JPG’s dead. Why your advertising-funded business could be next…

JPG Magazine is dead. That’s a bummer because, as TechCrunch wrote this morning, it was a radical idea in publishing: one that used crowd-sourced data to serve the magazine’s readers.

There were a few problems here:

1. They never got a large enough following to make a business viable. That’s because book stores are going away and the ones that are left are not willing to increase the shelf space to magazines. Tim O’Reilly talked about this in the interview I did with him a couple weeks back for FastCompanyTV. To make it in media you’ve gotta be where there’s increasing shelf space. Today what’s increasing? Newspapers? Nope. Magazines? Nope. iPhone apps? Yes! Facebook apps? Yes!
2. Photography is a tough place to make money off of advertising. Look at Flickr itself. Why haven’t you seen many ads there? Because advertisers haven’t figured out how to sell stuff by putting their messages next to photography. If they can’t figure that out online there’s no way they’ll figure that out in a magazine.
3. The web overwhelmed the model. Flickr has a really cool page called “most interesting over past seven days.” Look at it. I’ll wait. Now, why would I wait eight weeks to get those same photos sent to me on paper? Hint: I’m not. If you can’t answer the question of why I would change my behavior from what already exists, your business will be in trouble.

But, there’s something deeper here. If you’re going to go after advertiser dollars, you’ve got to have a pitch for how they are going to sell more stuff. This is why Engadget is such a great advertising play. Everyone visits Engadget to look at gadgets. People who look at gadgets probably buy 300x more than people who don’t. Right now Microsoft is advertising on Engadget. Why? Because they know that the audience that both cares about, influences other people about, and buys gadgets is there. Now, go back to JPG. What kind of audience is there? One that likes old photos from Flickr? Can you see the advertising sales problem there?

Many companies are making the same mistakes that JPG did. Thinking they are in a hot space just because they are associating themselves with the power of the crowds, and social software, and all that hot hooey. Me too! This is why Arrington and Calacanis, when they tell me to get back to blogging thoughtfully instead of spending all my time over on Twitter and friendfeed, are right!

You’re advertising-funded business is next after JPG if you:

1. Rely just on the geeky audiences that read Techcrunch. Or me. (Which is why I spent time getting to know other networks the past year).
2. Don’t have a well defined audience that you can present to advertisers. Facebook, for instance, goes in saying “we can introduce you to very specific demographics. You want to reach every 22-year-old woman who skiis, is Republican, likes Daft Punk, lives in New York, and who posts at least one video a month? We can do that.” What could JPG present to its advertisers? “We have a bunch of people who care about photography.” Not nearly as effective a pitch.
3. Are not gathering transactional people. Why does Popular Photography (a magazine that’s been around for a long time) do so well? It gathers people who are transactionally-oriented. What do I mean by that? Walk by a magazine rack. Most of the best photography magazines do NOT display photography on their covers. What do they do? They have EQUIPMENT on their covers! Why do they do that? Because they really don’t care if you are into photography. They care about gathering people who are into buying equipment. Why? Because that’s who advertisers want to reach. So, are you gathering transactionally-oriented audiences? If you aren’t, you’ll be swimming up stream. This is why Flickr itself is a tough business.
4. Aren’t giving advertisers a good way to talk to customers. This is why, I believe, Flickr recently added video. Why? Photography just isn’t a very good way anymore to reach customers, especially in today’s real-time-web environment. What is? A place that has a mixture of video, text, photography, and interactivity. What does that look like? Well, it isn’t printed on paper anymore.
5. Aren’t getting “shelf space.” Or, distribution. You might be the best community in the world, best blogger, best videographer, or best social network, but if you can’t get people to see it, use it, try it, you’ll be toast. JPG just wasn’t able to get the shelf space necessary to attract the audiences it needed to attract advertisers. I never saw it on the news stand. So, now, if you are an iPhone app and you can’t break into the top apps, you better figure it out or you’ll be toast.

Here’s hoping that we all avoid the problems JPG is having. Good luck out there! If you’re an advertising focused business, how are you closing deals and getting revenues? Any good ideas? Love to hear them, leave a link to your blog here.

