The DCN Annual Benchmark Report provides an annual analysis of revenue with full breakouts of advertising sales, traffic and other operational expense metrics by platform and media type. This report is the only marketplace intelligence analyses exclusively focused on premium digital content. It offers an aggregated analysis of Digital Content Next member companies and is distributed only to Digital Content Next member companies which submit data for this report. No other competitive reports like these exist in the marketplace. If you are interested in learning more about this report and other DCN benchmark reports, please contact [email protected].
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Jason Kint: Here are 5 ways Facebook violates consumer expectations to maximize its profits
As the Facebook scandal continues to snowball, COO Sheryl Sandberg and CEO Mark Zuckerberg have finally admitted publicly they have a lot of work to do to restore trust in, and combat abuse of, their platform. Those are facts supported by independent research from Edelman.
Trust is a result of delivering on expectations, whether the customer is another business or the public. Facebook and Google, more than any other two companies, have controlled and influenced the trust issues now being surfaced across our industry which impact the publishers and advertisers who choose to associate with their platforms.
In 2014, I wrote about Facebook’s questionable practices in The Wall Street Journal, focusing on Facebook’s mining of user’s browsing history. We argued that people do not expect Facebook to track them across the web and within apps in order to target advertising to them. Unfortunately, the backlash was slow to build (except for those most intimately involved in consumer privacy and regulation) and Facebook continued its practices. The 2016 election and the Cambridge Analytica scandal dramatically changed that.
Although Facebook recently added the ability for users to opt out (via a deeply buried setting) and announced new “controls” and “settings” are coming, the fact that it takes an avalanche of bad press and a #DeleteFacebook movement to motivate them to act in their consumers’ best interests clearly shows their products are designed to maximize profit rather than behave according to consumer expectations.
At Digital Content Next, we wanted to get a clearer picture of how consumer expectation does (or does not) align with Facebook’s data practices. So last week — at a time when consumer expectations of Facebook are likely at an all-time low — DCN surveyed a nationally representative sample to find out just exactly what people expect from Facebook.1 Here’s how they responded.
There were only two ways in which a majority of respondents felt that Facebook was acting according to their expectations.
There were five areas where respondents answered that Facebook was acting outside of their expectations. Importantly, these are the issues which drive down consumer trust, and they mostly involve activities where Facebook is taking data from publishers. These activities clearly show how Facebook’s financial gain comes at the expense of trust and profit for news and entertainment companies.
(Note: Facebook announced last week it would abandon this practice).
In summary, most users expect Facebook to be collecting some data about them in exchange for use of its “free service.” For example, most users probably assume that data is collected about things that they choose to “like,” or from information they enter directly into the Facebook app as part of using it.
However, when asked about some common Facebook tracking activities across the web on other properties, the survey results show that most people do not approve. These activities — and your data — have generated extraordinary wealth for Facebook and the limited number of executives who control the company. Your data is delivering more than $20 billion per year in profits at 50 percent margins.
Bottom line: Does Facebook have the ability and the desire to adjust its business model to better align with consumer expectations and attempt to rebuild trust?
- ORC International Online CARAVAN®, 1,000 Adults 18+, March 29–April 1, 2018. 85 percent of sample replied yes to having a Facebook account.
Reprinted with permission from Nieman Lab.
Publishers continue to invest in platforms, but research confirms that platforms give little in return
Digital Content Next (DCN) recently released findings from its second annual DCN Distributed Content Revenue Benchmark Report. The research, written about here and here, provides marketplace intelligence on distributed content strategies and the challenges confronting publishers when working with third-party platforms like Facebook, Twitter, Snapchat, YouTube, and others. The report confirms that despite the constant changes in distributed content policies and business practices, little has changed for publishers in the last 12 months.
Facebook and Google generate the most distributed-content revenue for publishers outside of Over-the-Top (OTT). However, together they account for less than 30% of the total distributed content revenue and represent only 5% of the total average digital revenue for publishers. Overall revenues from distributed content grew from 14% in last year’s report and now represent 16% of the surveyed publishers’ digital revenues.
