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Advertising | Industry-Research | Perspectives

Marketers keep spending on problematic platforms

Despite a steady stream of negative news about social media platforms, eMarketer predicts that marketers will continue to invest ad dollars there. eMarketer’s US Social Trends for 2019 foresees continued fallout from 2018’s social media scandals and revelations, particularly for Facebook. It appears that marketers will continue to advertise on the problematic platform, despite declines in usage and engagement along with increased regulatory scrutiny.

For Facebook-owned Instagram, the report points to the likelihood of “growing pains” and investigations into data practices and privacy, in part stemming from the actions of its parent company. Overall, eMarketer says that 2019 will be a year to watch in terms of changing user behavior and engagement across social media platforms.

For Facebook and Instagram, eMarketer predicts that:

  • They will bring in a combined $67.25 billion in worldwide ad revenue, up 23.5% from 2018.
  • They will see US expenditures increase 20.6%, to $27.57 billion this year.
  • Time spent on Facebook among US users will remain flat this year, at 40 minutes per day.
  • Time spent on Instagram will inch up only slightly, to 27 minutes from 26 minutes in 2018.

However, the report points out that, much as marketers have had trouble shifting ad dollars away from linear TV despite declining audiences, they won’t be inclined to quit Facebook either, even in light of its mounting problems. In fact, Next year, eMarketers predicts that marketers will put $32.18 billion into social ads, with the vast majority—$27.57 billion—spent on Facebook. That will bring social ad spending to 47% of TV ad spending ($69.17 billion) this year.

For Snapchat, eMarketer predicts that usage will slow. However, the company will have better luck garnering revenues from its existing users. eMarketer estimates that Snapchat’s US average ad revenue per user (AARPU) will top $10 this year ($10.18 to be exact), up 30.4% over 2018 (when AARPU grew just 10.9%).

Other eMarketer 2019 productions include:

  • An explosion of the stories format (followed by a backlash)
  • The spread of vertical video
  • The newsfeed will maintain its dominance as social media’s primary UI
  • Social shopping will gain traction

Given the turbulence in the social media landscape, we’ll all need to keep an eye on Facebook’s place and popularity in the marketing landscape as well as the ripple effect that increased scrutiny on platforms data usage will have on all players. It will also be interesting to see if the stories format remains relevant in the long haul, as well as continued shifts in the perception of, and tactics around, influencer marketing.

Revenue

Back in black: The rise of revenue diversification

The publishing industry is going through a transformation due to continued shifts in reader habits. As readers spend more time within social platforms, publishers are exploring new opportunities both on and off their sites to reengage users and grow their bottom line. Revenue diversification has become a priority in the media business.

With a large number of readers congregating on social platforms, advertisers and publishers followed them there. All types of content that ranges from personal posts to advertisements to videos have made their way into people’s feeds. But akin to display ads in the early stages of internet advertising, the feed has driven a need to break through the clutter. In today’s media environment “normal” coverage doesn’t always make it through – surprising events do, particularly when main metric that news outlets are judged are through ratings and page views. 

The changing social relationship

Social platforms are characterized constant changes to algorithms, the latest of which prioritizes posts of friends and family members over publishers. At the same time, Facebook regularly tries to entice publishers to try new products and features.  

Earlier this year, the social media giant also informed its production partners for news shows on Facebook Watch that it won’t renew two-thirds of its existing news shows. At this point, publishers aren’t likely to put too much faith into these so-called partnerships. As a result, they have to seek out new revenue approaches that rely less on social platforms.

Even web natives like Buzzfeed have recently struggled with layoffs, reinforcing the view that diversified revenue streams outside of platforms are imperative for survival. These venture-backed sites have seen issues surrounding the need to prove profitability faster than they can grow organically, causing a focus on sheer traffic and get-rich-quick strategies.

A healthier approach

Then there are niche players, like wellness publication Well+Good, which have done the exact opposite. They focus on growth by creating content and real-life experiences for their core audiences in order to connect with their readership in new ways and create additional streams of revenue.  As they understand the lifetime value of their readers and cater to their wants and needs, they’ve created a loyal following that transcends from online to real life.

By noticing a trend for “one-stop wellness” among its readers, Well + Good created experiential events through teaming with other wellness brands and expanded their offering. Readers can now experience the brand through wellness retreats, in-person monthly talks, and the potential for health & wellness pop-up shops.

Flowing with the revenue streams

However, it is important to recognize that new revenue opportunities need to be a natural extension of the brand. At the 2019 American Magazine Media Conference in New York City, Troy Young, president of Hearst Magazines, mentioned how media brands need to be more “thoughtful, research-oriented and data-driven.” At the same conference, CEO of Bonnier Corporation stated “…it’s dangerous for us in media to think we should stay in our swim lane. We are not going to get out of media, but we’re attached to it,” when commenting on how he would “future-proof” Bonnier by proposing one-third of his revenue comes outside of publishing.

Revenue streams outside of ads are not a one-size-fits-all. And figuring out how they fit within existing infrastructure can be difficult. But publishers that get it right have new ideas that focus audience attention and command bigger media budgets from brands. “There is going to be a new crop of players like us that accelerate because they understand how to connect content, commerce, and conversation,” Erika Nardini, CEO of Barstool Sports said. “Companies that do that are going to be in a good spot.”

