“With Facebook, we have examples like Tasty, where we are the biggest franchise on Facebook, and we generate zero revenue from Facebook. It creates huge value for Facebook. But we’ve had to find a bunch of other ways to make Tasty into a great business. It’s required us to work around the constraints that Facebook has placed on the ecosystem."
- Jonah Perreti, CEO @BuzzFeed
Have you heard about the magical spell that brings the site visitors back?
A spell that helped publishers cut it short to gaining thousands of brand lovers? Making new visitors pay for the content? Building an audience? Sorry to break the news - the spell doesn’t exist.
What about the best practices, you ask? There's no light there too. With countless marketers using the same old best performing strategies, the strategies have reached far from even performing today. Shouldn’t surprise you when the data says - 55% of the online readers spend <15 seconds on an article.
So, how do marketers engage the remaining 45%? Let’s learn from a warhorse that chose to leave the hacks behind and built a multi-billion dollar business with audience ownership.
Maureen and Tony Wheeler are best known to reveal the unknown hotspots and provide practical advice. While traveling through Asia in the 1960s, the couple picked up some writers and kick-started the project - Lonely Planet, a growing travel blog that today owns up to 25% of the guidebook world. Being able to build an interesting adventure aesthetic, they saw great traction but kept their focus zeroed on building a loyal audience.
But, will having an audience be enough to build a brand? The Lonely Planet founders realized that they need a platform where readers could interact with each other, meet their travel buddies, share advice, and exchange ideas about new places to explore. The couple knew that Facebook was NOT the platform to build this on. So, the plan, right from day 0, became focusing on building a brand. And a community. Hence came into existence, their community, “Thorn Tree”.
What celebratory did Thorn Tree bring to the Lonely Planet? - an enormous level of trust from its audience for 23 long years!
Thorn Tree, today, is used by over 1.3 million active users that engage with people across 14 different languages. In times where most travel-focused publishers have gone out of business (Shoutout to Google’s Travel and Maps), Thorn Tree has helped Lonely Planet flourish in the $90 million guidebook industry.
And, their owned audience continues to love their high-resolution photography and annual best-in-travel pieces published on Thorn Tree.
Exactly what publishers today need to focus on, investing in audience ownership. Right from Day 0.
An owned audience comprises of your paywall subscribers, email subscribers, push notification subscribers, chatroom sign ups, etc or as I would explain it to a 5-year-old → people that you have the power to call back. The operative word here being “you”
On similar terms, owned media assets would include the brand’s website, newsletters, and push notifications, or as a 5-year-old would understand → places that you have 100% control over.
Publishers have realized that their 65%-Revenue-Share-Deal with Google and Facebook is choking their odds of success. Many leading publishers have started shifting towards paywall subscriptions for driving revenue. And, they are killing two birds with this single stone. One, building a premium audience - owned subscribers. Two, becoming more self reliant - owned platform.
You can pick a successful publisher and their business model would reflect the owned audience + owned platform fashion. No really, think of a name. The NY Times? The Wall Street Journal? The Washington Post? - revenues rely heavily on subscribers.
And all are sailing away from the walled gardens and their direct advertising.
Why are walled gardens a threat to publishers?
The term “walled garden” was coined in 1999. It is referred to as a closed ecosystem where one or two entities get maximum share on the profits. In the digital spectrum, Google and Facebook enjoy a duopoly on similar levels.
For publishers, walled gardens are a competition, not a companion. They target the same advertisers and their advertising dollars. Moreover, given the network effects at play, their ability to monetize an audience has become far better than you.
When a user interacts with the content on a walled garden, it doesn’t get engaged with the brand publishing the content. Rather, the walled garden is what the user actually feels invested in.
Think about the last time you watched an engaging post on Facebook. What did you feel more connected to? Facebook or the content publisher (one of many)? Who did you visit again to consume more such content - Facebook or the publisher’s blog? While publishers with an incomparable content quality might win some chances against Facebook, it won’t be the case with the majority.
