Social as we knew it is over. Brands can adapt and create new opportunities.
The brand-audience ecosystem has changed. It’s well-documented that social media has undergone a seismic shift over the previous years, moving from a free tool for brands to interact with audiences into platforms putting monetisation at the forefront.
Most digital media brands are evaluating direct to consumer (DTC) options, and whilst the headlines are particularly grim for traditional news media, there are new opportunities to implement diversified business models returning control, revenues, and live audience insights to brands presenting new opportunities for those bold enough to seize them.
How did we get here?
Social revolutionised brand-audience interaction, delivering stellar shareholder value for social networks who successfully triangulated brand-audience relationships. When the mass market was combined with free organic reach and content revenue-sharing, it became an irresistible proposition for brands.
Where are we now?
Social network growth has reached 2.56Bn users, equating to 34% penetration of global audiences, but audience growth has plateaued since 2015, so with critical mass reached, social networks have switched to charge for impressions, with ad revenues representing >94% of their revenues.
Brands have been forced into a brutal acclimatisation, paying for social reach, but online media has felt the impact most – losing unfettered market access, shifting content revenue-sharing, with falling CPMs (cost-per-mille). Reach has plummeted 52% since 2016 with >50% of Facebook pages now forced to buy boosted posts. BuzzFeed and Vice Media both announced they will miss revenue targets.
Follow the money
Audiences generate $4-18 average revenue per user (ARPU) for social networks, whilst unauthenticated brand audiences remain anonymous until revealed, via brand signup.
Do brands still need social?
Yes, but it’s time to adapt and diversify. Social network reach remains unparalleled and mobile|social continues to be the millennial channel of choice, generating referral traffic but the focus must be to stop the perpetual cycle of paid reacquisition of anonymous audiences, uncertain content revenue-sharing, and diluted ad revenue, with GDPR also on the horizon in Europe. For brands unwilling to change it not surprising that one online media CEO predicted a “bloodbath” in 2017.
Brands interacting and monetising audiences for themselves. Amazon, ft.com and others of course have been doing it for years. GLOBALDRUMTM extends this by enabling brands to operate diversified live social business models on demand, within a social structure they define to meet their needs. Through synchronising with social networks, brands may combine existing reach to ‘acquire once’ regaining control and revenues, with transparent live insights. The focus, investment, and implementation timescale is not viable for many brands. Key is to access this event-level, live data to operate live social business models offering paid content and services, data sales, maximised ad inventory, and sCommerce on demand to authenticated audiences.
Brands own the conversations, understanding each individual customer
By enabling brands to reclaim social audiences and with it social conversations. Owning the conversation allows editorial teams (through live campaign management tools offering behavioural and contextual targeting) to align data-driven curated content, creating resonating pieces in areas that audience member truly engage with. This style of highly targeted content strengthens the connection with audience members and advertisers alike, giving brands the incentive to start charging higher CPMs. Brands have been monetising audiences for years, what’s different now is they too can use social to monetise audiences with diversified live social business models.
Let’s remind ourselves, it’s brands that drive the social ecosystem
Brand ad budgets drive the entire social ecosystem, DTC offers brands opportunities to reduce the dependency on social networks, acquiring and monetising audiences for themselves, offering partners deeper direct engagement using campaign management.
Media must adapt and overcome, or face an uncertain future. The co-dependency on ad revenues with social networks creates conflicting objectives and margin pressure.
Responses range between M&A to rationalise cost and operations, to membership donations, to the introduction of paywalls, made more viable with falling CPMs. Media brands with a segmented audience have the opportunity to use DTC to re-balance the social ecosystem and diversify revenues, if they are willing to change…
Brand mobile|social penetration is as high as 78% in fashion retail but with the social conversation owned by social networks, audience insights are not revealed until a conversion or sign-up occurs, meaning just 4% have been segmented in 2017.
Brands not only have the opportunity to improve conversions, but also to monetise content, services, their ad inventory with complementary partners, sell anonymised data, and integrate with eCommerce, all coordinated within an omnichannel strategy, but crucially the opportunity remains to improve conversions.
Is there an option to do nothing?
Not for ad-funded online media. It’s adapt or face an uncertain future. Social networks have conflicting objectives to deliver improving revenues that are dominated by advertising.
Brands have the opportunity to do nothing but risk missing the potential market value of owning their own social platform offering incremental benefits and improved conversions.
Brands need to decide if DTC is a competitive advantage or if they wish to focus on their core proposition. All now have the opportunity to become social entities for themselves, generating $4-9 per audience member pa notwithstanding improving their core proposition.
It’s about the willingness to change
The tipping point has been reached, and if brands are able to seize the opportunity to reclaim ownership of the social conversation, and with it the social audience, the possibilities are significant – maybe even bigger than before.
GLOBALDRUM is a mobile social platform enabling brands to monetise audiences.