Australian Women Online received an email from the CEO of Flossie Media Group in reply to my article Flossie Abandons Display Advertising and NZ Girl Jumps Ship published on the website this morning. As per Ms Crossan’s request, I have published her reply in it’s entirety, with my response to specific criticisms of AWO in red.
The decision to move away from display was not made lightly. I have found it interesting that some individuals have seen this as negatively as they have, and we have simply put that down to them feeling like we’re ‘attacking’ their revenue stream. We’re not. We’re not saying display doesn’t work, we’re just conceding that this is an area that we don’t want to play in – there’s not enough money to be made out of it.
The market has changed enormously in a very short period of time. The decision to launch Flossie into Australia (it was launched in NZ in September 2008) was made while we were still unaffected by the GFC. When the GFC hit our categories, it hit very hard. Like most networks, we found April through June to be exceptionally tough. We rode it out and sheltered all of our publishers from the pain we felt. Since then it’s been a rollercoaster ride. Visibility is 6 weeks at best and bookings are anything from $5k to $120k. No consistency, very up and down. Demand in only a few key areas, meaning some publishers absolutely raking it in and others not.
Some reasons and responses to your points made:
Payments:
- Payments delayed by 15 days (as you mentioned) were a direct result of the Australian agencies not meeting our payment terms – this was explained in full to all publishers. This is the first I heard of it.
- However, any communication ceased with Australian Women Online as soon as they breached their contract and signed with Fairfax Digital, whilst still signed to us. Personally I found it highly unprofessional that we found out about AWO move to Fairfax by seeing new ads on their site. Flossie were notified within 24 hours of our joining FD
- We were happy to let AWO out of the contract, due to lack of demand in their product from our advertisers. Now that’s just mean – suggesting that AWO is of no value to advertisers
- All other publishers were by sheltered by us from the agencies (that is, we paid them before we got paid), however, we didn’t feel quite so compelled to do this with AWO given their actions So holding payment from AWO was punishment for deserting Flossie, even though all publishers were let out of their contracts just a few weeks later anyway.
Inventory & CPMs:
- The CPM’s in the market are continuing to fall and we don’t believe that we can be competitive in this space ongoing. We believe that the battle between performance networks selling CPC and CPA and the portals means that this will slide for some time. As a 3rd party making money out of commissions only, this means it’s not a sustainable business ongoing
- Whilst Fairfax maybe able to fill AWO inventory better than us (which is what we are conceding by stepping out of this space) – they are filling it with advertisers that our network publishers would rather not have on their site. I agree that any of our publishers can fill their inventory faster if they are prepared to take any ads. We’re not prepared to sell that way and most of our publishers don’t want those ads.
The new model & our publishers:
- EDM communications continue to hold pricing and deliver better results – we have enormous numbers of case studies to back this fact up.
- The network partners who have committed to growing their sites databases have asked for assistance in this area and we have responded by building an automated tool which will enable us to easily campaign manager an aggregated EDM communication. This investment should be seen as a vote of confidence.
- However, we will not be bringing all publishers on board as we believe that it is better off for both publishers and FMG to keep the number of publishers tight and sell inventory out. We recognize that not filing inventory and failing to meet publisher expectations is an issue under the display model. The problem here is that agencies expect a certain reach – in AU it was 1 million UB’s and yet only booking 10% of that per campaign. That makes it difficult to manage when you have 25 AU based sites wanting a piece. This same rule does not apply to the EDM market.
- We also found only two key areas in targeting women that have significant demand – ‘mums’ and ‘fashion/beauty’. While we would have loved to supported the professionalflossie channel ongoing we have not seen enough advertising support or demand in that area to warrant the cost of continuing.
- Mass Exodus of publishers is a bit of a stretch, given we are the ones letting everyone out and then selecting the publishers where we know there is demand & are interested in the EDM area. They are being brought under new contracts under the Australian entity (instead of out of NZ). Those contract terms are obviously confidential – as were AWO’s – however, the ‘term’ is not two years, it’s sub 6 months.
