How Changes to Social Networks Affect Content Distribution — We Ask Alex Magnin

Alex Magnin is a Partner at The Thought & Expression Co., a website which allows users to upload their own writing and share their thoughts with other users of the website. Alex started at Thought Catalog in 2011 after spending several years working in digital media, and developed Thought Catalog as a Partner & CRO. We reached out to Alex to ask him about the vital subject of distribution channels for content, as the Thought Catalog was one of the first publishers to take advantage of social sharing in a major way.

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Our conversation include topics such as: Alex’s view on the social media distribution that has developed for platforms offering some form of sponsored posts from both the editorial perspective and sponsored perspective, the rise of arbitrage model publishers, whether advertisers care how they actually draw their users in, and the cyclical pattern of the rise and fall of new processes and technology within the industry.

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Interesting Quotes:

How do you guys view the social media distribution, now that pretty much every platform is coming up with some form of sponsored post which allows publishers or business to put content out there which also naturally cuts down the space for truly viral content?
I’ll split the question in the two parts, first on the editorial side and second on the sponsored side. On the editorial side, the biggest thing is that it’s wildly crowded… Putting stuff in the news feed that is sort of “clicky” and entertainment focused. We looked into that game and said; what do we really want to do in response to this? Do we want to be figuring out every day new tropes? Or do we want to focus on something more substantial, tune it up so that it might get shared a bit, apply what we know, but ultimately focus on something that’s a bit more mission driven.
For the sponsored side, I view it as analogous to a post I wrote for Ad exchanger. The title was “the tide will turn on branded content”. [Link here] What I think is happening there, the same thing has happened. Everybody offers these products and as a side note; one unspoken force is going on behind the rise of custom content and native advertising that doesn’t get talked about is how good this stuff is for media agencies. On the media agency side big trend doesn’t look good for them, which is that programmatic is rising, it went from being 15% of digital spend three years ago to 60% this year or something. Programmatic is not as lucrative business as hand done IO business that these digital agencies specialize in. Of course this “thing” comes along, called native advertising and sponsored posts and guess what, it’s really execution heavy and it requires a human being because machines can’t do this.

Bottom Line: Create quality content and focus your business on long term success

This sponsored content concept now brings the rise of arbitrage model publishers and we’re the publishers that have one foot in the arbitrage game of buying cheaply from a Facebook, Outbrain, Taboola or somewhere else in the web and then making the spread. How do you view that part of the publisher world?
It does fascinate me what they’re doing with these sites because it isn’t easy. Particularly when they’re buying from Taboola, Outbrain or what have you, traffic actually is not cheap, right? It’s costing up to 8 pennies to 13 pennies a click which is $80-$100 USD CPM. These websites aren’t selling directly, it’s all banner exchange ads. What they’re able to actually do is get people in these user flows, where they’re consuming 10,20,30 page views per session. While it’s all sort of pretty common denominator stuff that’s getting people into these “click holes”, it’s not nothing in terms of what they’re doing. The Facebook buying can be pretty cheap and you will see a lot more of people doing single page lists. They’ll buy global traffic for 4 tenths of a penny or something like that which means you only need to be doing a $4 USD CPM on the other end, and as long as the ad market is going to pay for those banner impressions this stuff will continue to go on.

Bottom line: Traffic Arbitrage isn’t easy but is currently possible

Do advertisers ultimately care how the users got there?
Brand advertiser that have high-end clients certainly care. I do think that another big positive trend for premium publishers is for the programmatic ecosystem to grow up and become adult like the television industry is today. Sweeping a lot of this inventory out of the way is going to be a big part of that, meaning: non-viewable inventory, arbitrage inventory. It will be a great thing for publishers who can actually get a user to read an article and spend 30 seconds in front of a 300x600 banner ad that can be exchanged programmatically. I think that buyers who have goals like that are probably already there or are already getting there. For the rest of them it will only help premium publishers as they care more about metrics, just cheap stuff that people might click every couple thousand times.

Bottom Line: Advertising serves different purposes in different situations