Madness at Mode Media

Early in September, with absolutely no warning, billion-dollar Silicon Valley content publisher Mode Media went bust – and with it went the contracts, hopes and pay cheques of thousands of bloggers.

Beyond the sad circumstances, could this signal the end of blog promotion and advertising as we know it?

Until the last moment, staff at Mode Media – and the bloggers on which they had based their business model – had no idea that things were going wrong. To the outside world, the business looked like a huge success, raising $200m in capital and preparing for an IPO.

The problem was, behind the scenes, Mode Media was running at a loss, haemmorhaging up to $10m a year.

In September this year, Mode’s backers pulled the plug – and it all unravelled very, very quickly.

When it came, the end was swift. For bloggers – some of whom were owed up to $15,000 – they quickly found their emails bounced, the phone wasn’t answered and the invoices were going nowhere.

Now, a month after Mode Media folded people are looking for answers – and so are we.

What went wrong?

Mode Media is based on a 14 year old business model. To see how ropey a 14 year old format can be, just take a look at this year’s X-Factor.

At times, you can almost hear it creaking. From the tired old set, to the tired old judges, to the worn and weary contestants, it’s showing every bit of its age.

Not that Simon Cowell would concede it, of course.

via GIPHY

Mode Media used low-paid bloggers, paying them small sums of money to create content, posting it to their sites and support it with banner and side-bar ads.

The thinking was the blogger would attract high-quality leads who, after reading the content, would click the links and buy the products.

If it all sounds incredibly simplistic and like something from a marketing textbook, that’s because it was.

The problem is that consumers have moved on and the monetisation of blogs isn’t that profitable anymore. Ad-blockers are one clear illustration of our attitude to advertising, but even without them, we’re much more sophisticated consumers.

As marketers, we need to face the fact that what has worked in the past may not work so well today. Mode Media (and Simon Cowell) don’t.

The core of blogging

The failure of Mode Media isn’t just one of cashflow. It hints at a much deeper problem that gets to the core of blogging as an activity.

The success of blogging is based that oldest of marketing currencies: authenticity.

The problem is, as soon as you accept advertising revenue, this authenticity is compromised. You become what we may (in the 90s) have described as a ‘sell out’. We can use these phrases again both ironically and because just about every teen blogger seems to be dressed in 90s clothes now.

Banner ads themselves may not be particularly intrusive, but they instantly say to the visitor that you’ve accepted money, and for most of us, we question just what that means.

Many bloggers themselves acknowledge, and even boast, about their commercial relationships. And it shouldn’t be something they should be embarrassed about. Blogging is, for many a way to earn extra money and, for a select few, their main form of income.

But an openly commercial blog has a time limit to it – and the clock is ticking.

The reason is, as advertisers become more sophisticated themselves they’re looking for much clearer metrics in terms of conversions and purchases.

Merely seeing an advert isn’t enough, they need to track that interaction from impression to action. Mode Media wasn’t willing – or able – to do this to the satisfaction for advertisers and that’s why it failed.

Is this the end?

The Mode Media closure doesn’t spell the death of blogger content, but what it does highlight is that advertising is moving on.

In the future, creative content and advertising – alongside greater social media integration – will be where advertisers spend their money.

It’s not the death of the blogger, but it may see their role as trendsetters pass, settling back into their traditional role as excitable amateurs. And there’s nothing wrong with that.

What it will do is strengthen the need for advertisers to seek professional help and advice when creating campaigns – and this is where we can help.

As an agency, we work with businesses of all sizes to help them create and develop marketing and advertising campaigns that get results. We use creative content and a unique approach to storytelling to help promote your business and your brand.

If you want to have a chat about how we can help you and your business, contact us today.