For many publishers, especially medical publishers, advertising dollars have provided reliable revenues for decades, allowing subscription prices to remain relatively low and rewarding wide distribution. As these journals have moved online, there have been many pressures on ad revenues — direct-to-consumer initiatives have siphoned dollars away from professional advertising, a more limited pipeline of new biologics has choked off new promotional spending, and more emphasis within device and drug companies on stock price optimization over R&D investment has further crimped the development pipeline.
It’s also been a rule of thumb that “online generates dimes for every print dollar.” For journals, this isn’t quite true, as online advertising prices are often quite high compared to prices in general media. Furthermore, this quip doesn’t address a deep structural problem with online advertising — it’s much more difficult to commercialize the same audience multiple times online than it ever was in print.
Online advertising is valued based on traffic, which is roughly analogous to print circulation. But that’s where the similarities end.
In print, if you have a circulation of 15,000 professionals, you can sell multiple pages of advertising against these 15,000 recipients as an audience. Another advertiser just means adding another advertising page or unit. And if an advertiser arrives near the deadline, you can easily add another page and sell the same 15,000 exposures yet again. Print advertising has been very scalable, with few rules about saturation of the print edition limiting its potential. In the heyday of print advertising, some books were nearly half ads, meaning this same audience was commercialized dozens of times simultaneously every issue.
With online advertising, the audience is measured in terms of page views. It’s against these that ad impressions are generated. If a site has 2-3 standard ad units, they can monetize these page views 2-3 times. Now, sites are more complex than this, but this is sufficient to outline the problem. I can sell as many impressions as this traffic multiplied by available spots allows. I can’t add traffic on a whim. I can’t easily add spots. I’m essentially capped by traffic and design.
In print, I could grow advertising quickly and easily. Online, advertising is not nearly as scalable.
Adding options is expensive and time-consuming, certainly not as simple as adding another page to the print book. Email alerts carrying ads, new creative positions or options, or new ways to attract traffic all take time to create, cost money to deploy, and suffer from the same scalability issues. That is, once full, they’re full. You can’t just add capacity like you can in print.
Options are expensive and time-consuming for people on both sides of the transaction, as agencies and creative houses have to accommodate multiple sizes (banners, leaderboards, medium rectangles, towers, skyscrapers, and so forth), monitor more data than ever, customize ads based on animation and privacy policies, and so forth. Creating online advertising is complex, expensive, and time-consuming.
We’ve been seeing the difficulties of expanding our online advertising initiatives within our own publications. We’ve spent thousands of dollars and hundreds of hours making new online advertising vehicles, only to have them sell out within weeks. I’d love to be able to add a few pages to them, but it’s not possible. We have to drive more traffic or create new outlets — essentially, build circulation or create publications, both of which take time and treasure.
Tricking readers by breaking stories across pages, forcing page reloads, is poor usability, making usability another hindrance to selling more online ads. On more commercial sites, you can see the lengths to which some sites will go to in order to accommodate advertisers and generate premium sales positions. But these techniques can irritate readers in ways that an additional 2-3 print ad pages never would.
Advertising works because it takes the same audience and commercializes it multiple times. Billboards, TV ads, print ads, radio ads, and online ads all work this way. But online is capped in new and unfortunate ways, depends on metrics that have nothing to do with traditional advertising’s goals of awareness and brand affinity, and creates costly and ineffective practices on everyone involved.
This has effects on editorial decisions, which have not yet become apparent in scholarly publishing, but which we can see elsewhere, with headlines now super-charged as click-bait, racy photos sprinkled in sidebars and widgets, and more silly lifestyle stories than hard news. If advertising were more scalable and predictable online, the tendency to pimp for traffic would be muted. Good brands would benefit, and good brand-building practices would be incentivized.
One such editorial trick trending these days is a euphemism — “native advertising.” What this used to be called is “sponsored content” or “advertorials” or “marketing copy.” The trick is to make it blend in with regular editorial content so that perhaps its message is mistaken for unbiased news or opinion. As a recent article in TIME notes, however, native advertising and its ilk are based on false premises — namely, that it works. Data show that users sniff it out and don’t scroll into it. (Another interesting chart in this article will make you question your assumptions about engagement, because it shows that social sharing and engagement may be inversely correlated.)