UPDATE: JPG should have called SmugMug’s CEO. He wants to help save the magazine. Funny, because SmugMug doesn’t live off of advertising revenues. They have hundreds of thousands of users who pay money to use SmugMug.

69 thoughts on “JPG’s dead. Why your advertising-funded business could be next…

  1. If you want to monetize the content you’re creating through advertising this is good post and there a lots of other wisdom gems here for me to think about.

  2. If you want to monetize the content you’re creating through advertising this is good post and there a lots of other wisdom gems here for me to think about.

  3. Kathy, being a gadget geek, I can tell you there may be some correlation between people who care about the and people who care about the , but it’s more indirect than you might think.

    There is a school that is totally focused on the acquisition of the equipment. They buy far in excess of what they’re capable of using, and in many cases, a lot of it goes unused. In the photography world, there are magazines devoted to the equipment, and magazines devoted to the art, and that is no accident.

    Talent is hard, buying is easy. And it makes sense to do as Scoble says and go after those who are more intent on the buying. In the end, we often see that where art is concerned, there may be little correlation between your equipment and your art–it’s all about the talent.

  4. Kathy, being a gadget geek, I can tell you there may be some correlation between people who care about the and people who care about the , but it’s more indirect than you might think.

    There is a school that is totally focused on the acquisition of the equipment. They buy far in excess of what they’re capable of using, and in many cases, a lot of it goes unused. In the photography world, there are magazines devoted to the equipment, and magazines devoted to the art, and that is no accident.

    Talent is hard, buying is easy. And it makes sense to do as Scoble says and go after those who are more intent on the buying. In the end, we often see that where art is concerned, there may be little correlation between your equipment and your art–it’s all about the talent.

  5. I have to agree with Mark above — I’ve found that so far most of the traffic to my blog is other bloggers. I’m new to blogging (only 2 months so far) so I expect that this might change but I wonder.

    One question that I have though, is how do you marry passion for a subject with the sales side of things? I want to make money on my blogs but at the same time I want them to be entertaining, thought provoking and fun. I guess that ties in with what Kathy was saying about passion still being important.

    There is a lot to learn in this business and I’m glad that there are others like you that have trod this road and help to point us in the general direction. Keep up the great work.

  6. I have to agree with Mark above — I’ve found that so far most of the traffic to my blog is other bloggers. I’m new to blogging (only 2 months so far) so I expect that this might change but I wonder.

    One question that I have though, is how do you marry passion for a subject with the sales side of things? I want to make money on my blogs but at the same time I want them to be entertaining, thought provoking and fun. I guess that ties in with what Kathy was saying about passion still being important.

    There is a lot to learn in this business and I’m glad that there are others like you that have trod this road and help to point us in the general direction. Keep up the great work.

  7. Robert …

    Editing now without the emotion
    of passion and gratitude, my head
    is clearer: “I appreciate the way you*
    think” ~ YOUR reason “stares” us down.

    Mahalo nui loa: thanks again, Robert!

    Best success,

    Zna

  8. Robert …

    Editing now without the emotion
    of passion and gratitude, my head
    is clearer: “I appreciate the way you*
    think” ~ YOUR reason “stares” us down.

    Mahalo nui loa: thanks again, Robert!

    Best success,

    Zna

  9. Robert, thank you!

    This is a “MUST READ” post which is applicable to
    every “niche” and every business should adhere
    to its five points, reasons advertising will NOT work.

    For this online marketing “newbie” a novice like me
    cannot afford to make mistakes. This gives one like
    me clear direction, absolute points “spot on” advice.

    I appreciate the way your think, and reason. From my
    own offline business for 27 years, using what has blitzed
    and wiped out the competition clearly follows your thoughts.

    We must, as you clearly state, provide what our “buyers”
    want, will act on, buy as “transaction oriented” leaders
    who know what they want and go after it without a
    hesitation. Excellence, quality, life changing, exciting
    and dream building, achieving products and services
    who communicate well with clear visibility created by
    the “buzz” you recommend is the only way to advertise.

    Create the environment, building that field of dreams,
    communicate this following your 5 points & they’ll come.

    Great post, Robert. This is a “pivotal point” for me. Thanks!

