The next time you ride the bus or step into a coffee shop, look around and count how many people are reading a newspaper. Perhaps a handful? Now look around for cell phones and you’ll see it’s no secret that people are glued to their smartphone screens.
While they may not be holding a newspaper, a quick peek at your neighbor’s screen and you’ll likely find them reading a blog post or news article on Social media. In fact, this year, 62 percent of U.S. adults reported they get their news on a social networking site, a 26 percent increase from 2012. And with millennials reporting that they are more likely to turn to social media for news than TV, these numbers are likely to continue to increase.
As people consume more of their news on social networking sites, these platforms offer Brands new and different opportunities to engage audiences, resulting in higher profits through advertising revenue.
In its third-quarter-2016 earnings report, Facebook reported $6.8 billion in ad revenue, a 130 percent increase from the third quarter of 2014. In the U.S. overall, social ad revenue is estimated to surpass $30 billion by 2021.
How social platforms are becoming media companies
As more people consume their news directly on social media sites, social platforms will continue to capitalize on this by behaving like media companies and offering ways for publishers to monetize. Let’s look at a couple examples that demonstrate this shift.
A prime example is Instant Articles, Facebook’s mobile publishing platform that allows news publishers to publish articles directly on Facebook’s application at a much faster speed than the standard web.
Facebook created this publishing product with the intent of streamlining the experience of clicking article links on Facebook. Consequently, users are consuming more news articles and brand content directly on Facebook, rather than via third-party media sites or company websites.
Just a few months ago, Facebook offered publishers additional incentives to publish more of their content directly on the platform with new ways to monetize their Instant Articles, including larger ad units, video and carousel ads and more.
LinkedIn’s publishing platform, Pulse, has drawn attention from top business publishers including Forbes, Bloomberg and Business Insider. Similar to Facebook, LinkedIn offers publishers opportunities to monetize their content with its sponsored updates product, which boasts highly targeted content ads.
Medium, another publishing platform, launched by Twitter co-founder Evan Williams, has also introduced monetization opportunities for brands and news publishers on the site through native advertising.
And, many industry experts and analysts predict that Twitter may eventually offer a longer-form content product, as well.
As digital video ad spending continues to grow, Facebook has been heavily promoting its Facebook Live video platform, even launching a major marketing campaign recently that included TV commercials, bus wraps and billboards.
Similar to Instant Articles, Facebook has been testing ad breaks inside live video broadcasts from its top publishing partners as a way for publishers to monetize their content.
While Facebook and Twitter currently dominate the social news sphere, other platforms are starting to catch up. Publishers are increasingly using Snapchat’s news platform, Discover, as a way to engage with Snapchat’s massive audience. With Snapchat as the current platform of choice for teens, it’s likely that more publishers will soon seek it out as a media distribution platform, if they haven’t already.
What this shift means for brands
Given all of these changes and monetization opportunities, news publishers are investing more heavily in these social platforms than ever before. But if you’re a brand that’s not The Huffington Post or The New York Times–i.e., a media company–this might seem like bad news.
In a crowded space, brands are struggling with getting their content seen now more than ever. This struggle is compounded by social media algorithm changes that drastically shift how content is seen, consumed and engaged with, like Facebook’s, which prioritizes posts shared by friends and family over those from publishers, brands and other pages.
Today, quality content isn’t enough for brands to reach and engage with their audience. Content has been dethroned by distribution as the key to bidding, sustaining and converting an audience online. Consequently, spending on paid media distribution globally this year is expected to increase by 5.7 percent, to $542.55 billion.
How brands can leverage this shift
While brands will ultimately have to devote more budget to paid distribution, this is not necessarily a bad thing.
As people increasingly use social networking sites for consuming content in a variety of formats and purchasing anything from movie tickets to food delivery, these sites are gathering a tremendous amount of consumer data, identifying users’ interests, behaviors, spending habits and more. All of this information is incredibly valuable for marketers, allowing brands to improve their targeting.
You simply can’t get this real-time level of information from ad buys on radio or TV. Furthermore, social ad buying is an interactive cycle, allowing brands to adjust campaigns and approaches in real-time based on what’s working and what’s not. Ultimately, brands can be more strategic and nimble with their targeting and spending.
It’s also important to remember that most social networks’ paid distribution models are bid models. Therefore, brands that leverage these new models sooner, especially with new content mediums, will have a leg up on capturing their target audience for less money.
Given this evolution, brands shouldn’t abandon the content initiatives and creative experimentation they’re already doing on social networks. Rather, they should experiment with paid distribution in these new formats to get to know their audiences better, ultimately driving the right eyes to the right content.
How this works in practice: A brand wants to promote a cookbook, so it hosts a live video stream on Facebook showcasing recipes from the cookbook. To drive higher viewership, the brand invests in paid social promotion of the video. While streaming the video, the brand can respond to users’ comments in real-time, answering any questions about purchasing, the ingredients, the recommended equipment, etc. Additionally, people can purchase the cookbook directly on the Facebook platform, eliminating the extra, time-consuming step of going to the brand’s website and purchasing from there, thus increasing the likelihood of them making a purchase.
This is just one of many ways a brand can experiment with paid distribution.
As social platforms increasingly become media companies, it’s imperative that brands realize that quality content is no longer enough. In order to be seen, brands must pay to play.
Test a new medium. Invest in paid media to yield the strongest, most accurate results from your content. Have strong key performance indicators and keep an open mind. A smart brand will embrace this shift to experiment and ultimately reach the right audiences with the best content.
Erica Jenkins is chief product officer for social media analytics company Sysomos.
Image courtesy of Shutterstock.