Principle and technology together: How adtech protects publisher content

“If music didn’t pay, it would be given up.” Those were the words of Supreme Court Justice Oliver Wendell Holmes, Jr., in his 1917 opinion in favor of the American songwriter, Victor Herbert, who had taken a New York restaurant to court because it had played one of his songs on a player piano – and hadn’t paid Herbert usage fees.

It was a small win for Herbert, but it was a huge victory for the new society he’d founded founded in 1915: the American Society of Composers, Authors and Publishers (ASCAP). To this day, ASCAP remains a powerful force that helps composers receive a fair share of monetization when their songs are recorded, performed live, or played on commercial radio and streaming applications.

The ASCAP was one of the first organizations to demand that a fair and transparent fee be paid to content creators when third-party distribution channels profit from their creativity.

Herbert’s court case was settled one hundred years ago.  But history has a habit of repeating itself.

Today’s independent content producers –journalists, app developers, or, yes, writers and performers of music – find that their creative output too often makes more money for other people.  Two platforms in particular, Google and Facebook, increasingly exert outsized influence over the distribution and monetization of content. In a digital ecosystem largely funded by advertising, they commanded upwards of 60 percent of all digital advertising dollars last year, even though they do not employ journalists, musicians, or filmmakers.

A Pew Research Study showing that roughly 62 percent of American adults receive most of their news from social media, which means that publishers as diverse as The New York Times and Buzzfeed  depend on social media giants as a distribution channel to connect them with their intended audiences.

Facebook positions itself as “a town hall for the world.” That may be true in part, but it misses a key point. According to research from the International News Media Association (INMA), 79 of the top-100 publishing sites in the United States reported a significant drop in visitor traffic coming from Facebook content links during the second quarter of 2016 alone

Facebook isn’t alone in attracting growing discontent among producers of content. According to findings by Digital Content Next (DCN), Google witnessed astonishing year-over-year revenue growth, increasing from $14.2 billion in 2015 to $17.4 billion in 2016. Meanwhile, the rest of the digital ecosystem (aside from Facebook) experienced a year-over-year decline of three percent during the same timeframe

As other distribution pipes continue to be scrapped in favor of Google and Facebook, numerous digital publishers find themselves scrambling for solutions. News outlets are a case in point.  Some, like The Wall Street Journal, have opted to place their content behind paywalls. Others, like The New York Times, offer a select number of free articles per month and then require their readers to subscribe to see additional articles beyond the free, monthly cap. Other companies such as Mother Jones offer their readers the chance to support “hard-hitting, non-profit journalism” by gifting “tax-deductible monthly or one-time contributions” directly to the company. And other news organizations have simply had to cut staff – or even close up shop.

That’s the bad news. But here’s how it can get better.

Returning to our prior example, the ASCAP uses technology to “track, match, process and pay on a trillion performances each year,” according to its website. That’s a critical point. Absent strong technology that allows its member publishers to see and seek payment at scale, the organization wouldn’t be able to help its members monetize.

For today’s publishers and content producers, adopting quality advertising technology is key to recapturing a fair share of monetization.

Digital advertising technology can be roughly broken down into two broad categories: enterprise products and marketplace technology. There are several attributes that content producers should look for in each.

Enterprise products should be:

Adept at applying machine learning at scale, so that publishers maximize yield.

Open and collaborative, in the same way other varieties of B2B  enterprise products allow for custom builds and integrations.

• Designed in a way that maximizes privacy protections.

Marketplace technology should be:

Efficient, and built to find the most direct path between buyers and sellers.

Transparent in pricing. Content producers should know the price their creative output commands in the market.

• Attentive to inventory quality. Buyers should know that their campaigns are directed at high-quality creative content not mingled with hate speech, pornography, piracy, or low-trafficked inventory.

The combination of principle and technology is essential. The principle tells us that when someone loads another person’s creative content on a player piano – or a social media feed – the producer of that content should be paid a fair price. And the technology that enables this principle should be designed in a way that ensures good outcomes for all marketplace participants.

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