How the Facebook boycott is bad news for publishers
With brands pulling spend, what happens to the sponsor content arbitrage game?
Today is the day when 400 advertisers or so pick up their ball and go home.
Just two weeks after the #StopHateForProfit Facebook boycott began, advertisers today put talk into action as they pull their ad spend. It’s been the biggest story in media for the last two weeks because a) Facebook is huge; and b) reporters love tension and here we have a story full of it.
But while we’re focused on keeping track of which brands are closing their wallets, there’s one story that’s not being reported about the boycott, one that has publishers frantic and pissed: while the boycott’s intended subject is Facebook—recall that the boycott, created by activists and civil rights groups, called on advertisers to pull spend because they argue that Facebook profits from “promoting hate, bigotry, racism, antisemitism and violence” and that brands shouldn’t help fund this—there is now an unintended consequence for the many digital media properties who use Facebook as a way to a) drive traffic; b) get factual information to users; c) fulfill ad deals.
It’s that last one that has publishers mad.
Publishers sell their audience, wherever they may be, and not just their own sites. In the ongoing race for scale, publishers overestimated the value of their reader on their own sites and as a stopgap (sorry, “added value”), publishers in recent years began selling their audiences’ eyeballs on the platforms.
It makes sense; if I’m a fan of a publisher on Facebook, it’s reasonable, thinks the sales rep, that I would be ok with getting targeted on Facebook with content from that publisher.
But by having a blanket boycott, publishers wind up having to go through hurdles, especially at a time where they’re already hurting due to the impact of coronavirus on ad revenue.
“In their race to out-woke each other, brands are actually hurting digital publishers who have been relying on the near unlimited views they arbitrage on social media,” Keith Hernandez, founder of brand consultancy Launch Angle, told me. “Facebook will be fine. They have thousands of long tail advertisers who can’t turn off or else their DTC business will fold. It’s the mid-tier publisher who gets fucked the most. Not enough inventory onsite to execute the deal on their own, they have for years been leveraging the scale on Facebook and making money on the margins.”
Jennifer Reitman, founder and publisher of DAME Magazine, told me that the Facebook boycott is a big deal as “so many publishers rely on Facebook…to fulfill guarantees.”
When I was on the business side creating sponsored content, we’d often sell packages knowing that we couldn’t get those impressions or video views on our sites. So as part of the deal, we’d charge a social spend budget (usually baked into the CPM somewhere) so that we can take that content, stick it into the social platforms’ paid mechanisms, sit back and watch the views/impressions/engagements/whatever-KPIs-we-were -looking-for, roll up.
It was another one of the not-so-secret secrets the industry perpetuates. There’s no harm, the thinking goes, as advertisers get their impressions; publishers get their revenue; readers just happen to be innocent bystanders who will see a piece of sponsored content in their news feed.
Bringing us back to the boycott that starts today.
A brand that has publicly taken a stand by pulling spend on Facebook, also means that every sponsorship or sponsored content deal they have worked out with a publisher will now have to be renegotiated.
And as many of these deals were signed in Q1 or Q2, that potential loss of Q3 money becomes a very real problem for publishers, especially as publishers continue to reel from loss of ad revenue due to the coronavirus. For example, national TV ad revenue in May plummeted 23 percent, according to Adweek.
For brands, who have done a great job generated positive P.R. for hopping on the boycott bandwagon, it will look pretty bad if they have sponsored content promoted on Facebook in July. So now they put more pressure on publishers to make sure that doesn’t happen. Because everyone bows to the brand.
Several media executives, talking anonymously due to the sensitive nature of negotiating with advertisers, tell me that while the big picture of Facebook valuing actual content is good for everyone, in the short term, this boycott doesn’t help anyone.
It’ll make no difference to Facebook, they say, and instead it’s just a kick in the gut to digital media companies that use the platform for everything from fulfilling sponsor content deals to driving traffic to their sites.
One media executive told me that they’re now having to renegotiate some deals with advertisers who already spent for Q3. They said that while there’s an inconsistent message from buyers and brands, some advertisers are allowing the media company to move media to other places, but it’s a lot of work that will cost it in both time and money, making a tough situation (you know, the effects of the pandemic on publishers’ bottom line) even tougher. Especially in the short term.
Of course, some publishers say they aren’t wholly reliant on the Facebook arbitrage system. Hernandez doesn’t buy it, telling me that any publisher “saying they’re not reliant on Facebook for views while creating original video with a brand should talk to their ops team. They’ll probably have an interesting conversation and learn a lot about their own company.”
The Washington Post has a different perspective, as it has several levers to pull. According to Joy Robins, the Post’s chief revenue officer, the outlet doesn’t represent what most others are feeling, as, she said, the majority of its pageviews come from its own promotional inventory on site.
“That’s the beauty of scale and Zeus Insights Targeting” Robins said. “We use Facebook for amplification and additional scale but we don’t use it for arbitrage the way I think a lot of publishers have to.”
(Zeus Insights Targeting is WaPo’s targeting technology baked into its proprietary ad-tech stack.)
Robins also noted that the company is monitoring the list of brands that are boycotting to make sure it doesn’t fall in conflict with any of its clients for which it does leverage Facebook to promote content.
“It hasn’t led us to have to renegotiate anything,” Robins said. “If anything, though, it’s made us even more focused on ensuring we can drive audiences to an even greater degree from our O&O.”
For digital media brands that have built their companies on the backs of the Facebook algorithm it’s a different story. And once again, they find themselves, at the mercy of Facebook. Even tangentially.
“Who could have guessed that relying on a morally bankrupt company to help you hit video views on ad campaigns would cause financial damage and embarrassment at almost every turn,” Hernandez said. “When kingdoms have land battles, it’s almost always the serfs who suffer.”
Thank you for allowing me in your inbox. If you have tips, or thoughts on the newsletter, drop me a line! Or you can follow me on Twitter.
The Mighty Diamonds, “Have Mercy”
Some interesting links:
Trump’s Twitter feed reads like a local crime blotter as he stokes a culture war (Washington Post)
"Sh**ty Media Men" List Creator Unable to Escape Libel Suit (Hollywood Reporter)
History will judge the complicit (The Atlantic)
WSJ introduces Noted, a news and culture digital magazine (WSJ)
Facebook To Seek Supreme Court Intervention In Privacy Battle Over 'Like' Button Tracking (Mediapost)
Why the Descendants of Confederate Generals Are Happy to See Their Names Go (Politico)
How Substack has spawned a new class of newsletter entrepreneurs (Digiday)