By Alan D. Mutter
Los Angeles Times.
The natural order of the universe was disrupted recently when BuzzFeed, NBC News, The New York Times and a number of other media companies ceded to Facebook the marketing and monetization of portions of their valuable content.
Here’s how the deal works:
The media companies will give full articles and videos to Facebook, so the social network can distribute them among its more than 1.4 billion users.
Publishers keep all the revenue from any ads they sell to accompany the content they allow Facebook to post. If Facebook sells the ads displayed next to the publisher’s content, both sides will split the proceeds equally.
The move, which represents a further step in the transfer of power from the media tribe to the technology tribe, means that some of the biggest names in media have conceded that they are neither large enough nor strong enough to thrive as independent digital publishers without the help of at least one of their fearsome frenemies in Silicon Valley.
In addition to Facebook, the other frenemy, of course, is Google. Although media companies like to think that the quality of their work speaks for itself, Facebook and Google referrals steer the preponderance of the traffic to almost every news site.
The Facebook deal institutionalizes as never before this long-running dependency. In addition to the trio mentioned above, the other media companies that will be funneling content to Facebook are The Atlantic, BBC News, Bild, The Guardian, National Geographic and Spiegel Online. Fearful of being left behind, it is fair to assume additional media names in the not-too-distant future will feel obliged to join too.
The choice to throw in with Facebook could not have been easy for the proud media companies. Historically, the last thing they wanted was to give their expensively produced content to another brand competing for the same readers and ad dollars. But that was then and this is now.
Difficult as the decision may have been, it was inevitable, given Facebook’s global reach and the several critical capabilities that the company has developed. These are its not-so-secret superpowers:
Superior mobile prowess. In addition to the sheer size of its audience, Facebook has mastered the art and science of mobile publishing better than almost anyone. In the first quarter of this year, the company reported, 65 percent of its traffic and 73 percent of its ad revenue came from such highly optimized mobile sites as its Paper app.
Superior audience engagement. Based on the amount of time people spend on Facebook, it is fair to say that its users are considerably more passionate about the service than the visitors to a typical news site. According to Alexa.com, the average user spends 18.4 minutes per day on Facebook, compared with 9.5 minutes at The New York Times, 6.4 minutes at NBC News and 5.4 minutes at BuzzFeed.
Superior customer data. Because enthusiastic users frequently and liberally update Facebook with a plethora of personal data, the company knows more intimate and more accurate details about more people than any company in the world. The information is updated dynamically in real time, as people report everything from their favorite new song to the jeans they want to buy to the fact they will have a baby in six months.
Superior ad intelligence. Facebook enables advertisers to target messages with heretofore unprecedented precision, thanks not only to the rich information supplied by users but also by analyzing information captured from the friends in their networks. The ad intel is supplemented with location data acquired from Facebook’s popular mobile services.
Superior content targeting. In the same way data are used to target commercial messages, Facebook has the capability to match the right content with the right user by monitoring searches and media consumption. If Facebook sees that someone likes cooking Italian food, it can slip relevant recipes from The New York Times food page into that user’s news feed, paired conveniently with an ad for a pasta maker. When Facebook recognizes that a bride is planning a honeymoon in Florida, it can send travel videos embedded with customized hotel offers.
With everything Facebook brings to the party, the partnership ought to be a plus for the participating media brands. But some media partners may experience buyer’s remorse if Facebook trims their split after they get hooked on this welcome new stream of incremental revenue.
It seems fair to conclude that the media companies who took the leap felt they were damned if they did and damned if they didn’t. In the end, however, this was an offer they couldn’t refuse.
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ABOUT THE WRITER
Alan D. Mutter is a former newspaper editor and Silicon Valley chief executive. In addition to teaching at the University of California, Berkeley, he is a strategic consultant to global media companies. He wrote this for the Los Angeles Times.