    Aloha nui loa, best wishes,

    Zna AKA @ZnaTrainer
    http://twitter.com/ZnaTrainer

  10. Robert, thank you!

    This is a “MUST READ” post which is applicable to
    every “niche” and every business should adhere
    to its five points, reasons advertising will NOT work.

    For this online marketing “newbie” a novice like me
    cannot afford to make mistakes. This gives one like
    me clear direction, absolute points “spot on” advice.

    I appreciate the way your think, and reason. From my
    own offline business for 27 years, using what has blitzed
    and wiped out the competition clearly follows your thoughts.

    We must, as you clearly state, provide what our “buyers”
    want, will act on, buy as “transaction oriented” leaders
    who know what they want and go after it without a
    hesitation. Excellence, quality, life changing, exciting
    and dream building, achieving products and services
    who communicate well with clear visibility created by
    the “buzz” you recommend is the only way to advertise.

    Create the environment, building that field of dreams,
    communicate this following your 5 points & they’ll come.

    Great post, Robert. This is a “pivotal point” for me. Thanks!

    Aloha nui loa, best wishes,

    Zna AKA @ZnaTrainer
    http://twitter.com/ZnaTrainer

  11. This was a great post. Glad chris brogan tweeter the link. I agree with your thoughts on spending more time with a thoughtful post as opposed to time on Twitter/facebook.

    Do you think that the blog model will be around for quite some time? It gives the one who posts a quality medium to relay their thoughts and the audience to can come back to it? Microblogging mediums seem to move so rapidly that there’s no time to provide meaningful reflection, let alone deep write ups like this.

  12. This was a great post. Glad chris brogan tweeter the link. I agree with your thoughts on spending more time with a thoughtful post as opposed to time on Twitter/facebook.

    Do you think that the blog model will be around for quite some time? It gives the one who posts a quality medium to relay their thoughts and the audience to can come back to it? Microblogging mediums seem to move so rapidly that there’s no time to provide meaningful reflection, let alone deep write ups like this.

  13. Ouch! The marketplace is 21st Century, 15-30 years old and money to spend on “gadgets.” Your article is riveting. Part of me is still in analog mode not because I’m older but because I like–some of it.

    The other part has entered into a digital age scrambling. Nothing amazing about it. Every generation before this one had to do the same thing as progress (yeah), drove into town. I welcome progress. I just don’t like the stupid stuff and there’s a lot of it.

    Nonetheless, it’s here. Thanks for the siren and putting it into words.

  14. Ouch! The marketplace is 21st Century, 15-30 years old and money to spend on “gadgets.” Your article is riveting. Part of me is still in analog mode not because I’m older but because I like–some of it.

    The other part has entered into a digital age scrambling. Nothing amazing about it. Every generation before this one had to do the same thing as progress (yeah), drove into town. I welcome progress. I just don’t like the stupid stuff and there’s a lot of it.

    Nonetheless, it’s here. Thanks for the siren and putting it into words.

  15. The bit about becoming a top iPhone app is a bit of a truism: “the way to succeed is to succeed.”

    But there is some truth in that truism. Problem with apps IS that the shelf space is so small, literally. Even with millions of users, the place they SEE apps is the very small space of the app store on their device or the slightly larger space iTunes. There is only room for a few products to show their faces. But how do you GET into that space in the first place? Not much of a long tail, for sure. Best seller territory.

  16. The bit about becoming a top iPhone app is a bit of a truism: “the way to succeed is to succeed.”

    But there is some truth in that truism. Problem with apps IS that the shelf space is so small, literally. Even with millions of users, the place they SEE apps is the very small space of the app store on their device or the slightly larger space iTunes. There is only room for a few products to show their faces. But how do you GET into that space in the first place? Not much of a long tail, for sure. Best seller territory.

  17. Yo Scob,

    You kind of look like Sean Astin. I suppose you get that a lot.

    Anyway, your post is nice. But, the logic is similar to any publishing text book–how do you connect your readers with advertisers and monetize that. But it misses the point.

    That three-way relationship is dead. How are media-providers going to stay in business? If the NYT had to re-finance their house, how are readers going to get content? Advertising is down–across all outlets. What is the new business model?

