Well one possible reason is the fact that Google and Facebook control nearly 50% of all online inventory and are slowly eating their way into every digital touchpoint from traditional banners, mobile, lead gen,instant messaging,video and so on which is pushing out smaller publishers and leaving medium to larger publishers facing challenging times ahead.
Smaller to medium sized publisher are finding they need to deliver content driven sites to satisfy, not their user audience, but the advertisers or their monetisation stats drop considerably.
The real issue may not be so much about the failure of digital media, but rather about the expectations the media industry has had for digital — that it would be its salvation.
Traditional publishers and the professionals who work for them, as well as digital publishers employing a new generation of professionals, have hoped that digital media would replace traditional publishing — both as a means of distribution and a revenue generator. How could it not? If the audience was moving to digital, advertisers would follow — and we would all be happy digital media workers.
One of the favorite stats about the inevitability of digital media, widely shared over the past year, shows that the total advertising spend in digital media will exceed that spent in television by 2019 (some claim 2017). Proof! But here’s your nuance: The category of direct response advertising — encompassing classifieds, direct mail, coupons, yellow pages, and other take-action-now messages — has always been bigger than television advertising. And it is this category that has moved most dramatically to digital.
While there is certainly a lot of money pouring into digital media, it is not the kind of money that has supported much of traditional media. Direct response advertising, with significantly lower margins than brand advertising, can seldom support high content costs (indeed media like the yellow pages had no content costs). Traditional news organisations as well as new ones like BuzzFeed — which has tried to build an aggressive news gathering team — have hoped, so far in vain, that higher margin brand advertising would eventually come to the support of higher-end digital content.
In fact, already-low margins for this direct response sort of advertising have become even lower in the digital world — this is due to oversupply, lack of effectiveness, the cramped screen space of mobile, and “programmatic” buying,
Still, ever-falling ad rates have, at many sites, been balanced by ever-rising traffic. But now the race for traffic — with traffic numbers reaching heedy heights — has pushed the cost of traffic acquisition often well beyond the point where there can be any hope that advertisers will pay more than traffic costs.
Now, too, increasing the panic, are ad blockers, starting to have a meaningful impact on digital revenue.
Certainly though, there are two too-big-to-fail digital media enterprises, Google and Facebook. While both face the same advertising pressures of lesser sites, they have made up for weak ad prices by the sheer scale of their audiences — creating another problem for everyone leaving little for everyone else, and, with their oversupply of page views, creating constant downward price pressure.
In digital media, the audience — traffic — is a fungible commodity. It is not, as in traditional media, a unique circumstance. Supply — and digital traffic is largely unlimited — determines the price. This doesn’t mean you can’t make money from commodified traffic, but you have to do it with ever-greater economies. In that sense, ad-supported digital publishing becomes a game of ever-cheaper content strategies. It’s a business, just not the one that many people with big media ambitions wanted to be in — or one that supports the valuations investors have on digital media.
That’s why this “borderline panic” is prompting a rush to video. And not just Internet-style video, but “premium” video, sometimes called “premium+” video — that is, something very close to television or, actually, television. . Dailymail.com has announced it is producing a celebrity news show for the television syndication market. Twitter has just made a streaming deal with the NFL. Mashable recently laid off part of its editorial staff to focus on television. YouTube is developing a premium service to compete with Netflix. BuzzFeed has announced a move “upstream,” a strategy that will include “linear TV.” Virtually every other highly funded news and content site is formulating a plan to create the kind of television-like video that might attract big brand advertisers, or big-media company partners, or create the kind of assets that can be sold into the ever-growing television market.