There’s a new trend in the tech field where every company is trying to become your default destination to consume news. This battle is a little inter-connected with every player who is trying to become the default destination having some connection or leverage over Publishers. The ones that I’ll be considering in this Article are Facebook, Google, Twitter and Apple. The reason behind covering these four companies are that all of them are in some way interconnected with each other and to the publishing industry at large. Apple, for example, by bringing content blockers affected Google’s ad display business a little at least. Similarly Google by agreeing to display tweets in its search engine can provide a boost to Twitter. All of these are massive companies with massive user base. Initiatives/efforts taken by even one of them can drastically affect the reading habits of a lot of people.
With around 1.6 billion monthly active users and around a billion daily active users, Facebook is without any doubt the largest social network in the world. This large user base has the effect of Facebook being the largest referral traffic source for many publishers even overtaking Google in the process. The graph below illustrates that point.
Although the graph is from August 2015, but given Facebook’s scale, it’s highly unlikely that Facebook’s dominance has been impacted. With Facebook commanding an ever increasing amount of traffic that reaches publishers, it’s little wonder that Facebook would want to monetize it. Facebook already monetizes its platform by asking publishers to pay if they would want to boost the reach of their articles in the news feed of users. Companies like Buzzfeed spend millions on Facebook to promote the reach of their articles.
Despite monetizing its platform, Facebook isn’t able to monetize the content as such and every link that takes users outside of Facebook’s walled ecosystem, also takes away the opportunity to monetize the user through ads. To combat this, Facebook has launched its Instant articles initiative.
Under that, articles are loaded within the news feed without users having to leave Facebook. Publishers can have their own ads in the articles and keep 100% of the money or let Facebook do the the ad placement for them and give Facebook a cut. Publishers could also use their current CMS and Instant Articles supported a wide variety of styles and formats along with media such as video, audio and even locations.
The benefit of going with Instant articles is clear for publishers –
1. Facebook already accounts for a vast majority of their referral traffic and getting these users read the articles within Facebook would be a huge conveniece for the end user. Instead of opening Facebook first and then the browser, users could just open Facebook, read article within Facebook and continue surfing the newsfeed.
2. Facebook’s algorithms should naturally over time start preferring Instant articles over links. This means publishers who don’t adopt to Instant articles might have to face lower priority in user’s newsfeed and ultimately lesser clicks to the article. If this happens, publishers who don’t adopt to Instant articles would have to either spend more money to prioritize their articles or simply settle with lesser pageviews.
3. Facebook instant articles are a great way for publishers to deal with the ad blocking conundrum. Since the ads displayed within Facebook’s app are native ads, ad blockers are useless against them.
Ad blocking has gotten popular. Last August, a report from Adobe and Pagefair found that use of popular plugins like AdBlock Plus had grown about 40 percent year over year. The report estimated that ad blockers cost publishers $22 billion in 2015. And that was before September, when Apple introduced iOS 9 and ad blocking suddenly went mobile. It gave the most valuable demographic of mobile the ability to block ads with just an add-on.
Facebook has a lot going for it in order to convince publishers to generate Instant articles, however most publishers are well aware that by doing so they only give Facebook more leverage and let Facebook control the crucial relationship between a reader and a publisher.
Considering the fact that Facebook is now the largest referral traffic source for many publishers and that news feed algorithms would start favoring Instant articles rather than links, publishers would have little choice but to give in.
When tested with a 2G connection the results are truly amazing, the data load is very less and hence the page loads much faster than usual. Loading time is reduced by as much as 80-90%.
Apart from making sure that publishers follow a certain set of guidelines, AMP accomplishes its goal by caching. Google controls a massive infrastructure extending down to storage bays hosted by most ISPs or cell phone carriers. As a result, a single page can be replicated and cached hundreds of times.
AMP also supports a select set of partners for analytics, ads and now even has made headway in supporting a payment gateway which is a necessity for publishers like New York Times, Wall Street Journal etc. This in turn means that AMP has necessary features to support monetization of the content and Google doesn’t take a cut on ads served over at AMP. Among the distributors of news, Twitter, Pinterest and even Nuzzel are on board.
As for AMP the following points need to be noted –
1. With a restriction on the kind of ads that can be allowed, Google is trying to curb the excessive advertising that plagues media websites. With only basic ad formats allowed for now, ads on AMP will be non-intrusive. This is Google’s “acceptable ads” policy in a manner. Ad blockers exist because currently ads on mobile devices are simply too intrusive, with AMP allowing only non-intrusive ads and limited trackers for now, the bet is that people who already don’t have ad blockers installed will not opt to install one given negligible effect on experience and loading speed.
2. Google’s AMP project is open source and embraces the open internet. It must be noted that it’s in Google’s financial interest to keep the internet open. All of AMP’s code is available on Github for users to add changes/modify it. This is in sharp contrast to Facebook’s Instant articles format whose code isn’t available and which works in Facebook’s app alone.
3. Unlike Instant articles, AMP isn’t immune to ad blocking. Current ad blocking software can work with AMP very well.
The crucial part for AMP is maintaining the balance. For publishers to be able to truly embrace AMP, they would need to be able to deploy at least some tracking, ads, analytics etc. However it’s these lines of code that slow down the current web experience. Web pages that take forever to load, provide users a strong incentive to jump elsewhere: about half of users will leave a mobile site that takes more than 6 to 10 seconds to load. What AMP needs to balance is giving publishers the flexibility to deploy ads, trackers, analytics while at the same time preserving the overall speed of the system. This is a thin line to walk on. On one hand if speed is given all the importance, publishers’ ability to add trackers, ads and analytics they need would be hampered making AMP unatrractive for them. On the other hand if publisher’s needs are met a lot, by supporting more and more ads, analytics and trackers, load times would increase which would frustrate the end user.