Additional Key Findings
- Monetization of distributed content for H2 2016 and H1 2017 represented an estimated $10.1 million and $10 million average revenue. For companies providing data for both H1 2016 (last year’s report) and H1 2017 for this report, distributed content revenue grew by an estimated 37% year-over-year.
- Video, consistent with last year, represents 85% of the total, $8.3 million in 1H 2017, driven by TV/cable companies’ OTT monetization. The remaining 15% cuts across social media, Google AMP and syndication.
- Facebook generated the most revenue for publishers, capturing $1.3 million (50% of social platform revenue) in H2 2016 and $1.5 million (59% of social platform revenue) in H1 2017.
- Out of the specific third-party platforms tracked, publishers are active on Facebook, Twitter, YouTube and Instagram. However, for monetization purposes, publishers are still most active on Facebook and YouTube.
Despite the challenges, DCN found that publishers remain active across a range of channels distributing and monetizing content off their sites at levels relatively consistent with last year’s findings. Still, publishers remain cautious about increasing staffing for distributed content monetization.
Best Practices
1. Concentrate negotiation at the executive level of your company management; do not leave negotiations to lower-level management and/or individual brands or businesses.
2. Focus on products that leverage your core business, are replicable, get new money, and have the potential to scale.
3. Negotiate for business requirements that support scaling in partnership agreements:
- ad server integration;
- third-party measurement integration;
- management reports (e.g. roll-ups by publisher and/or marketer);
- and-data for advertising and subscription monetization.
4. Test and measure content consumption and monetization through both advertising and subscription on third-party platforms and compare results to on-site metrics to inform monetization strategies.
5. Centralize responsibilities or use active cross-functional teams for managing third-party partnerships.
Advertising is the most common form of monetization of content distributed on third-party platforms, with more than 85% of total average revenue sold directly by publishers. While distributed content remains an essential part of publishers’ strategic plans, the revenues earned do not match publishers’ investment. Importantly, publishers will continue to participate and test to find the best value and revenue model for their premium content.
DCN’s new research: Trust as a Proxy for Brand Value
As the digital landscape continues to shift, it’s essential to understand the value of trust in digital media and the components needed to build a successful consumer relationship. New DCN research, Trust as a Proxy for Brand Value, shows that consumers today are increasingly using social media as their digital gateway to access information from news to entertainment. In fact, Facebook’s newsfeed is the number one place users go to get digital content.
Interestingly, our research uncovered that, while consumers use social platforms as a principal access point for information, they often do not trust the content they find there: Only 55% of consumers trust the information they find on social platforms. Furthermore, significantly fewer Millennials (45%) trust the information they find on social media. It appears that newsfeed automation and algorithms have a hand in the problem. Six in ten consumers (62%) agree that “there’s so much random content on social media, there’s no way to tell if an article is credible or not.”
As a result, a younger audience of “Social Skeptics” has emerged. Seven in ten of these consumers choose quality brand sites for content and prefer brand sites/apps for information. In fact, 41% of Social Skeptics have subscribed to digital content, which also signals a preference for premium content. This high-value audience is quite desirable: 61% are under the age of 40 and 68% purchased an item in the last month based on an ad they saw online.
The DCN research also showed that “fake news” and the spread of misinformation is impacting consumer trust in digital media. Eighty-two percent of consumers agree that “there is a lot of fake news on social media.” The fake news problem doesn’t stop there. Fifty-five percent of consumers surveyed noted they find a lot of fake news on brand sites and apps as well. Younger generations (Millennials and Gen-Xers) are even more likely to say there is a fake news problem. Misleading headlines, too many ads, and sensational, clickbait articles are top items that break consumer trust.
Brand sites build trust by delivering on key attributes, such as credibility and accuracy, which correlate highly to both trust and importance. However, there are also hidden drivers which are less obvious—but correlate highly to trust. These include popularity, virality, and personalization, all of which are important strategies to employ and very much a part of the algorithms of platforms.
Four key building blocks of trust that brand sites should incorporate into their strategies were uncovered in the DCN research. All four components are important in establishing and maintaining brand trust.
- attribution: confirming information with multiple sources;
- reputation: acting as an authority;
- navigation: ease-of-use /smart user experience;
- prediction: positive past experience and direct relationship with the consumer.