As long as the hot hunt for traffic is the only cure for online advertising woes, this new source of commercial potential — which can help offset subscription prices and hasten the move to full online publishing for major journal properties — will remain throttled and undervalued. It certainly does not scale as easily or inexpensively as print advertising did, and the trends indicate that it will be a long time before it does, if ever.
Discussion
14 Thoughts on "This One Doesn’t Scale — One Big Reason Why Online Advertising Is Comparatively Limited"
Total ad revenue is the result of both volume and price. You seem to be fixated on only one variable. The fact that you added additional ad units and sold out immediately would seem to indicate that you have a pricing problem.
Pricing around online advertising is an entirely different matter. From the purchasers’ perspective, the market has plenty of inventory, so raising your prices if you’re “full” only drives customers to another outlet, which may have long-term implications. The best solution is to create more volume, so that your current relationships and customers are satisfied sticking with you. In fact, high-volume advertisers often receive discounts out of consideration for their business. It’s a tricky business. Not being able to scale it as easily as print scaled does create challenge, and price increases are not an obvious answer.
“Adding options is expensive and time-consuming, certainly not as simple as adding another page to the print book.”
That’s a laugh. Try scaling your print publication from 1,000 readers to 1,000,000 readers.
But you can add more ad pages easily, which makes the product scale better for advertising.
Easily? Really? Printing (before digital printing came along) was done by signatures, so you couldn’t “easily” add just one page if that meant a whole new signature had to be added.
It’s easier to add a signature to support a paid ad than it is to build an entirely new email offering with new editorial content and requirements to build an entirely new audience.
Come, come Sandy digital printing has been here for years.
Kent – Your observation regarding the fact that print periodicals can sell a (for all intents and purposes) unlimited number of ads (at the same rate) to a given audience is fundamental and yet is often unremarked. Most discussions regarding digital advertising gloss over this critical point and therefore do not get to the heart of the matter as to why digital advertising is worth so much less to publisher.
I have only one quibble and that is with your statement “Advertising works because it takes the same audience and commercializes it multiple times. Billboards, TV ads, print ads, radio ads, and online ads all work this way.”
It seems like TV ads, radio ads, and billboards all have similar limitations to online ads. If I have a TV or radio show, I have only so many ad minutes available. I can’t create more ad slots — if I want to sell more advertisements I have to create new shows or even new networks. Similarly, with billboards, I can only show one ad at a time (maybe a few more with a rotating billboard — but still a very small number). If I want to sell more ads I have to build more billboards. Print periodicals seem to be the outlier here, with digital ads being more in keeping with the limitations of other advertising vehicles.
You’re correct. I should have thought harder about that. Thanks for correcting me.
There is more to be said for online advertising than you acknowledge here. I cover this in my essay “Back to the Future” as follows:
The article by Adner and Vincent in the Wall Street Journal begins thus: “With e-reader prices dropping like a stone and major tech players jumping into the book retail business, what room is left for publishers’ profits? The surprising answer: ads. They’re coming soon to a book near you.”
The authors go on to depict the difficult environment in which publishers now find themselves:
“Especially in light of the rush to e-books, the industry faces a troubling future. In the first place, overall sales have been stagnant or decreasing for over a decade, even as more books are published every year. Production costs are higher than ever now that publishers must produce both physical and digital editions. Above all, pricing remains a challenge: No matter what the split between publisher and retailer, at $9.99 a digital book is far less profitable than its hardcover cousin priced at $25.”
Their explanation for why ads have not been used in book publishing in modern times, though they once were, is interesting:
“Even though periodicals like the New Yorker and the Atlantic have printed ads alongside serious fiction and nonfiction since their founding, purists will surely decry ads in books. But historically, the lack of advertising in books has had less to do with the sanctity of the product and more to do with the fact that books are a lousy medium for ads. Ads depend on volume and timeliness to work, and books don’t provide an opportunity for either.”
But while physical books have had this shortcoming, digital books do not: “With an integrated system, an advertiser or publisher can place ads across multiple titles to generate a sufficient volume. Timeliness is also possible, since digital readers require users to log in to a central system periodically.” They note that Google Books has already taken a step in this direction by placing ads next to search results and that it is “a small step” to including them within books. “For its part, Amazon filed a patent for advertisements on its Kindle device last year. And Apple has recently entered the advertising game with its iAd platform for mobile devices.”
