The speed of change in the media industry is mindboggling, with today’s trends becoming yesterday’s news faster than you can blink. Not willing to look for answers in a crystal ball, media and news platforms similar to the MediaBriefing.com and Reuters.com are known to produce annual reports based on the insights and forecast of industry professionals, leading publishers and media CEO’s -we hope that these professionals didn’t rely purely on their crystal balls when filling the questionnaires.
Below are the main highlights we learned from the Media Briefing The State of Media Report 2017 and Reuters Journalism, Media and Technology Trends and Predictions 2017 report.
Facebook is still the boss, today more than ever
Facebook not only pocketed most of the advertising revenues – almost all the growth (99%) in digital advertising went to Google or Facebook between 3Q 2015 and 3Q 2016 – but was also expanding laterally. Chatbox, new algorithm and Instant Articles, introduced in May 2015 have all contributed to Facebook gaining more power.almost all the growth (99%) in digital advertising went to Google or Facebook between 3Q 2015 and 3Q 2016 – but was also expanding laterally. Chatbox, new algorithm and Instant Articles, introduced in May 2015 have all contributed to Facebook gaining more power.
It must be said, that it wasn’t all as smooth as Facebook CEO’s would prefer. The problem with platforms is that their audience is their priority, not publishers. Facebook has never made a secret of this fact, regularly changing algorithmic priorities to give users more of what they want. Journalists and publishers are concerned that bringing content inside the walled garden of social media platforms cuts out much-valued referral traffic, and with it, ad revenue. When we asked which social media platform represented the biggest opportunity for 2017, Facebook was ranked number one by 45% of respondents, twice as many as the next platform. However, over 60% of respondents named it as the social media channel representing the biggest threat to their business.
The problem remains, no publisher on their own can get anywhere close to Facebook’s 1.5 billion monthly active users, each spending 50 minutes a day between Facebook, Messenger and Instagram.
AI and algorithms are not there yet
2016 will go down in history as the year of frustrating chatbots and the year when Facebook algorithms failed to distinguish a Pulitzer Prize winning war photo from child pornography and had removed Nick Ut’s iconic image. The incident rightly caused the controversy and after a backlash, Facebook restored the image. The incident highlighted again the limits of rule-based computer algorithms in understanding complexity, nuance and cultural difference.
Another failure of the year was the release of Microsoft’s friendly AI driven chatbot Tay. This was supposed to chat happily with millennials and learn from their interactions on Twitter, but within 24 hours it was spouting offensive and racist messages such as ‘Hitler was right’ and ‘Bush did 9/11’. Algorithmic electronic trading has become so complex that it can drive stock market and currency volatility in ways that no-one fully understands.
On the other side of the argument a few success stories – a robo-journalism. Robo-journalism is increasingly being used by news agencies to expand the range and number of stories they can cover. AP can create basic financial stories that look like they were written by a human using structured data within seconds of firms releasing their quarterly results and has recently expanded into sports with plans to cover more than 10,000 minor league baseball games annually. In the UK, the Press Association is planning to experiment with automation in 2017.
Expect 2017 to be a year where there is far more focus on algorithmic accountability and more journalistic questioning of artificial intelligence, the use of data and the power of technology companies.
A lot of hope for sponsored content
Early content marketing was all about low-key brand storytelling and owned media, but the need for scale has brought marketers back to publishers for their audiences and their ability to craft effective content.
Publishers, in turn, have embraced the income stream, especially in light of the perennial falling revenues -or even losses- from printed media. Sponsored Content was identified as a top growth area in 2017 for 48.6% of the respondents of the MediaBriefing.
The success of sponsored media can also be largely attributed to the steady take-up of ad-blocking – reaching 408 million global users in March 2016. The ‘Native advertising’ on the contrary, provides readers with educational information and appears more natural.
With sponsored content taking such large proportion of ROI, -Return On Investment- it is surprising that only less than a quarter of magazine businesses has dedicated staff to deliver commercial content. However, concerns over editorial integrity and fears that consumers will be confused by the sponsors’ role in content origination in partly to blame.
Printed media is not dead… yet
Printed media is not dead yet, but falling print revenues as circulation plummets year on year on just about every printed title as the industry cannot compete with online publishing. Thus share prices are set to continue falling in years to come. The gap between print-loss and digital gain is still much wider than most newspapers would like, but next year will see continued determination to balance the ‘books’. For some that means aggressive plans for digital growth across subscriptions; for others, the future lies in growing emerging digital advertising formats like sponsored content and video. Others may simply shut down their print operations altogether.
Based on a few success stories, the advice for print, in newspapers or magazines, would appear to be: go niche and go carefully. Don’t expect huge sales.
Live news video has been around for more than two decades but exploded in the last year with the birth of Facebook Live. Such is Facebook’s obsession with live video, they paid the world’s top publishers to produce content for the platform, shelling out $50m to Buzzfeed, the New York Times and the BBC amongst others. Instagram introduced live streaming in 2016 while Twitter added 360 degrees live video within Periscope and has made live streaming a core audience and revenue focus for the company. Meanwhile, SnapChat has had success with its 24 hour Live Stories.
Leading newspaper and magazine publishers are already investing heavily in skills and equipment, to capture a share of increased spending and the MediaBriefing suggests that this will continue. For 2017, investment in video will be second only to data.
But there are concerns that the video bubble will burst, as major publishers pile into video and inventory expands. Reuters expands on the concerns over video: “Producing online video remains a risky and expensive business. As we discovered in our research for the report The Future of Online News Video (Kalogeropoulos et al., 2016), most of the action is happening on third party platforms where monetisation is still in its infancy.”
“Growth is much slower on destination websites and apps where video is less prominent and formats less compelling. The video-enabled internet is changing the formats and style of digital content, providing competition for, but not replacing text. Even on sites like the BBC, only around one in ten use video on an average visit, though this can double for major breaking news stories.”
Digital display revenues are bigger than ever and are expected to grow to beat TV spend in the US for the first time in 2017. But publishers are increasingly being forced to find a balance between funding free content with a mix of interruptive display and aggressive audience tracking. Ad-blocking, fuelled by rising consumer resentment, is matched by calls for the industry to up its ROI game from advertisers and agencies frustrated by ad fraud and poor viewability.
Despite the exponential growth of ad-blocking among internet users, the expectations for revenue continue to be fairly high. One in three respondents placed the digital display in the top three revenue generators for 2017, second only to sponsored content. The day of the simple banner ad is all but over, at least on the desktop, and there is no agreement on what will take its place.
Email is making a comeback
Time spent with email has risen 17% year on year. And destroying the myth that the internet’s original messaging app is only for old people, millennials (18 to 34) are spending the most time with email of any age group, primarily on their smartphones. A series of studies released last year suggest email has a real role in the mobile era, positioning it as one of the most important channels for news, together with social media and search. For many publishers, that means email newsletters are hot again. From a revenue standpoint, email can be positioned as a premium product, with a premium price point.
Once on board, email subscribers tend to be more engaged than the average social media follower. Leading publishers to see it as a niche platform that can be used to engage and convert general audiences to paying subscribers. With email marketing campaigns the rule is the same as with print – some big publishers have reported that the more niche they go with their newsletters the better their open rates were.
The article has originally appeared in Ikon London Magazine on 19 January 2017.