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Where’s The Beef?

Publishers should enter the challenging custom media pool at their own risk.



By David McDonald
04/19/2011

More and more mainstream publishers seem to be exploring custom content. We all know that there is significant change taking place, and I hear evidence of this change in the questions I am asked from time to time. Here are a few of the common questions and my perspective on these issues.

Is a branded content business model as profitable as the old-school “traditional” media we know and love? What type of margins should I expect?

The same you are accustomed to, and even more if a solution is particularly elegant. We all know the margins we are capable of obtaining, and if you do a great job of delivering unique and elegant solutions that are grounded in technology then you should expect to earn the same reasonable profits to which you are accustomed. I can’t tell someone else what they should plan for without knowing their current margin structures, but suffice to say there is ample opportunity to continue earning a decent living.

Likewise, there is great opportunity to erode your margins if you are unable to execute in delivering relevant, engaging content and platform solutions to your clients and users.

Do the myriad transcendent media platforms that we adapt to mean lower margins of profitability?

Potentially, if you are not creative in how you adapt the content to the new platform. For example, at the MPA Digital: E-Reader conference in mid-March, there was mention of the need to avoid simply re-purposing a magazine into a digital platform. The idea of developing digital editions that are simply an electronic replication and the same magazine we get in print is Victorian and of little value to the reader or the brand. You have to be creative and then you can charge for that creativity. So like any business model, the margins depend on the strategic ability of the publisher.

Is the organizational structure different from traditional magazine and media companies? For example, what roles do data and technology play in building a successful custom media business?

Every media organization will need to assess its current technology capabilities and step up based on their unique strategies capabilities—as well as budgets. No matter the size or scope of the organization, focusing on Transcendent Media platforms and the demands they place on media companies is the immediate imperative. For example, do you have the ability to develop mobile apps and rich media in house? If not, you will need to invest in those key areas in short order. How many developers are on staff? I believe that every media company should consider having a team of developers who can serve the ever-changing media landscape in real time and without outsourcing. You likely wouldn’t outsource editorial or design, so why give up control of the Transcendent Media aspects that are so fundamental to future growth?

Prepare for a Paradigm Shift in Publishing

We, as an industry, are now thinking about the value of a business that would sell content in a branded format rather than drive the editorial package from the egocentric perspective of an editor (and perhaps some research thrown in for good measure).

So, where’s the beef? Where’s the value for today’s media entrepreneur and media consumer? It’s in custom media and branded content and personalized media experiences that can only emerge through Transcendent Media functionality. Is it where this industry is headed? I believe it is and I believe that in the coming months—yes months, not years—we will see more and more media CEOs embrace technology at the core of their businesses, and that Transcendent Media forms will be the only drivers of strategic advantage as the industry evolves.
Will your business be there when it happens?


David McDonald is founder and CEO of True North Custom Media, a fully integrated custom media company. He is also founder and president of the Transcendent Media Lab, and a founding member of the Custom Content Council. For more information on building a successful custom media business, contact David at dcmcdonald@transcendentmedialab.com.

By David McDonald
04/19/2011







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