Traditional Publisher Spots Web Display Ad Woes
July 9, 2012
I read “Analysis: Microsoft Loss Reflects Web Display Ad World’s Woes.”
Is there a difference between knowing about a problem and fixing the problem? I think there is.
I find it fascinating when a management and growth challenged publishing company spots management and growth woes in a software company. The headline is a trifle cryptic. The “loss” refers to Microsoft’s interesting nuking of its $6.3 billion property aQuantitative. The number is interesting because it is not too far from the money Thomson Corp. paid for Reuters in 2007. More about this Thomson Reuters $17 billion deal in a sentence or three.
A rubber stamp to avoid.
The story makes the point that the notion of charging people to put ads on a Web site is not working out as planned. There is some explanation of why Web ads are not delivering; for example, Web pages are not where the action is. TV advertising is. Dave Morgan, “a veteran and entrepreneur,” is quoted as saying, “That’s where the big money and margins are.” Omitted is the requirement of an engaged audience, but that’s neither here nor there.
The other hot methods for online advertising are, according to Wine.com CEO Rich Bergsund Bergsund, “a lot of display ads, but now mainly uses Google paid-search, affiliate marketing and comparison shopping engines.”
No push back from me. I have three points to make:
First, Thomson Reuters may be fast approaching its own write off opportunity. The Thomson Reuters hook up is, in my opinion, starting to look like an even higher stakes game than the Microsoft aQuantitative marriage.
Second, traditional publishers and professional publishers are able to write about what works to generate money. Raising subscription prices and pay walls work but don’t generate the type of revenue that keeps huge information outfits out of the Sea of Red Ink. What’s fascinating is that traditional publishing and information companies can describe a problem and its fixes, but these same companies do not seem to be able to implement these solutions. I find this fascinating because the stakes are much higher than run-of-the-mill Monday morning quarterbacking.
Third, big does not translate to sustainable. The Microsoft aQuantitative is a recent case example of how spreadsheet fever makes financial services firm drool and quiver with joy. The actual management and fiscal reality demands severe and painful action.
Net net: I think there may be more cutbacks at Microsoft and in companies like Thomson Reuters. Just my viewpoint.
Stephen E Arnold, July 9, 2012
Sponsored by Polyspot
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