On The Level

  • Thursday, September 22nd, 2016
  • Author: Tim Maytom
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Owen Hanks, general manager international at Kargo, asks whos looking out for the content creators and publishers?

Owen Hanks HeadshotIf the current data around mobile media advertising is to be believed, 85 cents of every ad dollar spent goes to Google or Facebook (source: New York Times), leaving only 15 cents to be shared across the rest of the entire mobile advertising ecosystem. But is that enough? How are the editorial teams of the world’s largest ‘traditional’ media companies even surviving?

In the US and UK, the largest media companies have struggled to prove that they independently have the same scale as Facebook and Google. As a result, they’ve seen advertising dollars flow away from their owned and operated channels to the third party distribution platforms. But in reality, many traditional publisher sites have larger audiences now than they ever did in the heyday of print.

Take, for example, a glossy automotive magazine that at its print-era peak might have had 200,000 paying consumers in the UK and potentially two or three times that number reading each issue. This was a unique audience of 600,000 per month. Today, this magazine’s site likely has a unique audience of 1m per month, with 80 per cent consuming the content purely via mobile. So how is this perceived as decline?

Advertising dollars
I believe the answer is simple and has two parts. First, as Mary Meeker and many others have noted, mobile is still not seeing the volume of advertising dollars to match the audience eyeballs. This is changing, but not fast enough. Second, Google and Facebook are turnkey. In the words of Just Eat’s global performance marketing director Rachael Pollard, speaking at a recent mobile conference in London: “Spending money with Google and Facebook is a no-brainer because it’s easy and it works.”

Let’s take a closer look at the second point, as I believe that’s where the opportunity to redress the imbalance resides. Facebook and Google have their individual strengths, but for both, the advantage is ultimately about scale and ease.

What they don’t do is create content. They’re effectively newsstands. For the most part, when I’m reading or watching online, either via a social or video platform, I’m consuming editorial created by one of the traditional media companies that I was following in print 20 years ago. So, how do we shift the balance so that equal shares of ad dollars go to the professional content creators?

One solution: feed vs. read
In my news feed, I scroll through images of my kids, posts from friends and family, and news stories from favourites like the BBC and Sky. When I’m in the feed, the ad revenue goes to Facebook, but when I select a specific story and read it in full, the ad revenue is shared – though not equally – by the content owner and Facebook.

Interestingly, a recent study by the US Online Publishers Association found that brand advertising worked two to three times better in that editorial ‘read’ environment than it did in the ‘feed’ one. There were a number of reasons put forward as to why this might be the case. For example, in the feed you are scrolling four to five times faster than when you are reading an article in full. There are also generally three to four times more ads cropping up during your time on the feed.

That’s a powerful story for content creators to pitch to brand advertisers. All it’s missing is scale.

So, what if a company created a way for publishers to band together to achieve the scale of Google and Facebook and merge it with the engagement power of their quality ‘read’ environments, along with the ability to design premium brand creative that enhances brands as well as your edit pages?

It would be that third option for advertisers which would allow them to buy premium mobile editorial environments in conjunction with Facebook and Google buys for reach and performance. And it would be the one option that would return more dollars to the publishers versus the big platforms. It’s a business model we’re pursuing, and which is starting to level the playing field in the US now. Europe is next.

This article first appeared in the June 2016 print edition of Mobile Marketing. You can read the whole issue here.