Experience and growth

Leading local news organizations like Gannett are diversifying their revenue through subscriptions, though they are still focused on ad yield and engagement. To help with this, publishers are starting to personalize the onsite reader experiences with unique and proprietary formats to prove engagement with audiences for a higher price from advertisers. This is revealing to be a viable strategy for revenue over struggling standardized banner units. As people continue to shift toward mobile where there’s less real estate for ads, it has led to the rise of publishers embracing native, according to Digiday.

A recent eMarketer report forecasts that the spend for native display ads from US advertisers will be $43.90 billion in 2019, a $24.6 year-over-year growth. They also anticipate native display ad spend to grow over 20% to $52.75 billion in 2020. Principal Analyst for eMarketer, Nicole Perrin said “Native formats have made significant inroads in channels like mobile apps, but there are still a lot of traditional display units being traded programmatically, especially on desktop and the mobile web.”

It’s interesting to note that when it comes to the share of native from social, eMarketer sees a slight decline from 76.6% in 2018 to 73.5% in 2020. Yet this may be a silver lining for publishers. As Facebook finds itself embroiled with data concerns with its ad-targeting tools and constant change of its ad policies, it may become less appealing to brand marketers. It may also give publishers pause in how they include social as a part of their online strategy.

If today’s publishers want to explore new opportunities to diversify their revenue streams while making meaningful connections, a native feed experience is a viable strategy. It can help improve reader engagement by personalizing content experience and shift share from the social media giants and bring publications back into the spotlight. 

Advertising | Featured Post | Perspectives

Publishers have their mojo back

I’m calling it. 2019 is the year publishers get their mojo back. While there’s still work to be done – and the rewards for many are further down the road – the signs are pointing in the right direction. 

More than ever, digital media companies understand that their most precious assets are their audiences and advertisers. They understand that they must foster this relationship over time through their programming, advertising opportunities and the overall experience they create wherever they touch their customers. And, they understand that their brands are proxies for this trust. Without a doubt, the companies that publishers choose as business partners — whether distributing their content or advertising — can, and do, have a lasting impact on this trust.

Those of you who have been in the digital media business for a while are probably thinking: “Haven’t we been here before?” and perhaps you’re wondering what’s really changed in the past two years. Here’s the way I see it:

Facebook: pivots around publisher content

Initially, publishers believed the promise of a fire hose of traffic to their sites but eventually grew tired of the hoops they were jumping through to address Facebook’s changing priorities. From organic content to paid promotion, external traffic evolving into Instant Articles, embedded video becoming Facebook Watch, and everything-must-be-free to efforts to support paid subscriptions – it’s mind boggling. But all of this has resulted in publishers wanting to control their own destinies more than ever before.

Apple: push for consumer privacy

While Apple’s push for consumer privacy in its Safari browser is a laudable approach, it has hamstrung publishers’ ability to monetize their web inventory. At the same time, it pushes publishers towards Apple’s closed app platform where they cough up 30% of their revenues from selling subscriptions to their own apps. In an odd way, this 30% take-rate by Apple has made its reported 50% take on its new Apple News+ product seem more acceptable. In any case, growing consumer trust through a higher privacy bar while building in real support for publisher ad and subscription revenues are steps in the right direction.

Google: control of advertising supply chain

Google has demanded that publishers allow it to track their customers and collect their behavioral data across the web. At least if they want to get the full benefit of what has evolved into a Google-influenced, if not controlled, advertising supply chain. Google has also essentially made it a requirement for publishers to participate in AMP if they want to avoid being lumped into a news black hole on mobile. The relationship with Google can easily be one of the more sensitive issues inside any media shop and rocking the boat will almost certainly have consequences. However, consumers aren’t happy with unrestricted tracking, and that bodes well for trustworthy publishers who are transparent and handle consumer data with care.

Emerging platforms: a chance to get it right

There are new platforms growing quickly, which will succeed or fail based on their ability to fully appreciate the value of high-quality programming. Each one surfaces new negotiations and concerns. Roku is one to keep an eye on as they have the chance to reinvest in high-quality, brand-differentiated programming by truly partnering with their publishing partners. Or, they may be the next Blackberry — steamrolled as their market advantage is lost to other larger platforms that can beat them on technology alone. However, the path to success for emerging platforms will be true partnerships with trusted content brands.

What’s next? 

While we may never know exactly what has caused this shift, it is a positive sign that digital media companies here and in Europe are also asking for the same things, which I’ve seen first-hand. Publishers now speak of Facebook, Google, and even Apple not simply in terms of opportunity but with skepticism. They see the positives of each in driving new audiences, innovations, and experiences – and to be a part of what is “next.” However, they’ve turned a critical eye to each platform’s motivations and are pressing for better terms, including:

  • Protecting and preserving the relationship with their audience. They know that trust and value reside in the relationship: The data, the brand and two-way dialogue with the customer. 
  • Ability to drive subscription or membership revenue. For too long, this was antithetical to the interests of platforms, which wanted to touch as many users as possible for the purpose of mining their data for targeted advertising. The global discussion around this issue has shifted, starting in Europe. Now, the rest of the industry is trying to catch up. 
  • True partnerships. They’re not looking for another quick fling, featuring a spotlight appearance at Facebook’s or Apple’s soiree. Hopefully that no longer carries the glamour it once did as the hangovers are real. Instead, publishers are looking for fair value and a long-term commitment by the platforms to work together, solve issues, and build success for all parties.

