Facebook’s recent newsfeed algorithm changes have left publishers with a lot of questions. Many who relied heavily on Facebook and other third-party distribution sites find themselves needing to look elsewhere. Now these publishers are focusing on building stronger on-site communities and finding other distribution platforms that are more publisher-friendly. They’re wondering about Facebook’s decision, how they will be affected, and what they should do next.
Since the algorithm change, here are some of the most common questions I’ve encountered in talks with publishers:
Why did Facebook make the decision to de-prioritize publisher content in its Feed?
As many entrepreneurs are, I see Mark Zuckerberg as someone who takes his business personally. While I don’t think he’d act against his own best interests, I do think his decision in some ways was a reaction to the polarization that the news can create. This way, Facebook is not choosing a side, or subjectively deciding which news is ‘appropriate’ and ‘real.’ It looks like they’re disengaging.
Are there specific ad formats/publisher inventory you believe will be hurt the most by Facebook’s decision?
It’s not so much about ad format, in my opinion. Facebook’s big appeal to publishers was the benefit of strong audience development and the convenience of content distribution. These will be the main things that disrupt publishers the most. Facebook actively courted publishers for years on end, promising them audience and shared revenue. This shift could be quite the loss for the publishers who relied heavily on the platform for audience development.
What 2-3 platforms could rise up to support publishers in the absence of Facebook?
I believe that Snapchat and Twitter both have the potential to benefit from Facebook’s shift. That being said, Snapchat is certainly the platform that will benefit the most. Their publisher-focused Discover Channels are central to the platform. Especially with the most recent interface update, Discover Channels are positioned in a way that is meant to drive as much user traffic as possible. Snapchat has certainly jumped into the lead role in providing a solution to publishers who were thrown off by Facebook’s changes. They are a publisher-friendly platform on the market right now.
Should publishers forget about third-party distribution and refocus on building engagement/audience on-site?
Publishers are always working to build on-site audiences. But of course, that’s much easier said than done. These third-party distribution platforms—like Facebook, Twitter, and Snapchat—help identify and grab that audience, making it easier to build those communities back on-site. The issue for some publishers is that they become too comfortable with third-party platforms and, in turn, rely too heavily on them. There will always be a happy medium for both, though, as third parties remain a great tool for audience engagement and content distribution.
Facebook’s shift has certainly stirred up some uncertainty among publishers, regarding whether or not third-party distribution platforms are a reliable tool, and if the risk outweighs the rewards. These publishers will ultimately find comfort in the publisher-friendly models of other third parties, specifically Snapchat—but they will also invest more time and resources into building core communities on-site.
The digital media business is finally making the shift from attention to user engagement. We see users as individuals rather than sets of eyeballs and focus on winning hearts and minds. This is a huge, ultimately positive change that will produce a much healthier media ecosystem. But it’s not going to be easy. It requires new technology, new marketing and product skills, and most importantly a change in mindset from content-first to customer-first. That means moving away from some very entrenched habits.
The first 20 years of the consumer internet, especially in media, have been almost entirely about aggregating audience. Sites seek to attract millions, often tens of millions, occasionally hundreds of millions of people, with all those eyeballs “looking” at billions of banner ads. That focus on big, unidentified, often undifferentiated audiences made it possible for media companies to take the existing ad models—based mostly on audience size—and adapt them pretty easily to digital. Yes, there were significant creative and technical challenges in making that shift—learning to create digital stories and to sell and serve digital ads. But fundamentally the model itself didn’t change much.
The relationship with the audience was still largely a one-way, anonymous relationship, despite the new ability to engage directly, to measure behavior and to learn more about that audience. Most media companies were shortsighted, opting to avoid friction-inducing roadblocks like registration in order to maximize unique visitors, pageviews and ad impressions, missing a chance to develop a direct relationship with readers.
The end result: massive harvesting of user data, ad-cluttered sites powered by the ad tech Lumascape, “recommended for you” widgets, ad fraud, and ultimately unhappy, ad blocking users.
But simply launching a paywall, adding affiliate links or announcing an event series isn’t enough (hello, Buzzfeed). That’s just throwing new revenue streams up against the digital wall like spaghetti. There are four essential elements required for success in the new user-engagement era of digital media: customer knowledge, product strategy, enabling technology and marketing skill.
Let’s dig into each in turn.
In the attention era, media companies didn’t need to change their fundamental model. We could still follow an editor-first content strategy—writing about what editors thought was important or interesting. And the ad tech revenue stream didn’t require any understanding of who was reading beyond some basic demographics. Yes, there were audience analytics, paying attention to SEO trends and later social traffic. But the starting point was always what WE thought was interesting. We didn’t truly know our customers. In the user engagement era, understanding the reader (or viewer) has to come first. Whom are we serving? What can we learn about them? What do they need to live their lives, do their jobs or be entertained? Then we can apply editorial and product creativity to serve, surprise and delight them with great products and stories they didn’t know they wanted.
Once you know your customer, developing the right product to serve them takes more than creativity. It also requires focus, experimentation and iteration. In product management terms, it’s “finding product-market fit.” Focus means keeping your eye on the customer you’ve identified when deciding what product ideas to pursue and rejecting ideas that aren’t a fit for those customers. Experimentation and iteration go hand-in-hand. Buildenough of the product to test it with your customers (or at least a few of them), see what works and what doesn’t, and iterate to make changes and improve the product. This method will apply across multiple dimensions of product and business decisions—from editorial and product focus, to features, to pricing. It’s also an ongoing process, continuing even after achieving success.