Advertiser Impact
Consumer trust in brand sites also positively impacts advertisers on the site. Higher trust in brand sites results in a trust halo effect for advertisers. Brand sites provide a significant boost in advertiser trust and positive perception compare to social media and YouTube.
Two attributes that highly correlate to the importance and trust of advertisers on brand sites include emotional connection and identification with the style and tone of the brand site. In terms of building trust for the advertisers on a brand site, these two components resonate significantly with Millennials as compared to other generations.
Consumer expectations around trust is higher for brand sites and apps. Consumers expect them to be trustworthy, credible, accurate, and up-to-date. Thus, brands should closely monitor trust and work to maintain it as a key differentiator in the volatile digital media marketplace.
DCN and Reuters Institute studies align: Trust is key for the success of digital media
Digital Content Next (DCN) and the Reuters Institute both released significant studies on trust in digital information within a week of each other. Here’s a topline analysis of the many consistencies in the findings important to navigating the future of digital content and building trust in media.
First and foremost, it’s important to note each methodology and identify the differences. Here’s how they compare:
Here are some of Reuters’ top findings (and how they compare with DCN’s):
Social media is trusted less than the news media in its ability to separate fact from fiction. Respondents think newsfeeds are filled with inaccurate information, extreme agendas, and strong opinions, perhaps encouraged by social media algorithms.
- Supports DCN’s findings of 62% agree “There’s so much random content on social media, there’s no way to tell if an article is credible or not.”
A significant proportion of respondents feel journalists do a good job in checking sources, verifying facts, and providing evidence to back up claims.
- Supports DCN’s findings regarding the building blocks of the Trust Model and the importance of key components: brand sites must focus on four key areas to build trust: attribution (confirming multiple sources), reputation or authority, navigation/user experience, and prediction — building a direct relationship with consumers that builds upon past experiences.
In talking about trust, people mention television brands more than any other type of media (e.g. print or online).
- Supports DCN’s findings in the regarding top trust brands – Newspaper and TV/Cable legacy brands historically rooted in media.
Some media outlets are taking sides, encouraging polarized set of opinions.
- Supports DCN’s recommendation that Brand sites and apps should focus on what’s vital to consumers to drive trust, position their content as regularly updated, respected, and authentic in addition to the core positioning of high quality and trustworthy.
A substantial minority who trust social media, do so for its broad range of views and authenticity.
Key Recommendations:
The news media needs to differentiate itself more from information that has not gone through the same professional checking processes
- DCN’s recommendation that fake news and distracting settings are significant problems in the digital landscape. A good opportunity for premium publishers to market themselves as a destination to avoid these annoyances.
The media need to do a better job in separating facts from opinion.
- Correlates to DCN’s discussion of vital drivers of trust. Premium content should be in-depth, respected, expert and authentic. These are the definitions of trust that move the needle.
Build a more representative media – in terms of age, politics, economic outlook, and gender – is likely to help answer the criticism that media is only looking after the interests of the establishment (we don’t speak to diversification of reporting).
Building trust takes a strong commitment from publishers and platforms, alike, to develop a successful consumer relationship. It requires understanding and strategically implementing components and drivers of trust. Importantly, the need for self-monitoring is essential to ensure accurate and credible reporting is commonly practiced.
New DCN proprietary media strategy research offers best practices for paid content
PDF
As Facebook and Google continue to dominate the US digital advertising market — and capture nearly all its growth — digital publishers look to paid content for stable revenue and diversification. Consumer subscription models also provide publishers with a strong consumer touch point, allowing for deeper data and insights for content development and engagement. New Digital Content Next (DCN) proprietary media strategy research, DCN Paid Content Benchmark and Best Practices – Part 1 provides marketplace intelligence on paid content revenues and deal structures to support premium publishers with ongoing efforts to accelerate revenue diversification.
DCN members are actively developing paid content initiatives including direct-to-consumer subscription products and third-party revenue streams for licensed content. The study shows that monetization of distributed content for the first half of 2017 represent an estimated $22.4 million average revenue for the 20 participating DCN member companies. This report encompasses branded SVOD products (e.g. PBS Passport) managed by digital publishing operations, it does not include long-form digital video content through third-party virtual MVPDs (e.g. Hulu Live), SVOD services (e.g. Netflix) and download-to-own channels (e.g. Amazon). These businesses are for the most part run from corporate distribution operations.