Publishers everywhere are looking at these opportunities with a shrewd business eye. They recognize that these opportunities are being designed and offered by an intermediary to their customers. And, as the stock market clearly demonstrates, these intermediaries are focused on maximizing their own profits.

Whatever the reason, or confluence of events that caused it: The non-negotiable, take-it or leave-it discussions from platforms are in the rear-view mirror. Change is here and publishers have rediscovered their mojo.

Now it’s time to put it to work.

Industry-Research

Publishers focus on subscriptions as they diversify revenue

Publishers are challenged by the dominance of platform intermediaries in content distribution and advertising revenue. Those facing these challenges are looking to offset losses by broadening their revenue diversification through subscriptions and new product offerings. In fact, according to Reuters Institute’s Digital News Report: Journalism, Media, and Technology Trends and Predictions 2019, subscription and membership offerings are a priority this year.

The report, based on responses from 200 editors, CEOs, and digital leaders from 29 countries, states that more than half (52%) of digital leaders expect subscriptions to be a main revenue focus this year. This compares to just over a quarter (27%) who cite display advertising as a main revenue source, and only 8% who state native advertising and 7% who report donations. Still, advertising is an important focus. A strong majority see display advertising (81%), subscriptions (78%) and native advertising (75%) as “important or very important” for company revenue.

Additional findings include:
  • Limited funding for quality news. Less than one-third (29%) of digital leaders expect funding from foundations and non-profits. Eighteen percent expect contributions from tech platforms and 11% think governments will provide more support. A full 29% of publishers do not expect any assistance in funding.
  • Google is very important; Facebook and YouTube less so. Google remains a key priority for most with most publishers (87%). They report it as “very or extremely important” compared to Facebook (43%), Apple (43%) or YouTube (42%) as they look to reach new audiences. Fewer publishers see Instagram (31%), Twitter (29%), WhatsApp (16%), Amazon (16%) or Snapchat (8%) as important to their news organizations.
  • Social media presents options for marketing and acquisitions. Publishers that are focusin on subscriptions use social media more as a marketing and acquisition channel. Still, social media usage and results differ by publisher. Magazine brands are more likely to use Instagram and Snapchat for marketing, while local news publishers use broad reach platforms for referrals.
  • Publishers use visual storytelling to attract a younger audience. Stories has become a highly popular storytelling format. It is used daily by 150 million people on Facebook, 190 million on Snapchat, and 300 million on Instagram. Publishers are utilizing visual storytelling because it works well on mobile and helps attract a younger audience.
  • Podcasts and voice assistant devices become part of publishers’ strategies. Three-quarters of publishers (75%) think that audio devices like Amazon Alexa and Google Assistant will become an important part of their content and commercial strategies. Seventy-eight percent also report that voice assisted devices will impact how audiences access content in the next few years. The New York Times now offers a short news briefing for Alexa devices and consumers can ask for the Times’ Flash News Briefing.
  • Publisher paywalls may lead to consumer frustration. The strategy to put whole-publisher sites behind a paywall may meet with consumer backlash. If this occurs, publishers will likely see an increase in the adoption of subscription blockers, an easy downloadable software or browser extension with a workaround for metered paywalls.
  • Increasing bundled offerings and payment aggregation. To prevent churn and increase engagement, publishers will announce bundled packages including more product and cross-media packages. For example, The Times of London offers a one-year Wall Street Journal subscription. Publishers, Telcom, and over-the-top services (OTT) are also packaging their services in subscription offerings.

It’s essential for publishers to continue strengthening their relationship with consumers. Rasmus Kleis Nielsen, director the Reuter’s Institutes, comments in the Nieman Lab Predictions for 2019, “The shift thus has to be about better and more distinct journalism in an incredibly competitive battle for attention, about a greater focus on what readers actually value, about organizations and technologies built around serving them efficiently, and perhaps most importantly about a commitment to the long haul — to making the changes necessary to winning paying readers one at a time, keeping them, accumulating them.” Nielsen believes that in order to ensure journalism is valued, publishers must identify the needs of the reader. Importantly, there are new strategies and technologies available to build consumer value, heighten product attraction and increase engage with paying consumers.

Featured Post | Perspectives

Top 7 media trends in 2019

As the year comes to a close, we always get the reflexive compulsion to look back and take stock of what happened and consider what’s to come. And this year truly brought a sea change on a number of fronts in digital publishing. Facebook and other tech giants stumbled mightily from one PR disaster to the next, culminating in top executives literally telling Congress that they expect to be regulated. Who would have imagined that?

And the old, sad chase for eyeballs might finally be laid to rest, as digital pubs pivoted away from video, away from chasing mass audiences via social media, and toward reader revenues and putting the audience first. And while the digital ad duopoly of Facebook and Google face headwinds of regulation and a public backlash, Amazon is expected to make it a “triopoly” as their ad growth is skyrocketing.

Here are the media trends that made the biggest difference in 2018 and what to watch out for in 2019:

1. Facebook and Tech Giants Lose the Plot

It’s a lot easier to talk about what’s wrong at Facebook than what’s going right, and that goes doubly for its relationship with publishers. At the beginning of the year, Facebook changed its News Feed algorithm to downplay news pages and then saw its own usage flatten over the year. Things got worse when Facebook forced publishers to go through a verification process just to boost posts with political stories. Even at South by Southwest, a techie’s fevered dream, the “techlash” was in full effect with entire panels devoted to attacking Facebook.