While there has been a massive investment over the past 20 years in ad tech, there’s been relatively little investment in software and services to understand and engage with users as individuals, to measure behaviors like loyalty and conversion to repeat usage. Driving user engagement and powering consumer-paid content requires a robust technology platform that provides measurement and reporting, customer messaging, content gating rules, entitlements, and payment processing. Moving forward, machine learning will be a powerful tool for anticipating which users are most likely to become loyal and ultimately willing to pay.
It’s become conventional wisdom among media business observers that—through his often disparaging tweets—President Donald Trump deserves a lot of credit for the recent success driving subscriptions at The New York Times, The Washington Post, and other media companies. The follow-up question is often “What happens when the ‘Trump bump’ fades?” Piano’s CEO, Trevor Kaufman, points out that’s a pretty limiting way to look at it. No one asks, “Will consumers pay for Nike shoes?” the way media pundits ask “Will people pay for journalism?”
The problem is that most media companies don’t know how to think like product marketers. They generally don’t have the skills in house, haven’t got the tools available and aren’t building marketing into their business plans and P&Ls. So, once you understand your customer, create a compelling product they’re willing to pay for and have the technology support. The last element to put in place is the ongoing marketing plan to drive customers through the engagement funnel. Then Google and Facebook transform from behemoths with the power to slash your audience and destroy your business into just another channel for marketing your product.
The ultimate vision is a healthy media market based on true relationships with known customers. For publishers, creating products that meaningfully connect with a loyal audience will unlock multiple revenue opportunities—whether consumer-paid products, events, merchandise sales or even advertising based on that real customer connection.
Facebook CEO Mark Zuckerberg has long talked about his company’s goal of “connecting the world.” Clearly, they have succeeded. Families, friends, neighbors, classmates, fans, even employees all around the world connect on Facebook – to the tune of 2.2 billion monthly users at the end of 2017 according to Statista. And more recently, Zuckerberg has attempted to mature this vision with the lofty goal of “building communities.”
But, make no mistake, the platform was also built for advertisers. In exchange for “free” use of the service, people enable Facebook to collect highly personal information about them – information that is used to inform advertising and spread information. As the platform grew in popularity, the tools and information sharing became more innovative – some would even say
When their tools were exploited by foreign agents before and after the 2016 election, Facebook CEO Zuckerberg’s first reaction was denial: “…the idea that fake news on Facebook…influenced the election is a pretty crazy idea.” In hindsight, it’s seems implausible that a company built on data could be so ignorant about the use or abuse of the service. There was evidence that bad actors utilized Facebook to influence the Brexit election just a few months before. Are we to believe that Facebook employees never investigated those activities or considered how the service was being used around elections?
Given that every family has at least one crazy relative posting full time about politics on Facebook, I’m sure there are several teams of Facebook employees dedicated to understanding political discourse on the platform. Yet, ever since it became clear that Russian agents manipulated Facebook to sow discord in the U.S., the company strategy has been mitigation: slow to share data with the public and lawmakers about what happened, slow to roll out changes to prevent future exploitation, slow to take responsibility for what happened on their platform.
Then came Rob Goldman’s epic, Facebook says rogue, tweet storm. Special counsel Mueller’s indictment of 13 Russians for their role in attempting to undermine the 2016 election contains a detailed narrative of how Facebook was manipulated. Goldman’s tweets show that Facebook is STILL in denial. Goldman contends that Russians’ main objective wasn’t to influence the election contrary to Mueller’s indictment and, quite frankly, common sense. 44% of the ads were run before the election. Goldman even admits that the Russian-bought ads were pro-Trump. Worse, Goldman’s defensive tweets focused entirely on advertising, ignoring how foreign actors may have abused other Facebook tools. All of this bluster is intended to deflect blame, muddy the waters and shield Facebook from taking real responsibility (aka liability).
Ironically, Goldman’s tweet confirms that Russian actors used the Facebook platform to sow discord after the Florida high school shooting. Apparently, the solutions that Facebook has rolled out aren’t working to clean up their platform. One wonders whether the solutions were actually intended to appease lawmakers and regulators as opposed to actually solving the problem. We need to maintain the pressure on Facebook to deliver on it’s lofty rhetoric.
Perhaps we shouldn’t be surprised that Facebook’s first responsibility is to its shareholders, not our democracy. But, with the 2018 elections just around the corner, we need to continue demanding more from the dominant platforms of Facebook, Google and Twitter. At the moment, it seems they’re still playing the PR game when they should be protecting the “community” they have built.
Did you get the letter from Google? Late last summer, Google notified 1,000 website owners that their ads were annoying, misleading, or harmful to the user experience. They were directed to Google’s Ad Experience Report and encouraged to clean up their ads.
This encouragement is now a directive. As of February 15, the latest Chrome version (v64) began to filter all failing ads across every website with a failing status as listed on the Ad Experience Report. Given that Chrome dominates the browser market (60-65%, depending on the source), this news has serious repercussions for ad-supported websites. Never has so much hinged on ad quality.
Defining bad ads
The classification of a bad ad is no longer in the eye of the beholder (or media publisher). Formed in 2016, the Coalition for Better Ads (CBA) researched the acceptable advertising experience of 25,000 consumers in North America and Europe. The result is the Better Ads Standards, released in March 2017.
In a nutshell, 12 ad types regularly annoy consumers and correlate to the adoption of ad blockers: four for desktop and eight for mobile. Google is using the Better Ads Standards to evaluate ads on ad-supported websites. Upon initial review last summer, less than 1% of 100,000 websites contained ads violating the standards.
