Publishers must invest in products and distribution to adapt to the end of the Platform Era
Publishers are rebuilding their destination strategy, and to do so, they need to invest in distribution to win the attention of audiences.
17th November 2023
In the Pugpig weekly media bulletin, Pugpig’s consulting services director Kevin Anderson and digital growth consultant James Kember distill some of the best strategies and tactics that are driving growth in audiences, revenue and innovation at media businesses around the world.
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Publishers renew focus on their owned properties
As the old saying goes, there is no such thing as a free lunch or, for digital media, free traffic. When we talk about the end of the Platform Era, what it really means is the end of free traffic from search and social.
Moreover, it’s not just that free traffic has ended, but that paid search and social have become more expensive. In a great Internal Tech Email dug up by Brian Morrissey from 2019, IAC’s Barry Diller wrote to Google’s Chief Business Officer about the rising cost of paid search. Diller complained that Vrbo Travel saw its search advertising bill spike from $21m to $300m in five years even though it saw no increase in traffic from paid search. “The only conclusion is Google has systematically moved every lever in its hegemony over search to disembowel our business,” Diller said.
And it’s not just Google. Marketers have been complaining about the rising cost of Facebook ads. Facebook costs per click rose 89% from 2021 to 2022. It is another lens through which to view the shift from the scale-obsessed Platform Era to the relationship-focused Push Era. It is the realisation that there wasn’t that much value in aggregating as many casually connected unknown users as possible because they were really only renting those audiences. When the rent got too high or Facebook rewrote the lease for publishers, those audiences disappeared in a painful “attention recession”.
All of this is driving publishers to reconsider the risks of a rented audience versus an owned one. Owning your audience is about building a direct relationship with audiences as we often say here at the Media Bulletin, and as Greg Piechota of INMA says, this is leading publishers to consider developing destination strategies.
This can feel like a radical reversal after the Platform Era. During the height of that chapter in digital media beginning a decade ago, the accepted wisdom was that the homepage was dead, and people spoke about the overwhelming amount of “side door” traffic from search and social. An innovation report from the New York Times highlighted how between 2011 and 2013, traffic to its homepage dropped by 50%, and only 12% of user journeys at The Atlantic began on its home page.
But now, a decade later, the New York Times is “obsessively focused on getting people to come to our destination and build a direct relationship,” its CEO Meredith Kopit Levien told The Verge.
However, Greg recognises that a destination strategy may not work for all publishers or at all scales. As the Reuters Institute of Journalism has pointed out in its major digital news report over the past two years, the New York Times is one of the “upmarket national brands”, a winner that takes most in the competition for subscriptions. The New York Times continues to grow its subscriber base, while the Washington Post is suffering from a post-Trump slump.
For other publishers, they now face a question of whether to lean into direct distribution or diversify their marketing channels. Regardless of the mix of direct or diversify, we think Greg is right that publishers will need to invest more in distribution.
‘Product-led growth’ drives distribution success
During the apex of the Platform Era in 2015, Facebook introduced Instant Articles, and Google responded by launching AMP. Facebook and Google offered up improved mobile content experiences to publishers. Depending on how one viewed the move, it was either the platforms offering up their tremendous resources to offer a top-flight mobile experience, or it was another signal of the extent to which platforms were able to more effectively capture audience attention in ways that the publishers couldn’t. Both initiatives are now history.
But it is a good reminder of what platforms brought to the table, both to support and to challenge publishers. As Greg outlines, they brought aggregation, excellent user experience, personalisation and interactivity in the form of comments and likes. They set a high bar that many publishers did not respond to. Taking a leaf out of the tech industry’s book, publishers should focus on product-led growth, he adds.
How can publishers respond? Greg breaks this down into four categories of activities that platforms have typically excelled at and where publishers will need to compete:
- Aggregation – Jeff Jarvis has long advocated for the ‘do what you do best and link to the rest’ model. While that approach was de-valued during the listicle era, its fundamentals – focusing on where you can add value – are sound. Newsletters from many publishers aggregate smart thinking but add value with their own insights.
- Personalisation – Pugpig customers have told us consistently in our market research that this is a key goal of their development. AI opens up opportunities for publishers to compete on a more equal footing with platforms in leveraging personalisation.
- Interactivity – Many publishers have outsourced their comment sections to social media platforms, but this is changing as publishers rethink community. It’s more than just likes or comments and now is about connecting audiences with expertise, building communities and offering shared experiences.
- User experience – For publishers, the lesson of Instant Articles and AMP should be the importance of excellent user experience, especially on mobile. As Greg pointed out, the New York Times revealed in its most recent annual report that it had invested 25% of its operating expenses into product development, sales and marketing, customer service and online content delivery.
A product-led growth strategy for publishers focuses on building great products that deliver excellent experiences and foster relationships with audiences.
Developing and diversifying your channel strategy
Bringing people to your owned properties has returned as a core pillar of successful publishing strategies, but digital media still requires publishers to engage with off-platform channels and consider carefully the content formats they engage with based on ever-shifting consumer behaviour.
- Discovery – Publishers are having difficulty acquiring new users during this “crisis of discovery”. However, Greg points out that 30% of audiences still use social media and 25% use search as their primary gateway for news. For us at Pugpig, it is interesting to see that 9% use mobile alerts, which is higher than both aggregators at 8% and email which is 5%.
- Mobile app investment – 55% of consumers globally say that smartphones are their main devices for accessing news, Greg says. People spend four times more in apps now than they do mobile browsers, according to eMarketer, and as we have pointed out, apps beat desktop browsing when it comes to retention. And mobile website users are most likely to churn when compared to app and desktop website users.
- Changing channels – While 41% of consumers still use Facebook for news, any audience or analytics manager will know that they get what they need in Zuck’s magical walled garden and don’t now come to your site or app. And Elon Musk has now degraded the way that shared links appear in eX-Twitter. Greg points out that 30% of consumers get news from YouTube, and more people listen to news podcasts on YouTube than Spotify. The Pew Research Center in the US found that TikTok has exploded as a channel for news discovery.
- Age-appropriate formats – While half of people still prefer text as a way to consume content, more than a quarter prefer video and this differs across age groups. The Reuters Institute reports that younger and non-Western audiences “more mobile, social, and video-oriented”, Greg highlighted.
We agree with Greg that publishers will need to make smart investments in products and distribution. You can read his full analysis at INMA.
We are again in a period where there is a premium on innovation. The Platform Era playbooks no longer work, and we need to use innovation methods to de-risk experimentation and place smart bets on our futures are publishers and those who make the technology that supports them. As Maria Bissendorf, head of transformation at Hearst UK, said recently at our customer day: “Fail fast. Fix faster.”
Here are some of the most important headlines about the business of news and publishing as well as strategies and tactics in product management, analytics and audience engagement.
- Media Briefing: Publishers’ Q3 earnings show a return to owned and operated from Digiday
- Why newsroom transformation is key to subscription growth from Journaliam.co.uk
- “Good blogs are good for business,” and other lessons from Defector’s third year from Nieman Lab
- Newsquest CEO Henry Faure Walker on bucking the trend of regional press decline from the Press Gazette
- Media companies announce more layoffs to cut costs, blaming a relentlessly challenging ad market from Digiday
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