2015 is the year that publishers realized the power of platforms to distribute their content.
Facebook had been sending traffic their way for some time, but this year, it invited publishers to monetize on the platform through Facebook Instant Articles.
Meanwhile, Snapchat launched Discover, with custom-created articles for Snapchatters and the ability to sell on its platform.
To solve for content discovery on mobile, Google piloted AMP, which will cache pages so they load more quickly. Apple unveiled Apple News, again with an option to monetize on its platform.
Some publishers are jumping right in, declaring themselves “platform agnostic,” while others are watching the launch partners first to decide how to proceed. But publishers that don’t develop a platform strategy – soon – will likely be left behind.
At the same time, publishers have concerns about ensuring fair monetization and the inclusion of third-party measurement. They’re also cognizant of how some of these platforms compete for the same advertising dollars they do, creating a complex power dynamic that will shift over time, and likely in ways no one will anticipate.
Time To Decide: Launch Partner, Fast Follower Or Sidelines?
“At the end of the day, more audience distribution channels for content is a good thing,” said Jason Kint, head of publisher trade association Digital Content Next.
Content platforms have been “rolling out since the web opened up 20 years ago,” with tools like Flipboard or Pulse, he said.
Publishers, such as Time Inc., a launch partner for both Snapchat Discover and Apple News, now look at their total audience differently because of the rising importance of platforms.
“We have shifted our focus to growing the collection of distributed audiences we have – on Facebook, Instagram, Snapchat, etc. – rather than limiting our focus on the traditional ‘brand dot-com’ audience,” said Suejin Yang, VP and GM of digital entertainment for People and Entertainment Weekly.
While some publishers are diving into platforms, that doesn’t mean that all publishers need to embrace these changes quickly to survive.
“There’s nothing wrong with being a fast follower,” observed Eddie Kim, CEO of social analytics firm SimpleReach. “I don’t think anyone is going to lose because you waited to see how things played out and learned from others’ mistakes before you jumped in.”
But those interested in being fast followers won’t have too long to figure out how to proceed. If 2015 was the year of early adopters, 2016 will be the proving ground for these platforms, as their publisher partnerships move from beta mode to finished product.
“When I talk to small local publishers, they are asking me about Instant Articles and AMP,” observed Josh Schwartz, chief data scientist for publisher analytics tool Chartbeat. “We are going to see much wider adoption, and whether [the platforms] work to drive money and audiences for publishers.”
How Platforms Will Change The Ad Business
Monetization on these new platforms can seem obvious – ads or no ads? – but that’s a deceptively simple way of looking at platform monetization. The best models likely haven’t been figured out yet.
On platforms with no obvious way for publishers to make money, such as Instagram, brands can promote content just like an influencer would. These platforms can expand reach of native advertising, the chameleon format publishers are just beginning to use and understand.
In places where platforms are inviting publishers to monetize on their platform, including Facebook Instant Articles, Apple News and Snapchat Discover, there are other complexities to consider.
Many platforms have set up favorable terms with publishers. Facebook, for example, lets publishers keep all of the revenue from ads they sell themselves and 70% from the ads that Facebook sells. For publishers who may have lost out on revenue when readers abandoned slow-loading pages, that’s a bonus. Facebook also stands to benefit, since it previously received zero revenue once users clicked off Facebook.
Using Facebook Instant Articles could benefit publishers if Facebook’s audience data drives up the value of some of their inventory, but it also makes publishers more reliant on the platform to prove the value of their audience.
From a buyer’s perspective, the migration of audience to these platforms and away from publishers’ websites means more revenue is flowing into these platforms’ walled gardens, rather than an open advertising ecosystem.
“The broader issue is inventory moving to more closed marketplaces that want to own and control the entire media buy that goes through both their O&O [owned-and-operated] and them doing audience extension on behalf of a brand,” said Jim Caruso, SVP of product and client strategy.
On the buy side, that will create problems for “smaller media agencies or buying shops that cannot meet monthly minimums on many different platforms,” Caruso predicted.
Standing Ground For Third-Party Measurement
Many platforms have been reluctant to allow third-party measurement, an issue that Kint sees as critical for publishers.
Snapchat Discover, for instance, provides minimal analytics to publishers. Apple News has none. Facebook “kicking and screaming made an announcement allowing third-party measurement,” Kint summed up, due to pressure from agencies.
The exception is Google AMP, which is including third-party analytics providers in AMP to ensure their trackers are part of AMP.
“Many [platforms] have their own first-party measurements, but if [publishers] are making huge investments in edit and engineering, and having editors making decisions based on data, you want the numbers in a platform in a place that they’re already using,” Schwartz said.
Just as advertisers have pressured these platforms to incorporate third-party measurement, publishers are making the same case. “We’ve seen pressure to have high-quality analytics” on these platforms, Schwartz said.
The Power Play
Google and Facebook command the lion’s share of advertising budgets – approximately 75%, according to estimates by RBC Capital Markets analyst Rohit Kulkarni. That leaves everyone else fighting over the rest.
That also means that the publishers working with Google AMP and Facebook Instant Articles aren’t just partners – they’re frenemies.
Right now, the platforms wield a bit more power.
“I think we’re in the phase right now where distribution is getting the influence and power,” Kim said. “But as that normalizes, I think that pendulum will swing back and give the influence back to the premium publishers.”
Kim compares the current situation to Netflix. After years of getting content rights cheaply, content creators started demanding more. In Netflix’s case, that meant turning to content creation itself. Kim doubts that platforms will respond by becoming content creators and predicts they will instead just accept a newly calibrated power dynamic.
Snapchat tried being a content creator when it launched Discover in January, but abandoned original programming by October.
Because of Facebook and Google’s dominance in the ad market, Kint is bullish on Apple News, which he sees as less of a “frenemy” setup.
“Apple, unlike the other two, isn’t really out there selling advertising for the most part,” Kint said. “They’re a consumer tech brand, and advertising is one of the smallest businesses they have.”
As for the power dynamic between platforms and publishers?
“It constantly ebbs and flows,” Kint said. “Long-term consumer brands that create great content are needed by any distribution platform. That’s what makes the platform useful.”
