The junkies are rebelling against their dealer. The dope is the traffic, and the dealer is Google. For years, the search giant flooded the market with an ideology built on the early 2000′s, ill-fated, get all eyeballs you can, the rest (i.e. monetization) will take care of itself.
Publishers have invested tons of money, energy and brainpower in order to follow The Google Way: designing sites, structures, pages, even setting editorial rules to gain audience. Any kind of audience, by any means necessary. Legions of Search Engines Optimization (SEO) consultants were enrolled to help implementing the new click-to-Grail. At the same time, the so-called Search Engine Marketing (SEM) made a lot of expensive noise as media organizations were buying keywords to improve their ranking in search results, some of them spending as much as €100,000 a month in this digital heroin. At some point, for many sites, clicks coming from Google thanks to SEO compliance and aggressive SEM were contributing to 40% or 60% of their entire traffic.
Then, the tide reversed.
Publishers soon realized the Google windfall was not as high as expected. As the search giant kept thriving, their own revenue plummeted. Over the last 12 months, newspapers print and digital advertising revenues have melted: -16% in Western Europe, -19% in Central/ Eastern Europe and -21% in North America. At the same time, Google is still cruising at a 35% operating margin altitude. The economic crisis and the structural problem of web sites (endless inventories inducing low prices) caused CPM (revenue of an ad per thousand viewers) to drop. This convinced publishers the advertising-based free model wasn’t going to fly. They told themselves that sometime, somehow, readers will have to pay, and that Google, with its all-you-can-eat, free-for-all system, was in fact “doing evil” to they dying business.
That was the backdrop for last week’s 62nd Conference of the World Association of Newspapers (WAN) Congress and for the 16th World Editors Forum (WEF) I attended and spoke at, in Hyderabad, India. More