Designing media companies with a focus purely on scale is a bad idea. cjr.org/the_media_toda…
The biggest problem is that almost every media company that chases scale never accounts for the resulting costs and that's what does them in. Hopefully Vox can avoid this... but they are def fighting against the tide of history if that's the way they are looking at this deal.
The second biggest problem, especially for private companies, but for public media companies to some extent as well, is that if you focus solely on scale... it isn't a real goal. The investors are voracious and enough is never enough. Media cos are not FB/Goog. A ceiling exists.
A media company that makes traffic scale its north star is like a banker on cocaine. Sure, you get a lot more stuff done, but the quality of work starts decreasing radically and eventually you end up trapped in a worsening situation with an addiction as your only constant.
Vox has other irons in the fire. Good! But this acquisition doesn't seem to further any of those initiatives, only traffic, which is... worrisome. The thing about chasing traffic scale is: the more you get, the more you want, the more it costs to acquire, the lower the quality.
And that's the abyss that every modern digital media company has to stand on the edge of every day and very very carefully avoid falling down into in an endless destructive death spiral.
I like to think of this as
The Curse of Programmatic Advertising's Poisoned Promise
Which is to say: the core mistake at its heart is that scale is going to pay out via programmatic and uhhhhhhhhhhh
it does not.
The Curse of Programmatic Advertising's Poisoned Promise
Which is to say: the core mistake at its heart is that scale is going to pay out via programmatic and uhhhhhhhhhhh
it does not.
Eventually the traffic quality drops and you load up on ad tech and the page quality gets worse and you end up paying for traffic, most of which is fraudulent and then your CPMs drop and your traffic continues to drop and suddenly everything is down and companies make bad choices
Everyone's model is that Programmatic can scale to infinity, but unless you are Facebook or Google... it can't. You just end up in increasingly lower quality on every front and eventually you dip below a quality point visible to readers and they start to leave in droves.
And a lot of companies think they can tread water just above that quality point where they balance out scale, revenue and quality and Thus Far It Ain't Happened Friends. I would not put money on anyone being the first.
I think the best thing about the drive towards subscriptions is it puts other stuff on the table, different goals, different organizational shape; one that can work with advertising but not make it the be all and end all...
Vox has a NPR-style 'support us' model, which I appreciate and I think is great. I also support, generally, their idea that all of their content should be freely available. I think it's great! But now I worry about how that syncs up with their acquisition. Good luck friends!
(PS: The other way to stay above the water with a major scale component in your business plan is to really lift direct sales as a core part of your business +put them into the prog direct game & resource it well. Not doing this is digital media's most consistently made mistake.)
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