Hard to believe that we’re reaching the end of 2016, a year with one finger firmly pushing down on the ‘bad’ end of the scale. Last December when we published our tech and media predictions for 2016, there was no way we could have foreseen events like Brexit or a Trump victory. We would, in fact, have bet pretty heavily on the opposite.
Those events, one of which has had a knock-on effect on the relative cost of producing newspapers in the UK and the other of which has the news media entering a period of manic self-examination about its relative culpability and ability to influence public opinion, are going to impact business decisions throughout the next few years.
So with that in mind (and the likelihood that other black swan events are going to throw these predictions off sometime around mid-January) we thought we’d put together a list events and trends we think are likely to come to pass and impact your media businesses next year. Let us know if you think we’ve missed anything big in the comments below or on our social channels.
‘Around the web’ changes
Whatever you call the ad bars that hang around publishers’ sites offering related content from around the web, and however they bill themselves, you’ve almost certainly come across the ads themselves. They tend to look a little like this:
And they are, for the most part, trash. They take up valuable space on a page, they’re responsible in no small part for the promulgation of clickbait for the sake of revenue and they potentially tarnish a publisher’s reputation. Unfortunately most of the larger publishers are still using them because they’re a reliable source of revenue.
However, there are indications that some news outlets have recognised the bargain to which they’ve signed up is Faustian. Back at the end of October the New York Times reported that sentiment was shifting away from ‘content ads’ at some publishers, notably Slate:
““It is not the right look if you’re trying to say you’re a high-quality, upper-tier website — if you have something like this on it — and I think it’s time for us to be honest about that,” said Keith Hernandez, Slate’s president.
So will news publishers en masse, most of whom are acutely aware that their reputations are built on increasingly shaky ground, begin to move away from those content ads? Unfortunately, we predict not. The advertising pressures facing digital publishers are too great for any to walk away from a reliable source of revenue. Instead, we think it’s likely we’ll see a big song and dance from those recommendation engines like Outbrain, Revcontent and Taboola about how they’re improved the relevance of the content ads they serve – whether or not that will actually be true is another matter – and publishers will quietly let the matter drop.
Some, like Slate, will be smart enough to see that the long-term brand damage and erosion of the bedrock of trust on which news publishers are based is not worth the short-term revenue, no matter how large it is.
Age of the bots
Chatbots are already pretty ubiquitous, and they’re only going to become more so over the next couple of years.
There’s been a predictable backlash when some have fallen short of the potential. Facebook’s vice president of messaging products Mike Schroepfer has argued, however, that the internet and apps alike both had some UX and quality issues in the first months of their existence, and that of the 33,000 bots now in use on Messenger, there are many that are beginning to deliver on the medium’s promise. He cites Burberry’s recently-launched bot as an example of how bots can help brands communicate with – and sell to – their audience:
“Burberry just launched a really well designed bot, it combines brand storytelling with an automated gift recommendation engine for the holidays, but if you want to chat with someone from Burberry they can help you.”
With the launch of Messenger 1.3, Facebook is hoping that opportunity is extended to small- and medium-sized businesses as well, and consequently those smaller enterprises will appear in the search function when their bot is submitted and accepted by Facebook. Schroepfer argues that the advantage bots offer to brands and audiences is that they’re persistent dialogues that have a resolution or call to action baked-in. And as we’ve said many times before, when Facebook bets heavily on something, publishers had better pay attention.
Video spend fractures as it grows
When we conducted our State of the Media report earlier this year, we were expecting that publishers would be gung-ho for video. We were surprised by just how enthusiastically publishers would be investing, however, with it consistently in the top third in terms of areas for investment across almost all the business sectors on which we focused. Notably it was also considered one of the hardest areas for publishers to actually deliver upon – and we expect that won’t be any easier next year.
Quite apart from the fact that video requires quite a lot of resource to do well, there are considerations about distribution and monetisation of that video content. 2016 was the year that YouTube began to look not quite so unassailable, with increased competition from other video platforms and rumblings of discontent from some of its hot commodities – its stars.
Of course all indications are that its digital video that is likely to see the hottest growth in terms of where digital ad spend will be going in 2016, so it’s not exactly a zero-sum game, and the big players in the video platform game are all going to be winners in 2017. But if there’s one company that could upset the apple cart and genuinely challenge YouTube’s dominance, it’s Facebook. And, on the subject of Facebook…
Facebook is going to make a play to own the audio ecosystem as well
The signs are all there. The stars have aligned. We’ve read all the runes, examined the portents, gone through every form of future-telling of which we’re aware (our favourite was margaritomancy). And we’ve come to the inescapable conclusion that Facebook wants to own the entire audio ecosystem by the end of 2017.
First, there is good money to be made from audio content. As NPR’s CEO Jarl Mohn explains:
“I’d rather have a smaller percentage of a much, much bigger pie. Something that’s really healthy, where 90% of the population is listening to podcasts and we’ve got a great measurement tool that packaged goods, automobiles and all the major sponsors can use to buy sponsorship, underwriting or advertising”.
On-demand audio is a growth sector, and has been for the past few years. Small wonder than that Facebook, the Auld Enemy of media companies in 2016, is making a play for it:
“Book readings, interviews, and news radio are coming to Facebook thanks to its new Live Audio feature launching today with a few publishers and authors before opening up next year. A complement to its Facebook Live video streaming, it could bring audio-first content like podcasts to the News Feed, and provide a low-bandwidth real-time broadcasting options to publishers in low-connectivity areas.”
Honestly, if we had to make one single prediction for next year, it’s that publishers’ problems with Facebook are only just beginning…
We’ll back in the new year. Until then, have a great holiday season!