Media must break their current dependence and reclaim control of their business models
The temporary ban of UNILAD, the most engaged page on Facebook with an audience of over 34m, highlights the omnipotence social networks have over brands. In one afternoon UNILAD lost complete control of their main source of revenue.
Brands must use this as an incentive to diversify marketing strategy, for too long the safe answer has simply been to “put it on Facebook”, but that just isn’t viable anymore.
So what’s happened?
Organic reach has steadily eroded over the past years, dropping by 52% since 2016, as the legacy social platforms start to put real emphasis on monetisation over growth.
The impact on brands has been significant, particularly in digital media, where the lack of reach has affected the bottom line. In recent weeks both Buzzfeed and Oath (Yahoo, AOL and HuffPost) have been forced into severe redundancies, following worse than expected FY2017 results, while Mashable sold for just 1/5 of the $250m it raised last year1.
Buzzfeed’s Tasty interactions have dropped from 74m in May 2016 to 20m by September 2017
Attributed to algorithm changes 2
Key Publishers experienced 27% less traffic via Facebook this year 3
What can media do then?
1. Diversified business model
Ad revenues will continue to decrease for the vast majority of digital media. Those that will thrive in this new era will be brands that can establish multiple sources of revenue, such as subscriptions, paid content, data sales or joint-ventures with partners. None of which are currently available to brands on social networks.
One of the few brands to successfully transition from print to digital has been The Economist, who in 2016 set the goal of doubling circulation profits within five years. This has been centred around growing their subscriber base, changing their social media strategy and diversifying their business model.
Through audience data The Economist were able to establish that the first year of a subscription as the likeliest for churn, and create strategies around that to reduce the number of dropouts. Through this process The Economist has been able to grow to 350,000 digital subscriptions. Anna Rawling, EVP of customer experience and product strategy said, “We became more focused on circulation and driving subscriptions with an overriding focus on profitability rather than volume”4.
Projects like The Economist Espresso, a subscription based daily news app, are indicators of this diversified revenue and business model.
Big data has been the buzzword in marketing for almost a decade now, the facts remain that having a data dependent strategy will lead to a better understanding of your audience and more cost effective strategies in the long term. However with recent technological progressions, the ability to track live data has opened new doors for marketers and publishers alike.
At ESI, publishers of The Independent and The Evening Standard, the access of real time editorial data has allowed advertisers to bid on specific articles, in terms of dwell time and impressions, but also the nature of the article, improving their targeting and allowing ESI to start charging higher CPMs5.
Dwell time has become a vital metric for advertisers and publishers alike, with recent research indicating a direct correlation between time spent viewing an ad and the number of conversions. Meaning that targeted content should lead to higher conversions for the advertiser due to the natural increase in dwell time.
Direct correlation between ad dwell time and conversions6
3. End the dependence
While many accept the issues within the sector, a large obstacle within media has been the apathy to change. Senior figures have revealed an underlying fear that any move of independence would be “punished” by legacy social platforms, damaging in many cases a key source of traffic. With the complete lack of control exhibited by UNILAD and the undefined nature of content revenue sharing agreement, it’s unsurprising that publishers are nervous.
However a willingness to change and the desire to adapt in this changing social era will be vital to long term prosperity particularly in media, but in general for all brands. The days of unlimited growth and sharing on social have gone, it’s time to be the focus back onto profitability and the brands themselves.
 AdNews 2017
 Crowdtangle 2017
 Recode 2017
 Digiday 2017
 Digiday 2017
 Digiday, 2017