Mobile Video Ad Formats Give Advertisers New Reach

ZEDO started its days as a partner for newspapers, a way to help the newspaper business make the transition to digital.  We were one of the first ad servers to serve the newspaper market, which was in disarray as first classified ads and then hard news became digital, and free. How could we help our publishers acquire the ads they needed to support their digital operations? That was the first problem we solved for.

Fast forward fifteen years. Now everyone is a publisher, even sites that don’t deal in news at all — sites like Weather.com, or Daily Motion, or Facebook and Twitter are all considered publishers. Many of our customers aren’t news sites in any conventional sense. The result? There’s a much bigger competition for advertising dollars than just hard news or even sports, business, and fashion, the traditional sections of the newspaper. So what happens to news?

Well, no one wants it to go away. As a result, there has been much written this year about the entrance of wealthy individuals like Pierre Omidyar (founder of Ebay) and Jeff Bezos (founder of Amazon) into the news market. Both have financed journalists to produce news. But here’s what these people either don’t know or have forgotten:

News, save for its most exclusive and specialized form, has always been an advertising-led business. That is, before there were news outlets, there were advertisers looking for venues to publicize their commercial messages. Newspapers were made for advertising more than for news; radio was an advertising medium before there was news on the hour; television was a Niagara of jingles before it had to make some public service accommodation to news; CNN’s satellite model was an advertising idea before it was a journalism concept. The advertising existed first.

Now this process has been turned on its ear. Brand name journalists like Walt Mossberg and Kara Swisher, Glenn Greenwald, Ezra Klein, Jessica Lessin, and Andrew Sullivan have all bolted from the traditional newsrooms they “grew up” in and are heading out to form news startups. Will they all succeed?

Well, perhaps. With the introduction of programmatic ad buys and RTB (real time bidding), any site that belongs to an ad network stands a chance of drawing advertising — if its target market fits an advertiser’s. They no longer need large internal staffs to sell advertising.  That’s the good part.

The bad part? The proliferation of inventory drives prices down, especially for niche sites that have small, loyal readerships. Advertisers, who generally go for reach and scale, prefer sites with tens of millions of visitors. Only if your site has a very targeted audience that suits a highly targeted advertiser ( luxury brands, tech brands), will you be able to sustain yourself on advertising.

That’s why Andrew Sullivan and Jessica Lessin, journalists with great brands, have chosen to go with subscription models.

As Michael Wolff points out in USA Today,

Journalists don’t like advertising. It is both the corrupting influence and the hard taskmaster, to which they always dream of being free. But save for a few rare instances where information is so valuable or beloved that customers will pay for it, advertising is the only thing that has ever paid the news bill.

We don’t need journalists solving the problem of news. We need people with far more cunning and inventive commercial minds. But there are few of those.

We’re doubtful that the digital media conundrum will be solved soon, so we will continue to innovate and produce engaging mobile video formats that can support the news everyone wants to read, for which advertisers are willing to pay more.