Jonah Peretti, CEO at BuzzFeed, sensed this calm before the storm around 2 years ago. In a memo published in 2017, he said that BuzzFeed is going to counter the dominance of walled gardens (Google & Facebook). Fast forward to the present day, BuzzFeed sends out 20+ email newsletters to cater to their subscribers’ specific interests. Doing the real thing - building and retaining the audience - while monetizing it on owned product platforms like Tasty, Nifty, Goodful, etc. via non-direct advertising.
So, What Exactly is Audience Ownership?
Audience ownership is the most reliable engagement metric.
Owning is when the audience comes to your website to get the insights. Renting is when you ask the audience on walled gardens to come and consume your content. With renting, you have to ASK for the attention. Whereas, with owning, audience PAYS the attention by itself.
Renting audience impacts the reach of a brand as the algorithms decide the content viewability. Whereas with audience ownership, the user trusts you enough to share its personal information (name, interests, email address, notification permissions, etc). Owned audience shows up on your blog more than often. It shares your insights and even agrees to pay for the content that has been put behind a paywall.
Allow me to make it more relatable with the...
Once upon a time in the Indian Premier League (a 20-20 cricket league in India), joined a team called Kolkata Knight Riders. To maintain an engaging digital presence, the team thought of building a community on Facebook. And it did. After a decade of consistent engagement and interactive content, Kolkata Knight Riders was finally able to crack a following of 15 million followers.
But, what felt like an achieved milestone turned into a betrayal when the marketing head of Kolkata Knight Riders got a call from Facebook. Apparently, the audience that the team spent years building - belonged to Facebook. And lump sum had to be paid to rent it any further.
No they didn’t pay for it. Though the audience count looked hard to build again, the fact that it was not and never will be an owned audience made the team completely abandon Facebook.
How Powerful is An Owned Audience -
An owned audience gives your brand the “shield of trust”. It helps the brand reach discussions and collect new visitors via recommendations. An owned audience is reliable and invested. Here are the threefold benefits that make these powers even meatier:
- Audience ownership and engagement drives brand loyalty. Engaging with your audience on owned platforms helps you convert their attention into meaningful metrics. These metrics help you drive more revenue as compared to engaging people that like your content on Facebook. As per WordStream, Facebook ads achieve an average CTR of 0.9%. Comparing this conversion with push notification CTRs (5%) and email CTRs (2%), we get all the more reasons to build an audience.
- Audience ownership helps you become more self-reliant and reduce your dependency on Facebook and Google. Think of Audience ownership as buying insurance against Google and Facebook updates. On walled gardens, you have 0 control as a business owner. The ownership of your audience is what will protect you from them.
- Your owned audience sits right at the center of your visitor flywheel. A flywheel that converts your flyby visitors → repeat visitors→ loyal users → paid subscribers. Today over 69% of publishers define their success with the number of paywall subscriptions acquired. An owned audience will help you drive these subscribers - the real currency for the future of advertising.
Publishers need to accept that walled gardens aren’t really a friend. Having ownership of their audience today has become more of a necessity, than a benefit, for publishers to survive the future.
Because as difficult it is to own an audience, equally low are the chances of losing it to the competition. Let’s get deeper with understanding how someone, so close to publishers, is doing it so well.
Own it like Google
According to the data shared by Jumpshot for the US market share of search engines in Q2 2019, Google owns a whopping 69.35% of it. Google images contribute up to 20.45%. YouTube has 2.98% and Google Maps is at 0.7%.
Sum it up and you get the real picture. A crazy 94% of the search market is ruled by Google’s owned properties. And, less than 6% is what gets divided amongst the likes of Facebook, Amazon, Yahoo, Twitter, Bing and you know them (long forgotten).
Also, this is just the browser-based search data. Google apps like Chrome, YouTube, and Maps are installed in almost every device operated in the US. So, technically, if we were to include all the left out stats, the share exceeds 97%.
Google sends 10X traffic to a publisher website compared to Facebook. Google has your audience and the advertisers you need. Google has the audience’s data you can’t do segmentation without. And the worst of all...
Google is a Publisher
A publisher is a company or a person that creates or issues content to its users. Not for you, but Google does that for your audience.
Advertisers and the audience are a publisher’s lifelines. We know that there is no survival in publishing if you remove the reader and/or the advertiser trying to reach it. Google delivers premium value to both the segments. It has acquired the user data over the decades and now can offer the best segmentation capabilities to an advertiser. This allows Google to demand premium dollars from advertisers at scale and makes it the biggest rival to a publisher.
