Gigaom‘s closure came about so suddenly that it has shocked everyone in the publishing space. The demise of the tech website is sad news, but it does reflect many challenges that media companies face in today’s ever-changing digital world.
While the site didn’t disclose any details as to why it ran out of money, some industry participants think it can most likely be ascribed to a failing business model and the challenges of developing an effective mobile strategy. Its shuttering, say experts, can provide lessons to those in the publishing arena.
“Gigaom‘s demise should be a wake-up call to the digital marketing industry,” says Mark Yackanich, chief executive (CEO) at ad company Genesis Media. “They were doing a lot of things right: They had an excellent and influential audience, they had high distribution, they had rich content, and they had loyalty and fidelity. But I don’t think they were looking at the full set of tools available to them.”
One thing that should be considered, Yackanich continues, is that Gigaom realized the page view model could no longer support its business. “The page view model doesn’t work for publishers today. It’s not an appropriate way to value content,” he says, adding that publishers should instead use “attention metrics” like viewability and engagement to reward the quality of content.
But abandoning the page view model was a late move for Gigaom – it wasn’t until one or two years ago that the company stopped chasing clicks and started pursuing a combination of events and research business instead, according to Yackanich.
“That was a rational move in a sense that they were in recognition that page views would not support their business. But that was also a challenging move in a sense that any venture-funded company is attempting to pursue multiple business streamlines that are quite different, and [thus] can be easily falling into a trap of trying to do too much,” he notes.
“I think that [Gigaom‘s closure] is giving the industry a little warning that building great editorial and presence online, especially business-to-business, takes time,” he adds.
Looking at the tech blog’s demise from a different perspective, Yoni Argaman, vice president of marketing and business strategy at app monetization platform Inneractive, thinks that the publishing industry and its ad business are largely affected by mobile.
Publishers are in a dilemma today, according to Argaman. As more and more readers are spending time on mobile, publishers need to serve content either via the mobile Web or mobile apps. But the mobile Web may not be an ideal solution, because few users today are in the habit of going to a publication’s mobile site, opening the browser, and reading articles. Instead, they consume content via social apps like Facebook and Twitter, or news aggregation apps like Flipboard.
“Publishers today are very dependent on Facebook and Twitter, so they have a ‘gateway issue,'” Argaman explains. “For example, I’m on Facebook, I see an interesting Gigaom article posted by my friend, so I click the link and go to Gigaom‘s mobile Web page. Although the content I’m reading is from Gigaom, I’m still in Facebook environment, so who should serve the ad there?”
Publishers can avoid the “gateway issue” by developing mobile apps, but few readers are willing to download an app from a publication, says Argaman, despite the fact that some prominent publishers like The New York Times have released mobile apps.
“It’s just challenging for publishers to go to mobile,” he says. “There aren’t many with successful mobile apps.”
Although it may take time for digital publishers to figure out an appropriate mobile strategy, Argaman thinks they should start reinventing the user experience in mobile now, or risk facing the consequences.
“Yahoo can be a good example on this front. It’s a classic publisher, and has released a number of single-purpose mobile apps, such as a news app, weather app, and sports app,” he says.
What do you think? What can the closing of Gigaom teach those in the digital publishing industry about how to survive in the changing landscape? Leave your thoughts in the comments.
Image via Shutterstock.
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