Riding Above The Platforms
A recent groundswell of opinion has claimed that modern-day media companies need to change the way in which they distribute their content. According to some conventional wisdom, websites are (or will soon be) obsolete, and media companies should put literally all their content on other companies’ platforms, like Facebook, Snapchat, YouTube and Instagram.
If this is indeed the case, and content should reside everywhere but a media company’s home, how can publishers monetize the content that costs them money to create? The main way could be through native advertising, where advertisers tend to pay creators based on the sheer number of times — and not the context in which — the audience views a piece of content. Some of these platforms also offer revenue shares based on ads they run adjacent to the content, e.g., YouTube’s pre-roll, but historically the amount of revenue the publisher sees from these arrangements is tiny.
As with most business strategies, however, anything that advocates leaning too far to one end of the spectrum is hyperbolic and potentially dangerous. Publishers, particularly those who have strong brands or who are hoping to build a brand (even if they publish content about a large swath of topics), need a home base where they control the user experience. They can then simultaneously take advantage of the scale and inbound traffic opportunities these outside platforms can provide and use them for distribution and native ad opportunities when available. Media companies should not, however, surrender total control. Their content has value, and simply handing it over transfers all of that value to the platform.
Indeed, a battle for access to and control over the consumer is raging between the content creators and the platforms (similar to the one between cable companies and programmers, many of whom are trying to get off others’ distribution systems and go directly to consumers). Although both sides are trying to determine if there is a way to work together effectively, which would be an ideal outcome, one thing is clear: If publishers bifurcate their distribution strategy between their own home and the social platform-based ecosystem, it provides the two sides a mutually beneficial relationship. The content creators tap into the the platforms’ audiences, and the platforms receive some (but not all) monetization some of the content that drives traffic.
Overall, media companies need to ride above the platforms, not simply submerge themselves in them. Putting some content on these platforms in a very tactical, measured way provides the greatest payoff for a number of reasons:
- Publishers need to have a direct relationship with their own audience: Publishers need access to their own consumers in order to create the best possible experience for them and — of course — to be able to market to them. Platforms are notoriously stingy about sharing user access and data with content creators.
- Publishers maintain a huge monetization technique: By having their own strong presence, media companies retain their display and other direct ad opportunities (including programmatic, which by some estimates still accounts for over $20 billion per year and 60% of total display revenues).
- Platforms get most of the benefit if publishers’ content lives natively on a platform: For example, Snapchat Discover is driving millions of impressions for companies involved, but this is all happening on Snapchat’s real estate. Ultimately Snapchat is strengthening its own audience engagement and controlling the monetization.
- Platforms have full control over economics: Companies like YouTube are starting to prohibit certain types of native ads so they alone can maintain control over the monetization. Others will most likely quickly follow suit, thereby cutting off this opportunity for publishers.
- A platform’s user experience is homogeneous, so any outside brands are compromised: When every media company’s content fits into the box that Facebook or others designate, their brand gets subsumed into the platform’s, with few opportunities for distinction.
Audiences are obviously spending the bulk of their time on social platforms (although tastes change and people migrate quickly), and publishers need to go where the audience is. However, they need to do so without sacrificing what makes them unique. Placing some content natively on these platforms is strategically beneficial and necessary, but giving up total control to them diminishes media companies’ brands, monetization, differentiation and ultimately their critical relationship with their audience.