Fixing bad ads before they fix you
When it comes down to it, meeting the CBA standards shouldn’t be that difficult, especially if you’re a premium publisher that knows all parties contributing content to the user experience. This knowledge makes it easier to communicate and enforce any policy—be it ad quality, security, data leakage, performance and more—and cease business with those that don’t have your—and, therefore, the user—best interests at heart.
What happens if you chose to ignore the Chrome audience? Your website will be assigned a “failing” status, and if this status remains for more than 30 days, then Chrome will filter all ads running on your website. Therefore, your choice directly affects the website’s ad-based revenue continuity.
Be proactive. Adopt a holistic creative quality assurance approach to continuously assess ads—creative and tags—for compliance with regulatory requirements, company policies and industry practices, like those promoted by CBA. By developing a tactical ad governance structure, you can codify what constitutes an acceptable ad and ensure compliance with multiple industry standards.
Check: What’s your status?
The CBA also announced a self-attested certification program whereby publisher participants pledge to abide by CBA standards. The program is free during the trial period, with an expectation that it will run at least until July when fees will be announced. As of now, Google agrees to not filter ads for any company participating in the CBA program. With the program’s initial steps only requiring registration, self-attestation and no fees, it makes sense for publishers to participate.
Remedy for Bad Ads
Regardless if you register with CBA, all media publishers should verify their status and take steps to remediate offending ad quality as soon as possible.
Review your website’s status for both desktop and mobile
Warning or Failing status requires immediate attention
Remediate all ad quality issues, especially those promulgated by CBA through these steps:
Identify the source of the issue
Communicate digital policy requirements, i.e., CBA standards
Demand correction or remove the source from your digital ecosystem
Document your remediation steps in the “Request review” area of the portal
Submit for review by clicking “I fixed this”
As a member of Coalition for Better Ads, The Media Trust has various solutions to address ad quality, from creative policy enforcement, to campaign verification. Whatever your decision, you can achieve ad revenue objectives while delivering a clean and regulatory-compliant user experience. Clearly, a more positive ad experience benefits everyone—publishers, ad/martech and agencies and, most of all, consumers.
It started with a simple hypothesis: The most powerful long-term driver of publishers’ business is reader’s trust, which builds loyalty and habits over time. If a person who reads something today comes back tomorrow for another serving, that would create a sustainable return audience. That audience would consistently contribute to the bottom line and produce much greater returns than simply increasing the number of ads-per-page until the user experience breaks down.
However, over the past few years, most of the industry drifted in the exact opposite direction. Most seek more revenue extraction on each visit, while handing people’s loyalty and habits over to platforms like Facebook. It may have seemed like a logical approach for revenue-strapped publishers. Unfortunately it is also one that carried negative long-term implications, which spawned guaranteed revenue deals with myriad monetization partners, including Outbrain.
When considering guaranteed revenue deals, keep these three topics in mind:
Restrictive Page Layouts. The days of asking a publisher to maintain a static page layout or conform to a certain number of paid placements are over. Always-on testing and optimization are critical tools in publishers’ toolbox. Guarantees prohibit flexibility by locking in page format, design and a specific number of placements. Without flexibility, publishers forgo a core capability to engage their audiences and improved monetization.
Constant Compliance. Slow approval and legal overhead reduce time to deployment, reducing revenue opportunities. In addition, ongoing compliance creates a burden of monitoring, coordination amongst internal teams and strains partner relationships. Ironically, most guarantee deals eventually default to revenue share because compliance is so cumbersome.
Reader First. To deliver on guarantees, publishers have to push the boundaries of recommendation quality. This trade-off can sometimes lead to a lousy reader experience, frustrating editorial teams and creating recommendation blindness. It’s a short-term revenue win but one that can degrade reader trust. This dynamic is one reason we recently launched Sphere, a publisher traffic exchange to promote high-quality editorial content.
Guarantees work in certain cases, but more often than not are an illusion for revenue-strapped publishers because they can undermine the long-term reader relationship. In addition, a lack of flexibility and a heavy compliance process distracts from more value-add and strategic activities.
Recent market developments show signs that publishers are beginning to understand the trade-offs between true partnership-based revenue share relationships, where participants work together to improve the overall health of the publisher business. This contrasts with vendor-based, revenue-focused deals that are narrowly defined by extracting highest possible RPM. Guarantee deals will remain relevant for some publishers, but hopefully the industry can make more informed decisions based on the mutual benefits of revenue share relationships.
Americans are watching fewer big live events on TV — as seen in declining viewership of the Super Bowl, Oscars, etc. And you can count the Winter Olympics as another victim of those changing habits. A recent Gallup poll confirmed that lower ratings will likely follow. But Comcast and NBC aren’t letting that get them down. Instead, they are pushing even harder into social media and new platforms.
And it’s not just a way for NBC to increase its social footprint and beat criticism of #NBCFail memes of years past, when viewers were unable to access solid coverage because of tape delays and commercial interruptions. With less people watching linear TV broadcasts, multi-platform viewership on digital and social is likely going up, and NBC is pushing hard into different platforms to stay ahead of the curve. It’s a way to engage advertisers and audiences — especially younger audiences — for the future.
Here’s a look at how NBC and other publishers will take on the Winter Games this year.
NBC Goes All-In on Social
This tweet has already gathered 45,000 retweets and nearly 124,000 likes as of writing:
The tweet from NBC Olympics is just one example of a social strategy that appears to be working: Push content online right away. Research out of the Rio Olympics from 2016 reflected skyrocketing numbers for social viewership, and there was no reason to anticipate those figures would decline.
