Which are the most important industry forecasts for 2018?
Predictions are always plentiful at the beginning of a new year, but which ones should you actually pay attention to if you want to to be able to help your business? Now that the dust has settled, we’ve reviewed the most popular predictions for digital publishing in 2018 and picked out the ones which can really help you understand where the year is headed.
At Bibblio, our main concern is how to build a sustainable, profitable content ecosystem that works for publishers and audiences. There are signs that that is beginning to happen, and these forecasts can help you understand how it will come about so that you can adapt to the new reality.
The forecasts are all linked by one overarching theme - the crisis of digital advertising combined with the "Duopoly" capturing more and more of the market and almost all of the growth. This has hammered the ad-funded digital content model, and means that everybody else in the sector has to find other ways to make money. From AI to new key metrics, find out what trends are helping them do that in 2018:
1. Publishers will start to free themselves from the honey trap of platforms
“Publishers will break their dependence on platforms”
- Nic Newman, Digital Strategist at the Reuters Institute, in Journalism, Media, and Technology Trends and Predictions 2018
The platforms promised the world to publishers in exchange for them giving up ownership of their relationship with users. In revenue terms, they haven’t delivered. That’s becoming harder to ignore, especially with referral traffic from e.g. Facebook already dropping, after it announced that it would be cutting back the amount of news in users’ feeds by 20%, and video not bringing in the revenue that was promised.
The latest survey by The Reuters Institute reveals that around half (44%) of executives are more worried about the power of platforms than they were at this time last year (although it’s worth noting that sentiment is far more positive towards Google than the other players). This concern is going to manifest itself in more publishers pulling out of deals with e.g. Facebook, Apple, and Snapchat that they don’t feel are benefitting them and focusing on increasing direct readership instead.
It's not the end of the story for publishers and platforms though. Some publishers are increasingly seeing Google and Facebook as acquisition channels rather than trying to rely on them for revenue. A good example is The Economist, which gives away some content in order to then retarget interested readers.
2. It’s going to be The Year of the Subscriber, but is subscription the new ‘Pivot to Video’?
“Whereas certain titles had a 10:90 ratio of subscription to ad revenue in 2012, we predict it may be 50:50 by 2020” - Deloitte 2018 Digital Media Report
One of the consequences of the decline of advertising revenue for publishers, and their increasingly fraught relationship with platforms, is that many are looking for new revenue sources. One of the most popular new models, is, in fact, an old one - charging for subscription.
There have been a huge number of good news stories for subscription services across the content spectrum over the last few years, but that doesn’t make it a panacea for publishers. The CEO of subscription revenue’s poster child, the New York Times, said in his predictions for 2018:
“Most news organizations contemplate or launch pay models, most of which fail.” - Mark Thompson, CEO New York Times, in Journalism, Media, and Technology Trends and Predictions 2018
So, whilst predictions that subscription will flourish this year are maybe the most common, along with advice on how to do it well, it’s worth thinking about what makes your product unique enough to make someone open their wallet for it. Users won't pay for generic, undifferentiated content. There's also an open question as to how much content to give away to lure in readers, and and how and when to introduce the 'pain' to persuade them to convert. Do you have a metered paywall after five free articles? A premium content in a members area? We'll have more answers by the end of 2018, but it's unlikely there'll be a one-size-fits-all solution.
3. Loyalty is the word on everybody’s lips
“Which metrics are better indicators of what’s working to cultivate and retain folks? What behaviors can show us who is the most loyal among our audience? And ultimately, how can we serve them better? That’s what we’re going to home in on next year.” - Julia B. Chan, Director of Audience for Mother Jones, in NiemanLab’s Predictions for Journalism 2018
If you’re going to make audience-based revenue work, then you need a loyal audience. Loyal users read more content, engage with it more deeply and are more likely to share content and act as evangelists for a publisher.
Learning what leads to loyalty, and then measuring and optimising for it, are going to be key to businesses moving beyond a purely ad-based model. That move is well underway. As reported in Digiday, Hearst Newspapers has begun focussing on users who visit at least 10 times per month, rather than uniques, and The Boston Globe prioritizes creating the sorts of stories that convert subscribers over those that simply increase traffic. The need to discover and optimise for ‘loyalty metrics’ is something Bibblio discussed earlier in the year too.
“Driving loyalty requires focusing on quality. Readers and reporters will be grateful.” - Sarah Marshall, Head of Audience Growth at Vogue International, in NiemanLab’s Predictions for Journalism 2018
4. AI will stop being a buzzword and become a tool
"Almost three-quarters [of publishers] (72%) are planning to actively experiment with artificial intelligence (AI) to support better content recommendations and to drive greater production efficiency" - Nic Newman, Digital Strategist at the Reuters Institute, in Journalism, Media, and Technology Trends and Predictions 2018
"AI for your website" is now everything from dynamic layouts and ad selection to content recommendation and conversion/revenue optimization. Smart algorithms and the data feedback loop mean you can make better and better decisions when the next users come.
It’s not a coincidence that these advances are being embraced as the drive towards alternative revenue streams gathers pace. Publishers are beginning to understand how AI is a key tool to improve users’ experiences. It also frees up editorial staff to do work where ‘human’ skills really add value.
One example of how AI is helping is by allowing organisations to understand users better, and produce and recommend the distinctive content that creates loyalty and justifies a subscription. Experiments with AI software writing content have also shown that very low margin coverage doesn’t require employing an expensive human to do it. In an industry where understanding the audience has never been more essential and margins have never been more squeezed, this technology is going to deliver serious results.
“AI/intelligent assistants solving for consumer needs across devices, environments, media is the big tech story of the year.” - Mark Thompson, CEO New York Times, in Journalism, Media, and Technology Trends and Predictions 2018
Of course ‘personalization’ via AI has been the great hope of some areas of publishing for a while, but it’s not clear what direction it will take. After personalization was implicated in all the problems created by hyper-partisan Facebook filter bubblers, it became clear that it’s a two-edged sword. This is especially true when most organisations lack the sort of user data needed to make personalization act as anything other than a crude interest filter. However, there’s some hope that personalization can be a lot more than that:
“...this is the year where there should be a wider focus on using personalization to inform, educate, and foster common understanding.” - Tamar Charney, Managing Editor NPR One, in NiemanLab’s Predictions for Journalism 2018
That’s a goal for AI editorial tools that we should all get behind. We’ve seen the endgame of the race to the bottom of the attention barrel in the crappiest recesses of the internet, and that’s not a place the publishing industry can afford to go.
Where does that leave us for 2018? To sum up, we're going to see increasing numbers of digital content businesses looking to alternative ways to monetize as they retreat from ad-funded platform strategies, and to do that successfully they will need to work very hard to cultivate a loyal audience. AI will play a growing role in helping to achieve that, as well as becoming a key editorial tool to help publishers do more, smarter, with less.