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It's simplistic to lay publishing's woes so squarely at the feet of Facebook's video stats. This was contributing factor, certainly, but the executives who pivo
by netaustin 8y ago
It's simplistic to lay publishing's woes so squarely at the feet of Facebook's video stats. This was contributing factor, certainly, but the executives who pivoted to video weren't abandoning 7% margins on text in search of 15% margins — if they were, they'd likely have left the text operation intact and built video atop a successful business. Editorial operations were already struggling! In some cases, the promise of video may have spurred additional investment in publishers that wouldn't have been able to get it with just text. While video is more expensive to produce, the CPMs are also higher, which creates a bigger cashflow. It seems likely that this was a factor in Buzzfeed's NBCUniversal rounds.
- netaustin 8y agoIn other words, everyone had the same bad data: The investors, the marketers, and the publishers all thought video was a winner.
- _jal 8y ago...Everyone except Facebook, who was making money, and sat on the data for a year.
- prostoalex 8y agoDon’t ad buyers have internal mechanisms to track conversion rates and revenue uplift independent of what the publisher tells them? Facebook was hardly the first player in the video game, with YouTube, Hulu and a few other big brands relying on this model exclusively.
- IggleSniggle 8y agoKeep in mind that buyers are everyone from Big Corp down to Mom n Pop. The smaller the shop, the more you must rely on the metrics you are told. And even small places may value awareness and/or indirect conversion. In fact, a local, interest based ad may be totally focused on awareness, hoping to increase the chance that you walk into the store the next time you drive by.
- badloginagain 8y agoMany orgs had to let a bunch of people from text to free up resources for video, video being so much more expensive than text/audio.
- madeofpalk 8y agoHold up - they didn’t “have to” let anyone go, they chose to because they wanted to hire other people.
- armandososa 8y agoNo. They didn't "had to" produce more video content. But once they decided to do just that, they had to let people go because producing video is more expensive. That's what the GP is saying.
- rossdavidh 8y agoThis may be true, or it may be that the "pivot to video" was the excuse they used for something they were going to do anyway.
- dabei 8y agoSpot on. News publishers have been suffering from declining ads revenue for years. They needed to pivot to something anyhow.
- deleted 8y ago[deleted]
- buboard 8y agobut why are CPMs higher? i mean do they actually get higher return of investment or is it all based on faith again?