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Medium Moves Away from Online Ads
Earlier this month Evan Williams, the CEO of Medium, announced that the company was moving away from the standard online advertising model. The announcement was surprising for a number of reasons. For one thing, the online publishing platform had its best year in 2016, increasing readers and published posts by about 300% and becoming an authority for online news in a year when such authority was in short supply due to inaccurate US election coverage and a flood of fake news.
Despite this success, the announcement to move away from traditional advertising was tied to the company laying off 50 employees, about one third of its workforce, and shutting down its offices in New York and Washington DC. This latter move is seemingly tied to William’s admission that he didn’t know how Medium would monetize its content outside of the current online advertising model, and the company’s uncertain financial future presumably requires a pre-emptive cutting of resources as they attempt to navigate the online publishing business in 2017.
Williams described the current online content model as a “broken system” that is “ad-driven.” He goes on to say that, “It simply doesn’t serve people. In fact, it’s not designed to. The vast majority of articles, videos, and other “content” we all consume on a daily basis is paid for — directly or indirectly — by corporations who are funding it in order to advance their goals.”
Journalism professor Frederic Filloux points to a central problem regarding the current online advertising model as it affects Medium: “reconciling editorial quality and economic value.” As Medium explores alternate options to monetize its content platform, many publishers will be looking at it as an example of the potential advantages and pitfalls of moving away from the traditional model. Filloux offers an optimistic view: “The road to business model salvation might prove to be a long one, but I'm convinced the advertising community will inevitably come to the conclusion that quality breeds (a) higher engagement and, (b) better demographics, both bound to bring in premium advertisers.”
Williams went on to talk about the core values of Medium as one of the primary factors influencing these decisions, including a commitment to content creators and the sharing of ideas: “We believe people who write and share ideas should be rewarded on their ability to enlighten and inform, not simply their ability to attract a few seconds of attention.”