With media companies around the world struggling to make money, the publishing platforms on Facebook and Google promised to bring in much needed income streams. They appear not to have worked.
Business Insider reports how US based premium publisher trade body Digital Content Next surveyed its members on their online platform income and discovered some disappointing answers.
On average, premium publishing companies generated $773,567 in the first half of 2016 by distributing their content on YouTube. Content published to Facebook earned an average of $560,144 in the period, Twitter generated an average of $482,788, and Snapchat generated $192,819 for each publisher in the sample.
To call these returns derisory is an understatement and it illustrates how the current media model is unsustainable as it’s impossible to sustain a basic newsroom, let alone produce investigative features with those sort of budgets.
It isn’t just the media model that’s unsustainable, Business Insider cites the CEO of Digital Content Next, Jason Klint, who flagged in a blog post last year that all the growth in digital advertising is being accounted for by Facebook and Google – the rest of the industry is shrinking.
Even Facebook and Google aren’t immune from the unsustainable model that’s currently in place, Klint points out that fraud and intermediaries further skew the model which undermines advertisers’ confidence in the platforms and online media in general.
For the moment though, the intermediaries seem to be doing okay. Klint cites IAB research which claims AdTech companies are making 55% of the online advertising industry’s revenues while publishers are only getting half.
That illustrates how the tail is currently wagging the dog with publishers and content creators losing out while middlemen who add little in the way of value get the bulk of the revenue. That too is not sustainable.
We’re still in early days for online media and the models are still being worked out. While we wait for the 21st Century’s David Sarnoff many sectors are threatened including the advertising, marketing and PR industries. At least the publishers aren’t alone.
It turns out that big companies need scale, not precision, so to grow sales they need to be engaging with more people and not restricting their message to niche groups.
Given the different natures of businesses it’s not surprising to see strategies that work for one group fail dismally for others, but it’s interesting how targeting turns out not to work so well for mass market products.
The losers though in the P&G story are smaller websites as Wall Street Journal quotes the company’s Chief Marketing Officer as saying they will focus more on the big sites and move away from niche players.
Mr. Pritchard said P&G won’t cut back on Facebook spending and will employ targeted ads where it makes sense, such as pitching diapers to expectant mothers. He said P&G has ramped up spending both on digital sites and traditional platforms. One category the company is scaling back: smaller websites that lack the reach of sites such as Facebook, Google and YouTube.
Again we’re seeing the early promise of the web failing as economic power continues to be concentrated with a few major platforms. This is also terrible news for media organisations as big advertisers – P&G are the world’s biggest spender – focus on a few sites and increasingly ignore local or niche news publications.
There’s also the quandary of where the content that Facebook’s users share will come from, with the advertising shifting away from media companies – new players such as Buzzfeed and Huffington Post as well as the old established mastheads – to Google and Facebook, there’s less funds to create interesting and shareable stories.
Miller was a classic social media influencer, with 700 thousand young followers she was popular with advertisers then along came the payday of reposting fake diet pill testimonials.
Miller started to make serious money. She’d already been able to make a little cash: fashion companies and some small Etsy stores paid her to post pictures of clothing on her blog, with a nudge to her followers to check out their sales. She’d earned about $4000 in this way.
But then the big one came along. Two 18-year-old American social media entrepreneurs, Zach Lilley and Jeremy Greenfield – fans and friends of Pizza – approached Jess Miller and other top-performing Tumblr bloggers in April 2014 with a proposition for a money-making scheme. It used a decidedly old-school lure: diet pills.
Lilley, Greenfield and their associate Dennis Hegstad ran a website called Exposely, which connected brands to people with strong followings on social media. Lilley and Greenfield used their social media skills to create diet pill ads that masqueraded as Tumblr posts, essentially fake testimonials from women talking about their weight-loss journey. Miller would re-blog these posts, and get a small payment if the user clicked on the link. If the user bought the pills, Miller would get $23 and Exposely would get $26. She watched the money roll in – to her mother’s PayPal account.
Eventually the breaches their terms of service, not to mention ethics, became too much for Tumblr’s management and they deleted Miller’s blog along with a group of others in the scheme.
Miller’s story illustrates the manipulation that is a big part of the social media influencer industry with behaviour that’s almost certainly illegal and most definitely unethical. It also illustrates the risks of basing an income or business on service where you can be closed down any time.
For Miller, she seems relieved her time of fame is over. Those building their businesses around these platforms may not be so philosophical.
For years I resisted attending the Tech Leaders conference, formerly Kickstart, as I felt a bit of an imposter being invited to attend as a journalist. As a consequence I missed the peak days of the event.
In the ‘good old days’ dozens of journalists, most in the employ of profitable media companies, would fly to a Queensland resort to wine, dine and debauch themselves as PR agencies who were picking up the tab would try to introduce their clients and pitch to the group of hungover scribes.
Funding these events was relatively straightforward, public relations agencies and their clients were happy to pay substantial sums for access to journalists. In the golden days of technology journalism, large IT supplements were full of lucrative advertising for jobs and products.
That river of advertising gold has long dried up and in the technology industry that shift has been exacerbated by the collapse in IT industry margins which has further hurt advertising budgets.
As the industry has faded so too have the numbers of media professionals, many journalists have either moved into PR roles themselves or are now desperate freelancers.
The industry shift to freelancers has been problematic for the organisers as the remaining staff journalists are chronically time poor so can’t lightly take a day away from the desk and the independent reporters don’t offer direct access into trade journals and general news outlets.
