Publishers (And Everyone Else), Beware Amazon
Amazon’s advertising business has become the third largest online ad platform in the US behind Google and Facebook. It’s expected to pull in a stunning $40 billion annually in ad revenue by 2023, trailing closely behind the duopoly in market share. According to Juniper Research, Amazon’s ad business will grow more than 470% over the next five years. It may not catch up with Google and Facebook, but it will outpace their growth.
Amazon’s success comes at a cost for publishers. Its growth means that retail and CPG brands are shifting digital spend away from publishers, siphoning off a key source of revenue. How can publishers compete? Their survival may come down to better ways of monetizing existing channels like email, as well as more effective use of their greatest asset: first-party data.
The hope for publishers lies in email and the power of the email address. With email, publishers have a logged-in channel that’s virtually fraud-free. Email represents a direct relationship with the consumer and one that is detached from platform intermediaries that have unfairly claimed revenue and attribution from the rightful influencer: the publisher. And contrary to popular belief, email is still a channel where people spend over five hours a day. What’s more, email is impervious to subtle shifts of an algorithm that force a publisher to buy the right to reach people, as opposed to owning the relationship with those who have requested a publisher’s content in the first place.
The humble email address represents an identifier that works seamlessly across devices and sits at the center of the identity conundrum. This is increasingly important as marketers rely less on the cookie due to factors like ITP 2.0. As long as publishers can deliver personalized content that offers a value add to their user, the email newsletter represents a great hope for publishers in fighting back against the walled gardens, and helps brands reach people with intent wherever they are paying attention.
Even though publishers are losing ad revenue and audiences to Amazon, Facebook, and Google, they can still shore up their future by thinking holistically about their income streams and diversifying it. According to a survey from Reuters, more than half of publishers (52%) said subscriptions and membership will be their “main” revenue focus in 2019, as opposed to simple ad dollars. This year, we will see publishers prioritizing subscriptions and memberships, since these create predictable revenue. And that road to predictable revenue can be constructed via the direct relationships publishers have built through quality content.
The key to driving subscriptions for publishers is targeting using the insights they glean from their vast first-party data troves. A publisher can’t just throw up a paywall and hope readers opt-in. Instead they must use first-party data to determine which readers are engaged and close to converting to a subscriber, and which need more free articles to help them understand the value. It’s very similar to how retailers market to their own customers.
What comes for the publishers will surely come for brands as well. Amazon has a nasty habit of creating its own product lines and selling them using the data they alone are privy to from working with brands. Brands should be wary of moving large portions of their budgets to Amazon. But, like publishers, they too can control their destiny by investing in the email channel.
In order to survive the giants, the industry must adopt technology that is beyond the reach of the walled gardens. To have no intermediary is to control your own destiny, and that’s what retailers and publishers must do. The added benefit is that in a future where the end of the cookie is nigh, those publishers and retailers who have focused on email and their own first-party data will be in a position to thrive and fight back.
Kerel is the Senior Vice President of Global Marketing at LiveIntent. He currently leads the marketing team and works closely with sales, product, engineering and customer success to create awareness and generate leads for key products and features. Kerel has 20 years of digital media experience building and leading Advertising Operations, Account Management, Partnerships & Product Marketing teams. Prior to LiveIntent, Kerel Cooper held positions at Advance Digital as the Senior Director Ad Platform Strategies and JupiterMedia as Director of Advertising Operations. Kerel has his Bachelor’s degree in Management Science/Marketing from Kean University and a MBA from Regis University.
