I wouldn’t be surprised of these hipster millennial crypto scammers becomes a Netflix show in short order. I mean, there’s a character who is a rapper, streetwear designer, game theory expert and Forbes contributor. Appreciate the hustle. Before we get to The Mayo Game, a word from my friends at Audigent.
The programmatic advertising world is complex, fast changing and often confusing. After all, there’s debate about whether zero-party data even exists. On this week’s The Rebooting Show, I sat down with Audigent’s Jake Abraham to discuss the future role of data in digital advertising. Jake dispelled a few myths:
The disappearance of the third-party cookie is a disaster for publishers. The third-party cookie was never built to play to role it ended up playing as a “hack” for targeting ads. Its demise, along with other restrictions on data use, provides the industry a “reset” that will be “beyond good” for premium publishers.
First-party data requires an email address. In fact, first-party data can be collected in many ways and doesn’t require an email as an identifier. “First-party data can come from a number of different mechanisms.”
Web tracking doesn’t have victims. Publishers have often gotten the short end of the stick, as some middlemen have taken a greater chunk of value than the value they’ve added. “In a pretty unregulated industry, [some intermediaries] have found a way to insert themselves and arbitrage.”
Check out the full episode to hear more about how the use of data will evolve – and how publishers stand to benefit.
The summer job was a rite of passage in most Gen X childhood. I don’t recall any enrichment classes on offer; instead we were sent into the bowels of restaurants as 15-year-olds to wash dishes. I learned a lot while washing dishes. You have to keep your cool when a line cook is screaming at you that they’re out of monkey dishes. One other lesson: When you get in the weeds, since diners clump at certain times and the dishes come too fast to keep up, it’s best to not frantically load dishes willy nilly but instead take a step back, stack dishes by type for efficient offloading and target what dishes are in short supply. Finally, keep on the good side of the chef because they’re always crazy and stressed out, and you don’t want to be the guy who has to empty the fryalator at the end of the night.
My friend Tom had no interest in these lessons since he preferred to not get yelled at, lose the skin on his fingers, exposure to possibly toxic chemicals that at best would worsen acne and come home smelling like wet garbage. He instead got a job at a boardwalk sandwich shop, serving lunch to people who didn’t want to go far from their Coppertone. Tom and his colleagues one day played the Mayo Game: How much mayonnaise can you put on a sandwich before someone complains? It turns out the answer was quite a bit more than you’d think. “I made roughly 10 BLTs with more mayo each time before someone actually returned one,” Tom tells me.
I often return to this story because it speaks to an essential challenge of modern publishing. The nature of the “adversarial internet” is that publishers are constantly exploring just how much mayonnaise they can put on the sandwich before some irate, sunburned guy on his two-week vacation to the Shore brings back his BLT because it’s inedible. The Mayo Game is a short-term approach. After all, the reason the teens played was there was little downside. The beach is filled with tourists that will be gone the next week, replaced with new unsuspecting shoobies hankering for a Bob’s lemonade and Curly’s fries.
The incentives of publishing have long been similar. Most visitors to sites have come in through indirect channels, clicking on a link on Google or Facebook, often with little understanding of where they are going. These are shoobies. Might as well play the Mayo Game. This is how you get The Worst Page on the Internet, filled with an endless scroll of content-rec ads. There’s no expectation of loyalty, or even an attempt to build it, rather the game is to see how much you can credibly get away with.
This is, of course, a short term approach by design. Building loyalty with high-quality products takes time. You can’t just dump some money into paid acquisition and call it a day. The ad model’s greatest flaw is that it incentivizes playing the Mayo Game. Publishers focus on yield per page, so white space becomes potential margin. This is how many news sites came to resemble the Simpsons episode where Krusty tries to quit smoking and covers his entire body in Nicorette patches.
Subscriptions models should theoretically provide better incentives. After all, the audience shifting from the product to the customer aligns incentives. That is not only the case. Too many publisher subscription efforts are adapting the Mayo Game, piling on top-line subscriber numbers on cut-rate intro offers before hoping they don’t notice before the rates are jacked up. Think about how publishers spam you nonstop, yet they remain oddly quiet when your subscription is up for renewal. Netflix sends me a notice. I don’t get those from publishers.