So, NBC is seizing control over the narrative of the Olympics. It’s broadcasting the games live for the first time, streaming clips on Facebook, posting videos on YouTube and Twitter, and investing heavily in a Snapchat presence that also includes hiring BuzzFeed to produce a daily, Olympics-themed Snapchat Discover channel. NBC and Snapchat struck a partnership — one of several, as NBCUniversal invested $500 million in Snap Inc. when Snap went public last year — to broadcast exclusive content on Snapchat.
That Snap had a solid earnings call right ahead of the Opening Ceremony this year also gives the company an extra boost of recognition. Snap may be suffering the fallout from Instagram and Facebook copying some of its core features, but it has long pitched itself as a “complementary, second-screen platform for live and linear TV,” as Digiday’s Sahil Patel wrote. And that’s a selling point when you think about the ways linear TV habits are changing.
Publishers, Take Note
Alongside NBC’s huge push into social distribution, a few publishers are also engaging audiences in new ways to boost their own metrics down the line. The New York Times, for example, announced a “live messenger experience” with the Times’ deputy sports editor, Sam Manchester, where he’ll be messaging directly with audiences who want a closer, behind-the-scenes, personal take on the Olympics.
With different mediums for consumption — and therefore disparate methods for measuring consumption — Discovery Communications is consolidating data from linear broadcasts, digital platforms, and social media engagement metrics, to get a better picture of who’s tuning in and who is tuning out of watching the Winter Olympics. Discovery has the rights to broadcast the Games across Europe and will share these results with their clients and partners. While no measurement approach is perfect, it’s a huge step to prepare for a future where understanding metrics can make or break an editorial or ad strategy. It’s not a question of whether other publishers will follow suit, but when.
What conversation about distribution can take place without acknowledging the influence of large gatekeepers like Google? Google’s search algorithm has long been key in ensuring people can actually find all the content publishers are putting out there. This year, Google is filtering live video, VR video, and YouTube video into its search results. It’ll offer users location-specific updates about a country’s rankings and other top news stories from the Olympics. And subscribers to YouTube TV can stream over 50 hours of live video coverage, including VR content.
Let’s be clear: The efforts in social viewing and highlight reels for the Winter Olympics this year are not a one-off endeavor. Insights gleaned from how it pans out this year will help better cater to multi-platform consumption in the future — not just for the Olympics, but for all content moving online and on social. And as live events lose their luster on linear TV, more publishers will consider ways to move to social viewing while still driving revenues along with attention.
Since January 2017, we’ve watched with interest as traffic from Google Search to publisher sites globally has risen by more than 25%, more than outpacing the much-publicized decline in Facebook referrals over the same time period. We’ve spent some time digging into our data and today, we conclude that this is driven by a 100% increase in mobile search traffic from Google on sites using Accelerated Mobile Pages (“AMP”).
Below is Chartbeat’s early analysis of the trend, why it’s a good thing for publishers, and some initial recommendations on how to take advantage of this growth.
Google Search has always been the largest referrer to Chartbeat clients, who represent a large majority of leading news media sites in the U.S. and globally. From January 2017 through August 2017, Google Search steadily drove approximately 1.3 billion visits per week, representing 40% of external traffic referrals and 21% of total page views.
In late August, Chartbeat data scientists noticed that Google Search referrals across our client base were trending up. The sheer force of nature drove initial bumps: on August 17, much of the United States saw a total solar eclipse, accounting for the first peak in the above chart. In early September, Hurricane Irma made landfall in Florida, resulting in the second peak.
We initially assumed that after these events, traffic would fall back to normal levels. Instead, as these events receded in the news cycle, we were surprised to see that Google Search continued to drive increased traffic to our clients, hitting approximately 1.65 billion visits per week by early February, an increase of over 25% since July.
Chartbeat’s Data Science team began an investigation in partnership with our clients to understand what drove this change. Initially, our team checked if this was either a bug or the un-darkening of previously dark social traffic. In both cases, it was not. We also looked to see if Apple’s switch on iOS (from using Bing to Google as the default on Siri and Spotlight) was the key factor. It wasn’t. The growth is visible on both iOS and Android, and we have not seen a corresponding drop in Bing traffic.
We then looked specifically at search traffic by device and the answer was clear from our data set. Mobile Google Search referrals were up significantly while Desktop Google Search referrals were flat.
We then looked specifically at Mobile Google Search to compare sites that are using AMP versus those that are not. The difference was stark. While Mobile Google Search traffic to our AMP-enabled publishers is up 100% over the same time-frame, traffic to publishers not using AMP is flat.
This is stunning news. The data shows that Google Mobile Search referrals have grown so much in the last six months that they now outpace all Facebook referrals (mobile and desktop).
Why This Is A Good Thing
At the same time that publishers are seeing increased traffic from Google, the industry and the search giant, long at odds, are reaching a kind of detente. In a recent survey by the Reuters Institute, Google ranked as the platform that publishers [felt] “the most positively about.”(Full Disclosure, I worked for Google from 2007-2011). It’s true that Google is far from perfect — not to mention that the Reuters survey may be the only popularity contest where a score of 3.47 out of 5 can win — but there are real reasons to feel positive about the warming relationship between the two parties.
For one, there’s the cause: the underlying business models of each are pushing them closer together.
Google’s business depends on an open web that is searchable and contains as much of the world’s information as possible. The biggest threat to Google is a world in which essential information remains inside the walled gardens of platforms like Facebook, Instagram, and Snapchat, where its crawlers cannot go. In fact the AMP Project, although independent and open-source by design, was spearheaded by Google from the outset to “make the web better for all.” The roots of AMP clearly lie in Google’s need for, and corresponding commitment to, the open web.