    Answer me that Samwise Gamgee.

    -c

  18. Yo Scob,

    You kind of look like Sean Astin. I suppose you get that a lot.

    Anyway, your post is nice. But, the logic is similar to any publishing text book–how do you connect your readers with advertisers and monetize that. But it misses the point.

    That three-way relationship is dead. How are media-providers going to stay in business? If the NYT had to re-finance their house, how are readers going to get content? Advertising is down–across all outlets. What is the new business model?

    Answer me that Samwise Gamgee.

    -c

  19. Robert: Interesting insights. When it comes to magazines the math is usually fairly simple – balance publishing and operational costs with the dual revenue streams of subscriptions and advertising. One of my other lives is working with Dulcimer Player News, which has got to be one of the more uberniche of niche print mags, and bridging the crevasse between advertisers and consumers is priority #1 to keep the thing sustainable even in its quarterly form. You have to have advertisers who are relevant to the audience and an audience that is relevant to the advertisers. The closer you get to 100% cross-relevance, the closer you get to a sustainable successful magazine.

    As for shelf space, there may be less space at Barnes & Noble et al, but there should be plenty of space at the brick and mortar photography stores like Cord Camera in my area. If you’re a niche, don’t expect to sell well in the general market. Go after the places your niche hangs out in.

  20. Robert: Interesting insights. When it comes to magazines the math is usually fairly simple – balance publishing and operational costs with the dual revenue streams of subscriptions and advertising. One of my other lives is working with Dulcimer Player News, which has got to be one of the more uberniche of niche print mags, and bridging the crevasse between advertisers and consumers is priority #1 to keep the thing sustainable even in its quarterly form. You have to have advertisers who are relevant to the audience and an audience that is relevant to the advertisers. The closer you get to 100% cross-relevance, the closer you get to a sustainable successful magazine.

    As for shelf space, there may be less space at Barnes & Noble et al, but there should be plenty of space at the brick and mortar photography stores like Cord Camera in my area. If you’re a niche, don’t expect to sell well in the general market. Go after the places your niche hangs out in.

  21. In the end, business is still about creating value that consumers are willing to pay for. One may try many products and services, but becomes much more discriminate when handing over cash. Customer validation is not about those willing to try; it is about those willing to buy.

  22. In the end, business is still about creating value that consumers are willing to pay for. One may try many products and services, but becomes much more discriminate when handing over cash. Customer validation is not about those willing to try; it is about those willing to buy.

  23. “Because they really don’t care if you are into photography. They care about gathering people who are into buying equipment. Why? Because that’s who advertisers want to reach.”

    The part about “who advertisers want to reach” is probably true, but for a photography magazine to not care if you’re into photography and care only that you’re into “buying equipment” makes no sense to me… people “buy equipment” for photography to the extent that they are “into photography”. The more into photography they really are, the more likely they are to appreciate the need for (and cost of) higher-end gear and accessories.

    The quickest way to sell more gear is to get more people further up the learning/appreciation curve. I suppose a short-term advertiser might not care, but any long-term marketing/business strategy for an equipment maker would care about repeat customers, growth, higher-end upgrades, etc. — things that come only from those with a deep interest in the activity they’re using the equipment *for* — in other words, those who are “into it”.

    I’m not really arguing with your point — I’m saying that the smarter advertisers do–or at least SHOULD–care. Go where the passion is, and there you’ll find the people most likely to want the best gear, and in the best position to justify the expense.

    I’m still thinking about the rest of your post… and you certainly gave me a lot to think about. Thanks!

  24. “Because they really don’t care if you are into photography. They care about gathering people who are into buying equipment. Why? Because that’s who advertisers want to reach.”

    The part about “who advertisers want to reach” is probably true, but for a photography magazine to not care if you’re into photography and care only that you’re into “buying equipment” makes no sense to me… people “buy equipment” for photography to the extent that they are “into photography”. The more into photography they really are, the more likely they are to appreciate the need for (and cost of) higher-end gear and accessories.

    The quickest way to sell more gear is to get more people further up the learning/appreciation curve. I suppose a short-term advertiser might not care, but any long-term marketing/business strategy for an equipment maker would care about repeat customers, growth, higher-end upgrades, etc. — things that come only from those with a deep interest in the activity they’re using the equipment *for* — in other words, those who are “into it”.

