Publishers of all kinds are faced with the challenge of achieving great reach with their digital content and then monetising it profitably. The immense competition and the resulting mass of digital content are just one aspect.
Many publishers also fail to update their classic financial models from the traditional but dated times of printing, consisting of advertising and paid subscriptions, to their digital offering. Adblockers then cause sales slumps of display campaigns, making it necessary for publishers to explore new ways to monetise their content.
How Buzzfeed uses affiliate marketing
The adequate alternative to previous models currently appears to be affiliate marketing. Well-known media, especially Buzzfeed, have been successfully using this channel for some time. With nearly 300 million visits per month, the media company is one of the largest in its category and, with more than 14 billion monthly views, is a pioneer in the social video sector. Despite these figures, it’s not easy for even Buzzfeed to turn its popularity into money. Its envisaged annual turnover of $ 500 million for 2016 was reported to have been quite significantly missed.
The viral giant nevertheless continues to stick to the format it does best: Listicles. These top-XY articles, with sensational headlines, do no longer only contain funny pictures, but also increasing numbers of product placements, which are connected with corresponding affiliate links. This is certainly no coincidence. Behind it lies a sophisticated monetisation strategy crafted by a twelve-headed editorial team, as well as a specially developed tool, which facilitates both shop operators and editors working with affiliate links. In addition to affiliate marketing, Buzzfeed also operates its own stores with some of its self-developed products and makes use of the range of its own channels for their marketing.
The New York Times recent acquisition shows that Buzzfeed is not alone with its strategy: The Newspaper bought the affiliate pro "The Wirecutter" the end of 2016 for 30 million USD. “The Wirecutter” is a platform for product testing and recommendations, funded almost exclusively by affiliate marketing, thereby earning millions. Another indication of the current and future importance of e-commerce and affiliate marketing for the digital publishing industry.
Facebooks role in Social Commerce
Facebook is still the world's largest social network with almost 1.4 billion daily users. But on its own platform, Facebook has been idling away when it came to commerce for years, and thus given away great potential. Ten years after the first launch of the Facebook Marketplace, 2016 finally saw a re-launch - but only for peer-to-peer purposes.
With the buy button and the fully integrated shop for site operators, Facebook finally went on the social commerce offensive. The buy button can be integrated as a call-to-action in posts and ads. The Shop feature even allows you to buy and sell products on the Facebook site without having to leave the platform, enabling seamless social commerce, including integrated payment, for the first time.
The meaning of Facebook videos for publishers
The medium of choice to market products on Facebook is the video format for most publishers; not least because Facebook's news feed algorithm prioritizes video content significantly over other content. A video site sees far more users than a regular, text-based contribution. Currently, Facebook still doesn’t make it easy for publishers to monetise videos. While Facebook's preference for videos has significantly changed the audience of many media, the additional traffic does not yet benefit them financially. Many earn nothing of their millions or even billions of views. Of the mid-roll ads that Facebook has introduced for longer videos, only a few, large publishers benefit.
Still, there are some in the industry who have perfected the business of Facebook videos. For example, digital viral publisher "The Daily Dot", has 2.5 million fans on Facebook and 50 million monthly views. Its most successful videos almost always contain product placements. The Daily Dot has recognized their potential, and so combined two major trends - video and commerce. The small team publishes over 20 videos a month. The online magazine uses the experience to produce videos with branded content for brands.
The online magazine "Fatherly", whose core target group are fathers of the millennial generation, has also found a way to use Facebook videos profitably. Thanks to a well thought-out Facebook video strategy, the site generated more than 250 million views in less than a year. It uses them not only to strengthen its presence in the social web, but also to expand its subscriber base. According to own data, 40,000 of the 250,000 email subscribers of the portal were acquired via Facebook videos. Fatherly thus has an excellent return on investment from the platform, which many others cannot consider profitable.
In addition to affiliate revenue, Facebook videos also provide data on the kind of products that are popular with users, as well as Facebook audience reactions to any specific content. The content form is therefore doubly interesting for publishers, and is used by Medienhaus Business Insider specifically for this purpose.
And what about Facebook Live?
Up until now, Facebook Live has maintained a low profile in this context. Some nonprofit publishers use live video to collect donations for charitable purposes, and QVC has been broadcasting its shows since 2016 as a simultaneous transmission over the channel. Apart from this, only a few publishers use the medium to generate specific revenue.
It will be interesting to see what advertising opportunities Facebook comes up with in the near future for publishers. The focus on videos does not seem to change at all, because (as rumor has it), Facebook is working on its own shows for this platform.
Is it questionable from the journalistic point of view that more and more publishers use affiliate marketing (which is more or less hidden)? This is a matter of opinion. Anyway, the fact is that affiliate commissions are only earned when the respective product is bought and not returned. It is therefore in the interest of the authors themselves that the product recommendations are relevant and target group-specific – and that’s the big difference from the classic, poorly measurable advertising.
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