What adjustments would ads in books bring about? Adner and Vincent suggest that digital samples would likely include ads, that publishers will need to devise a new way to evaluate the commercial success of their books with advertising revenue in the mix, that the distinction between hardback and paperback editions may be replaced in the digital world with the difference between lower-priced ad-carrying books and higher-priced books without ads, and that new relationships with authors will need to be negotiated concerning what ads would be appropriate to place with what content.
They conclude: “Ultimately, advertising will be a way to monetize that most valuable content of all: consumers’ time. In a fitting irony, the technological advancements of the 21st century may see authors returning to the 18th century concept of paying per word. Advertisements may be necessary to save book publishing, but book publishing will never be the same.”
This article generated a lot of commentary in the blogosphere and on Twitter. Some noted that despite the absence of ads in books in recent decades, there was a time when ads were included on the endpapers of books in the 19th century, when early Penguin paperbacks carried ads for products like Gillette razors, when cigarette and liquor advertising was prominent in the U.S. in books published in paperback in the 60s and 70s, when books in the French detective series “Serie noire” carried cigarette ads on their back covers, and when Germany’s National Bank ran ads in millions of Pocketbook editions. Advertising, of course, was also an important revenue source for scholarly journals before their migration to the digital sphere, and scholarly books would often in earlier times carry ads for other books on jacket flaps and backs. Others commented on the emergence of product placement in fiction writing, noting that, for example, “ in his best-selling Millenium trilogy, Stieg Larsson uses brand names every time there’s even a smidgen of opportunity” and that “in 2001, author Fay Weldon was widely criticized by fellow authors for penning a novel for Italian jewelry maker Bulgari,” later published by Atlantic Monthly Press as The Bulgari Connection.
Other developments are already under way. In 2004 HarperCollins published its first free Web-based, ad-supported business book, Bruce Judson’s Go It Alone! The Secret to Building a Successful Business on Your Own. Canadian mystery writer Cheryl Kaye Tardif has begun selling ads in her books. As she explains in her blog posting for September 25, “I may just be one of the pioneers of advertising in books and ebooks….Advertising in one of my novels is an opportunity that is affordable (my ad rates are cheap compared to many alternatives) and reach a wide demographic….As an author publishing my own ebooks, I like the flexibility of being able to choose my sponsors and my advertisers. I’m looking for specific kinds of ads, ones that are complimentary with each novel or with writing in general….I am especially interested in selling ad space to suspense authors, YA authors, romance authors, publishers, agents, editors, freelance book professionals and more.” http://www.redroom.com/blog/cheryl-kaye-tardif/ads-books Paul Carr at TechCrunch comments on the possibilities: “With electronic books, ads can be served dynamically, just like they are online – not only does that remove the problem of out-of-date ads being stuck in old books, but it also allows messages to be tailored to the individual reader. Those reading the Twilight books at the age of 14 can be sold make-up and shoes and all of the other things teenage girls need to attract their very own Edward. Meanwhile, those still reading the books at 35 can be sold cat food. Lots and lots of cat food.” One of my favorite examples of ad possibilities comes from Fintan O’Toole writing in the Irish Times about ads that might appear in the opening lines of James Joyce’s Ulysses, as quoted by Lorcan Dempsey in his blog (http://orweblog.oclc.org/archives/001943.html):
PICTURE THIS. You read “It is a truth universally acknowledged, that a single man in possession of a good fortune, must be in want of a wife”, and up pops an ad for a dating agency.
You read “As Gregor Samsa awoke one morning from uneasy dreams he found himself transformed in his bed into a gigantic insect”, ads for Odearest mattresses and bug repellent swim before your eyes. You read “It was a bright cold day in April, and the clocks were striking thirteen” and a message from Omega urges you to buy a new watch.
You read “Stately, plump Buck Mulligan came from the stairhead, bearing a bowl of lather on which a mirror and razor lay crossed” and you get Weight Watchers at the top of your screen and Gillette at the bottom.