Even worse for the technology behemoths was the continued pushback from regulators in the EU and U.S., including a rare bipartisan rebuke against executives. While Republicans and Trump have alleged anti-conservative bias at Facebook and Google, many others believe they need stronger regulation around privacy, especially after so many scandals related to politics (see Cambridge Analytica) and data leaks (see Facebook’s not-so-private photos). Expect more backlash and more regulation to come.

2. Amazon Joins the ‘Triopoly’

And if you’ve grown tired of the exploits of the digital ad duopoly, rest assured you have a new tech giant to worry about: Amazon. The Seattle behemoth has quietly slid into third place among digital ad purveyors and is set to grow a whopping 400%+ per year to grab 15% of U.S. market share by 2020, according to eMarketer. And the signs have been growing about Amazon’s dominance all year, from the time they beefed up agency and marketer support to the point where they had a scandal over sponsored wedding registry listings. Let’s celebrate another player to give Facebook and Google a run for their money – as long as they play fair.

3. Media Mergers Trump Trump

He tried so hard to penalize CNN. But in the end President Trump failed to block the AT&T purchase of Time Warner, or force a spin-off of CNN (which has been on a money-making tear). Instead, the mega-merger was approved by the courts, and we also saw Fox offload most of its assets, including the 21st Century Fox studio, to Disney, while Comcast skulked away in defeat.

And T-Mobile and Sprint passed their final hurdles to merge in 2019, leading to only three major mobile services in the U.S. They promise to cut prices for consumers, but less competition usually results in higher prices overall. How will all these huge mergers play out in 2019? For the media companies, it’s all about taking on the disruptive tech giants moving into entertainment and streaming. For the wireless carriers, it’s about moving toward speedier 5G to give us faster streaming (at higher prices). All those trends will come together as Disney unleashes its new streaming service next year.

4. The Digital Media Reckoning Continues

This year just reinforced growing trends in 2017, that will likely continue into 2019: Digital-only publishers cannot rely heavily on advertising or even sponsored content. Without diversified revenue streams, and especially reader revenues (subscriptions, memberships, etc.), most of these former darlings will end up hallowed out, like what happened to Mashable before and Mic recently. Even BuzzFeed had to move toward an NPR model, asking for $5-a-month memberships to support its news operation – complete with the cliché tote bag reward.

BuzzFeed CEO Jonah Peretti is calling for more consolidation. But most importantly, publishers need to put the audience first and take a user-centric view of sustainability. As Politico’s Tyler Fisher wrote in Nieman Lab:

“With a business model focused on reader revenue, the entire company can set its sights on making the best journalism product possible for the reader … The smartest of smart newsrooms will take one more step in their path to sustainability: They will become a trusted institution in their communities by respecting their users’ time, intelligence, and privacy.”

5. Snapchat, Flipboard, Pinterest Rise as Facebook Falls

As Facebook took a tumble this year, others stepped into the void and took advantage of the social giant’s missteps. The most ironic beneficiary was Snapchat, which had taken a beating from Facebook with copied features (ahem: Stories). The company stepped up its game by letting marketers target publishers in Discover and letting publishers use non-exclusive content in Discover. Even old stalwarts like Flipboard and Pinterest saw their stock rise as Facebook fell to earth. Why? As Facebook dealt with misinformation and algorithm angst, Flipboard focused on human curation and Pinterest on lifestyle. Of course, Facebook does own Instagram and WhatsApp, which continue to grow and thrive outside of the parent company’s shadow.

6. Linear TV Under More Pressure from Streaming

As noted above under the “Digital Media Reckoning,” the move toward reader revenues means more ad-free environments, and streaming giants like Netflix and HBO are leading the way. Even Facebook did some research on whether a subscriber-supported ad-free social network would pay off. Meanwhile, cable nets such as AMC Network saw their advertising revenues drop, while distribution revenues soared as they sold content to streaming networks and diversified.

Where does that leave our old friends, the purveyors of linear TV? They’ve had to up their game and innovate with “addressable TV ads” that target people better than mass market TV ads, which are on the wane. And AT&T’s purchase of Time Warner has given the telecom giant a chance to broaden its offerings with more content and data. Linear TV will continue to find ways to battle – and emulate – the streaming upstarts.

7. Podcasts Remain Strong After Some Contraction

Podcasts continue to mature and large publishers such as New York Times and Washington Post are pushing deeper into the audio-on-demand medium. There were some hiccups in 2018, with Panoply dropping its podcasts to focus on being a platform and infrastructure for podcasts. And BuzzFeed also closed its in-house podcast production outfit to focus on long-form video. But there were also signs of continued expansion, as Malcolm Gladwell and Slate’s Jacob Weisberg launched a new podcast company called Pushkin Industries, and iHeartRadio bought podcast producer Stuff Media (which makes “How Stuff Works” and more).

The reality is that as metrics improve, including the NPR-led open source RAD technology, more marketers will jump in and find that podcast listeners can be a very loyal bunch.

Conclusion

With the tech platforms hitting rough spots, this has been a year of retrenchment for publishers, who are taking stock of what’s really working and what’s leading them astray. The days of shiny new objects like VR and blockchain seem to be on the wane, and a laser focus on the user and serving the public are front and center. As VC funding becomes scarce, media startups need to be more practical and strategic. The chase for eyeballs is coming to a close, and now we can think about what’s real for our businesses – and for our communities.

