I was interviewed by Tobi Elkin from MediaPost, discussing the setbacks for the Medium.com business model and why the publishing industry overall should take notice.
RTBlog: What lessons can be learned from Medium’s situation?
Sibson: Programmatic ad revenue is in large part the cause of publisher woes. It started off well. For advertisers, programmatic aggregates and provides enormous reach, as well as powerful targeting capabilities that deliver click performance.
For publishers, it’s turnkey: put a small piece of code on your site, and the money starts to flow. However, now publishers don’t need an ad sales team, and the barrier to entry for new publishing businesses has dropped dramatically. There’s now an oversupply of ad inventory, and CPMs are compressed as a result.
For many, the solution to preserve revenue was to show more ads, which in turn, helped precipitate the rise of ad blockers, which further compressed CPMs (per page view). I like to say that BuzzFeed took $10 billion of publishing industry revenue, and converted it into $1 billion in revenue for BuzzFeed.