The Post-Facebook Era Has Begun: 8 Things Digital Media Operators Should Be Thinking About For 2018
The post-Facebook period has begun.
Prices on Facebook have increased 171 percent in 2017, making it harder and harder to achieve profitable results for marketers, according to AdStage.
Facebook can no longer be relied on for anything, as many Americans learned when the Russians used the platform to undermine U.S. elections.
The days of Facebook as a reliable traffic source are over. Facebook will always do what’s best for next quarter’s earnings at the expense of publishers, society, and whatever else is in the way.
Now that Facebook has pimped user data and publisher content into a $500 billion market cap, it is already testing removing publisher content from the general user feed.
I believe smart publishers have already started to reduce their reliance and exposure to the Facebook platform. I predict this will accelerate in 2018.
Digital media are in a severe bear market as measured by pricing contraction, layoffs, lack of profitability and lack of positive cash flow among digital publishers, thanks to the increasing power of the Facebook-Google duopoly.
Look at the winners in the space who are actually printing cash flow. They are highly automated and rely on algorithms vs. humans. Any digital content company that is unprofitable and human-heavy is likely going to lose at this stage in the game.
Digital media companies need to think about how can they automate, form smart partnerships, and outsource to survive this severe bear market.
Everyone can use their imagination to think of new ideas and initiatives that cost the business a lot of money. Try instead to imagine cutting your expenses 30 percent with a better business design that allows you to focus on a few things better than anyone else.
Things are likely to get worse before they get better in digital media and it’s better to voluntarily rationalize and optimize your business now than be forced to do it later.
If you are not doing this already, now is a good time to start thinking hard about challenging the assumption that has ruled digital media for the last 20 years — that content needs to be free.
Most publishers in the future will need a subscription product to even dream about reaching 30-percent profit margins and have sustainability protection from Google, Facebook, and Amazon’s advertising business — already $1 billion and growing.
In times like these, you need to be a contrarian and go the other way.
You are unlikely to be successful medium-term if your business plan looks like 90 percent of other ad-supported companies, most of which have weak margins or are unprofitable. You don’t need to roll out a subscription plan now, but now is a good time to start thinking about your roadmap and how to get there.
Jessica Lessin, a former Wall Street Journal reporter with deep Silicon Valley connections, had a vision. She wanted to develop a subscription-only platform that didn’t run the same stories as everyone else and was not looking to compete on volume. She bet that people would pay for high-quality, exclusive stories, and that this would be a better path to profitability than the consensus ad-revenue-or-bust crowd.
She is profitable and doing well. A subscription to The Information costs $39.99 a month.
There is not enough digital advertising left over from the duopoly for everyone to pay for quality content.
A bigger shakeup is coming. You’ll see more content companies going bust. Those that survive are likely to either have subscription businesses or a hybrid of ad and subscription revenue (NYT, WSJ, Washington Post). Broadly speaking, the push towards quality is really about subscriptions, as digital advertising is not robust enough to support quality content.
While everyone was getting all giggly over the flavor-of-the-day viral publishers, the smart publishers were laying the building blocks for a sustainable subscription business.
How can you “blockchain” your content business?
A lot of people are getting giggly and bubbly about Bitcoin, but the real story is decentralization and the underlying blockchain technology. You think of blockchain as a super efficient digital ledger that allows you to process information and transactions more efficiently.
Rather than Facebook making $billions while users get nothing back for their data and time, imagine a world where platforms actually push monetary value back to the community and to the users who make everything work.
Two companies have thought about how to incorporate blockchain and decentralization concepts into their business model.
Andreas Gal, the former CTO of the open source browser Mozilla Firefox, launched the Brave browser and raised $30 million to launch his own token. Brave will reward users for time spent in its ecosystem. Brave has its own cryptocurrency called BAT — Basic Attention Token.
Just as Bitcoin could potentially disrupt government manipulation of money, the concept of decentralization could disrupt Google and Facebook. Their duopoly keeps everyone in a voluntary pimp-prostitute relationship. Decentralization could help the real value in the media ecosystem swing back to content creators and users.
Steemit Is another company that is a first mover in blockchaining media. It rewards its users with cold, hard cash in the form of a cryptocurrency:
“Everything that you do on Steemit—every post, every comment, and every like—translates to a fraction of a digital currency called Steem. Over time, as Steem accumulates, it can be cashed out for normal currency.”
Most publishers should be thinking about how they can take advantage of disruptive blockhain technology.
Companies such as Ezoic are making it easier for small-to-medium-sized publishers to leverage artificial intelligence and A/B testing to improve monetization and engagement rates. You don’t need a big wallet or an army of Silicon Valley engineers to efficiently leverage artificial intelligence.
For example, Ezoic can make real-time decisions on what is the best user experience and ad layout to show specific users vs grouping them all together. Ezoic has a lot of tools that can be useful for smart, lean and nimble publishers who need cutting-edge tech but don’t have a big wallet. Ezoic is so confident in its tech that it allows you to test its solution against your own set-up and compare the results before committing to anything.
Pageviews KPI is old-school and lazy
2018 is not the year to be religiously following the pageview key performance indicators. First, pageviews don’t tell you anything about whether users are even seeing the ads or whether ad impressions are actually firing. Pageviews don’t tell you whether people are really engaged on the page. Pageviews don’t tell you anything about your viewability scores. Pageviews don’t tell you ANYTHING.
Sophisticated digital media operators will increasingly pay attention to the following as key performance indicators:
- Average time on page (TOP).
- Average session duration (SD)
- Earnings per thousand visitors ( EPMV).
You could also be closely watching how many ad impressions fire per user or traffic source. It is lazy to look at page views as a real KPI. I see publishers dumping this metric over time.
You don’t need an expensive mobile app to push content to users anymore. Users can opt in through their web browser. Two companies offering this technology to publishers are MoEngage and GoRoost. Subscribers to your browser’s push notifications allow you to have a direct connection with your users in addition to your app or email connectivity. When you publish an article or a big feature or exclusive piece, your subscribers will get a simple notification.
Now is a good time to either audit your SEO budget and strategy and optimize for 2018, or start to prepare for your first campaign. SEO still works and should be included in any comprehensive audience development strategy.
With social media traffic becoming less reliable and more costly for many publishers, SEO should be given more attention in your audience development mix.
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