October 20, 2015

Back to the garden?

By Martin Shaw Head of Digital, APAC

Martin Shaw

Martin Shaw

Head of Digital, APAC

In the latest edition of The Change Briefing, Maxus Head of Digital for APAC, Martin Shaw, discusses the implications of social networks offering more news-based services such as 'Instant Articles' from Facebook.

What’€™s Changed?

Recently there has been a proliferation of news-based services offered by social networks. The big news at the moment is the launch of Facebook Instant Articles, which will allow Facebook users to view content from partner publishers within the Facebook app, rather than clicking through to a publisher mobile site.  This is rolling out globally currently and joins Snapchat Discover as well as Linkedin Pulse and Twitter’€™s Moments, in bringing curated content to social media users. Though not a social platform Apple News will also be attempting to own the news space through partner content.

What the change means:

On the face of it, news and social make good partners, the news outlets benefiting from the extraordinary reach of social networks, while the social networks have another reason to keep their users within the social environment. And, for the moment at least, the social networks seem to be playing nice with generous revenue share to the publishers from the ads served around the content.

Interestingly, this scenario has been played out at least once before, in the days when AOL’€™s ‘€œuser-friendly’€ walled garden was designed to keep paying consumers in, and effectively became the internet for many millions of people back around 2000. The wheels came off that ecosystem when consumers gained the confidence and expertise to go beyond the garden walls and AOL failed to deliver a compelling broadband proposition, but, for a time, this ‘€œstickiness’€ did give AOL a strong hand in commanding ad revenue and negotiating rates, so the attractions are clear. Following this, Yahoo’€™s original hand curated search offering also gave the wary consumer a simple, hand-curated compass to navigate the internet, before Google’€™s algorithms took over and allowed us access to the world’€™s data in a much broader way.

Now it seems that the garden is back in a big way, the stakes are higher and this time it’€™s free for consumers. Of course, news isn’€™t the only place where social tech companies are trying to lock consumers into their ecosystems. In China, Tencent’€™s WeChat has achieved real dominance in the social space by successfully loading an entire portal of functionality onto what started as a basic messaging app. They remain the current market leaders in their space, but will be hotly pursued by Line, WhatsApp and Facebook Messenger, the last of which we anticipate will be used as a lab for Facebook to test this area heavily over the next couple of years ‘ expect to see a lot more from them!

Maybe consumers are getting lost in the avalanche of sites and content available and just want things to be kept simple for them ‘ it’€™s what Facebook and the rest seem to be banking on. However, it may not be game over for the open web just yet. Google is developing an initiative called ‘€˜Accelerated Mobile Pages’€™ (AMP) designed to enable news articles to open significantly faster on smartphone and tablet browsers. It’€™s rumoured to be introduced fully in early 2016 and many prominent global publishers are already involved, including The New York Times, Condé Nast, The BBC, and The Daily Mail. In theory, this should make consumers happier to surf the open web from their mobile, without the irritations of slow loading pages, and thus make them less likely to stay within the confines of a Facebook or a Snapchat.

What are the implications for advertisers?

Certainly in the short-term there will be plenty of interesting new areas of social platforms to test. Advertisers will be able to standardize targeting criteria across different types of content, while comparing results between consumers that see ads around the same content but via different access points. Potentially the number of vendors can be reduced, making the buying process more efficient. There will also be numerous new access points to bring great content marketing to entice, engage and convert social platform users into purchasers of brands and services.

However, as with AOL, the greater share that Facebook, for example, takes, the more likely that prices will rise to advertisers, while revenue share falls to publishers. In this potential monopolistic scenario, innovation will also likely suffer, both on the social platform end through complacency and from publishers, as they will need to conform first to the rules and formats of their distributer, before they can innovate themselves.

That all said, for the moment it is still a wildly competitive space and previous attempts to confine consumers to pre-defined areas of content have tended to result in failure. What we can say is that we are assured of many a twist and turn over the next few years and it’€™s certainly going to continue to be both an exciting and testing time for advertisers! Our advice to marketers, as always, is to lean into the change and adapt fast to survive and flourish.