This strategy aligns well with the vast majority of publishers, who also depend on an open web. Few, if any, have the intent to create meaningful walled gardens. Instead, they’re focused on an open web for discovery, monetization, and distribution.
Lost in the discussion about platforms and publishers is how the business model of Google differs from other platforms. Facebook, Instagram, and Snapchat depend on capturing as much of an individual’s attention as possible, and keeping it within that platform. Users only have so much time to spend with media, and a minute spent on The Washington Post is a minute that a user can’t be spending on a platform. Google, on the other hand, is primarily interested (with YouTube being the biggest exception) in getting users off of Google Search and onto another page as quickly as possible.
Google also sends traffic to publishers directly, where they can monetize using their own ad sales team and infrastructure. Google’s DoubleClick business remains the ad server of choice for publishers, and Google’s Ad Exchange is in almost every programmatic publisher stack.
Listen and Learn
Perhaps most importantly, they’ve also listened to publishers and made changes. In October, Google provided more support for publishers with subscription-based businesses by no longer requiring them to use the “First-Click-Free” program to be fully indexed in Google Search. Upon abandoning this policy, Google earned positive feedback from publisher partners around the globe.
That said, Chartbeat clients still have a long list of important — and, in my view, valid — criticisms of Google. Publishers share with us their frustrations around Google monetization, ad blocking in the Chrome browser, the Google “Answer Boxes,” and the proliferation of inappropriate content and “fake news” on YouTube in particular. We know that AMP not only has benefits in referral traffic, but that it also boosts engagement by up to 35%. Our clients continue to tell us anecdotally that AMP-formatted pages do not monetize as well as their own pages, yet they continue to experiment.
Perhaps most importantly, we should remember that Google and Facebook still capture 80% of every new advertising dollar in the world. The duopoly represents an existential threat to ad-supported media, pushing media stakeholders to work towards new business models like subscriptions, affiliate revenue, and commerce. Still, there’s a thaw in the relationship. Now, the question is what to do about it.
The Importance of a Search Strategy
Informed by the new data, it’s clear that leveraging Google and AMP effectively is more important now than ever.
First, we encourage all those who have not already done so to take a long look at “AMP-ing” their pages. The growing prominence of AMP, combined with the fact that AMP was already found to be more engaging for users than the mobile web, should make the ROI calculation even more compelling for publishers.
Second, it is important for all content teams to revisit their overall search strategies, particularly on mobile. SEO may feel like an acronym from another time, but these data trends make it clear that SEO and AMP strategies are as relevant as ever.
Chartbeat clients who publish evergreen content never lost the SEO muscle. Using tried-and-true techniques around keywords, authenticity, and swift page-load times on both mobile and desktop, they continue to drive audience traffic effectively through Search.
In news, entertainment, and sports, savvy publishers know to take advantage of Google around big events like elections and sporting events. The results can be tremendous. While most U.S. Chartbeat clients saw some increase during the 2016 U.S. Election, and many saw increases of 20x, those with the best SEO (who ranked in the top 2 or 3 for key searches like “Election Map,” for example) saw peaks of up to 100 times their nightly average on election night. 2018 promises to be a huge year in events: The Winter Olympics, the World Cup, and the 2018 U.S. Congressional Elections. All should drive global traffic, and dozens of elections and sporting events will drive outsized results regionally.
Readers and Revenue
All of this traffic can be used to generate incremental advertising dollars. More importantly, it can drive new readers to publishers where they can be converted from fly-by searchers to loyal, direct visitors to revenue-generating customers no matter the business model.
We will continue to analyze and examine the data for insights and underlying causes. If you have any hypotheses, see interesting things in your own data, or just want to talk, please reach out to us.
We’d also love to hear some contrarian views on Google. Are there ways in which their growth could be hurting publishers, in addition to what I’ve outlined here? Let us know. Same goes for sharing best practices around search.
John Saroff is Chief Executive Officer of Chartbeat, a leading content intelligence platform used by more than 50,000 of the world’s top media properties in over 60 countries. He has worked on the cutting-edge of media and technology for 17+ years, setting the daily operations and business development agendas of companies as diverse as Google, NBC-Universal, and vente-privee. John received his undergraduate degree in History from Haverford College and a joint degree in Law and Business from Columbia University.
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.
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.
Strategies for differentiating their premium news and entertainment companies in an environment of disruption, trust issues, and monetization challenges were the focus of the annual closed-door members-only Digital Content Next (DCN) Summit held Feb. 8-9 in Miami, Florida.
DCN CEO Jason Kint updated attendees on consumer privacy, net neutrality, and press freedom policy initiatives. He said that pressure on platforms will increase this year and that advertisers will seek greater transparency. Kint cited findings from DCN’s new Distributed Content Revenue Benchmark Report, which found that publishers only garner 5% of their revenue from social platforms. However, he also touched upon the growth in paid content, on-demand video, and promising signs of sustainable advertising models.
For the digital media industry, Trust has reached a crisis level, Kint said. He and other speakers throughout the event pointed to the 2018 Edelman Trust Barometer, which reveals a low consumer perception of the media, platforms, and advertisers—particularly around digital.
An absence of trust has been a driving factor toward regulatory scrutiny in the U.S. and abroad. It has also profoundly affected digital advertising, one of the mainstays of the industry. Kint applauded DCN members for embracing DCN’s new tool for rebuilding trust: TrustX. The cooperative private programmatic marketplace serves as a collaboration platform for marketers and publishers to create innovative advertising solutions that drive measurable value and improve the consumer experience with confidence and safety at scale.
