In the immortal words of Terrell Owens: getcha popcorn ready! If you have been reading tech press, ad trades, or stepped foot into a digital agency over the past year, you have heard a common theme: brands are becoming publishers. The belief that the spread of social media eliminates the need for a traditional publishing middleman, since the brand now owns their own distribution through platforms like Facebook and Twitter.
In theory, I agree with the sentiment: Coca Cola has more Facebook fans than the primetime audience for American Idol four times over… but the belief inherently assumes that brands know how to create content that people actually want to consume. Therein lie the rub.
There are brands that are completely dedicated to creating that type of content: NBC, Viacom, ABC/Disney… they have the formula for what it takes to make “hit” content, and even they can’t get it right over half the time.
These content creation brands diversify their portfolio of content to hedge their risk against duds (The Playboy Club, anyone?); brands like Starbucks, Coke, etc don’t have the same type of risk luxury. This is the reason why brands won’t *become* publishers: either they already are, or they’re waiting on the right solution.
Creating Good Content Requires Risk & Commitment
When a brand is tasked with aligning itself with certain intangibles (adrenaline:Red Bull, happiness:Coke, athleticism:Nike), it’s difficult to imagine investing countless months into a content program only to find it flop. Companies like Warner Brothers make several programs each TV season in order to spread their risk against flops (not to mention how many content ideas they hear which don’t receive the green light).
Over time, content producers develop a mastery of what makes good content and what does not. They also develop an affinity for their content that takes on a brand of its own. This requires a commitment that many brand marketing teams aren’t prepared to take.
When the commitment is there, however, your brand can reap the rewards. As I was on vacation last week, I was reading Travel+Leisure on the beach. One thing struck me, there were a lot of articles promoting American Express. Some minimal digging revealed that I wasn’t crazy: American Express actually publishes T+L (and Food & Wine, and some others).
American Express has dedicated a subsidiary company, American Express Publishing, to focus on this content creation alone. This is what commitment to being a publisher looks like.
That undertaking yields high brand exposure, but requires a large time and monetary investment. Most brands aren’t ready to take this sort of leap, which leaves the brands as publishers movement splintering into two camps: outsourced content management or guest publishing on proven content brands.
Camp 1: Outsourced Content Management
Brands don’t have the stomach for a series of trial and error in the content game to better understand how to produce their branded delivery. I’m a big fan of companies like Federated Media and more algorithmically-based Percolate who are centralizing the content production and sourcing it out to partner brands.
Brands like Intel, Buick, Samsung and Mastercard have used these services to create legitimate content experiences for their brand, with the risk hedged by hiring a secondary firm with expertise. This same type of sentiment drove the high valuations for Buddy Media & Vitrue: understanding how consumers engage with content and building from that expertise.
This solution works best for brands who are sure that they want to develop a content program. It also requires patience, which is not always a marketer’s top virtue. For those marketers, Camp 2 is a better fit.
Camp 2: Guest Publishing on Proven Content Brands
The emergence of content consumption platforms like YouTube, Funny or Die and Buzzfeed are taking the attention of consumers across the Internet. Viewers turn to these content experiences for a quick laugh, to catch up with fun gossip or just to watch dogs on skateboards. These platforms have already built and understand their audience, and they will help a brand create a custom content experience.
Funny or Die has been creating sponsored videos, such as the Zach Galafianakis hit “Between Two Ferns" (brought to you by Speed Stick). Buzzfeed can connect you with Mike’s Hard Lemonade’s tips on how to creatively have a drink this summer.
YouTube is a bit different, but working with partners like Maker Studios to help build content that consumers will natively integrate into their content consumption experience.
These forms of content publishing have a considerably shorter shelf life than creating a trusted brand, which leads to a higher cost per engagement, but substantially lowers a brand’s time investment risk.
The Emerging Opportunity
The reason these forms of engagement are growing stem strongly from a reduction in consumers’ desire to engage with “traditional” web ad formats that do not align with a user’s expectations. Opportunities in the field of “brands as publishers” are emerging to provide risk management platforms for content creation.
Companies like Percolate are taking a bet on making this an algorithmic approach, which helps reduce the cost of management. Media buying technologies like Adaptly, Sharethrough, and UNIFIED are driving the ability to grow their distribution through Facebook, Twitter, StumbleUpon (disclosure: I work there) and other platforms.
Ultimately not all content programs are going to work for brands, but banner and other interruptive ads certainly aren’t going to work either. We’re in a current landscape where the brands who are taking the risks today are getting to learn quickly to ultimately reduce their costs in the long run.
I look forward to the technology that will enable the next Travel+Leisure to emerge, because ultimately, that’s what consumers like to engage with the most. Let’s start building!
There has been much discussion in the nerdosphere about Facebook’s move last week to debut their ad exchange: a form of retargeting visitors to an advertiser’s web page when they are back in the friendly confines of Facebook.com. Layer on top of this a real-time bidding (RTB) engine, and you have advertisers rejoicing that Facebook is finally listening to market demands.
But here’s the rub: Facebook isn’t designed to be an advertising network. It’s designed to be a content consumption experience.
Advertisers have an inherent demand for commoditizing advertising across the Internet, because it naturally builds in scale for buys. This is great for building up ad revenue from the vast majority of ad dollars dedicated to maintaining the status quo.
The sad part is that consumers often have a non-scientifically correlated “stay the f*** away from me” demand from interruptive advertising. The average click through rate on a Facebook right rail ad is 0.05%.
Compare that to the view-through rate of posts on Facebook: damn near 100%. With in-stream Sponsored Stories, Facebook was aligning itself with its core user experience: connecting people with stories that make them feel good, inspired or educated.
This marks the most challenging part about building a monetization system: where do you draw a line between incorporating commoditized ad units vs a native platform which aligns with your user intent?
On one side: advertisers want what is familiar (commoditized ad units). It’s easy because you (the agency/advertiser) maintain your processes. From a product perspective, this is known as low hanging fruit. It’s easy money, so you take it and compare yourself to other ad buys.
On the other side: 99.9% of engagement with your site (assuming a 0.1% page ad CTR) is not generating revenue. While FB Exchange is priced on CPM, the clicks are really where the money lies. 99.9% is a really big number of untouched revenue.
It makes sense why Facebook is making this change. It’s been getting beat down by investors, claiming that the Mighty Zucks aren’t responsive to big name advertisers like GM.
This move will slow down the negative momentum, so I get it. The other part it slows down, though, is the drive to create great content and distribute it wisely across the Facebook ecosystem.
In the long run, this FB exchange will likely prove more a distraction than a key, disruptive revenue driver.