How Google plans to maintain a balance between the two remains to be seen, however one thing is for sure, AMP is Google’s response to Instant articles and their attempt at protecting their referral traffic share.
Twitter has had quite a lot of financial troubles in recent times. Its stock price is consistently dropping. Just in the past few days, several top executives have left Twitter either voluntarily or involuntarily. The company’s monthly active user base is still a third of Facebook’s daily active user base. Moments hasn’t turned out to be the hit it was supposed to be and recent reports include possibility of venture capitalist Marc Adreessen and Silver Lake buying Twitter.
There are two rumors that still revolve around Twitter. One is that Twitter is testing an algorithmically powered Timeline and plans to use that instead of the current chronological timeline, which was partially implemented yesterday. The second rumor is that Twitter plans to extend character limit to 10,000 characters.
One of Twitter’s defining features is that tweets cannot be longer than 140 characters. However there are rumors of Twitter planning to expand that to 10,000 characters. If this turns out to be true, Twitter can be a content house in itself.
A study conducted by American Press Institue had the following results →
- Nearly 9 in 10 Twitter users in the study (86%) say they use Twitter for news, and the vast majority of those (74%) do so daily.
- Roughly the same number of people say they use Twitter to be alerted to breaking news (40%) as to keep up with the news generally (39%).
- Three quarters of Twitter news users follow individual journalists, writers and commentators (73%) and nearly two thirds follow institutional accounts (62%). Twitter users also are very likely to discover new journalists and writers and consequently follow their work, often on other platforms beyond Twitter.
- Fully 94% of Twitter news users get their news either through scrolling their timelines or browsing tweets of those they follow. Other features are used far less often: For instance, just 34% of Twitter news users say they get news from trending topics and 30% use search.
- 82% of Twitter users access the platform on their phones and many access Twitter across multiple devices.
From the above mentioned points, it’s very clear that Twitter is actively used as a platform for news consumption. If the proposed 10,000 limit is brought into effect, users could start publishing articles from within Twitter itself.
This would be a huge opportunity for Twitter similar to Facebook’s Instant articles, and Twitter would need to provide serious publishers with content monetization opportunites, ability to integrate analytics and several other things. However if Twitter does indeed execute upon this plan two things can happen –
1. Twitter can significantly capture much more time of a user which would rather be spent reading the news in Twitter’s in-built web browser or an external web browser.
2. Secondly if Twitter does give publishers the ability to monetize articles, Twitter itself could take a cut from it. This would again be free from the effects of an ad blocker as ads would be native.
Twitter has been having financial problems for quite some time now. Increasing tweet limit to 10,000 is a low hanging fruit that can help the company earn some extra money and potentially convert it into a content powerhouse. The evolution of Twitter as a product can also help in this regards. The 140 character tweet can for example just host the headline, clicking which reveals the full article. Tweets already have the ability to reply to them which can act as comments. Hearts can act as bookmarks and retweet/quotes as appreciation/criticism for a particular article.
In its latest earnings call, Apple’s CEO Tim Cook announced that there are a billion iOS devices now. This puts Apple in a league of its own, bigger than even Twitter. Such a huge base also helps Apple jump start their own services. Apple Music for example has 10 million paying subscribers according to a report from Financial Times. Apple achieved 10 million paid subscribers in just six months, and by comparison Spotify took eight years to achieve the same milestone.
Along with content blocking extension that made its debut with iOS 9, Apple also launched its own News App called Apple News. A host of major publishers have signed up to distribute their content via Apple News, including Time Inc., Vice Media, The Atlantic, Business Insider, The New York Times, Washington Post and Technology Personalized!
However reaction to Apple News has been soft in the tech community. There are no hard statistics available for Apple News except that Eddy Cue mentioned around 40 million people use the app. How many of these are regular users is unknown. Also a recent bug apparently under counted the traffic originating from Apple News.
Apple requires publishers to use iAds to serve ads in Apple News, however many would prefer something like Google Adsense instead. Also, the success of Apple News is directly tied to the number of iPhones Apple is able to sell as it’s the largest selling iOS device on the planet. However, in the most recent quarter, iPhones had the slowest possible growth and many analysts expect that iPhone growth would either be negative or improve marginally in the quarters to come as current phones are good enough and global growth of smartphones starts slowing.
Everyone wants to be users’ default detination to read news. Every company has their own set of advantages. While Google and Facebook have the upper hand at referral traffic, Twitter has a highly news focussed audience. It’s going to be interesting to see these giants compete with each other and to see how their respective products/initiatives evolve with time.
However one thing’s for sure as Facebook or Twitter or Apple or even Google become more and more powerful, they get more control. For example, a recent tweak from Google in its search algorithm favored websites optimized for mobile more, now if site isn’t optimized for mobile, traffic to the site can drop dramatically. Similarly, Facebook announced that it would start asking users to rate the article and if the rating given to the article doesn’t match the number of likes or comments it has got, the article’s ranking would drop in the newsfeed.
© Raju PP for Technology Personalized, 2016. This Feed is for personal non-commercial use only. If you are not reading this material in your news aggregator, the site you are looking at is guilty of copyright infringement. Please contact us, so we can take legal action immediately. If you are on Twitter you can follow me @rajupp! |
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