Kint was far from alone in extolling the importance of trust in the digital content marketplace, however. Fatemeh Khatibloo, principal analyst at Forrester Research cited the building blocks for trust, which include integrity, competence, transparency, privacy, and data security.
David Sable, Global Chief Executive Officer, Y&R, noted that trusted brands employ honesty, environmental sustainability, and kindness. He also pointed out that millennials are keen to identify trusted news sources. Building trust starts early, according to Sean Cohen, president, International and Digital Media, A+E Networks, citing how brands such as the History Channel have become a trusted source for students.
While Edelman’s barometer noted a five-point jump in trust of journalists, a social media-weaponized world has given way to readers and viewers expressing anger, often anonymously and without consequences, as vividly reported by a panel of journalists— Arianna Davis of Refinery29, Jorge Ramos of Noticiero Univision, CNN’s Brian Stelter, and Katy Tur of MSNBC Live.
Brand Quality and Context
People won’t pay for brands that don’t focus on quality, noted Andrew Essex, former CEO of Tribeca Enterprises and Droga5 [pictured, top]. Quartz President and Publisher Jay Lauf also emphasized value-based selling over commodified volume selling.
Context is critical, he said, adding that marketers “are terrified” about ads appearing on an exploitive YouTube video or inadvertently funding fake news on Facebook. And Hearts & Science research on negative reach confirms advertising appearing next to content a consumer finds offensive does more harm than good according to the agency’s president Zak Treuhaft.
And, in a world dominated by memes and disembodied news delivered via social platforms, “Context is king,” according to Sean Cohan, President, International and Digital Media, A+E Networks. For example, he pointed to the History brand’s increased emphasis on providing a larger historical context for today’s news, such as the history of sports figures’ involvement in political protests.
Disruption and Opportunity
Disruption has led to a competitive marketplace imbalance as DCN member companies try to transform their business models, as Kint noted. At the same time, disruptive technologies, such as voice assistants, can create significant opportunities.
Loren Mayor, COO, NPR, spoke of the station’s mission to connect with people through storytelling journalism and is using on-demand audio and podcasting to enhance audience growth and engagement.
Smarter use of data and respectful personalization were subjects that came up in a number of conversations and presentations. More-informed data will help drive value, according to Lou Paskalis, SVP, Enterprise Media Planning, Investment and Measurement Executive, Bank of America Merrill Lynch.
Marcus East, EVP, Product & Technology/CTO, National Geographic, said that successful brands create personalized experiences and help consumers save time and money, create emotional connections, offer life-changing elements, and promote positive social impact.
That said, in today’s uncertain digital environment, the hallmarks of reputable journalism have reemerged as critical for consumer trust and attention. Michael Anastasi, VP News, USA Today Network, Tennessee pointed to importance of the Indianapolis Star’s investigative coverage of U.S. Olympic gymnastics doctor Dr. Larry Nassar, which stands out in a time of local news outlets’ survival uncertainties.
Anastasi said that USA Today leverages its local/national symbiosis on to inform some of its stories. He cited the brand’s coverage of the opioid crisis across all platforms—and with national, local, and individual ramifications. The comprehensive coverage was made possible through a sponsorship from BlueCross BlueShield of Tennessee.
In addressing financial sustainability in non-profit journalism, ProPublica President Richard Tofel noted significant growth in donation-based revenues since the 2016 U.S. presidential election. The non-profit model seems to be working for ProPublica as Tofel said that they launched with a staff of 25 nine and a half years ago and now number more than 100.
Diversification and Monetization
Unsurprisingly, revenue was a key topic at the Summit. And while advertising remains a critical focus, diversification was a dominant theme. In all aspects of monetization, good consumer experience and engagement were essential. As Ed Davis, EVP & CPO Advertising Products, Fox Networks Group put it: “Attention is currency.”
Maggie McLean Suniewick, President, NBCUniversal Digital Enterprises, showed off the many ways the company’s Olympic coverage is tapping into a wide range of platforms to engage target audiences wherever they might be. Bloomberg Media’s initiatives include global partnerships that help it transcend the competitive U.S. market according to Scott Havens, Global Head of Digital, Bloomberg Media. And The Washington Post has launched 15 products specifically designed to engage consumer interaction according to Jarrod Dicker, The Post’s VP of Innovation and Commercial.
The History Channel is leaning into new platforms and partners with The New York Times on stories and photo spreads. Sean Cohan, President, International and Digital Media, A+E Networks said that the company is seeing doubled social engagement, significant newsletter interest, and substantial boosts in YouTube video revenues.
Marty Moe, Vox Media President, said his company focuses on finding ways to grow quality, scale, and audience across its eight brands while retaining relevancy on each platform. However, diversification brings challenges such as tracking and measuring performance on multiple platforms, noted Christy Tanner, EVP & GM, CBS News Digital CBS interactive.
Dr. Jens Mueffelmann, CEO, Axel Springer Digital Ventures GmbH, President, Axel Springer USA, said his company’s success in global acquisitions is based on later-stage investment, development and partnership. While its successful classified ad profits have stunned critics, Mueffelmann urged companies to “stay paranoid” and continue to keep a close eye on emerging digital technologies and players.