And that’s because many subscribers are sleepers. A big surprise for many publishers who start subscriptions is how many go mostly unused. According to Piano, 40% of paying subscribers to news products are sleepers, meaning they haven’t visited the site in the past month. The best approach here is to tip-toe around them in the hopes they don’t wake up and go over their credit card bill. As Elon Musk said of Dogecoin, It’s a bit of a hustle.
Even worse, it is taking the Federal Trade Commission to force newspapers like The Wall Street Journal to offer easy online canceling options rather than being forced to call during business hours to run the gauntlet of the “saves team.” Running a sustainable publishing business is hard, but it should not be a game of optimizing to what you can get away with.
The data always tells you to send email. It’s why signing up for a publishing newsletter is often an invitation to a deluge of “SPEAKERS ADDED” events promotions, “partner” spam, new emails you never wanted and so on. The number of unsubscirbes is rarely high enough to tell a publisher to stop. The problem with spreadsheets is they don’t tabulate people feeling annoyed but who can’t be bothered. My friend said while some brought back the sandwich with a solid-two inch slab of Hellmann’s, most put up with it. That’s not to say they liked it or thought very loyal to this sandwich joint. After all, they’d be back at their desks soon and just want to enjoy the Salt and Pepper Shakers ride and funnel cake before loading the kids into the station wagon and hitting the Parkway.
The digital advertising world is in a painful reset as a variety of forces, ranging from Apple and Google to governments, rewrite the rules of the road for the use of data. The ad industry has pointed lots of fingers, trotted out small businesses who stand to be hurt, and generally failed in its attempt to brand targeted ads as “personalized.” This is a pickle the industry got itself into because it too played the Mayo Game, seeing just how much they could get away with before users revolted. Take the pop-up ad scourge of the early internet. At the end of every quarter, internet sites would be nearly unusable as publishers scrambled to make numbers. Retargeting is a nifty tactic, but it was abused to such a degree that it spawned broad distrust. Ask a room full of normal people if they believe their phones are “listening to them” to serve ads, most hands will go up. That’s a profound lack of trust.
The platforms themselves are little better, despite how often they preach about how loyal they are to users. Anyone who has used Google’s search engine has noticed that results pages are filled with ads. YouTube is hardly any better. No wonder Google returned blockbuster results.
The ingrained habits of the Mayo Game will need to be overcome for many publishers as the value in publishing shifts to primary-engagement publishing. The sleight-of-hand tricks will lose their luster and effectiveness. The biggest new opportunity in publishing lies in skipping the Mayo Game altogether to build product experiences that people appreciate. If that comes at the cost of slower growth, so be it.
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5 things to check out
Front Office Sports is one of my favorite modern B2B media companies. Kudos to Ad Age parent company Crain for recognizing this and buying a minority stake in the company. I spoke to Adam White, the CEO of FOS, on the first episode of The Rebooting Show.
Axel Springer is a funny company. Most in the U.S. market had only a passing familiarity with Springer when it bought Business Insider in 2015. It has since added to its U.S. ambitions by paying $1 billion for Politico. But in Germany, Springer is a giant institution, more influential than the New York Times here. The continuing scandal involving how management handled complaints about the behavior of former Bild editor-in-chief is putting a dent into Springer’s reputation since it is clear its top management and board were more interested in protecting the company’s reputation than addressing the allegations.
The Chernin Group is probably the most influential media investor around. It has made shrewd bets on brands that sit at the center of communities and use media to further their connection with the members of the communities, backing the likes of Barstool, Food52, Meateater and more. Peter Chernin was the guest on the Invest Like the Best podcast. Worth a listen.
Are paywalls ethical? This might seem a silly question, but most news organizations balance business requirements with societal needs. It’s not a stretch to say that the current information system is broken, and it’s hard to see how credible news being a luxury good will help deliver on the mission of an informed citizenry. Alexandra Borchardt sees this leading to a more robust non-profit sector that fills in the gaps where the market cannot.
They Got Acquired is an interesting new brand that’s focused on gathering the details of corporate exits under $50 million. This is a good focus because not enough is written about the process of selling companies that aren’t the big deals you hear a lot about but are, ultimately, the minority of transactions.