This example suggests the kind of ingenuity that might be needed to make advertising an important enough revenue generator to cover all or a good part of the costs of publishing a scholarly monograph. It would go well beyond the kind of advertising that university presses publishing journals have become accustomed to soliciting, and because of.sensitivities of various kinds involved, including political, publishers would need to work closely with authors on the solicitation or at least approval of ad content. There are a number of challenges facing publishers taking this route to alternative financing. Peta Jinnath Andersen, writing in Popmatters.com on August 26, notes: “There are a multitude of ways advertising in books could go wrong. We could end up with a poorly organized system of patronage and an era of censorship in the name of political correctness. But we could also end up with an industry wherein writers earn enough to keep producing creative work, publishers can afford to take greater risks, and low-income families can afford textbooks. Somewhere, there is a line between what’s okay and what’s not—we just haven’t programmed our ad-supported iPhone GPSs to find it, yet.” http://www.popmatters.com/pm/post/129931-will-ads-in-books-destroy-the-industry-or-save-it/
Well, these examples from books and articles are highly speculative or rather dated and implausible (for many reasons). To me, they bring back memories of a time when online advertising was painted with a utopian brush. It has not turned out to be a utopia, and has complexities and limitations that are new to many scholarly publishers.
“Timeliness is also possible, since digital readers require users to log in to a central system periodically.”
Require? I’m not in the market for one, but I’m not aware of any readers that require the device itself to maintain the ability to phone home. Download to a home network, transfer to the device, and keep the radio off. Maintain a separate backup of the primary archive.
One root problem for publishers is that agencies (I’m at one) and advertisers run ads that don’t make sense, garner low return on investment, and thus aren’t bought from the publisher again.
Take a life scientist for example who reads Science, Nature, or a news publication like GenomeWeb. Why does he or she read those publications’ content? Is it because he or she is looking to buy products right away? Unlikely. So why is nearly every ad on those publications’ websites hawking a new DNA polymerase with XYZ great feature, a sale on gene synthesis, or why brand ABC’s whole product lineup will accelerate my research (whatever that means)? Only a sliver of the audience is in the frame of mind to care about any of that, realize they need that DNA polymerase, or could care about a nebulous claim about how your brand matters—so of course few people won’t click those ads in droves. It’s likely not the right time or place.
The more productive way to advertise is obvious, but in the life science space in particular remains largely ignored. That is: give readers knowledge that matters. The ad might still sell a product through a different frame, but more often the stronger ad is not about a product. For example, last year we ran a campaign promoting a CRO’s adaptive clinical trial design software and services to an audience of statisticians and people in pharmas and biotechs who design clinical trials. Instead of advertising the software online, we ran ads about a university’s report on the state of adaptive clinical trial design, challenges to adoption, and ROI calculations from existing implementations. This was knowledge few others had. Those ads had sky-high click-through rates that publishers loved. People who read the report gained knowledge that otherwise was not available in that publication. For the advertiser, people who read the report now had a different mindset to consider the benefits of the software made accessible next to the report, which led to more and better qualified leads in their sales funnel. We clocked a 1134% conversion rate increase. The people who clicked on the ad weren’t yet ready to think about buying software, but they were ready to learn about things that already mattered to them. Rethinking what the ads were actually selling produced wins all around, particularly for the publishers because the advertiser could better justify spending limited budgets on ads versus other marketing tactics.
Simply put, publishers can transform the revenue from their existing platforms if they can get advertisers to realize how to make more appropriate ads. It’s not just the colors, it’s not thrusting a new in-your-face ad position on readers, it’s not native advertising, nor more ad space that’s needed. The publication’s academic or journalistic content often just needs friendlier neighbors.
At one point I published a free circ monthly newspaper. It was totally supported by advertising. Until one has jumped into those waters most talk about ads in STEM pubs is rather moot. In short, the journal will will make it with or without the ads. The ads become incremental income.
Advertisers are very stingy with their dollars and expect either an immediate return or a return in intangibles, i.e. maybe this or that scientist will come to work for me…
I discovered that snappy ads don’t sell to scientists. They are too serious. So designing ads for the market is very difficult. Also, as mentioned most are not impulse buyers. Most, if wanting to buy, are looking for a specific item. Thus, one thing is for certain – in print the ad has shelf life. On the web shelf life is fleeting and this is one of the big obstacles to successful web advertising for STEM.
Lastly, scientists still like catalogues. Best advertising ever for the market.