Industry-Research

YouTube outage drives 20% increase in traffic

Last month, YouTube experienced an outage for about an hour and the internet got a taste of what would happen if the platform disappeared. The results were surprising: Internet behaviors shifted immediately and fiercely. There was a huge overall traffic surge, with some of the largest increases seen on app and search traffic.

Chartbeat analyzed the YouTube outage using global traffic data across a sample of more than 4,000 sites. Overall, this outage resulted in a 20% net increase in traffic to publisher sites. Just over half of this increase (11% of overall traffic) went to general articles on publisher sites, while articles about the YouTube outage comprised a 9% lift.

Huge surges in search and app Traffic

It makes sense that since 45% of the traffic lift came from articles about the outage, we saw a large boost in search traffic, with readers likely searching for answers regarding the outage.

Specifically, we saw a 59% increase in search traffic. Across other referrers types, we saw a consistent lift—notably also from platforms within the Google ecosystem:

  • Direct +9%
  • Links +28% – of total link traffic during the outage, Google Chrome Suggestions made up 19% and Google News 14%
  • Internal +13%
  • Social +11%

As we look at how and where people read during this outage, we saw app and Google AMP traffic seeing the largest surges, with 78% and 67% lifts respectively. We also saw boosts across desktop, but mobile and tablet saw even larger increases.

  • Web +15%
  • Facebook Instant Articles +6%
  • Desktop +13%
  • Mobile +26%
  • Tablet +26%
Not all platforms are created equal

We compared this traffic boost to the Facebook outage on August 3rd, 2018, which brought a 2.3% net increase to publisher traffic in the 45-minute outage window. Similarly, the late August Reddit outage didn’t even make a blip to overall publisher traffic. In the Facebook case, only a negligible amount of that traffic went to articles about the outage.

There are a couple potential reasons for the vast difference in traffic increase in the YouTube outage vs. the Facebook outage.

  1. YouTube is not normally a traffic driver to publishers: Unlike Facebook, YouTube does not refer a great deal of traffic to publishers. Thus, the effect of people moving from YouTube to publisher sites during the outage had a dramatic impact and was purely additive.
  2. Day and time difference: Facebook’s outage occured on a Friday afternoon (US time) / evening (Europe/Asia time). Thus, the majority of people were likely at work or out for the evening. It wasn’t prime news-reading time. The YouTube outage, on the other hand, was on a Tuesday evening (US), which is prime couch time.

So far, we’ve seen there’s no single reaction when a platform goes down. Sometimes people are more apt to search for answers, sometimes they go directly to a news source they trust. The one thing we do see is that when Facebook or YouTube goes dark, the rest of the internet comes alive.

Industry-Research

How do Facebook’s News Feed algorithms impact non-profit publishers?

The Facebook’s News Feed, introduced in 2006, was once a strong source of traffic for many publishers. News organization utilized the intermediary platform to grow their audiences. The social sharing of news also altered the direct-to-consumer paradigm.

Earlier this year, Facebook announced that their News Feed would prioritize posts from friends and family over news content. While some news publishers faced modest declines, others reported significant ones. Chartbeat, a content analytics platform, provided data showing Facebook traffic to publishers declined 6% since the beginning of January. However, LittleThings, a publication focused on feel good stories and other content for women, claimed they lost 75% of their referral traffic due to changes in Facebook’s New Feed and subsequently shut down.

In its latest research, The Shorenstein Center on Media Studies explores the impact on non-profit news brands. Non-profit news organizations rely heavily on social interaction to help encourage donations. A traffic decline could negatively impact donation revenue. Shorenstein’s new report, Facebook Friends? The Impact of Facebook’s News Feed Algorithm, offers a custom analysis of eight non-profit news publishers.

The research divides the publishers into two categories: investigative and single-subject. The investigative group focuses on producing investigative journalism on a wide range of topics. The single-subject group produces investigative journalism in the context of a single subject. The three investigative organizations include The Center for Public Integrity, ProPublica, and Reveal from The Center for Investigative Reporting. The five single-subject organizations include Chalkbeat, The Hechinger Report, The Marshall Project, The Trace, and The War Horse. The analysis focuses on two key metrics – total users and total sessions – looking at the three months prior to and after the News Feed change.

In the three months after the News Feed changes, in terms of overall traffic, the investigative organizations saw small changes in both the number of users and the number of sessions. In contrast, the entire single-subject cohort registered growth for these two metrics.

The analysis also looks at the composition of traffic, where the traffic is coming from, by using the Google Analytics channels Direct, Email, Organic Search, Other, Referral, and/or Social. Referral traffic was most consistent; increasing both in users visits and sessions. Only two of the eight non-profit publishers show social referral increases. Not surprisingly, Facebook referrals closely follow in line to social.

Given some of the non-profit news publishers registered small to moderate traffic increases, the Shorenstein research hints to Facebook’s potential growth path for non-profit news publishers, even with the algorithm changes. The difference between larger commercial news publishers and non-profit may be due to how non-profit new organizations’ stories are shared on Facebook. More research on this is needed to understand the consumer experience sharing content from commercial news publishers compared to non-profit news publishers.

Industry-Research

How publishers align business models with strategies for social media distribution

Publishers use social distribution to keep up with  consumers’ news consumption habits. And despite the annoyance and uncertainty of platform policy changes (e.g. Facebook news-feed changes), publishers continue to align their business strategies and social practices.

To better understand this alignment, the Reuters Institute explores distribution strategies across 12 news publishers in six European countries in their new report, Digital News Project.

