What affect will the online publishing crisis have on web analytics?
Keeping my eye out in the press as I do, I haven’t failed to notice that the online publishing world has been going through a bit of a crisis recently. Rupert Murdoch recently claimed that he might move his newspapers to a subscription model. Has it really come to this? Will we have to pay to read news online as we used to in the old print world? It wasn’t that long ago when I was writing about how the business models of publishers work. Even Time magazine put the death knell on 10 news publications in the States. So if the newspapers are suffering, why are they suffering and what does that mean for people who work in web analytics in that industry. More importantly what can they do about it?
To sum up the problem – in the old offline world, people paid money to advertise in newspapers and magazines, the cost of printing and distributing was then covered by the cost of the publications plus or minus a bit extra depending on how much they could get away with charging for it. This was a double edged sword – lower the cost of the publications to increase your distribution, the more you could charge for the adverts and the more you got from selling the thing. Want to make more money instantly? Put a couple more pages in so you can sell more ads; bump up the costs of the publication to make more in subscriptions; charge your advertisers more.
In the online world that hasn’t really worked so well. Advertisers don’t pay per person online, they pay for a very definitive number of adverts, so if you have more people, you can’t really charge more. This led to the sudden plea from publishers for more page impressions (cf ad impressions). More page impressions meant more available advertising space, but that is only true until the point where advertisers are willing to pay for those adverts. If you have spare advertising inventory, more page views doesn’t mean more money.
As publishers realised that this was happening, they started to wonder if they could charge their advertisers more by getting more people seeing their message. Well this is ok too, but you’re still paying for a set number of ads, not a set number of people (imagine if someone brought out an advertising model saying they would guarantee a number of users seeing the page rather than page impressions – would you do it?), so advertisers were reluctant again.
This was all fine whilst the print revenue was gradually increasing and the online revenue was going up rapidly, but in 2008 the increase in online spend was only 2% in the last quarter compared to the previous year, whilst offline advertising shot down with the recession. See the Wikinvest page for New York Times:
The drop in revenue in 2008 was primarily attributed to a 13.1% decrease in advertising revenue- print advertising declined 16.7% and online advertising advertising [sic] increased 8.7% during the year.
So that is what is happening in 2008, with 2009 getting worse. This means that publishers are having to cut back on resources and investments in an attempt to cut costs and keep profits up (or debts down). One of the areas that people often see as being culpable for job cuts are things not are not production based (I won’t get into the whole debate about whether sub editors are or not). Web analytics is not production based. And whilst the analytics vendors are going around telling you (and your boss) that it is easy, then you are likely to be the one who gets the chop.
So what can you do to avoid it? You need to be adding value. You need to be showing that without you, your company would make less money. If you read Eric Peterson’s blog post on beating the recession, he makes five recommendations:
Tip #1: Focus on Increasing Profits, Not Minimizing Spend
Tip #2: Don’t Be a Report Monkey
Tip #3: Start Watching the Job Boards
Tip #4: Think About Your Skill Set
Tip #5: Network, Network, Network
Whilst numbers 3 and 5 are specific for making yourself recession proof, numbers 1, 2 and 4 are areas that you can think about in your current job.
Focusing on increasing profit is difficult in this industry. As we’ve just seen above, the profits aren’t really going up that much any more. What it does mean though is that your reporting shouldn’t just be focusing on page impressions and visitors. You should be looking at how your business model is set up and reporting against that. Get your company into a focus that there are many metrics and the most important one is on the bottom line with a pound sign (or dollar). So you need to work out what is going to increase that.
More importantly I think is that you shouldn’t be a report monkey. Any reports you are asked to send out should not be reports. They should be an analysis. They should be telling your customers what the data means to them and what they should do about it. In the past I have found that the commentary that I have put into reports and lead some people to not even bother opening the report. If they are at the point where they go off and take your recommendations without even bothering to look at the numbers, you are doing well. Without you, they’ll have to sit and do their own analysis which may lead them in the wrong direction.
Thinking about your skill set is something that is great for your personal improvement. It is also great for your company’s point of view, because it means that you should be able to relate your web analytics reports and analysis back to the more realistic methods for your recommendations. Want to tell people how to improve their blog? Try writing one. Want to tell people to improve their SEO for improved conversions? Why not look into ways of doing this – try some link building yourself, talk to your search team on technical improvements, etc. Does the social media work not create much engaged traffic that wants to view many pages and complete lots of money generating actions? Look into how you could do it yourself. Sign up to all the social media things.
Remember that if you work at Google you are asked to spend 20% of your time working on other projects that will help Google in the long run. If you spent your 20% of time learning new things in the publishing world that would help you write your recommendations that can only be good for you and your company.
Personally of course, I left the online news industry at the end of last year for a Government content website. We don’t have quite the same issues.