In this week’s Rundown, we look at digital media’s autoplay obsession, Amazon’s reality check and publishers’ fears that Facebook will stop funding content.
The pivot to autoplay
Many in digital media reflexively blame outside forces for shortcomings in their own business strategies. The pressures they face tend to result in short-term decisions that are not in their long-term interests.
Nowhere is that more evident than the continued horror show that is the user experience of many publisher sites. Horrific user experiences are as old as the commercial internet. And they always arise out of the difficulty of squeezing more money from ads when supply has so far outstripped demand. The rise of programmatic has heightened these pressures, as publishers find their audiences commoditized. After all, retargeters are just looking for the people, not the context. It doesn’t matter if they’re on a high-priced site or a low-priced site — in the retargeters’ world, they’re the same or ranked simply based on which drives more clicks and conversions.
The money in digital media has moved to video. As Meredith Kopit Levien, COO of The New York Times, said to me on the Digiday Podcast, “The pivot to video is really a pivot to video advertising.” Visiting publisher sites these days makes that clear. Autoplay video has gone from a novelty to a scourge. Talk to publishers and they’ll admit that it’s not the best user experience, but hey, Facebook normalized it. The problem publishers face is the article page is not a feed. Publishers can’t get away with the things Facebook can. I don’t think there’s a CNN or ESPN article page that doesn’t have an autoplay video at this point. I went to read a Peter King column at SI.com and was assaulted by an autoplay video that, when paused, followed me as I scrolled down. Then, more autoplay came at me from banner placements.
Digiday’s Lucia Moses yesterday published a story on the state of autoplay video. Looking ahead to 2018, publishers are going to pay the price for getting greedy. Google is bundling in autoplay blockers in Chrome. Other browsers will follow suit. The situation is analogous to what happened with the pop-up ad scourge in the early 2000s. Publishers knew pop-ups and pop-unders annoyed people and damaged their brands, but they couldn’t help themselves. It took browser-makers to put a stop to that nonsense by defaulting pop-up blockers on.
The same story will likely repeat itself. And it serves as a disturbing counterpoint to the argument that tech companies have too much power. Yes, publishers should decide what kind of user experience they have overall, but what passes for a user experience now isn’t acceptable for the long-term health of digital media. — Brian Morrissey
Amazon’s reality check?
Amazon is disrupting a lot of industries: groceries, delivery, advertising, entertainment — the list goes on. And it’s safe to say the last year has been the peak of the Amazon hype cycle. The mere mention of Amazon getting into an industry sends stocks of other brands in that space tumbling.
But I’m hearing more talk that questions whether Amazon can truly “build a brand,” that ephemeral, shape-shifting and amorphous idea. It’s clear that it’s trying: Amazon has a whole coterie of “secret” brands, and there are plenty of indications that it will try to make a mark in apparel and shoes. While there’s no doubt Amazon has a stellar supply and distribution platform and no shortage of scale, building a brand is harder. Are consumers going to want to buy Amazon shoes? What about Amazon clothing? Most retail execs in the space are pointing to examples like Walmart’s purchase of Bonobos as proof of how hard it is to build a brand, especially in those categories — it’s why most companies acquire them. “Authenticity, storytelling and creativity might all be stuff people scoff at, but that’s how you get people to shell upward of $300 for a pair of shoes,” said one retail exec. “And nobody is going to want to do that for an Amazon brand. They can try to find space on shelves at lower-end retailers, but Amazon will always be a price play, not a brand play.” — Shareen Pathak
What if the Facebook money well goes dry?
Earlier this year, Facebook replaced its live-video deals with publishers with licensing arrangements, under which a select group of publishers would get paid a set fee for producing a minimum number of minutes of live and on-demand video. With Facebook Live turning into a dud, this was seen as a way for Facebook to continue incentivizing media companies to create content. (Facebook would make its money back by running mid-rolls, after which it would share ad revenue with the publishers.)
Now, some publishers are privately questioning whether Facebook plans to renew any of these deals, which will be up early next year. “Look, in theory, a guaranteed floor with rights to recoup is not a bad structure — it’s how record deals work,” said one publishing exec. “But it’s only helpful if there’s enough money to go around, where if there is success, you get rich. I wouldn’t be surprised if they wind up pulling the plug on those deals.”
Facebook plans to continue funding content for Watch through 2018. But even here, Facebook has said its plans are to power Watch content through rev-share instead of upfront production costs. With little revenue coming from mid-rolls, some publishers are not optimistic. “It’s an interesting universe a year from now if Facebook is not priming the pump, and publishers realize there’s no economic value to publishing to Facebook,” said another exec. — Sahil Patel
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