Reports this week that Hearst might buy iCrossing left many industry insiders pondering the logic behind it all. Why would a newspaper and magazine publisher, best known for titles such as the Houston Chronicle and Cosmopolitan, spend upwards of $375 million on an interactive ad shop? Monday morning quarter-backing ensued even though there was no deal in place, with industry analysts quick to naysay the idea.
This is not the first time a publisher has gotten into the digital-marketing business. Both Meredith and Conde Nast have busted free of their neat publishing confines to buy stakes or full ownership of ad and tech firms.
I must admit, I greet such developments with almost a childlike glee. I've written what seems like countless articles spanning the last decade vociferously declaring the publishing industry's drastic need to transform itself for the digital age.
Opportunity, even obligation
It's no secret that print ad revenue has taken a nosedive, as has newspaper circulation, as consumers make their irreversible migration towards online media. Years ago, I witnessed the dramatic forces affecting the industry at the helm of Computer Shopper, which once sold more newsstand copies than Forbes, Fortune and BusinessWeek combined and, at its height, carried over 8,000 ad pages annually. Today, all that survives of this epic franchise is the interactive shopping service sold to the CNET organization and several print copies that I keep to convince disbelievers.
Despite this (or perhaps because of this), I have always believed that media companies have an incredible opportunity, obligation even, to boldly reshape their business model. At their cores, publishers have always known the tremendous power of relevant content in attracting, retaining and activating audiences. In fact, it has been within the DNA of the best and brightest publishing houses to take on the role of trusted adviser and help educate the marketing community on how best to connect with and influence these audiences.
Now, as media-consumption patterns change and online ad revenues climb, it hardly seems crazy that they begin to look at options to expand and diversify their digital business. These options might not only allow them to build new and growing revenue streams, but to provide their advertisers with the ingenuity and technology -- resident within the publishing house rather than an outside agency -- to fully leverage digital media and execute their programs all in one place.
The fact is, publishers already have the content and brand equity; what they have typically lacked is the technology and expertise to take a commanding lead on the digital side of their business, the side on which their futures increasingly and inevitably depend. With their recent investments and the possible iCrossing acquisition by Hearst, publishers can get access to the technology platforms, not to mention the people with vast digital and analytics know-how, to make the required bold transformation.
Maximizing more than their brands
They will then be able to maximize their own brands, but that's really just gravy. More importantly, they can continue to leverage their vast marketing insight and expand it into adjacent media channels, providing their advertisers with new digital services and solutions, cross-sell opportunities, custom marketing programs and significantly increased traffic -- all areas in which these marketers previously leaned on and invested in their agencies.
What would be true insanity would be to retain the status quo. The state of the industry calls for fearless vision and action. Finally, we are seeing moves in the right direction. Despite the challenging odds and the countless doubters, publishers are beginning to muster the courage, conviction and passion to remake themselves for a new age.
Congratulations to all those who have the guts to make the transformation.
|ABOUT THE AUTHOR|
Al DiGuido is CEO of Zeta Interactive.