Strategic objectives

While distribution strategies may vary in approach, they center on one of three core objectives:

  1. driving on-site traffic through referrals
  2. driving off-site reach through native formats, and
  3. driving digital subscription sales.

Based on this sample, social platforms offer limited opportunities for publisher monetization. Nevertheless, news organizations can receive indirect benefits in terms of traffic, off-site reach, and/or subscriptions.

Platform differentiation

Understanding and differentiating between platforms is important for social diversification:

  • Facebook accounts for the largest share of publishers’ social media traffic. It also delivers higher levels of audience engagement and is considered more cost-effective at driving digital subscription sales.
  • Twitter offers the most value for generating off-site reach and greater visibility with breaking news. It’s the go-to platform to reach journalists, opinion leaders, trendsetters, and influencers.
  • Instagram has the potential to deliver high audience engagement and promote news brands, especially to younger audiences. It’s a great fit for light content like entertainment news. Publishers view Instagram as experimental.
Publisher practices

The Digital News Project also examines publisher practices on Facebook after the January 2018 policy change to deprioritize news publishers’ content in favor of family and friends’ posts. Analyzing these practices provides a performance review of news sites’ social platform strategies.

For example, Iltalehti, the Finnish tabloid, continues to publish as often on Facebook after the policy change. However, Facebook’s new policy resulted in a 28% decline in Iltalehti’s average daily interactions. Unfortunately, Iltalehti’s bottom line is severely impacted since the publication relies heavily on social traffic referrals for monetization.

In contrast, the French publication, Le Monde, decreased the frequency (13%) of their Facebook posts after the policy change. The decline in Le Monde posts resulted in a 29% decline in average user interactions. Le Monde is deliberating on their long–term Facebook social strategy since they too use traffic referrals as a significant part of their overall monetization strategy. Insert le monde chart

It’s important for news publishers to identify their objectives before implementing social distribution strategies. The social approach should allow publishers to experiment with new opportunities to drive on-site traffic, or to build awareness and brand recognition or to engage users to subscribe to paid service.

Industry-Research

When people can’t read news on Facebook, they find it anyhow

What would the web look like without Facebook? Chartbeat had a glimpse into that on Aug. 3, 2018, when Facebook went down for 45 minutes and traffic patterns across the web changed in an instant. What did people do? According to our data, they went directly to publishers’ mobile apps and sites (as well as to search engines) to get their information fix. This window into consumer behavior reflects broader changes we see taking hold this year around content discovery, particularly on mobile. And this is good news for publishers.

Traffic Trends Reverse

Despite volatility driven by algorithm shifts and intense news cycles, user demand for content (represented by traffic across the web) is quite stable. But the sources of that traffic are anything but static. In fact, we’ve seen a major reversal in the specific sources driving traffic to publisher sites in the last year.

Key shifts:

  • Mobile traffic has seen double-digit growth and surpassed desktop, which saw double-digit declines.
  • On mobile, Facebook is down nearly 40% since January 2017, while Google Search has seen a 2x growth in that same time period. That means increases in Google Search referral traffic have more than offset any declines in Facebook referral traffic.
  • Additionally — and of significant importance — mobile direct traffic to publishers is now greater than traffic sent by Facebook to publishers’ sites. This means consumers are now more likely to get their news by typing in a publisher URL or opening an app than by being referred through Facebook.

Mobile Content Discovery Apps Broaden

We’ve also observed content discovery habits changing, as “built-in” mobile aggregators emerge as meaningful referrers. While traffic driven by more traditional referrers like Yahoo, Twitter, and Outbrain has stayed roughly constant for the last 18 months, news aggregator apps that are built directly into the mobile phone or browser experience are now driving significant traffic to publishers. These apps have seen incredible growth:

  • Google Chrome Suggestions, a personalized newsfeed built into Chrome’s mobile browser, is up 20x.
  • News aggregator Flipboard is up 2x in the past year.
  • The new Google News app, which is pre-installed on Android devices, is up roughly 60% since it relaunched in May.

Built-in portal apps aren’t the only apps to watch; publisher-owned news apps are also making a comeback. According to the Digital News Report 2017 from Reuters Institute, weekly use of news apps in the US was up roughly 40% in 2017. And Chartbeat data shows that app users are not just consuming more content, but they are also an incredibly loyal audience – 5.7x more loyal on average than visitors who arrive from platforms like Facebook and Google.

All of which makes the Aug. 3 Facebook incident even more interesting to observe.

The Outage

Chartbeat analyzed the Facebook outage using global traffic data across a sample of more than 4,000 sites, and presented a summary of what happened at the ONA conference. Key data points show that when Facebook went down, referrals to news sites fell as expected, but other activity more than made up for it.

  • Direct traffic to publishers’ websites increased 11%, while traffic to publishers’ mobile apps soared 22%.
  • Search referral traffic to publishers was also up 8%.
  • Surprisingly, there was a net new total traffic increase of 2.3%, meaning that the number of pages consumed across the web spiked upward in this timeframe.

One of the fascinating things we noticed in the data was just how instantaneous the reaction was. When Facebook went down, it took only seconds to break the habit. Habitual Facebook usage is so intertwined with mobile usage, however, that it is hard to say what would really happen in a Facebook-absent world. Would mobile consumption be the same without it?

Facebook drives a tremendous amount of traffic to publishers, but at the same time, it also competes in terms of consumer time and attention. It is heartening to see that when Facebook is temporarily out of the picture, consumers still seek out the stories they want— and this is good news for publishers.

