraded our infrastructure, implementing
1) It's easier to build an audience on YouTube than make money as one of its partners.
2) It's easier to make money on Forbes.com (no revenue splits with partners are required) than build an audience.
3) It's easier to find syndication partners than find marketers willing to approve use of their pre-rolls on other sites.
4) Sponsors often want the kind of video that audiences don't seem to be interested in.
5) Pre-roll ads still annoy consumers, especially when the videos themselves are short.
Traditionally, online video is expensive, unless you're a broadcast or cable brand. That's why our goal is to create a network of video contributors much like we did with text-based writers. We're putting the finishing touches on a model to recruit 50 incentive-based video contributors in 2014. This distributed workforce will use mobile phones, tablets, apps, whatever's in the marketplace that facilitates scaleable, efficient production. We've had fits and starts with similar efforts. It's been hard to figure out the right incentive system. No one "owned" it (we're looking for someone who will). And most important, video creation/production is not yet a native skill for most topic experts. We will need to tap a rising generation more comfortable with the format and tools. Finding a solution is critical. Advertiser demand for video ad inventory is strong, and it's the best way to lessen our reliance on autoplay video, even though I see more industry players adopting it.
Native Advertising: FORBES BrandVoice is leading the way in this fast-evolving premium ad space. Launched nearly three years ago, it gives marketers access to the same tools as staffers and contributors to publish content for our audience and on Forbes.com, always transparently labeled. The "our" and "on" are critical. Twenty digital BrandVoice partners now work with our sales team to create actual posts (945 so far this year) that fit in contextually with the FORBES editorial offering. Very few publishers have done the critical development work to provide this type of integration with a content management system. Enter the Native Ad Networks. They go "over the top" of any CMS and place native ad units (vs. native content) throughout any site. This new abundant supply of native ad inventory will likely be paired with brand journalism that's outside a publisher's site and for a mass audience, not content housed on a publisher's site and specific to its audience. The risks here are clear: consumers will get wise to the commoditized offering, reducing clickthrough rates and devaluing native ad placements -- exactly what's happened with display advertising. The larger trends are equally apparent. "Paid," "owned" and "earned" media will continue to converge as ad agencies and PR firms fight it out for business. Programmatic buying of display ad inventory will put even more intense downward pressure CPMs. Marketers who want to be publishers, too, will seek effective placement for their content. Publishers will only be able to command a premium for native ads if they require marketers to produce content specifically for their audiences.
Mobile: The numbers explain my focus-bordering-on-fixation. In August 2012, mobile traffic to Forbes.com represented 25% of total visits. Last month, it was 35.5%. In each case, smartphone visits were more less double tablet visits. Mobile page views tell a similar story. In August 2012, smartphone pv's (U.S. only), were 9% of our total page views. Last month, they were 15%. Industrywide numbers like that have led to the battle cry of Mobile First, a somewhat flawed effort to focus on product solutions before ad solutions. At the moment, ad agencies and their clients aren't ready for mobile. They can't come to grips with the smaller screen. Search is a $20 billion digital business; display, $18 billion (with banners representing $10 billion); mobile $8 billion (with search text ads accounting for $4.5 billion); and video, $4 billion. How do you get marketers more comfortable with non-search mobile ads? For FORBES, first comes BrandVoice. We believe the headline for a BrandVoice post is essentially the better display ad on mobile devices. Those headlines, pre-pended with the marketer's name, fit the screen perfectly and are part of the natural flow of editorial content on our smartphone experience. Second comes the new screens we'll soon be rolling our for desktop consumers. We're replacing page views with intelligent streams of content (post after post after post). We'll progressively load ads on those screens, meaning the number of ads is determined by the depth of the scroll. We'll also integrate new native ads units. As we migrate the desktop experience to mobile, we'll do the work to make the experience -- and the ad units -- responsive to the smaller screen.
We've done a lot at FORBES to disrupt the traditional media model for news. We collect news differently. We produce, present, distribute, market and pay for it differently, too. We've disrupted the century-old media model for creating and processing news. Still, new days are ahead, more broadband-like changes to come. The essential mission of journalism remains the same -- to observe, collect and interpret information. The business also remains the same -- to provide solutions for marketing partners. The challenge, as always, is to adapt to the changing dynamics of an industry now in the grip of technological upheaval.
