How do you boil a frog? Slowly. And in Facebook’s case, 14 months is the time it took to get the pot of water boiling, with publishers sitting inside.
The branded content industry is on fire, estimated to be growing at 35 percent year over year and is a major digital growth strategy for premium publishers. The challenge is that branded content revenue growth has been higher than organic audience growth. To make up the difference, publishers heavily rely on paid distribution to deliver the reach marketers expect — and guess what? It’s mostly with Facebook.
Having been so closely aligned with publishers for several years now, our team at Polar took a closer look and discovered that Facebook’s ad revenue growth has largely been at the expense of publishers.
The social media giant has also been incredibly successful at monetizing brands and influencers alike. A few weeks ago, we published a 20-page white paper examining the history of Facebook’s monetization strategy. Here’s a brief teaser into what we discovered about Facebook’s activity over the past 14 months:
Q2 2016: Facebook introduces the handshake tool, changing its policy to require publishers and influencers to tag advertisers in promoted posts or branded content.
Q4 2016: Social marketing agencies and platforms start to notice a decline in organic reach on Facebook. Any post tagged with the handshake tool has essentially dropped to zero. This is exactly what happened to brands in late 2013.
Q4 2016: Publishers start to pay Facebook even more money to boost posts for branded content to achieve audience distribution targets that their marketers expect.
Q1 2017: When a brand is tagged with the handshake tool, they get to see all of the performance data for the post, including how much the publisher paid Facebook to boost it. Initially buyers did not understand where to find this data, so Facebook’s account management team was directed to train and educate buyers on where to see the data. The net result? Buyers now question publishers on their massive margins and downward price pressure on publishers intensifies.
Q3 2017: Facebook announces that a brand tagged under the handshake tool can now boost the post directly with paid spending, using the publisher or influencer’s handle. The publisher margin will be cut to zero.
Facebook’s most recent announcement to allow brands to boost publisher posts they are tagged in has fundamentally changed the game.
The water is now rapidly boiling and by next year, publishers will start to see the fallout from buyers reducing their direct spend on branded content and reallocating the distribution budgets directly to Facebook.
Given the complexities of the digital advertising ecosystem, it may take some time for the shakeout to fully surface. At any rate, premium publishers should start thinking about alternative strategies to grow their branded content business, ones that relies less heavily on Facebook.
'Minority Report' and 18 More Movies That Accurately Predicted Future Tech (Photos)
Steven Spielberg's tech-heavy "Minority Report," starring Tom Cruise, is now 15 years old. Considered one of the most prescient sci-fi movies to grace the big screen, it predicted multiple future innovations, including facial recognition, personalize advertising and predictive crime fighting. In honor of the movie's anniversary, click through here to revisit 18 more movies that accurately peered into the future of technology:
20th Century Fox
We're so used to touch screens at this point -- we use them every day on our smart phones, and even at McDonald's -- that it's easy to forget that Tom Cruise used the technology in "Minority Report."
20th Century Fox
Long before Siri, there was HAL. The ominous yet soft-spoken computer system was the antagonist in 1968's "2001: A Space Odyssey." Stanley Kubrick's sinister talking computer ended up turning on its crew in a Siri user's worst nightmare.
MGM
Tech giant Elon Musk is at the helm of SpaceX, which will send two tourists to space in 2018. But "2001: A Space Odyssey" imagined commercial space travel decades ago.
MGM
Elon Musk, Google and Uber have been duking it out to bring self-driving cars to the masses, but Arnold Schwarzenegger might have jumpstarted the competition when he took a robot-controlled ride in 1990's "Total Recall."
TriStar Pictures
"The Terminator" predicted military drones in 1984 -- long before they were introduced to police forces and militaries.
Orion Pictures
Virtual reality is taking over the tech scene. You can play games in VR, watch movies and experience Coachella all from the comfort of your living room. But Hollywood predicted we'd have VR more than 20 years ago in 1992's "Lawnmower Man."
New Line Cinema
The 1982 cult classic "Blade Runner," starring Harrison Ford, predicted digital billboards, which you can see now all over the country, from Times Square in New York to the Vegas strip.
Warner Bros.
Remember when the TSA rolled out invasive body scanners and a lot of people freaked out? "Airplane II: The Sequel" imagined airport scanners that revealed a person's naked body to agents.
Woody Allen's "Sleeper" had robots assisting surgeons by offering advice during surgery. Today, doctors use robotics to add precision to procedures.
United Artists
The beloved 1960s cartoon "The Jetsons" -- which was made into a movie in 1990 -- predicted the use of robots to clean homes. They had a robotic vacuum and a robotic maid. Can you say Roomba?
ABC
In vitro fertilization and at-home genetic testing are common place these days. "Gattaca," with Uma Thurman and Ethan Hawke, predicted this tech in 1997.
We know how dangerous cyber warfare is, and countless companies have been hacked recently. 1983's "WarGames" with Matthew Broderick is all about a kid who walks the line between gaming and reality.
MGM
FaceTime, and Skype before it, are commonplace today. But it was cool new technology in 1989's "Back to the Future Part II."
Universal Pictures
There are a ton of different options out there for smart watches. This was predicted in 1990's "Dick Tracy."
Touchstone Pictures
It's so easy to order Domino's online -- you can even watch how far along in the process your pizza is. In 1995's "The Net" with Sandra Bullock, they showed ordering pizza online for the first time.
Columbia Pictures
Tinder, Bumble and OKCupid are only a few of the many, many online dating options out there. But Meg Ryan and Tom Hanks were on the forefront of the online dating trend in "You've Got Mail."
Warner Bros.
VR porn is growing in popularity. Or as it's called in 1993's "Demolition Man" -- "digitized transference of sexual energies."
Warner Bros.
The 1929 movie "Woman in the Moon" predicted space travel. Obviously, we hit that milestone decades ago. And hey, they even got the shuttle shape right!
From robotic vacuums to smart watches, Hollywood got these tech trends right
Steven Spielberg's tech-heavy "Minority Report," starring Tom Cruise, is now 15 years old. Considered one of the most prescient sci-fi movies to grace the big screen, it predicted multiple future innovations, including facial recognition, personalize advertising and predictive crime fighting. In honor of the movie's anniversary, click through here to revisit 18 more movies that accurately peered into the future of technology:
Kunal Gupta is the founder and CEO of Polar, where he leads a talented team transforming the media publishing industry with technology. He is passionate about leadership and finding focus in a modern era. He runs a leadership blog at medium.com/find-focus.