How publishers manage the emerging platform-influenced economics of attention to grow audience and revenue was the focus of a recently released INMA report, “How News Media Wins In the Attention Economy.” On Wednesday, the author of the report, Dr. Merja Myllylahti, discussed the publisher struggle for attention and where Facebook and Google fit into that struggle in an INMA Webinar.
Myllylahti discussed the publisher struggle for attention and where Facebook and Google fit into that struggle, while also examining platform dependency, platform attention revenue, the value of attention, and the costs of acquiring and retaining attention.
What is attention?
Myllylahti opened the conversation by asking, “It’s really unclear — when people talk about attention — what do they actually mean?”
Is it a share, a like, a pageview, a tweet, or an Instagram post?
Myllylahti came up with the definition of attention: “I define attention as a scarce and fluid commodity, which carries monetary value and which is based on individual user interaction which can be harvested, measured, and exchanged for revenue on a platform, a news site, or an online site.”
Fluid economy is her own addition to the equation, and it simply means that attention keeps shifting. “That is the element which makes it so hard to monetise,” Myllylahti said.
Recent digital platform inquiries in the United Kingdom and Australia indicate Google and Facebook are “unavoidable business partners” for news companies because they deliver audience reach and attention.
But are they?
“We can debate this, and we see that some news companies believe they are better off outside the platform economy and some use it as a marketing tool,” Myllylahti said. She also noted that the UK review observed attention has become a vital concept for the long-term sustainability of journalism.
“Some people argue that attention is not so crucial anymore, but I would say that it’s becoming even more crucial. Social media news distribution does offer audience reach and traffic, as recent studies have shown.”
Studies have shown Facebook is still the most important source for social media traffic, despite algorithm changes and scandal.
Risk with platform metrics
“It has been claimed that Facebook has delivered unreliable video metrics to news companies,” Myllylahti said. “BuzzFeed and Vice, for example, were burned quite a bit. In New Zealand, for example, The Spinoff is a small organisation and decided to follow Facebook’s advice to move to video.”
The company laid off many traditional journalists and hired video editors in their place to push video content to Facebook. But their traffic dramatically decreased after this move, as much as 40%, and they’ve been struggling ever since.
The bottom line, Myllylahti advised, is that publishers need to think about what those platforms and metrics are — and if they can actually trust them.
Certain attention does not deliver revenue
“My research shows that attention in the form of social shares and related traffic does not deliver revenue,” Myllylahti told the audience. For the four news companies studied, social shares delivered less than 1% of their total digital revenue.
“It was really hard to validate my findings,” Myllylahti admitted, saying there simply isn’t enough comparable data out there to use as a benchmark. “But I did put my findings in line with industry reports. So I’m confident that my results are not far off. There are no proper models to look at this.”
Attention keeps shifting
Myllylahti wanted to look closely at the fact that attention is shifting from platform to platform, and that makes monetisation of the attention challenging. While Google and Facebook have been the major players, Apple News Plus is reported to be gaining traction with 90 million readers.
“So whether you are participating or not participating, where do you move next?” she asked. “We have to pay attention to how this attention is moving between the platforms and the news sites. How in the whole news ecosystem and platforms does attention keep shifting?”
Monetary value of attention
The problem is how news publishers can value the attention and how to determine the differing valuation between platforms, such as Facebook and Snapchat, Myllylahti said. “How do we really value it and calculate that value?”
For her research, she used some valuing done by Deloitte and others, but noted that their models are not fully tested. “Guessing what is what when you don’t have the proper modelling or valuation” is the challenge, she said.
“We know that Google and Facebook ate your breakfast — they have captured most of the digital advertising markets that we know,” Myllylahti said.
But those platforms also are realising that attention on the platforms can be turned into subscription revenue and are coming to monetise that same attention that news companies are trying to monetise. “The platform companies are moving to the same table.”
Benefits from platform subscriptions services are unproven
Platform subscription services may offer some small benefits for some companies, possibly generating some subscription growth. However, publishers don’t know what the long-term benefits from platform subscriptions are. “Also we have to remember that they are substantial, the costs related to acquiring subscriptions from platforms,” Myllylahti added.
Acquiring subscriptions from platforms comes with rising costs, and special offers are eating into the resulting revenue. Social media promotion, as well, can increase marketing budgets substantially.
How to combat the platform power?
Myllylahti took a look at how much revenue the platforms are actually sharing with publishers:
- Apple: 50%
- Amazon: 75-85%
- Google: 85-95%
- Facebook: 100%
“This has been discussed for years: Should there be a common publisher platform?” Myllylahti noted. “I don’t know how this has come to fruition or not, though I think they haven’t come much to anything.
However, Japan has something of a common publisher platform. Nordot is used by six million readers from 400 publishers.
But are such publisher platforms really workable? “I have no idea. I’m really intrigued to see and want to do a little bit more study on that,” Myllylahti said.
INMA: The report seemed more like a platform report than an attention report. Is that fair?
Myllylahti: Yes, I was interested to learn how the attention could be monetised through the platforms, so my research is definitely on the platform ecosystem.
INMA: Are we not monetising on the platforms because of their inherent nature or because of the attention shifts between them?
Myllylahti: The shifts are happening — and I don’t know enough about how that’s happening and its impact on revenue opportunities. But we have seen examples that monetising doesn’t work. The revenue created from those shares, Facebook for example, is valued at US$.05. These companies have millions and millions of shares, but the value is so minimal so how do you make revenue off those shares? Of course you can say that traffic creates revenue, but most publishers still don’t say that they make much money from Facebook.
INMA: Can you comment on the ways you see companies engage with their viewers to keep them attracted to their Web site?
Myllylahti: It’s a fundamentally important question. Some news companies have done some experiments where they have pulled completely out of Facebook. They did see some traffic drops, but then they saw more quality engagement. They got a smaller group of people, but they were more engaged. Where do you promote? Well, where was the news promoted earlier (before these platforms)? So there are ways to promote your product. News makes only 5% of the news content on Facebook.
INMA: In an ideal world, how could Google and Facebook come together with news brands as “unavoidable news partners.”
Myllylahti: This has been debated for years. It should be mutually beneficial. If they only give you 50% of the revenue, why would you do that if it’s not a fair share? Some have pulled out of those platforms. This is the big debate as we know. I don’t have a solution for that.
INMA: What’s the purpose of aggregating attention? Shouldn’t publishers focus on reporting well even if it brings down traffic a little bit.
Myllylahti: This is where we need to ask: What journalism is for and what is its value? Is it marketing and attention, or reporting? Attention shouldn’t be the first place where we focus, but if you need to build revenue, where do you do that? Is it the wrong thing to do?
INMA: What is vital for publishers to know about your research?
Myllylahti: I think that what is important is to understand what is the real value of platform distribution. I think it’s a mistake to publish on these platforms if there is not enough revenue. If you use it as marketing and get that attention that you can then turn into revenue, maybe that’s what you need to do. Though I was surprised at how important Facebook still is for news publishers, and that worries me that it’s still so valuable. It’s crucial to understand, and that’s where I’m trying to move with my research in the future.