Facebook Luring Hosted News With Improved Ad Sales
According to a story last week from Jack Marshall in The Wall Street Journal, media companies who have begun using Facebook Instant Articles are now, after Facebook made some tweaks, seeing roughly as much ad revenue from those stories as they did from their own mobile sites. Right now the system works so that if the companies sell the ads themselves they keep 100% of revenue but if they opt to have Facebook sell the ads they get just 70% of that revenue. And it sounds like many players are choosing to go with the latter option because it comes with better targeting.
It’s understandable that these media companies would look to Facebook as the most friendly port in a storm. It wants to give them money without them having to deal with pesky little things like infrastructure for hosting stories as well as, increasingly, taking care of their ad sales. With media companies shedding staff, the idea of outsourcing some of this stuff, much of which they were never great at to begin with, has to be attractive.
But as usual this is short-term thinking, which is ironic considering many of these companies are the same ones that have decried for years the online ad market that gives them digital dimes where they used to get print dollars. Now they are getting digital $.07 after Facebook takes its cut.
This move also comes from the assumption that ad revenue is the end-all-be-all goal. I understand that’s true to a great extent. If there’s no money there’s no product, after all. As I’ve pointed out repeatedly, though, that’s not the only thing that keeps any particular media brand chugging along. Brand equity is a big one that’s lost in a Facebook-hosted world as everyone begins to get their news “…from Facebook” and not from Newsweek or the Chicago Tribune or anything else. Those names may still be there but they’ll be increasingly inconsequential to readers just like no one says they watched a music video “…on Vevo’s YouTube channel,” just “…on YouTube.”
I’m likely shaking my fist at windmills here as just about everyone thinks hosted news is the future. As I wrote before it’s clear to me that Facebook with Notify and Apple with News among other players want to be single sources, where their brand takes precedence over those that actually provide the news to them. It’s disappointing, though, to see legacy news brands treat $.70 on the dollar as the absolute end-point of their endeavors. Ultimately that means more tacking toward the lowest common denominator in journalism, less diversity of voices and eventually fewer providers of unique perspectives.