Look Ahead 2013

The Digital-Media Forecast for 2013

To Make Real Money, You Can't Just Distribute Other People's Content

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Number 1

Web publishers cede more ground to advertisers

One of the grandest traditions of print organizations is the unwavering divide between editorial and advertising operations. That practice has transitioned well to the digital era. But when it comes to the physical design of the news product, the walls between editorial and advertising are collapsing and are on their way to obliteration. The home pages of sports-news sites have especially become a canvas for an increasing amount of ads that push down, temporarily cover up and surround editorial work. But they are not alone. General-news publications such as The New York Times and the Washington Post often run home-page ads that either temporarily interrupt or completely envelop the reading experience. Even as content-driven advertising has experienced resurgence, intrusive online advertising continues to proliferate. As long as readers keep coming back, expect the trend continue.

Web distributors double down on original programming

YouTube, Netflix, Amazon and Hulu all made huge investments in original content in 2012. Meanwhile, the biggest players in web video threw itself the Digital Content Newfronts, which generated buzz that rivaled TV's upfronts. A reality has set in for web distributors -- one that HBO realized years ago: To make real money, you can't just distribute other people's content. To get premium dollars, you must also own content. That's why original-content investments will accelerate in 2013. For Netflix and Hulu, it's a matter of long-term survival; for YouTube, it's about seeding content studios built on an internet scale. And don't write off web-original content just because it fails to produce TV-like hits. Successes in this new world will look very different than they did in a three-network one.

Advertisers demand ROI against content

"Native advertising" made a splash in 2012, with content publishers and distributors of all stripes appropriating the term to describe advertising that wasn't a typical display ad. Advertisers followed suit, rushing to prove that they had a "content strategy." But as more advertisers set aside bigger portions of their marketing budgets for content-centric campaigns in 2013, they will increasingly look for more sophisticated ways to measure their returns on investment. After all, does a blog post showing images of 17 animals dressed like humans, no matter how many times shared on social networks, really boost the perception of a brand?

Publishers that take the time to help advertisers analyze content campaigns beyond vanity metrics, as well as produce content that actually incorporates a brand's values in smart and subtle ways, will take a bigger piece of the pie. The rest will see their "native" business line revert back to one-off custom projects.

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