Events like Tech Leaders are giving the PR industry a glimpse of the journalist free media landscape of the near future where the traditional pitching to outlets in the hope of being published is effectively obsolete. Looking at the numbers at Tech Leaders, it’s clear that world is not far off.
The question everyone in the industry has to ask is ‘how do people perceive I add value?’ For many, including myself, the answer is ‘we don’t’.
In an age where there is an almost unlimited supply of information and commentary, journalists and PR people have to find a new way to convince the market they add value.
“If you have anything negative to say, please don’t use the hashtag” implored the organiser to her stable of ‘influencers’ ahead of a recent social media campaign.
Like everyone in the PR, marketing and advertising industries, that organiser was desperately keeping a shiny patina on their clients’ brands at a time where they are one tweet away from disaster in today’s world of message obsessed management.
With influencer programs those risks are magnified as marketers co-opt amateurs to promote their clients in return for access and freebies*. Those unpaid posters on Instagram, Twitter and Facebook may be happy to give a positive view to everything but their fans may not be so kind.
Given their clients’ aversion to risk, it’s not unusual to see marketers setting out terms to ‘influencers’ demanding the brand has the right to vet posts – as one telco requested to this site last year – or outright prohibiting anything negative being said about their client.
Happy Shiny People
Perversely, selecting happy shiny people to promote brands on social media while suppressing critical thinking could actually create distrust of brands argues communications consultant Joanne Jacobs who states “this distrust is causedby campaigns of undifferentiated positivity and uncritical thinking.”
A good example of this potential damage is a recent influencer campaign by Chinese telecommunications Huawei where a group of influencers were flown to the 2016 Mobile World Congress to post about their experiences with the brand.
The Facebook post below shows the influencers enjoying the vendor’s hospitality but it also illustrates the lack of diversity in the group, something that was quickly called out in the comments.
For the Huawei influencers who had spent the previous week gushing about the vendor’s products and events this was an opportunity to provide leadership on the lack of diversity in the tech and telco industries..
Instead the critics – some of whom had more influential online audiences than the ‘influencers’ – were dismissed with the passive aggressive accusation of being ‘negative’, the cardinal sin of social media marketing.
For Huawei, there was a real risk their happy shiny influencers clumsy attempts to protect the brand would damage for the company and it was unsurprising the company’s professional PR managers stepped in to defuse the situation which in the hands of amateur ‘brand ambassadors’ threatened to become a self inflicted disaster.
Brittle brands of happiness
Huawei’s experience illustrates a key problem with the happy shiny influencer campaigns in their brittleness when faced with genuine criticism. The happy consumerist gleefully liking Instagram photos of shoes or hamburgers will quickly abandon the product should the brand be perceived as acting dishonestly or unethically.
For those influencers who’ve tied themselves too closely to brands, such a scandal could find their own names tarnished and their hard won audiences and reputation deserting them.
In an age of conversation where critical voices can be heard, the nice shiny facades can easily collapse. The days when the tobacco industry or brands like Coca-Cola could drown out critical voices simply by the weight of their advertising campaigns are long gone.
Struggles with a fragmented media
The struggles for the PR and marketing industries in dealing with today’s fragmented world are not to be underestimated – the old models of broadcast advertising and engaging with journalists and celebrities have lost their effectiveness and the industry is grappling with what works with the new channels.
In a building a brand that will last in today’s media landscape, pandering to shallow thinking consumerists is at best going to be a short term fix. To succeed, building a believable trustworthy name that tolerates dissent, allows complaints and acknowledges informed criticism is much more important and exponentially more valuable.
Shallow thinking and shiny people might have worked for Coca-Cola selling to young baby boomers in 1965 but fifty years later things the critics and deeper thinkers have a voice to. Co-opting those voices will only strengthen the brand.
*Disclaimer: This writer has been on a number of influencer programs and received various degrees of corporate largess including a Huawei smartphone.
One notable aspect of Google’s failure is the locksmith problem where thousands of fake businesses have slipped into the company’s database. The result is thousands of consumers being ripped off and honest local businesses being overlooked in search results.
It’s hard not to conclude that the local listing service isn’t really a high priority to Google’s attention deficient managers and it isn’t surprising given maintaining databases is nowhere near as sexy as being involved in moonshots or as lucrative as the company’s core adwords business.
Google’s bureaucrats think so little of the service that they give the task of maintaining its integrity to an army of unpaid volunteers. The New York Times tells the tale of one of these ‘Mappers’, an unemployed truck driver named Dan Austin, who proved so good at the role he was ‘promoted’ – still unpaid of course – and then ‘sacked’ when he demonstrated how easy it was to plant a false listing.
Another weakness illustrated in the Locksmith story is the collateral damage of the ‘fail-fast’ mentality where features are released without the developers really understanding the consequences. The cost of failure may be felt by innocent parties more than the company that’s ‘failed’, as Search Engine Land flagged in its 2009 article.
Google has continued to release features into local that are open to abuse. Google has used its release early and iterate tactic to gain market share at the expense of more circumspect competitors and on the fragile incomes of small businesses.
The continued failure of Google’s local business service remains frustrating for small businesses, having destroyed the Yellow Pages and local newspaper advertising models most neighbourhood services have few places to advertise. While Google and the other internet giants remain focused on other matters, local business search remains a great opportunity for a smart entrepreneur.