- Our old contracts however did have exit clauses for most publishers – obviously these were negotiable by publisher
- We agree that some longer tail publishers are going to lose out here, but I would rather do that now than continue to provide a substandard representation in display. The problem with very long tail publishers is that it’s the old 80 / 20 rule. In particular we have found some who may only be able to deliver $50 in advertising revenue a month (due to very low page impressions) would be the ones wanting to chat to our network management every day. The cost of even delivering their invoice exceeded the return we were getting. My wish to include long tail publishing in the model may have been a bit of a pipe dream.
nzgirl:
- nzgirl has not ‘jumped ship’ – FMG will continue to be selling nzgirl packages ongoing. We have, however, separated nzgirl out from FMG so that it can continue to grow – previously it was being managed by the same team managing FMG. This made no sense, FMG is an aggregating business, where nzgirl is a publisher. We want to see the nzgirl brand, which is now 10 years old, thrive and being tucked into the other business it was not. But we are still going to work under the FMG system – using the EMS and the ad server. For display, nzgirl has been selling exclusive long term sponsorships – the same model we have recommended to most of our long tail publishers as a way to fill inventory without having to go ‘hand to mouth’ with another network.
- It’s also worth pointing out that FMG is now based in Australia and nzgirl is in New Zealand.
I have been in digital for 14 years, 10 of those I have run my own business (nzgirl). This is a market that demands ‘nimbleness’ – there’s no room to sit still and you have to act quickly. You can criticize me all you like, but I have worked my butt off to make this work and will continue to do so. Will it mean a successful outcome? I can’t guarantee that, but I do know that at all times we act with integrity, honesty and passion. We have the support and backing of a great bunch of people, publishers and agencies.
For AWO to sit back and point a finger at it is to be one of the naysayers. How disappointing that you fall into that category and not the camp that’s cheering for people to not give up, pick themselves up and find new ways to try and find revenue generation online.
Deborah Robinson says
Update: Flossie have agreed to release the payment owed to Australian Women Online. Thank you Jenene.
Jenene says
Although far from interested in having a public debate, I would like to state for the record that we found out about your shift via seeing ads on your site which did in fact break your contract.
Megan Rice says
Wow! If that was a boxing match Flossie would have been out for the count in the first round. Sorry Jenene, but everyone is entitled to an opinion right or wrong. A right of reply should not come out of the corner looking for a fight. Although I was most entertained thank you. Good luck with your new venture. I don’t know you, but I suspect you will give it a good go. I will keep track of developments.
Jenene says
Thanks Megan
No one is looking for a fight, just a fair representation of the facts and reasons. It’s been a bit of a week….
Megan Rice says
As an ex-agency person, I was very unpopular with web-publishers when I briefed them on my expectations if buying their membership.
Publishers must supply the following –
1. Members are regularly engaged by the publisher without promotional strings
2. Members are reactive – proof of engagement without promotional strings
3. Members represent the population of the site
4. Active members only – this is the killer for those who sell me data
My instructions were clear – I will pay a premium for members who have responded to a publishers message (without promo strings) in the last 3 months. A strong pulse and reactionary.
So food for thought Jenene. Good luck.
Deborah Robinson says
Jenene
If you only want to represent the facts then I have to correct something you wrote in your right of reply:
Fairfax gives publishers the option to reject ads they don’t want on their website and they can do it with just a click of their mouse. Furthermore, Fairfax have only ever served ads on AWO which are from blue chip companies with well established brands – what publisher in their right mind wouldn’t want these ads on their website?
Whilst you have the right to reply to anything I have written in relation to yourself and Flossie, you don’t have the right to criticise another network, or to speak on behalf of your publishers.
Megan makes a good point. When you run a network you have to look after ALL your publishers and treat them well, otherwise it comes back to bight you.
Now I realise that you have the power to withhold the money you still owe to AWO for commissions earned in October and November. But I’m not prepared to be silenced just for the sake of a few hundred dollars.
Jenene says
Deborah, your contract states pretty clearly that those commissions are not even due for payment as yet (they don’t get paid to us until end of this month). And as mentioned previously, discussing your contract publicly isn’t advisable for either of us given the confidentiality terms. I’m happy to discuss this further with you, but offline.
Megan, absolultey agree and that’s a prerequisite for being a publisher with us going – must be able to show engagment. Always interested in hearing feedback from client / agency on this side.
Deborah Robinson says
Megan
I also agree that publishers need to engage their readers/members without promo strings a lot more and this is something AWO has been focusing on lately and we will be rolling out lots of new features to engage our readers (without promo strings) over the next few months.