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InContext / An inside look at the business of digital content

Instead of scrabbling over the triopoly’s crumbs, publishers must unite

April 19, 2021 | By Bruce Brandfon, Chief Media Officer – Duration Media @DurationMedia

Recently, when I was reading an article in the The Wall Street Journal about our industry, it became apparent to me that web publishers, who spend millions of dollars every year creating highly engaging content, are clearly not being rewarded for developing that content. The very survival of our greatest media brands is in question. Yet the Triopoly of Facebook, Google and Amazon has captured 90% of all digital ad spend in the USA in 2020. Think about that. The remainder of the players in the digital media ecosystem compete for just 10% of the advertising revenue. Imagine what those percentages might be in 2021, 2022, 2023 and beyond?

To put this in perspective: What percentage of US digital ad spending did the Triopoly capture in 2018? 

A. 53%
B. 48.6%
C. 66.8%
D. 78%

How about 2019? What percentage of the US digital ad spending did the Triopoly capture in 2019? 

A. 63%
B. 58.6%
C. 80%
D. 68%

If you answered C for both questions, you are right. The Triopoly took 66.8% in 2018, 80% in 2019, and 90% in 2020. This is a pretty disconcerting trend if you are a publisher. However, it is equally consequential for readers as well as society as a whole.

So, what are the majority of web publishers doing about this?  How exactly are they trying to stop this train from crushing them, or at least slowing it so that next year it’s not capturing 92% or 95% or 98%?

Stop complaining and act

The answer is they are doing not much more than complaining about it. Many (if not most) senior publishing executives will tell you the answers are direct revenue from consumers (subscriptions, memberships, etc.). Seems reasonable until you consider that most of it is already available for free from the competition.

Unfortunately, most publishers are not The New York Times, The Wall Street Journal, or The Economist. Therefore, subscription revenues are unlikely to replace the loss of the billions of dollars of advertising revenue that enables most publications to survive and grow.

And what exactly does the Triopoly have that web publishers don’t have?  Well, that’s a long and somewhat complicated answer but let’s take a look.

A better mousetrap

Essentially, they have built an easy to access and toll-free on-ramp to every publisher’s unique content. Thus, they’ve eliminated the need to invest in the time-consuming and expensive process of creating that content themselves. What’s more, they have the ability to capitalize on their audience engagement in this content (that they neither created nor own). They offer high value and effective ad impressions to target specific audiences.

Now let’s pretend for a second that you sell fly fishing gear…

  • Google serves the ad to fly fisherman searching for gear
  • Facebook serves the ad to fly fisherman or those who appear to be
  • Amazon connects with fly fishermen via targeted ads and keyword search

In each case they have the ability to deliver a high value advertising environment that delivers proven ROI. In short, they get rewarded for their access to the content the user wants at scale.

Make your audience king

What, dear reader does the publisher have?  They will say “we have unique content.” I respectfully and reluctantly say, BS. Many sites have content that is largely undifferentiated from that of other publishers. Even if some publishers actually do have unique content, they are not rewarded for the millions of dollars they invest to create that content as a result of the painful efficiency of programmatic advertising and RTB.

Truth is that the programmatic buying machine doesn’t reward publishers for better content. It simply seeks the most cost-efficient way to deliver advertising to the targeted audience.  The algorithms don’t really care if they find their prospects at Bloomberg, The Wall Street Journal, or Fandom. In the programmatic world the target audience is king.

So, it’s very easy to see why the Triopoly has racked up 90% of the ad spend.  Remember the Facebook boycott last summer?  How long did that last?  Advertisers ran back to Facebook because they have built a proverbial better mousetrap that consistently delivers a measurable ROI. The result? Facebook’s numbers are off the charts (as usual) and so are Google’s and Amazon’s.

My question is:  What have we allowed to happen to our beloved and irreplaceable publishing community? Every year market share erodes, now 10%, in 5 years what?  It’s time to stop that steady drip, drip, drip. These are desperate times for our industry and the survival of our cherished media will require bold action. If the audience truly is king then let us all capitalize on the engagement and commitment of our collective audiences and stop fighting with our sisters and brothers for the ever-dwindling market share. To paraphrase Pogo, “We have met the enemy, and he ain’t us!”

An immodest proposal

I am hereby issuing a clarion call for web publishers to stop competing among themselves. Your peers are not your opponents. They are your colleagues. Now is the time to band together and develop a consortium that can rival the Triopoly with the scale and the ability to provide unique ad solutions. It’s time for publishers to receive their just rewards for creating premium content. Yes, this has been tried (mostly without success) before, as discussed in this recent Digiday piece

Yet, the concept is sound. And the time is upon us to act boldly and massively. Three or four or a dozen like-minded publishers will not make the difference necessary to turn the tide. A broad industry initiative led by an organization as credible as Digital Content Next and with support from its members and affiliated technology partners is what is called for. We are committed to make this happen. Who else is in? Let’s not wait a moment longer.

About the author

Bruce Brandfon is Chief Media Officer of Duration Media. Prior to that he was EVP of Webspectator, and before that VP and Managing Director at Publicitas. Before joining Publicitas, Bruce was VP and Publisher of Scientific American. He has also held leadership positions at The Philadelphia Media Network, Newsweek, and Time Inc. Bruce is Director of the Board of Advisors at Planet Forward, and an Adjunct Professor of Media Studies at Westchester Community College.

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