Facebook, Google, Twitter, Apple, LinkedIn - the new media oligarchs
- Summary:
- The new media oligarchs are having a profound impact on ad buyers and publishers. What's going on and how do you respond?
Google dominates search. Anyone who wants their media to perform dances to Google's tune. Google Analytics form the baseline for numerous media decisions on both the ad buyer and publisher side. Most brands and publishers understand this and have spent years optimizing for Google Search. Google controls important ad distribution networks including the crude AdSense mechanism that pops apparently contextual ads into numerous web pages.
Facebook has seen mobile traffic triple in two years (PDF). Facebook has slowly eroded the ability of brands to enjoy an advertorial free ride on its platform. If you want attention, you pay for it but you've also got to optimize for a mobile readership. Facebook collects a lot of data about people which it can then use to serve highly targeted ads. Facebook doesn't allow Google to crawl its content so Google cannot reach the Facebook user. Facebook search? Forget about it. Crude at best but brands can get promoted content into the reader's eyeline.
Twitter carries promoted posts but I have little idea whether they are effective. The evidence suggests Twitter struggles to maintain consistent ad engagement (PDF). There are numerous Twitter based apps to help content consumers on both desktop and mobile devices. Many swear by Twitter as a news source but others think that Facebook is the place to be.
LinkedIn is forcing publishers to drop full content into its roach motel of a platform. Many have taken the bait. LinkedIn can and does monetize those efforts. Targeting at LinkedIn is still a work in progress as Sameer Patel demonstrates.
Apple wants a piece of the whole pie. Its attempt to get content comes in the form of ad blocking which it hopes will mean publishers focus formatting for iOS devices first. That content can include unblockable ads rather than the more generic web format that most publishers employ.
Facebook, Twitter, LinkedIn and now Apple all want to take some of Google's market share. The knives are well and truly out. Despite much prognostication, no-one knows for sure if and when the competitive landscape will change or what the Apple ad blocker cottage industry means for ads generally. Some think that with numerous apps and the Android operating system, Google is spread too thin. Others think that Facebook's focus helps it gain market share.
The current competitive landscape leaves ad-driven publishers in a bind. Do they continue to create content and hope Google can hold onto its position? Do media buyers view Facebook and LinkedIn as a place to drive advertorial in preference to relying on Google search and AdSense? Can the ad networks provide truly contextual, relevant and timely ads in preference to the carpet bombing of today?
What's next for the oligarchs?
I don't dislike advertising per se. I dislike the current state of the digital advertising art. It is far too easy for attention abusers to game the way ads are delivered. The new media oligarchs promise context but the only one that has come close to nailing it is Google Search. The rest trail miles behind.
Facebook has a good shot at this because it has access to our social graph data and follows us around both on and off Facebook. Even so, Facebook has yet to crack the contextual nut. The same goes for LinkedIn. We cannot know how it will work out for Apple. What about the publishers?
What's next for publishers?
Niche titles that concentrate on a thin slice of a market can do well without necessarily worrying about Facebook and LinkedIn - the two main competitors for reader attention. Some titles can attract a paying audience although we believe the ability to create a sustainable, subscription based business model by any publisher that has not operated that model before is questionable. Some very rare examples will prove the exception to the rule. But even they will require recognition and promotion by much larger titles.
I believe that information wants to be free. The explosion in digital content production makes that abundantly clear. I do not believe the price of that information should be an ad unit that gets in the way of content consumption. That is the dominant model today. Commercially it may seem to make sense in a world of declining interest in publishing brands but as the earlier story explained, it is self defeating. Some content may need to be kept behind a paywall but that will be restricted to highly valuable, current content that is usually expensive to create and curate.
I am of the view that a model that is funded partly through patronage and partly through carefully curated content marketing is sustainable. This model only works if the distinction between publisher and vendor content is transparent and the vendor content is actively edited to conform to reader expectations. That approach drives the vendor towards a model where attention is earned while recognizing the value of independently produced content. This is a trust based model but to succeed, it also requires the kind of brand participation that is rare today. Disclosure: I would say all of this - it is the basis for the diginomica model. But it works and works well.
I do not believe that native advertising as currently practiced is sustainable because it is open to the same kind of abuses as occur today. We already know that readers are suspicious of native advertising. I think the problem stems from a misunderstanding about how earned media works. It is possible to overcome the problems but only through enlightened marketing.
Mobile moves
None of the above addresses the mobile component. Here I am conflicted. Do publishers develop for mobile as a distinct format compared to the desktop experience?
Do publishers build native apps alongside the desktop and mobile 'versions?' It seems odd but native apps ought to be the way to go yet they often fare badly compared to the web experience. Buzzfeed offers two mobile app variants that work well as distinct media properties. They have sacrificed advertising in these apps for market share - for the moment. The Economist's Espresso is subtly ad-supported and provides a solid user experience but it tries to push the reader towards a paid subscription. The Guardian is leaving choice to the reader with a paid for subscription that is ad-free.
Final words
The Apple ad blocker discussion has been a useful jump off point for re-examining the publisher/ad model in the light of mobile consumption and the attitudes of those who consume media. Ad buyers and publishers must carefully consider their position on these topics. Right now we're in the early stages of a fresh round of disruption. Few will place firm bets anytime soon but improved contextual intelligence must surely be a priority for those who believe in the longevity of the ad networks. That puts a lot of pressure on Google.
Endnote: See what Forbes has to say about the rise of the walled garden where the oligarchs get to decide what you see. This is an angle I've not explored in this story.
Cartoon via Gapingvoid, featured image via Techdrive.co