On the occasion of unveiling the first edition of the Dentsu Aegis Network e4m Digital Report 2017 yesterday, Paul Rossi, President, The Economist Group, spoke about the role of digital in the years to come, his predictions for brands and the media industry in the near future (2020 and beyond), mega trends and their implications, and finally, a caveat, given the current political scenario globally.
At the outset, Rossi pointed out the pervasive nature of digital by saying that it is redundant to say ‘digital media’ as anyone who is into media has a presence in the digital space. He then went on to highlight the role of mobile, social, and video in current content consumption behaviour. “Eighty-four cents of all incremental online ad spend in the world is going to Google or Facebook,” he said. “So, in reality, in the near future, we need to focus on these two big players—Facebook and Google—and their ability to influence what’s going on.” Following closely on the heels of Facebook and Google is Snapchat (or something similar), according to Rossi.
Mega trends in digital
1) Read. Watch. Listen
Rossi pointed out how the millennials and the younger audience are increasingly ‘watching’ news and not reading it. So, the ‘print to digital’ is becoming ‘text to visual’. “My prediction based on this is that you will see newspaper companies going bust; you will see that big newspaper brands focusing on print at the weekend and using digital from Monday to Friday will do well.” The print product for the weekend, according to Rossi, will be a high-quality, high-value product that people will spend time with, combined with a focus on visuals such as pictures, infographics, and more.
2) Who pays for journalism?
No platform or marketer has a moral obligation to support media or journalism at all, stated Rossi. “The obligation sits with the media owners to put into place a business model that will make them the money.” For the last 3-4 years, the media industry has been expecting advertisers to pay for digital content, which is not going to work, emphasised Rossi. He cited four major reasons for this: a) ad blocking, b) viewability, c) ad fraud, and d) the shift from desktop to mobile.
Speaking about ad blocking, Rossi stated how media owners, clients, and agencies collectively put too many ads on the page, which has turned ad blocking into a sort of rebellion by the consumer. Supporting this, he shared statistics on the increase in ad blocking in certain markets. “Ad blocking on mobile devices in Asia is growing about 35 per cent. In the US, it is growing by 22 per cent.” With viewability, the Google report finding that 50 per cent of all online ads are not seen by humans presents a challenge. With the problems of ad fraud and the shift from desktop to mobile adding to this, Rossi predicts that “If you are a website or a media owner that is entirely funded by digital advertising, you will go bust in 3-5 years.”
The people who will survive this will be the ones offering some value proposition to the consumer. Comparing this to the newspaper model, Rossi said, “The free newspaper is going to really struggle while The New York Times with its payment model has a much stronger opportunity to stay healthy.” Rossi further added that The Economist falls into the latter group as it has two very strong models around subscriptions and advertising.
3) Trust me.
Fake news is an advertising problem, stated Rossi. The ‘trust me’ trend will decide how consumers will decide what they are reading, watching, and listening to, and where they are doing all this. “Even though there is more content and more choice available today, the reality is that people actually consume less,” said Rossi. “They are going back to 2-3 highly trusted brands that they consume a lot of and ignoring everything else.” Moreover, that is accelerated by algorithms. Rossi cited the example of The Economist on Facebook. “If you follow The Economist on Facebook, you will not see all the content that we produce because an algorithm (made by humans) is deciding what you will see and what you won’t see. And that is accelerating this clustering and polarising of brands that people are seeing.”
To add to this, Rossi emphasised on the role that millennials play as ‘content DJs’. “They share something when they see it as an extension of themselves. They don’t share anything that is fake, inappropriate, or invaluable. As millennials consume content, they are (in their minds) brands that represent who they are. So, distinctive, valuable media brands, be it VICE or The Economist, will stick around. You will see mass entertainment and mass news brands disappearing into the long tail—and there’s no money in the long tail.”
Rossi concluded his address by throwing in a caveat given the current political scenario, referring to the US administration under the leadership of US President Donald Trump. He said, “If the world is truly becoming less global and more nationalistic, it’ll be interesting to see what that means in terms of media consumption—which media companies will survive. We’re only two months into this and this (US) administration is already saying that The New York Times is fake news!”