This data was originally presented at the Online News Association 2018 annual conference by Josh Schwartz, Chief of Product, Engineering and Data Science at Chartbeat. You can watch it here.

Industry-Research

Americans want platforms to be transparent about the content in their news feeds

Americans recognize the tremendous power that internet companies like Google, Facebook, and Twitter have over the news and information obtained on these platforms and they question the practice of filtered content. The Knight Foundation and Gallup examine consumer opinion on curated content in their new report, Major Internet Companies as News Editors. The research shows that consumers are more negative (54%) than positive (45%) about the idea of major internet companies targeting information to individual users based on their interests, internet search activity, and web browsing history.

Interestingly, younger respondents are slightly more positive about receiving targeted information (51%) compared to adults, ages 35 to 54 (46%) and adults 55+ (39%). However, across demographics, on thing is for certain: Consumers want full transparency. Nearly nine in 10 adults believe that internet companies should be transparent about their methods for delivering content and should publicly disclose the algorithms they use.

Additional findings include:

While three-quarters of Americans agree (“strongly or somewhat”) that major internet companies should get credit for connecting local communities, 85% have concerns with their inability to stop the spread of fake news. In addition, 69% agree (“strongly or somewhat”) that major internet companies are limiting Americans exposure to viewpoints different from their own.

Consumers recognize that the primary reason for internet companies to show personalized content is to monetize consumer usage of their platforms. More than seven in 10 say that the reason why major internet companies show certain news items to certain people is to increase the effectiveness of advertisements (79%) and to keep people interested so they regularly visit the website or use its app (74%). Both reasons revolve around revenue generation. Only one in 10 Americans (12%) believe that internet companies personalize information to help support a more informed society by connecting people to important news.

The research also finds that Americans want a standardized news feed for all users. In fact, 73% prefer that the major internet platforms show all people the same set of news and information. Only 22% of consumers prefer that the major internet companies target news and information based on people’s interests, past browsing or search history.

It cannot be denied that major internet companies now function as intermediaries between consumers and their news. According to Pew Research, about a quarter of all U.S. adults (26%) get news from two or more social media sites, up from 15% in 2013 and 18% in 2016. However, as consumers become increasingly reliant on these platforms for their news, they expect transparency about how the companies determine which news items appear in their news feeds.

Featured Post | Perspectives | Revenue

Snap rises as Facebook falls

For so long, Facebook has been the classroom bully in social media, with Snapchat taking it on the chin when Facebook copied Snapchat’s Stories format on FB, Instagram and WhatsApp. But now, the little tyke is exacting revenge as Facebook deals with blow after blow in the public arena: ongoing Russian meddling on the platform, incendiary posts inspiring real-life violence in Myanmar and Sri Lanka, and a stock market plunge that encapsulates its challenges fighting misinformation. Meanwhile, Snap has been quietly rolling out new deals with publishers and making itself out to be a much friendlier space to do business.

While it’s hard to compete with Facebook’s 1.47 billion daily active users, the story of Snapchat as the underdog fighting back is one to watch — especially as publishers tire of Facebook’s litany of problems.

‘Brand Safety and Control’

While Facebook consistently dominates tech news coverage, Snapchat also turned heads recently when it launched a private marketplace for advertisers akin to its own premium programmatic advertising marketplace. Now, advertisers can book space on specific shows and channels from a variety of publishing partners, including BuzzFeed, ESPN, and NBC Universal. Previously, brands could buy Snapchat ad inventory, but not target their advertising to specific publishers.

The beauty of this? Publishers can set their own ad rates, target only certain segments of a show’s audience, and advertisers can find more brand safety on Snapchat than they currently do with Facebook and Google’s YouTube. This is of course a boon for Snapchat too, as AdAge’s Garrett Sloane put it:

“Advertisers have been concerned about the type of content that appears on both YouTube and Facebook. Snapchat is trying to take advantage of the industry’s unease by offering a higher level of brand safety and control: Discover already operates as a gated community for professional publishers only, and the private marketplace now lets advertisers expressly select the shows they want while still using ad tech.”

On top of this, Snapchat is planning to sell six-second, unskippable ads in the private marketplace — meaning the chances of sustaining audience attention is even higher.

Broadening Discover’s Horizon

Snap also recently announced a new Discover partnership with an LGBT publisher — its first one — the U.K.-based website PinkNews. According to PinkNews CEO and editor-in-chief Benjamin Cohen, part of the incentive is that Discover is still a curated platform, meaning that accessing the humans behind the automation is still possible. Snapchat was also enticing in part because Facebook traffic for PinkNews— as is the case with many publishers — has gone down, Cohen said, and so he was looking to broaden audience traffic elsewhere.

The idea of working with a social platform like Snapchat that is actually willing to pay publishers became even more attractive for PinkNews. The partnership is also, undeniably, a win for Snapchat. It gains an outlet that will help the platform attract a young audience willing to push the boundaries of sexuality.

Indeed, it’s obvious that Snapchat is on the hunt to broaden its 191 million daily active users. In addition to working with traditional publishers, Snapchat has made a bigger effort this year to partner with digital publishers and social media stars that appeal to younger audiences. That includes Daquan Gesese, a hip-hop and pop culture personality with a huge presence on Instagram, and Fanbytes, an 18-month-old digital media company that runs four popular accounts on Snapchat, and operates a network of mostly 15- and 16-year-old creators who run their own accounts and publishing brands on Snapchat.