Key findings
- One quarter of digital revenue comes from digital content subscriptions, and 27% from paid content overall. It’s important to note that eight companies reported less than 5% of their revenue coming from paid content.
- Eighty percent of paid content is comprised of consumer subscription products sold directly by publishers, while the balance is divided between licensing and syndication (11%) and third-party sales of consumer subscription products (9%).
- Companies reported an average of 12.3 digital subscription products sold directly to consumers, however after adjusting for the large portfolios of print brands included in the study, the average is 2.9 digital subscription products per company.
Distributed content
Facebook and Google technologies and policies limited publishers’ ability to leverage new audiences sourced through distributed content. Such subscription business models require the control of paywalls, the ability to track and differentiate the experience of repeat visitors, and the capture of data to manage the relationship with subscribers. Facebook and Google’s recent announcements of plans to support publisher digital subscription models with subscription tools and new policies are promising but still at early stages of planning and activation.
Best practices
DCN identified five best practices publishers developed for successfully managing paid content.
- Support commitments to paid content initiatives at the highest levels of top management.
- Invest in premium content — including the creation of original content — for direct-to consumer subscription products that inform, educate, enrich, benefit, entertain and thrill consumers to drive subscriptions, high levels of engagement and renewal.
- Support direct-to-consumer subscription products with opportunity for growth with investments in dedicated staffing, marketing, and technology and develop disciplined subscription marketing operations to optimize your marketing spend.
- Where possible, push for a high level of accommodations from key third-parties – Amazon, Facebook and Google in particular — for subscription content and products. These platforms need to continue to develop policies and tools that provide for the data capture, paywall management and the direct customer relationships required to manage a subscription business.
- TV/cable companies should also consider launching strongly branded Subscription Video on Demand (SVOD) services.
While there are many examples of digital subscription success, there are still those publishers who exhibit a cautious yet opportunistic approach. DCN Paid Content Benchmark and Best Practices (which is only available in full to members of DCN) serves as the starting point for additional member research on paid content planned for 2018. Next up is a series of case studies that will dive deeper into the strategies and best practices that are driving success for select DCN member companies.
Digital Content Next releases Q1 2018 DCN Quarterly Revenue Report (QRR)
The DCN Quarterly Revenue Report (QRR) delivers a quarterly pulse of the premium digital marketplace. The report includes a quarterly trend analysis of display and video revenue and sales metrics across desktop, mobile and tablet. No other competitive reports like these exist in the marketplace. If you are interested in learning more about this report and other DCN benchmark reports, please contact [email protected].
DCN’s Distributed Content Revenue Benchmark Report
As many of our members know, recently Digital Content Next undertook a members-only study on the revenue impact of distributing content on social platforms. The 30-page private study was released last week to the 17 participating member companies. However, excerpts of the report have since been leaked to the press (see below) so we’ve now made an abridged version available to all DCN members.
Here are excerpts from several media outlets’ coverage of this research:
Business Insider | Leaked @DCNorg report shows how much money publishers make from Facebook, Google & Snapchat
Publishers are receiving far less money than might have been expected from placing their content on the third-party distribution platforms owned by companies including Facebook, Google, and Snapchat, according to a new report.
The report, from premium publisher trade body Digital Content Next (DCN), claims that the (mean) average premium publisher generated $7.7 million in revenue from distributing their content on third-party platforms in the first half of 2016 — equivalent to around 14% of their overall revenues in the period…
Bloomberg | Facebook, Snapchat Deals Produce Meager Results for News Outlets
Newspapers and other media outlets are struggling to make money from their partnerships with tech giants like Facebook and Snapchat, raising concerns over their business models in a news landscape increasingly dominated by social media platforms.