    I’m not really arguing with your point — I’m saying that the smarter advertisers do–or at least SHOULD–care. Go where the passion is, and there you’ll find the people most likely to want the best gear, and in the best position to justify the expense.

    I’m still thinking about the rest of your post… and you certainly gave me a lot to think about. Thanks!

  25. Word has it the 8020 media CTO tried a coup to take over the company forcing an imediate closure of the company. A mess internally and externally.

  26. Michael hits part of the point; related to that though is general management. Here’s a company that crowd sourced photos and had a staff of 18 when it closed…circulation 50k or less. The problem wasn’t that is was an innovative company, the problem is that it turned into a bloated media 1.0 company, and in the end that killed it. You can survive on advertising, but you have to be lean to do so, JPG/ 8020 wasn’t.

  27. Michael hits part of the point; related to that though is general management. Here’s a company that crowd sourced photos and had a staff of 18 when it closed…circulation 50k or less. The problem wasn’t that is was an innovative company, the problem is that it turned into a bloated media 1.0 company, and in the end that killed it. You can survive on advertising, but you have to be lean to do so, JPG/ 8020 wasn’t.

  28. Robert, I think you’re missing the big picture of JPG magazine here.

    The real trouble has nothing to do with the economy. It all started a year or so ago when Derek Powazek and Heather Champ (the founders) left the company:

    http://powazek.com/posts/534

    At that moment JPG lost its authentic voice and lost my subscription. The quality of the editing went down IMHO after that. (And there WAS editing – that’s what made it more interesting than a purely crowdsourced thing like Flickr). It could have survived after that but the new owners would have had to build a great reputation, a community, and relationships with advertisers from square one, and obviously they failed to do so.

  29. Robert, I think you’re missing the big picture of JPG magazine here.

    The real trouble has nothing to do with the economy. It all started a year or so ago when Derek Powazek and Heather Champ (the founders) left the company:

    http://powazek.com/posts/534

    At that moment JPG lost its authentic voice and lost my subscription. The quality of the editing went down IMHO after that. (And there WAS editing – that’s what made it more interesting than a purely crowdsourced thing like Flickr). It could have survived after that but the new owners would have had to build a great reputation, a community, and relationships with advertisers from square one, and obviously they failed to do so.

  30. Great post Robert.

    I get the feeling that another problem faced by JPG Mag and the web in general is that there are too many content creators and not enough content consumers. The JPG Mag community is mainly photographers who want to get published. It’s the same with Flickr and video sites. It’s like having a gallery opening in the real world and the only attendees are photographers and artists all trying to sell their work, but there’s no one there to buy.

  31. Great post Robert.

    I get the feeling that another problem faced by JPG Mag and the web in general is that there are too many content creators and not enough content consumers. The JPG Mag community is mainly photographers who want to get published. It’s the same with Flickr and video sites. It’s like having a gallery opening in the real world and the only attendees are photographers and artists all trying to sell their work, but there’s no one there to buy.

  32. I’m a fan of products and services, where ad funded is a nice supplement.

    You need some *control* over your business. Today’s business bets are information products for micro-niches and long-tails.

  33. I’m a fan of products and services, where ad funded is a nice supplement.

    You need some *control* over your business. Today’s business bets are information products for micro-niches and long-tails.

  34. Robert – I have to say it – these are the kind of posts I enjoy reading from you. The tweets are fine but Mike was right – your blog is where you we get the benefit of your insight. I’m glad you agree – this level of thought just can’t come across in a tweet.

  35. Robert – I have to say it – these are the kind of posts I enjoy reading from you. The tweets are fine but Mike was right – your blog is where you we get the benefit of your insight. I’m glad you agree – this level of thought just can’t come across in a tweet.

  36. Good post, Robert. Not easy to take if you’re in the crosshairs, but I think it makes sense. Cool Flickr page, too – I hadn’t seen that one before.

  37. Good post, Robert. Not easy to take if you’re in the crosshairs, but I think it makes sense. Cool Flickr page, too – I hadn’t seen that one before.

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