In May, Daquan launched his own Discover channel, and Fanbytes and Snapchat are currently trying to figure out whether “official” versions of its channels could be tailor-made for Discover.

More Flexiblity

But here’s what’s ironic about the Snapchat comeback: It wasn’t that long ago that Snapchat was ridiculed for a redesign that paired friends and family in one stream, and publishers and advertisers in another. Audiences complained, publishers worried.

“Content producers from eight publishers I spoke to said that the redesign had made their metrics go haywire,” Vanity Fair’s Maya Kosoff wrote. So it seems pretty natural that some publishers don’t necessarily see Snapchat as a particularly good long-term strategy if they can monetize better elsewhere, as one publisher anonymously confessed to Digiday last month.

However, it’s also understandable — decent, really — that Snapchat is letting publishers introduce non-exclusive shows to Snapchat Discover. Syndication is not particularly sexy, but even if shows have already aired on YouTube or Facebook Watch, this is a chance for Snapchat to build a Discover audience — and it’s a chance for publishers to ignite new revenue streams for its most popular intellectual property without having to create something original for each platform.

While publishers aren’t going to give up on a massive platform like Facebook anytime soon, Snapchat is getting back in the game on two counts. First, it’s actually the steady performer as Facebook struggles. And second, it is finally serving publishers in more ways while opening itself up to newer creatives. As with all platforms, there’s only so much trust publishers can give third parties who change their practices and rules on a whim, but it’s a good thing that Snap is trending up at just the right time – finally getting off the mat to give Facebook a few good licks.

Perspectives

Facebook: Take out the trash

After last week’s uproar over Mark Zuckerberg’s comments on censorship, Axios asked experts what they would do to decrease the fake news on Facebook. Clearly, this is not a simple problem to address but we must. In fact, because Facebook hasn’t taken proper action over the past two years, governments all over the world have stepped in to take steps to address the problem of misinformation.

As the trade organization representing media brands that seek long-term consumer trust through the creation of high quality news, information, and entertainment, we take the problem very seriously. In 2016, we wrote an unanswered letter to the CEOs of Facebook and Google – Mark Zuckerberg and Sundar Pichai – to provide our perspective on the dangerous proliferation of “fake news” throughout the digital ecosystem.

In the letter we asked Facebook to aggressively harness their brilliant minds and massive resources to clean up the garbage that was flowing, with little friction, through their platform. We also cautioned against acting as a censor. Given the escalation of concerns and the fact that the 2018 midterm elections are less than 100 days away, it’s critical that Facebook take more significant and concrete actions to help ensure their platform isn’t used against our democracy again.

In the spirit of transparency, here are a few things we mentioned to Axios that Facebook could do today.

  • Eliminate the viral and monetization benefits for known fake news peddlers. Take Infowars as an obvious example. (1) At this point, Infowars should only reach users who explicitly follow its account. We’re not asking for the account to be banned entirely, although the arguments to do so are reasonable at this point. (2) Infowars shouldn’t be able to buy advertising with creative containing links to Infowars content and (3) user activity (likes/clicks) on Infowars content should not enhance its presence in the feeds of users who don’t follow it. Essentially, their content shouldn’t be exposed to users unless they explicitly ask for it. It’s why on Tuesday I asked what percentage of the views of a grotesque Infowars clip were viewed by Infowars followers. The answer could be very revealing.
  • Publish a clear escalation policy (as YouTube does) which would suspend and permanently ban accounts which repeatedly violate their hate speech and harassment rules. Although YouTube’s escalation seems to have loopholes and oddities, as proven yesterday, it’s at least transparent and up for scrutiny by the public.
  • Elevate the brand presence around content. The brand is a proxy for trust and Facebook (and Google) have long minimized the brand in their experiences. This is important for those who have built up trust through their reputation but it’s also important to newer publishers who want to build their brands. If you’re reading an Axios story on Facebook in your feed, you should know the source. Likewise, if you’re reading a Russia Today story, you should know the source.
  • Develop a transparent ranking system by domain/brand. This is not a novel approach: Google does it. Email services do it. If Infowars wants to keep publishing garbage, then let’s see their domain score fall off a cliff. The score has to mean something. The fact is that most respectable news publishers, regardless of subject matter or leanings, would score well and not be impacted. However, the trash would get taken out.
  • Hire more human moderators. Algorithms are amazing but personal responsibility should involve people. The company needs to take ownership over its “news feed” or stop calling it a “news feed.” We also need transparency on where these moderators are being hired. As platforms have challenged the economics of local news, we’ve also lost local accountability to the public. Moderators need the proper context for the areas, countries and cultures they’re serving.
  • Engage with member associations and non-profits to get advice on codes of conduct that responsible news organizations follow. Facebook had a significant misstep here when they rolled out their political advertising labels and archive. They dangerously conflated boosted news coverage about political issues with advertising about political issues. Facebook chose to ignore counsel from publishers and shut off communication with member associations despite more than 20,000 news publishers expressing concern to its CEO and COO.

A couple of executives at what is arguably the most impactful news distributor on the planet are making business decisions that have a massive impact on the political dialogue in our democracy. They should thoughtfully listen to concerns, advice, and legal inquiry in order to become a responsible member of the digital ecosystem from which they reap great profit. The problem of misinformation is not small, it is not easy, but it’s a problem that we all have a stake in solving.

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