Breaking the digital conundrum

As we enter 2018, consensus has largely been reached that digital in its many evolving forms, is the future of publishing. One individual stubbornly continues to disagree though – the accountant. Her lament is built on a point that should have everyone concerned; publishing on the internet is nowhere close to generating the kind of revenue seen in print, and compared to TV, it is a mere blip.

Print ad revenue increased by 11% compared to last year and digital increased by 22%. Even if digital were to continue growing at this rate, it would be years before it would earn half as much as print.

Unfortunately, even card-carrying digital advocates such as myself cannot call this a short-term problem that will resolve itself as digital continues to grow. There are many challenges, some of which will take years to overcome, and some that may never be resolved. Disclosure: in my role as Chief Digital Strategist at Dawn, I am involved in online marketing/sales and oversee the sponsored content desk.

Earning at scale. Let’s start by taking a look at the numbers drawn from the annual Aurora Fact File. Of total ad spend in FY 2016-17, print accounted for 23% (Rs 20 billion) and digital for six percent (Rs 5.5 billion). Print ad revenue increased by 11% compared to last year and digital increased by 22%. Even if digital were to continue growing at this rate, it would be years before it would earn half as much as print.

It can be argued that in the long-term, digital will catch up and pass print earnings but until such a time, the mantra of digital being able to ‘save’ print is mostly myth. If anything, print revenue will have to shore up digital operations for some time. Facebook, YouTube, Netflix, Snapchat and other giants are now putting all their weight behind video and making a comparison with TV necessary. To keep it brief, total ad spend on TV in FY 2016-17 was Rs 42 billion – digital will simply not be challenging that.

Frenemies. Then there is the Google/Facebook duopoly to contend with. For publishers, both are a blessing, extending reach, engaging audiences old and new, increasing traffic to sites etc. On the earnings front, not so much.

The two companies earn a majority of global spend on digital advertising, to the extent that a recent forecast by GroupM sees the two attracting 84% of all ad spend next year, excluding China. This is almost exactly in line with the Pakistan market, where the combined revenue of Google and Facebook accounted for 83% of total ad spend in FY 2016-17.

There is little chance for publishers to grab a bigger slice of the pie, especially when it comes to banner ads. Inevitably, programmatic advertising (which both Facebook and Google excel in) will negatively impact anyone involved in the business of creating, procuring and running banner ad campaigns, possibly to the point of redundancy. The problem is further exacerbated by the growing trend of users installing ad blockers for banner ads.

SMH B/C #FAIL (Shaking my head because #fail). This brings us to the next great challenge – one that applies to everyone operating in the digital sphere, not just the publishers. To put it bluntly, brands, ad agencies and marketing teams appear to be sailing rudderless, both on the strategic and creative front.

Brands are allocating more and more to digital spend every year and publishers are pumping money into their digital operations, irrespective of the bottom-line.

This has given us banner ads with tiny fonts and over 20 words of text; tired, old press releases labelled ‘sponsored content’; 30-second long online video ads that are copy-pasted TV commercials; absurd tenancy requests for ad space; far more absurd requests for permanent access to a publisher’s real-time analytics; paid content published on the worst possible day of the week because offline deadlines matter more than traction; social media posts that require $2,000 of boosting to secure 200 comments because that is the KPI; laughably bad Facebook videos/Insta stories/Snapchat updates posing as content, with the brand integrated with the subtlety of a sledgehammer; requests to run full TVCs on Facebook pages, buying bloggers (and journalists) to shamelessly plug products/services and my personal favourite – paying double to publish a press release because it’s the end of the year and budgets must be spent.

The situation is grim. Brands are allocating more and more to digital spend every year and publishers are pumping money into their digital operations, irrespective of the bottom-line. But if 83% of revenue is going to Facebook/Google and the rest is being put into churning out subpar campaigns that audiences are bored by, blind to or block, there is need for a big rethink.

Some of the above challenges admittedly have no clear solution. Those require acceptance, adaptation and more importantly, inclusion when making decisions. For those problems that can be tackled however, a lot can be done, and done fast.

After all, we are blessed with not having to invent or reinvent anything; global trends, strategies, creative ideas and solutions are just one Google search away. It is only the will to change how we conduct business that appears to be lacking.

Jahanzaib Haque is Chief Digital Strategist and Editor, Dawn.com.

First published in THE DAWN OF ADVERTISING IN PAKISTAN (1947-2017), a Special Report published by DAWN on March 31, 2018.