On the heels of the news that The New York Times added 157,000 digital subscriptions in the 2017 fourth quarter, pushing its subscription revenues – which comprise 60% of overall revenues – to more than $1 billion, COO Meredith Kopit Levien encouraged everyone to get into the subscription business. It’s important to understand what drives subscribers, she said. For The New York Times, it’s the resources to create better original content, including 250 daily stories, a popular crossword puzzle and a cooking app, she said, noting “our strength is as a brand.”
While challenges in trust, brand quality, disruption and diversification continue to throw roadblocks up in the news and entertainment industry, Kint emphasized that for DCN members, there is strength in numbers, citing The New York Times’ subscription victory as a victory for all DCN members because of what it symbolizes for the industry.
At the core, DCN members are focusing on what they do best and continue to innovate and experiment in order to best serve audiences.
“All of our members have a direct and trusted relationship with your audience and with your advertisers,” Kint told the packed conference room. “They come to your brands because they know what they’re going to get when they give you their valued attention or valued advertising dollars.”
10 actionable steps to charting a publisher’s course to digital GDPR compliance
Yes, it is the topic du jour, but somehow many are still adrift when it comes to the European Union’s impending General Data Protection Regulation (GDPR), which goes into effect on 25 May 2018—under 100 working days or five short months away. Countless articles summarise requirements into generalities covering organisation-wide data elements, such as customer, partner and vendor information. More often than not this approach doesn’t mean much to Ad/Revenue Operations (Ad Ops) professionals.
The Ad Ops Challenge
GDPR presents three significant hurdles to Ad Ops:
Identifying known data collection activity;
Confirming it is legitimate under GDPR (i.e. that the rules are being met); and
Detecting and remediating unauthorized data collection, which is potentially considered a data breach.
The highly-dynamic and opaque nature of the digital ecosystem often means that all three of these hurdles are difficult to clear without adversely affecting a media publisher’s strategic revenue channel. So, the key issue to resolve is this: how does a publisher go about managing data in a GDPR-compliant way but without undermining its business model(s) and therefore its commercial viability?
The answer, as usual, is Ad Ops. For this group, GDPR presents an important opportunity. As the frontline of digital operations, Ad Ops professionals are in the unique position to influence, drive, and co-create strategies to protect and optimise revenue in the changing regulatory environment. In fact, they have a powerful legitimate reason to control audience data collection activities on their digital properties and demand compliance from upstream partners.
10 Steps to GDPR Compliance
The daily demands placed on Ad Ops can be overwhelming, with the complexities—and vagaries—of GDPR an unwelcome intrusion. But it’s a critical opportunity. Here’s a 10-step approach (with supporting GDPR references) towards GDPR compliance for media-oriented websites and mobile apps:
1. Participate in an internal GDPR Task Force [GDPR Articles 37-39]
Every business— large and small—should have a GDPR ‘Task Force’ or something similar. This could be organised by a senior data privacy leader, such as a Data Protection Officer (DPO), which is now a requirement for many organisations. The Task Force should be staffed with key personnel across the organisation who interact with any type of personal data, i.e. operations, IT, privacy and risk, security, HR etc, and should include individuals across strategic markets as the GDPR has a global reach (see GDPR Article 3). As part of the Task Force, Ad Ops can explain the role of consumer data in the digital environment to deliver user-specific content and advertisements and how it supports the publication’s mission and contributes to revenue.
It is important to understand that the scope of personal data is broader than under existing EU data protection law. Under Article 4 of the GDPR, personal data is defined as “any information relating to an identified or identifiable natural person (‘data subject’); an identifiable natural person is one who can be identified, directly or indirectly, in particular by reference to an identifier such as a name, an identification number, location data, an online identifier or to one or more factors specific to the physical, physiological, genetic, mental, economic, cultural or social identity of that natural person.”
To this extent, typical data collection, use and sharing activity generated from everyday access of websites and/or mobile apps for digital advertising purposes (i.e. cookie deployment or device identification) should be treated as personal data. Therefore, the term ‘non-Personally Identifiable Information’ should no longer exist as personal data under the GDPR is broader than PII, which is a significant change for digital advertising.
The Task Force will probably be responsible for developing a centralised roadmap for the organisation’s digital data and designing the plans to implement necessary processes and changes (including budgetary considerations) required to comply with the new law. Many organisations will need to conduct a Data Protection Impact Assessment (DPIA–a valuable exercise for good data hygiene), mapping the kind of data collected and processed. (Here’s a good template to follow.)
The DPIA should enable revenue and Ad Ops teams to get up close and personal with all data collection and processing activities, and knowing with whom data is being shared. There are many companies that can assist with DPIAs to develop a point-in-time data picture, which is a critical start to identifying data in the publisher ecosystem. However, the ever-changing digital environment requires continuous monitoring for compliance in order to provide an audit trail or truly demonstrate ongoing compliance. The bottom line is that the GDPR seeks to introduce a ‘Privacy by Design’ approach: removing or minimizing data or ‘pseudonymising’ it (e.g. hashing) to minimize the privacy risks.
3. Create an Authorised Partner List [GDPR Article 30]
Accountability is a central theme within the GDPR: you are required to record and account for all data processing activities. Ultimately, publishers will need to know and understand what data is being collected and processed, and who it is shared with—a serious challenge for the dynamic digital environment.
This means Ad Ops needs to develop a list of all parties that execute on the website (including contracted second parties and any subsequent parties called during the rendering of the visitor experience), analyse digital behaviour to understand data collection or targeting needs, and block those that exhibit anomalous or unapproved activity.
Conducting a data audit, compiling inventory and documenting authorized partners is a good first step; however, these will have to be continuously evaluated with an eye towards changing partner activity, new digital supply chain partners, international data transfers and consumer understanding of tracking/identification and its value to the digital experience.
