Media Companies Playing the Long Game
When monetization strategies are hazy, what is the end-game of investing in social content?
When you hear, as we do pretty regularly, about how media brands go all in with resources on some new platform product — Facebook Live, Snapchat Discover, or Vines, which were super hot a few years ago — you wonder about their end game.
They go in with no assurance of monetization, but almost certainly knowing that platforms are not their friends. Facebook, Snapchat and the other platforms have an end game. It’s to obtain content (from you and other content producers) to expand their audiences, increase engagement, and monetize via programmatic advertising.
Brands that deploy major resources against unproven media forms, especially media forms launched by outside companies for their own financial benefit, really do need to think about monetization, or some kind of end game.
When you hear that, say, Cosmopolitan, has five dedicated people for Snapchat, creating content that disappears after 24 hours, that seems extravagant. When you hear big companies like The New York Times announce, somewhat breathlessly, that they have a team of 10 people creating content for Facebook Live, it’s hard not to come back to those few core questions. You’re providing their content, free, so what’s in it for you?
I never hear media-company executives address those questions well. They usually say the platforms are an essential distribution channel. Or that the platforms are a “frenemy.” Or that referral traffic back to their sites is a form of monetization.
Facebook increased ad revenue in 2016 by 57 percent. What did you do in 2016? Oh wait, I think I know the answer. The platforms might even claim they’re going to share revenue, but usually, the terms are inscrutable, or they change frequently, or both.
So it was illuminating and valuable yesterday, at a Min Master Class on video yesterday, to hear the perspective from the operator level of media companies, the people on the front lines, not the strategic thinkers.
And at the ground level, in terms of monetization, cool things are happening. A presentation from Cory Rotkel, national digital ad director for MensHealth.com, summarized a lot of the innovation — and revenue generation — that’s occurring, from native and co-branded videos to mid-roll sponsorships and traditional pre-roll.
And on the bigger, more existential question of the end game, Hearst Digital Senior News Producer Saj Pothiawala captured what I think might be the point. He described an extraordinary volume of live video across 19 brands at Hearst: 240 videos per month, with average views of 40,000 and average reach of 400,000.
Mostly, he said, Hearst’s video initiatives are based on a realization that the world of media consumption has changed. People expect to find a live video feed of a major event available via mobile wherever they are, and from any and all media brands. It’s not a discreet activity anymore, he says, but part of the stream.
And while monetization models are still evolving, and platform companies are certainly getting the lion’s share of the revenue at the moment, the long game — the end game — is maybe simply this: to be relevant to consumers now and opportunistic as things evolve.