Facebook and Publishers
Following the changes to the Facebook algorithm we mentioned last week many publishers have voiced their concern. Given users value Facebook for the way it connects them with friends and family, the changes are probably a smart move by Facebook – even if it impacts their revenues in the short term. But if you are a publishers and seeing your reach – and revenues - decline, you will have a different view.
As US commentator Michael Wolff puts it, the interests of Faceboook and Publishers have diverged. Last year we heard very different views on the prospect of Facebook becoming an important distribution channel for news. The CEO of a broadsheet was worried about becoming reliant in case the demands for a revenue share become too high. The Proprietor of a Tabloid was of the view that the regulators would prevent GAFA becoming too greedy. I don’t think either foresaw that the traffic may be choked.
The response has been fierce. The Guardian editor says Facebook is the enemy – and suggested to advertisers it was their enemy too. News Corp is concerned and talk of a powerful network of their own assets.
Quite why anyone thinks GAFA wouldn’t prioritise their own business models isn’t clear – and the key for all the platforms is the need to keep their users happy. Noone is better at maximising attention than Facebook and ultimately them keeping their users committed to the platform is in the interests of everyone who relies on that platform for reach.
We don’t agree with the view that Facebook see publishers like Uber sees their drivers – a necessity for now, but disposable over time. People value content they can share and the news publishers provide a valuable resource. But given some research suggests 43% of people aren’t aware of the publisher behind the story they read on social, they need to do more on their brand.
But the real issue here isn’t the number of eyeballs – it is monetizing those eyeballs and Facebook are much better at that than the publishers. Their priority should be making more money from those people who consumer their news on the apps and sites of the publisher.
Try this quick experiment this morning; flick through one or two national newspapers and you will see lots of ads for famous brands, who believe that the people reading the paper are worth paying for. Now go to the app and or mobile site for the same publishers and look for the ads. Few, if any of those brands are there and that makes no sense to me. Resolve that and you can be a little more relaxed about Facebook.
We talk about the super computer in everyones pockets as a smartphone. But given how many people use them more for taking pictures than making voice calls, in an alternate universe we could easily call them smartcameras.
Google and Apple keep developing services that help people better manage their photos and we have talked often about Photos being an Anchor – people don’t want to switch to a platform if they lose access to all those visual memories – even if they rarely go back to them.
Snapchat aspire to have their users take all their photos with Snapchat rather than the device camera and their new Memories feature is designed to help achieve this. Every photo taken in the app is backed up by Snapchat rather than saved on the device. And if you use a photo or a video from the camera roll Snapchat will save that too. Now that’s an Anchor.
As computer vision gets smarter, we’ll see more focus on the camera and a new acquisition by Google supports this – they have bought a company that uses machine learning to identify objects in pictures. And they have also made an investment in a high end camera company.
This week we met some smart people who use image recognition on Instagram to group people according to what pictures they take. So in theory you could target people who take pictures of flat whites. Or you could tailor ads by using similar imagery to that which they share or like.
In the conversation we learned of the problems with machine learning. A very expensive study was done ‘training’ a system to recognise whether a tank was a US one or a Russian one. After it was made to work, they deployed it in the real world and it tagged every tank on battlefields as Russian ones. It turns out that the factor the system used to differentiate was dirt; all the US tank pictures fed into the system were of pristine tanks parked on army bases whilst the only pictures they had of Russian tanks were of ones photographed in the wild. Back to the drawing board.
Just too late for last weeks Fix, we learned that Apple are talking to Tidal about acquiring them. As a number of people pointed out, this shouldn’t be a surprise for Fix readers. Music is probably the ultimate Anchor and everyone wants to be the dominant player; having access to the top talent and consequent exclusives is a key factor. Consider the long awaited, much anticipated Frank Ocean album –dropping that as an exclusive would be a huge marketing coup for any of the big players in music.
As Apple build their customer base to 15 million paying customers, YouTube is bullish on their ad supported music business. Their head product guy was behind much of Googles growth in advertising, so knows his stuff. It’s interesting to remember how Apple were gearing up for iTunes radio not too long ago and that they saw an ad supported model as quite viable. Lots more to happen in Music and the fact Facebook don’t really play in the space makes them buying Spotify fairly likely in our opinion.
The War for Attention
One of our old Maxims was that mobile has won the war for attention. No matter what else is happening, people keep giving their attention to the small screen and that has real consequences for all the other screens.
A new US survey makes this point well showing that the average consumer now spends a full hour more consuming media than they did a year ago. Now people may be getting up earlier, but common sense says more and more media are being consumed at the same time. So the attention has shifted.
Our favourite evidence for this is the head of research for US Network CBS;
We know that TV can and does work, but a lot is terrible – watching the Euro games on ITV means you have to watch live ad breaks and whilst we don’t fully agree with this US view, it’s clear that things need changing. It could be this is a Brexit like scenario, where we London Media types avoid ads and the real people up and down the country don’t. But would you bet on that? (Enders think the Brexit effect on media spend will be pretty negative but TV might do OK.)
In the US, the way they measure TV viewing is changing and now that digital is to be properly included it is thought viewing will be seen to be up – probably by around 10%. But getting that accepted by the industry is going to be tough – especially as WPP are big investors in a rival firm which combines a TV focused business with an online focused one. In the UK the way TV is measured is also evolving.
The big brands invest heavily in both TV and digital and the art is getting the balance right. This piece on Unilever confirms something we heard a few weeks back – they have a saying of No Mobile, No Meeting and it causing consternation amongst their more conservative partners.
Following our Making Mobile Ads Better breakfast one action is to look at how good examples of mobile advertising can be shared. We think a version of Product Hunt is probably best and we are looking for partners to help develop this. In the meantime these are some good examples.
And the news UberEat is now active in London – and looking to eat Deliveroos lunch (sorry) – shows how fragile some businesses are. If your only real asset is better utilization of minimum wage staff, then you will always be vulnerable to adjacencies.
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