Some publishers are scaling back on Facebook Inc.’s Instant Articles program, in which they host stories directly on the social-media company’s platform instead of their own websites so they load faster on phones, according to a report by Digital Content Next, a trade group…
Quartz | Betting on Facebook and Snapchat hasn’t paid off big for publishers, a study shows
If journalists were betting on third-party apps, like Facebook and Snapchat, to revitalize their businesses, they may be disappointed. Early signs show that the giants of online social networking and messaging aren’t huge sources of revenue for publishers.
Content on third-party platforms—where the work is hosted on services like Facebook Instant Articles, Snapchat Discover, and YouTube rather than on their own URLs—account for a small share of publishers’ overall revenue, according to Digital Content Next, which analyzed data provided by its partners, which include TV and cable networks like ESPN and NBC News, and publishers like The New York Times, The Washington Post, and Business Insider…
Digiday | Publishers made only 14 percent of revenue from distributed content
Publishers are only making 14 percent of their revenue from distributing their content on third party platforms, according to a new report from Digital Content Next, the premium publishers’ trade group. The Distributed Content Revenue Benchmark Report, which reflects revenue in the first half of 2016, is based on a limited sample — 17 members — but offers a rare look at how much publishers are making from social distribution. The majority of publishers’ distributed revenue came from YouTube, as newer platforms and features have failed to turn into meaningful revenue streams…
Advertising Age | Facebook, Snapchat Deals Produce Meager Results for News Outlets
Newspapers and other media outlets are struggling to make money from their partnerships with tech giants like Facebook and Snapchat, raising concerns over their business models in a news landscape increasingly dominated by social media platforms.
Some publishers are scaling back on Facebook Inc.’s Instant Articles program, in which they host stories directly on the social media company’s platform instead of their own websites so they load faster on phones, according to a report by Digital Content Next, a trade group…
Cheddar | DCN Report on Publisher Revenue from Social Media Distribution
To generate revenue on social platforms, publishers must offer more ad opportunities and embrace subscriptions, @DCNorg says. #CheddarLIVE pic.twitter.com/sdN8dAbY5j
— Cheddar (@cheddar) January 25, 2017
To access the abridged Distributed Content Revenue Benchmark Report, you will need to a member of DCN and to be logged into the site.
The power of focus: building a strong niche publishing business
The media industry is in a time of great transition, in part due to the proliferation of digital publications and the growth and popularity of social platforms. While industry consolidation might threaten the independence of some publications, there is also an unprecedented opportunity for publishers to communicate their unique perspective to underserved, targeted audiences.
“I know firsthand that we’re much more nimble than larger news organizations. We can try things out quickly. You know, we can try things out and fail fast, or we can try things out and see some early wins and then build on them. I really appreciate our ability to be nimble and flexible and measure our results and make quick decisions.”
“The number one mistake that media companies make is that they have a journalistic idea, and it’s not done in tandem with a business idea that operates in synchronicity with the journalistic idea.”
With this in mind—and with the help of funding from the Knight Foundation—Digital Content Next worked with Ascolese Associates on the research report Niche Publishers: How to Create Sustainable Business Models in a Digital Marketplace, released January 18. This niche publisher research examines how 11 digital publications each capture a unique space, attract audiences, and monetize those audiences.
“I know firsthand that we’re much more nimble than larger news organizations. We can try things out quickly. You know, we can try things out and fail fast, or we can try things out and see some early wins and then build on them. I really appreciate our ability to be nimble and flexible and measure our results and make quick decisions.”
Mary Walter-Brown, Voice of San Diego
The research identified two core focus areas for niche publishers that are vital for their success: content strategy and business strategy. According to the report, these core focus areas are made up of seven tactical components, which are discussed in detail: content development, editorial brand, audience development/ delivery, data, KPI’s, revenue streams and operational efficiencies.
Publishers interviewed agreed that superior content is the core deliverable, but content alone can’t drive a publication to success; an integrated business strategy is necessary. While a quest for scale dominates many digital strategies, niche publishers focus on providing distinctive, even unique content that meets the needs of a very specific audience.
Almost universally, these niche publishers emphasized something that has become a common theme across digital media: the importance of revenue diversification. Additional revenue streams give non-profit publishers more independence from corporate and individual sponsorships and for-profit publishers some independence from advertising sales.
