(Editor’s note: Terry Boyd is the co-founder of Dispatches Media.)
Success is a funny thing in the digital media world, right now.
Invest a lot of money, build a platform that reaches tens of thousands of people across Europe – indeed, the world – and guess what happens?
Everyone wants to advertise with you.
Great, right? Except for one little thing.
Advertisers (in some cases, really big businesses) want Dispatches to post their ads – which they like to refer to as “great content” – for free.
We love you … but not enough to pay you
Marketing and PR people send us chipper little emails every single day that begin with, “Hi! How are you? We are working on a project now that is simply stunning ….”
There’s the bitcoin company whose PR person constantly follows up, wanting to know why we haven’t used that “great post” they sent us.
There are our friends at an Irish marketing firm who want us to promote their client by running canned content. For free.
There’s GoEuro, Narem Shaam’s Berlin-based travel app.
GoEuro sent us what is admittedly a great post, and we used it. It blew up, reaching 19,000 people on Facebook with high engagement and more than 2,000 page views in a few hours. But when we pitched a campaign with us, their marketing person informed us they have “no budget for that.”
Huh? Because GoEuro just got a $70 million B-round investment from VCs including Kleiner Perkins, the original Sandhill Road VC firm in Silicon Valley.
I have to hand it to them. The people at advertising agencies and marketing firms do their research. They know Dispatches has quality content and a robust audience, and they hope we’re naive enough – and new enough – to post their content gratis so they can cash a check with their clients.
And we might have a year ago when we first launched. But less and less now.
We’ve hired a lot of terrific content contributors, developers, UX experts, coders, branding talent, attorneys and accountants.
And guess what?
A long and expensive process to build Dispatches
We know we’re just one of many digital entities advertisers target because we reach a very specific audience and a desirable demographic. It’s not bragging if it’s true, and it’s an absolute fact that we can deliver certain demographics far more efficiently than companies can reach them by advertising with Google or Facebook.
And that’s kind of where this is all headed … there’s a storm coming for the digital platforms.
We’ve been here before. With our first pure play digital news startup, we cultivated the audience first and figured out who they were. We used that data to pitch advertisers we knew would be a good match and collaborated with them to do compelling native content that was useful for readers, and effective for them.
We find out who they are. We find out what they want to read. That all has to happen first.
Now, that we’ve built the audience, we’ll go after the sponsors whose content we want to present to our audience. Doing it that way, we know there’s a match.
Don’t worry about us … we’ll be fine. We knew when we came to Europe that conventional advertising would be just a minor revenue stream until we reached the million page-view mark, and we have a lot of tricks up our sleeves.
But a lot of legitimate and valuable media efforts are going down the tubes.
An inflection point for digital media
We’ve reached, as a former investor always liked to say, an inflection point.
A number of large media companies such as the Guardian, New York Times and Wall Street Journal have pulled out of Facebook’s Instant Articles and Apple News because both of those digital platforms turned out to be one-way transactions for the news companies. The media companies spent billions on cranking out first-rate content.
Apple and Facebook got the advertising revenue while the media companies and advertisers got little aside from being thrown into digital environments that are, shall we say, increasingly toxic.
At the same time, YouTube is at war with its talent. “YouTube has been cleaning house ever since major brands froze spending out of fears they were supporting objectionable content with their ad dollars,” is the way Ad Age puts it.
This can’t go on very long because here’s the essential truth: If they put all the content providers out of business, Apple, YouTube, and Facebook won’t generate as much revenue. And they’re never going to start their own primary-source news operations because they know the risk is greater than the reward.
Funny thing is, journalists, musicians, and entertainers are pretty smart people. If they figure out they’re never going to get paid, they quit doing what they do and go work at Goldman Sachs, where I hear the remuneration is pretty good.
I’m trying not to be bitter about this, and when marketing people pitch us their clients’ stuff, it really is a validation that we’re doing a great job.
But it’s a compliment we can’t afford.