4. Get Legal! [GDPR Article 6]
It may seem strange for Ad Ops teams to concern themselves with too many legalities, but with the GDPR it is imperative that those involved in data collection activities understand the consequences of their actions. The regulation outlines six legal bases to justify the processing of personal data:
the user’s consent (which is defined more stringently than under current data protection law)
the use of contracts involving the user
legal compliance (i.e. with another law)
protecting the interests of an individual
when it is in the public interest to do so
when it is the organisation’s legitimate interests to do so (provided it doesn’t override the rights of the individual)
Digital advertising will require the user’s consent, not least because it is required for the storing of information or gaining access to information already stored on a device—whether personal or not—(i.e. via a cookie) under the existing ePrivacy Directive (See Step 6.) This is where Ad Ops needs to work closely with the compliance teams: an innovative consent mechanism will be required for digital advertising activities. But, keep in mind that some data processing activities (e.g. for network security or when tackling fraud) may warrant different legal bases.
5. Enforce Digital Partner Compliance [Articles 26-30]
The GDPR introduces obligations (and liability) for all organisations, whether a ‘data controller’ or ‘data processor’. Find out how data partners are preparing for the GDPR and establish a working group with key partners to discuss compliance strategies. This requires first knowing your upstream partners from SSPs and exchanges through to DMP and DSPs. Some data partners are likely to have to conduct a DPIA as well—guide the process for them. In time, revisit, review and adapt contracts or agreements with existing partners to ensure that shared obligations and responsibilities under the GDPR are accounted for and that partners are complying with digital asset policies for your company. If a partner chooses to not comply with your policies reconsider your relationship with them.
6. Obtain Consent [GDPR Articles 7-9]
Consent is the new king in digital advertising, so review where and how you obtain it. Under the GDPR, consent must be given freely, specifically, and unambiguously, and it requires affirmative user action. Some pre-GDPR consent mechanisms (i.e. so-called ‘implied’ consent) may not be valid when the GDPR applies. And it remains to be seen if existing consent management platforms can properly handle authorized cookies delivered by third-party partners in addition to a publisher’s first-party cookies. It’s important that practical and user-friendly consent mechanisms are adopted. Where appropriate, review existing consent mechanisms and explore evolving market solutions to suit your business. EU regulators have provided some draft guidance on consent.
7. Be Transparent [GDPR Articles 12-14]
Revisit and restructure your Privacy Notice to ensure that it meets the requirements of GDPR. It is likely it will need to include more information than your existing one (such as all the technologies used to process data, including by third-party solution providers). Ad Ops teams will be directly responsible for any data collection activities. The UK Information Commissioner’s Office (ICO) Code of Practice provides a good template to follow, including what information to include, how the Privacy Notice should be written, and how to test, review and roll it out. But don’t stop there. Consider enhancing transparency by deploying additional measures including ‘Just-in Time’ mechanisms, video messages or the EU AdChoices programme.
8. Give your Customers Greater Control over their Information [GDPR Articles 15-22]
The GDPR seeks to give people greater control over their data and therefore includes many rights for individuals, such as the Right to Erasure and the Right to Data Portability. Media publishers will need to put in place processes to achieve these for their customers. Beyond consent, publishers need to provide mechanisms for consumers to solicit information collected and used by the publisher and absolutely honor requests for data removal. The ability to offer this functionality and test its reliability are further proof points to demonstrate compliance. Where appropriate, point to existing controls such as unsubscribe mechanisms and opt-out points, and consider other innovative data control solutions.
9. Designate a Lead Supervisory Authority [GDPR Article 56, 60-61]
Choose who your ‘Lead Supervisory Authority’ (i.e. regulator) will be when the GDPR becomes effective. This regulator will act as a single point of contact for the enterprise’s data activities throughout the EU. Documenting and opening up communication channels with the Lead Supervisory Authority now is critical to understanding how future enforcement will be carried out. Keep an eye on Brexit: if you are hoping to designate the UK ICO you may have to think again.
10. Prepare for any Data Breaches [GDPR Articles 33-34]
Implement (and test) procedures to detect, report, investigate and resolve a personal data breach (e.g. data loss or hack). Keep in mind that the reporting of high-risk breaches to the relevant Supervisory Authority (regulator) needs to happen within 72 hours of discovery—a timeline publishers are not positioned to meet. As Data Controllers, Publishers are ultimately responsible for breach notifications and, therefore, they need to be aware of any breach that occurs throughout the digital supply chain including upstream partners.
Sailing Through the GDPR Storm
All experts agree: GDPR will be a watershed moment for digital publishers. The next several months (let alone years) will be tumultuous as stragglers try to catch up and the more-prepared publishers await the success of their compliance programs.
On a positive note, the winds are favorable for digital publishers to take back control over their audience data. Direct access to the consumer relationship and the control of consumer consent puts publishers at the helm. However, it is up to the unlikely heroes—Ad Ops teams—to ensure smooth sailing when it comes to digital data compliance and risk management.
Since 1999 Matt has been working on the front line of digital advertising in an industry-facing capacity. Most recently he has taken on the role of European General Manager for The Media Trust, a US-based digital security and advertising quality assurance company.
Matt has consistently strived to generate industry consensus from senior leaders and drive innovation through collaboration. He is a frequent speaker, panelist, and chair at industry conferences including Digiday, IAB, dmexco, The Guardian, AOP (UK), Admangerforum, and corporate-operated events. He is an active advisor and investor for advertising and marketing technology start-up enterprises and a senior partner at AtlanticLeap.