Gigaom, the apparently well-established technology news
site, came crashing down in March 2015 sending shockwaves across the digital
journalism landscape and raised some uncomfortable questions about the
viability of its business model.Some critiques have called it a result of poor management and
an anomaly that should not alarm digital news platforms. But the underlying
cause for the organization’s sudden demise is distressing for those who pinned
their hopes on its idealistic approach toward advertising dollars.
Gigaom claimed a niche
readership of 6.5 million visitors per month. This readership could be highly
valuable for marketers yet the organization purposely distanced itself from
traditional methods of generating revenue through advertising and depended on
its event and research sections to raise capital. Gigaom was trying to assert
higher ethical values by keeping advertisers as far away from editorial
policies as possible. In other ways, it was holding on to an archaic approach
to sustain its business.
At the very beginning of news
business, advertising only formed a fraction of the source of income for
newspapers. The relationship between news organizations and advertisers evolved
with time. But with the exponential growth of digital platforms, the
drastic change in user behavior stupefied journalism platforms and advertisers
alike.
The economics of journalism no longer work like they used
to. The same holds true for the advertising business. These two clashing
industry realities require both print stalwarts and digital believers to get a
grip. This drastic shift from paper to screen has left the news organizations
chasing for clicks. Advertisers are falling in this marketing black hole of
“clickbait” culture, by expecting to create brand awareness through clickable
ads but are doing so at the cost of destroying user experience. The
display ads do not impress most digital readers, and the click through is a
meager 0.03% to 0.08%.
It was this intrusive and
annoying form of advertising that Gigaom was perhaps trying to protect its
readers from. There are also some sinister examples of advertising giants
crossing the line to sway editorial judgment that probably dissuaded the
technology news organization from considering traditional methods of
advertising to raise money.
If advertising priorities are allowed to determine
editorial judgments, how can readers continue to feel this trust? It was this
trust that Gigaom wished to uphold , the organization had a reputation for high
ethics. A vendor might pay Gigaom hundreds of thousands of dollars for various
services, but all that green didn’t increase the odds a reporter would cover it
– or on the chance that someone did write an article, no amount of cash would
tilt the opinion-meter even a hair toward the positive.
But it was the money from
these advertisers that Gigaom needed to survive and thrive- the ultimate
paradox of modern news business. This makes way for better brand journalism and
some news organizations like Forbes have already adapted it as a safe middle
ground between strict editorial policies and money generating content.
Until better methods of advertising are developed and
embraced by consumers, organizations like Gigaom, with their strict adherence
to “high ethics” will unfortunately be on the losing end.
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