Even Nimble Long Tail Media Will Suffer in Economic Downturn

The ad:tech power panel “Will the long-tail go bankrupt?” was extremely timely given current economic conditions. Digital content is everywhere online and is growing exponentially. This epic flood of digital content and unprecedented media fragmentation has produced a fundamental conundrum: it’s hard to make money. This panel explored how the long-tail can make money, and the barriers to growth, especially given where the economy is going.

MODERATOR:
Emily Steel, Reporter, The Wall Street Journal

PANELISTS:
Matt Palmer, Executive VP, General Manager, Stardoll
Jordan Bitterman, Digitas
Matt Coppet, Head of Global Media Strategy, UBS
Philip Mitchell, Ogilvy
Jim Louderback, CEO, Revision3

The Billion $$ Question. How can the Long-Tail make $$$?

The extent to which advertising can be incorporated into content in a relevant and natural way has great effect on the “worth” of the ad impression. And this goes beyond display-based advertising. Jim Louderback, CEO of Revision3 used an example of how a beer sponsorship was incorporated into their podcast. The DiggNation podcast has long featured guys drinking beer. Incorporating sponsors for the beer was a logical and natural tie-in, without the need to directly relate it to the content. (DiggNation is a technology/news blog). According to Jim Louderback sponsors see as high as 100% unaided awareness from sponsorships which is significantly higher than display based ads.

Though a small part of Revision3’s business, the sponsorship model is high touch and takes a lot of hand holding. Creating a self-serve, scalable version of this model is one of the biggest challenges.

What are the barriers to monetization?

The panel called out 3 key barriers to monetization: Analytics, Accountability and Scale.

Analytics

Analytics must become more robust to vet sponsorship before they gain mass adoption. Publishers and advertisers need to work together to ensure the right measures are in place to assess ROI. While testing can be costly (sometimes more expensive than the cost of the program), investment in analytics is key to the success of sponsorships as a revenue model.

Accountability

Accountability and consistency in measurement is primary as well. Currently, there are no consistent and accurate standards for measurement in emerging platforms. For example Neilsen and Comscore use panels to report measures which often don’t match the actual statistics for a website. Additionally, people rely on sites like Compete, Alexa or Technorati for statistics. And none of these sites are truly accurate. Finding universal measures that are accurate and accessible will be a key to success for long tail-style operations like Revision3.

Not only is consistency in metrics an issue but finding the correct measures for emerging platforms is equally important.  For example, the IAB standard for viewing a video is 3 seconds. Downloads can take up to 10 requests to fully load – some companies will count each request as a “view” thereby incorrectly representing true viewership.

Scale

In order for long-tail players to realize this type of revenue stream, content producers must provide advertisers with simple, standard methods for making large, accountable ad buys across content. “You totally need to have automation for this thing to work… I mean, there aren’t enough hamsters in the world to keep this thing going,” one panelist lamented. The difficulty faced by long-tail and emerging media is the lack of streamlined methods by which campiagns can be implemented and measured.

Standard ad units are required across platforms to create scale across media, especially for new and emerging ad-platforms like video and mobile.

Who benefits from partnerships?

In the short term, long tail companies are benefiting. Traditional media companies don’t have a solid understanding of the space and are not likely to benefit in the near term.The question will always be “Does the partnership really make sense?”

And the economy? (yes, every panel touched on this)

Jim Louderback was asked about recent layoffs and show cancellations at Revision3.  “If the world is going into a nuclear winter you need to survive that.” Hmm. That’s an interesting way of putting it. I bit extreme, perhaps.

In terms of marketing trends in the current economic climate, the panelists felt there weren’t big cuts coming but marketers are certainly pausing and re-thinking before spending. Though digital properties are more efficient an measurable, Jim said he had heard of a number of companies making cuts, which, sadly, may not bode well for smaller, struggling long-tail media properties.

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By Daron Fowler on 2008 11 13

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