DCN Miami quantifies revenue from social giants

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Despite their massive advertising take, Facebook and Google account for only five per cent of publishers' digital revenue, according to new statistics from Digital Content Next.

The group, which is the expanded former Online Publishers Association - with members including News Corp, Gannett, Hearst, Tronc and the New York Times as well as broadcasters and cable companies - presented figures from its second annual report at its members-only conference in Miami last week.

In its 'Distributed content revenue benchmark report', it shows how Facebook, Twitter, Snapchat, YouTube and other platforms are partnering with premium digital publishers to attract users and grow advertising revenue.

Despite the constant changes in distributed content policies and business practices, it found little has changed for publishers in the last 12 months.

Facebook and Google - the two dominant companies generating the most revenue for publishers outside of OTT - together account for less than 30 per cent of the total distributed content revenue and represent only five per cent of the total average digital revenue for publishers. However, overall revenues from distributed content grew from 14 per cent in last year's report and now represent 16 per cent of the participating publishers' digital revenues.

For the companies providing data for both H1 2016 and H1 2017 for DCN's report, distributed content revenue grew by an estimated 37 per cent year over year.

Video revenue continues to drive monetisation, representing an estimated 83 per cent of the total, with TV/cable companies reaping a disproportionate share of third-party platform monetisation and growth through OTT and syndication.

Facebook overtook YouTube in 2017 as the individual platform generating the most revenue for publishers, capturing $1.3 million (50 per cent of social platform revenue) in H2 2016 and $1.5 million (59 per cent of social platform revenue) in H1 2017.

In addition, publishers say that marketers continue to be interested in Snapchat's young demographic, but dislike the ad product which is easily skipped and has low (under three seconds) average view times. It remains to be seen how Facebook's January 2018 announcement to deprioritise certain publisher content in the news feed and prior shifts in its video business model - as well as Snapchat's changes to its monetisation model and self-service Ad Manager API - will affect publishers' interests and monetisation.

Despite the increased demand for premium digital content on third-party platforms, publishers continue to struggle to extract value from their distributed content. Search, syndication and OTT channels have been more accommodating to publishers than social media. While there have been some encouraging developments, like the introduction of the Facebook Instant Articles subscription tool, the realities of implementation are harsh and the challenges remain, especially for print and pure play publishers.

"The revenue earned from distributed platforms does not yet match the investment and tremendous value of DCN members' news and entertainment," DCN chief executive Jason Kint said. "The report once again supports our members' drive for better economics which is now happening in parallel to a much larger global debate about the societal and economic harm from certain platforms."

Despite the challenges, DCN found that publishers remain active across a range of channels distributing and monetising content off of their sites at levels relatively similar to last year. All publishers are distributing through social media and syndication channels, while slightly more than half of the sample report distribution through Google AMP and through OTT. Facebook and Twitter remain the most used of the channels followed closely by YouTube and Instagram.

"Distributed content remains an integral part of publishers' strategic plans," said Kint. "The continuous platform changes create challenges for publishers but they must continue to partner, test and drive for the best value for their premium content on the platforms that control such significant audiences and attention."

The report, presented at the DCN Next: Summit offers these best practices for publishers, including:

1- Concentrate negotiation at the executive level of your company management; do not leave negotiations to lower-level management and/or individual brands or businesses.

2- Focus on products that leverage your core business, are replicable, get new money, and have the potential to scale.

3- Negotiate for business requirements that support scaling in partnership agreements:

• ad server integration;

• third-party measurement integration;

• management reports (e.g. roll-ups by publisher and/or marketer); and data for advertising and subscription monetisation.

4- Test and measure content consumption and monetisation through both advertising and subscription on third-party platforms and compare results to on-site metrics to inform monetisation strategies.

5- Centralise responsibilities or use active cross-functional teams for managing third-party partnerships.

Consultant Eleanor Powers was hired by DCN to conduct proprietary research with its members on distributed content monetisation, which was focussed on four channels of distributed content publishing and monetisation - social media (Facebook, Snapchat, Twitter, Instagram and other partners in aggregate), search (Google AMP), traditional syndication (YouTube and other partners in aggregate including MSN, Yahoo, AOL and Apple News), and OTT.

Pictured: Jason Kint at the conference with A+E Networks international and digital media president Sean Cohen (Picture DCN)

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