So, a large part of your audience engages with Facebook. Fine, but, as publishers, don’t obsess with it. It is not the best revenue sharing outlet and it’s best to develop new revenue sources beyond social media. Those are the conclusions of a new WAN-IFRA report by Grzegorz (Greg) Piechota.
Delighted to read this just released report by Grzegorz (Greg) Piechota for WAN-IFRA, in which he analyzes the disruption of news business models by Facebook, and its monetization strategy for publishers.
One centerpiece of the study: Facebook may appear as this ultimate savior as a revenue producing source for newspaper publishers. In reality, however, according to this report, Facebook contributed on average 7% of the digital business revenue (median though is just 3%) for major publishers members of WAN-IFRA.
Greg is a specialist on digital disruption patterns, having done research at Harvard as a Nieman Fellow, and is currently engaged in a year-long study of paid content models at Oxford’s Reuters Institute for the Study of Journalism.
Here are highlights of the report, in Greg’s own words:
Don’t rely solely on Facebook
* In general, news publishers cannot rely solely on monetization programs offered by Facebook and other digital platforms. Even for the most successful digital news publishers in the USA, the revenue shared by the leading platforms is too low to fully fund editorial operations. Members of WAN-IFRA reported that Facebook contributed on average 7% of their digital business revenue (median though is just 3%).
Facebook shares less revenue with content creators
• Facebook seems to share proportionally less revenue with content creators than other platforms do, the analysis of their financial reports shows. Although platforms promise to improve monetization programs, this source of funding is not likely to become sufficient for all publishers in all markets.
Build sound business outside of social media
* To monetize engagement with Facebook and other platforms, news publishers need to build sound business outside of those platforms rather than outsourcing their future to them.
Go beyond display advertising
The challenge is that the most common digital-publishing business model is based on advertising revenue, which leads news companies to head-on competition with platforms. I argue that news publishers can change the dynamics by going beyond display advertising, and they increasingly are.
And the good news is….
* Fortunately, as this report shows, new revenue sources such as digital subscriptions, e-commerce and branded content may bring news publishers greater returns than monetization programs on the platforms in the short term, and in the long term they seem to offer greater opportunities than digital display advertising can offer.
Stop obsessing with Facebook
* Last but not least, the report dissects the industry’s obsession with Facebook and the whole friend or foe debate. Facebook is just one of the digital disruptors. News publishers need to find a strategic response to digital disruption from all kinds of platforms, not only Facebook. The solution needs to address the root issue, which is not Facebook, but the behavior of news consumers.
This two-day event, organized jointly by WAN-IFRA and the News Media Alliance (NMA), will provide a unique opportunity for North American news media executives to hear and discuss digital revenue strategyfrom the world’s most advanced media companies.
I will be one of the speakers for this conference in New York City.
Sept. 18, Boston University, College of Communications
Sept. 22, Columbia University, special program for Argentine journalism students, School of Journalism
Oct. 19, WAN IFRA Digital Media North America, New York City
Nov. 16-19, WAN IFRA Latin America, Buenos Aires, Argentina