“The number one mistake that media companies make is that they have a journalistic idea, and it’s not done in tandem with a business idea that operates in synchronicity with the journalistic idea.”
Jim Vandehei, Axios
Many niche publishers interviewed cite repurposing content and digital or live events among their revenue streams. However, other avenues include outsourcing internal talent, a “data store,” and a marketing membership program. Notable among these publishers is a willingness to collaborate and create partnerships that allow them to fight above their weight class in terms of staffing and data resources.
Ultimately, the report finds that a niche publication’s smaller size translates into a flexible and nimble environment and, often, a more entrepreneurial approach to their business. Notable among these publishers is a willingness to collaborate and create partnerships that allow them to maximize their staffing and data resources but also to ensure the viability of this segment of the digital media industry.
2016 DCN content distribution impact research
The 2016 DCN Content Distribution Impact Research report – the first comprehensive examination of content distribution’s impact on premium publisher’s brand websites across content type — examines the current market for content distribution, consumer motivations for interactions with various platforms and the impact on engagement with premium publishers’ brand sites.
Available to DCN members only, the research showed when known brands appear on the social platforms measured – Facebook, Twitter, Snapchat and Instagram – they saw a double-digit net increase in engagement. The research also showed Snapchat Discover currently has the greatest ability to drive longer engagement with premium brands (53% between 10 and 20 minutes) and 51% of respondents noted they’re more likely to engage with a brand that publishes on its Discover offering.
The research also found that nearly 75% of consumers access more information now that their favorite brands are on social media: Social is additive – respondents who plan on spending more time accessing information from brands on social media sources don’t plan to reduce their content consumption on brand sites and apps.
Additional findings from the report:
- Usage – Current events and depth of information on brand sites/apps drive usage.
- Impact – A majority of consumers are likely to visit a brand’s site or app after reading a story on a social media platform.
- Engagement – Viral and personalized content are hidden drivers for engagement on premium websites.
Important Note: If you are a DCN publisher member, please be sure to log in or register to access this special members-only research, which will appear below this notice once you have logged in.
2015 DCN Consumer Ad Block Report
The 2015 DCN Consumer Ad Block Report explores the increasing threat posed by ad blocking software. The Report examines consumer attitudes toward ad blocking software, finding that 33% of U.S. consumers are very likely or somewhat likely to try ad blocking software in the next three months. Available to DCN members only, the report offers additional insights into awareness and usage of ad blocking software, attitudes towards perceived performance impact on browsing experience, and how perceptions differ between premium content and social media sites.
According to DCN Research Director Rande Price, survey responses often over-estimate actual behavior, therefore a “discounting” formula was applied to attempt to estimate intended install rates. “We estimate about half of the ‘very likely’ responders and one quarter of the ‘somewhat likely’ responders – a net take rate of 9% – will opt out of advertising in the next three months,” said Price.
Additional findings from the report:
- Experience: More than 70% dislike ads that expand over content or play with sound.
- Tracking: 68% are concerned when ads track their behavior.
- Performance: 57% note their web pages load too slowly with ads.
If you are a DCN publisher member, please be sure to log in or register to access the special member’s only Report, which will appear below this notice once you have logged in.
2015 DCN Bot Benchmark Report: What makes a publisher premium
The 2015 DCN Bot Benchmark Report: What Makes a Publisher Premium, conducted with digital advertising security company White Ops, examines bots in advertising traffic across 32 DCN premium publisher sites. This 32 page groundbreaking Report offers insights into ways in which the industry can contribute to solutions. Areas covered in the Report include display inventory, video inventory, viewability, traffic sourcing and retargeting, audience development and content policies, bot sources, malware, impact of current events, usage patterns, false positives and much more.
Key Results:
- The study examined more than 30 billion total impressions.
- DCN publishers see significantly less bot traffic overall (3 percent) compared to other advertising campaigns deployed across a wide variety of websites. (11 percent).
- The average bot percentage for DCN participating sites was 2.8 percent.
- Display inventory was one quarter of the level rate found in the ANA The Bot Baseline 2014 study.
- Video inventory was one tenth of the bot rate found in the ANA The Bot Baseline 2014 study.
See the press release here.