Google dominates the digital advertising market. As per eMarketer, Google owns over 37% of the total digital revenue in 2019.
Google search results include 16 to 40 percent news content that it scrapes from the news publishers’ content. The News Media Alliance (NMA) which represents around 2,000 news publishers, found that Google made an estimated $4.7 billion in revenue in 2018 from that news content by paying $0 to the publishers. But that’s not for you to be shocked about. The fact that the news industry as a whole made $5.1 billion in digital advertising revenue in 2018, is.
Those were some of the facts about how big Google has become today. But how did it get there? How does it own so much and more? Let’s get deeper.
Google engages with its audience on owned platforms:
Well, the rule is an absolute gem.
We know engagement lies at the heart of any successful online business. However, engaging your community in an owned space is what brings sustainability in that success.
Don’t believe me yet? Perhaps some more facts would help. Revenue charts of Google shared that for owned and operated properties ($53,017 million), the revenue was 5X higher than that of network properties ($10,304 million) for the first 2 quarters in 2019. Google generates 87% of its revenue from the ads published on its owned and operated properties whereas the margin gets down to approx. 35% for ads published on a publisher's website - power of ownership.
And yes, Conjuring is scary and all but did you know - more than 50% of the searches on Google now result in zero-click?
According to recent findings from Jumpshot, approximately 75.6 billion, browser-based search clicks, were organic in Q1 2016. Fast forward to Q1 2019, the number of clicks is 20% fewer.
For Q1 2019, where Google is already solving half of the queries on the search itself, approx. 12% of all clicks are sent to Google’s owned properties (GMaps, YouTube, Travel, etc) and more than 4.4% clicks are paid.
Let me paint the picture clearer. Out of 100% of the queries, over 50% of the traffic stays on Google search, 12% traffic goes to Google’s owned properties, and 4.47% is what Google is monetizing through ads. This means that for publishers across the globe, burning the midnight oil to publish premium content and build a loyal user base, what is left in organic is 33%.
Retention matters to Google:
Google is going big after building, owning and retaining its audience. With Android, Chrome, YouTube, GPay, and Search - all requiring a user to share the identity and permission with Google - Google now owns the audience and its data.
But as darkness brings the fear of crime. A fearful eye on the beast has helped publishers and solutions sense the storm approaching. To reduce the revenue shared with the walled gardens, publishers have started shifting towards owned platforms like the website, emails, and web push notifications. Practices like non-direct advertising that excludes walled gardens up to a certain extent have been stretching their space in publishers’ business models.
Google has realized that owned audience platforms will soon be an undeniable threat to it. Therefore, measures to retain publishers have started to see the light of the day.
To make publishers want to stay, Google is rolling out powerful data tools like:
- News Consumer insights (NCI) - uses the funnel concept to visualize different Google Analytics audience segments and how they engage with your website.
- Real-Time Content Insights (RCI) - offers a more robust version of the real-time data in GA. It shows the top articles in realtime and past 30 minutes, realtime readers by geography and referral source.
- Data Maturity Benchmark (DMB) - finds out where your news organization is on the data maturity scale.
Google offers a premium audience experience:
Does not require any facts.
Google has always kept its focus squared on users. Not advertisers. Not publishers.
It has an audience base that Google always puts first. We all know about the Chrome loophole that Google fixed in its v76 update. Before this update, media sites could easily tell when a user was browsing in Incognito mode by simply checking the status of the FileSystem API (disabled in private mode). If you had a dollar for every publisher that uses paywalls, losing its sleep that night, you would’ve been rich enough to buy Google by now.
It was a dreadful update for publishers but made the lives of Google’s audience so much better. Google users now have an easy workaround for accessing metered paywalls.
The image that includes two screenshots of version 75 and 76 of Chrome shows that it is working. Readers are able to bypass a paywall with Chrome v76.
So let’s face it - the reality of the publishing ecosystem is scary. But, there are only a few things in this world that can’t be undone. And, reviving in the publishing industry is not one of those. Publishers can still take back what once belonged to them before the idea of Google, Facebook, or even the Internet existed - their audience ownership.