Distribution is “drug” for publishers: NewsLifeMedia CEO

Rachael Micallef
By Rachael Micallef | 27 August 2015
 

Publishers can get hooked on the easy social gains made by using distribution platforms but NewsLifeMedia CEO Nicole Sheffield has pointed to the risks of balancing a business on the whim of an algorithm change.

Speaking at a panel event for the IAB Leadership Summit, Sheffield spoke about the dominance of platforms such as Google and Facebook, but noted that relying on social as a delivery mechanism can be like "a drug” to some publishers.

“Distribution is not just the distributor’s fault - half the time it's the publisher's fault because it's a drug,” Sheffield said.

“The number of times people get so excited because all of our social followings are massive - and that’s wonderful - but that’s one measurement. If you're looking at how much traffic is being driven by social environments and you’re reliant on that, that effectively becomes the drug that you are building your business on and all it takes is an algorithm change and you don't have that business.

“So I think as publishers we have to be smart not just on the vendors that we work with but our role is to be very clear on what we do and to do it well.”

Carsales director of media Anthony Saines said the increasing dominance of media giants such as Google and Facebook is eroding two key elements that publishers need to prosper: distribution and monetisation.

“There is a danger that that is being outsourced to three or four platforms,” Saines said.

“You've got to play in that space if you're a news producer but are you giving up your right to that consumer in the future?

“It could be an existential threat for a lot of publishers. I think in 10 years' time the world will look very different.”

However, looking at the current landscape, IAB CEO and president Randall Rothenberg said he doesn't believe that it's “that different to what we've experienced historically”.

Rothenberg pointed to the “monopolies, duopolies and oligopolies” that existed in the media market before the advent of digital, noting that in 1965 three companies controlled 100% of prime time advertising.

“There is no decree from god that said people were going to have an easy time making money from content; it was never that way,” Rothenberg said. “If you were talking about the movies or if you're talking about magazines or you’re talking about television, it was always difficult for creators to make money.”

AdNews contributing editor Paul McIntrye, who moderated the panel, said the difference he sees is that those companies in the past were still investing in content, whereas new platforms are leveraging user-generated content or publisher content that they don't pay for.

But Rothenberg believes the changes have actually democratised creativity.

“I just don't think it possible actually. Take a 1000 ft view of what has gone on, and is going on, in digital content and not say that the opportunity to create and distribute creative product has increased beyond the wildest imagination of any human being,” Rothenberg said.

The other issue for publishers is the increasing complexity of the ad tech landscape and the number of ad tech vendors.

“The most common criticism of any ad tech company that you hear is 'that's not a company, that's a feature,” Rothenberg said.

“There is far too much money in venture capital, chasing far too few deals, and so venture capitalists end up financing very small minor differentiations in service and capabilities that under normal circumstances could not exist as free-standing companies.

“It seems a little nutty to be taking one more penny, one more nickel, one more dime out of the dollar, to pay for services whether you’re a publisher or an agency, that ought to be integrated.

“The market is pushing back and continues to push back.”

Have something to say on this? Share your views in the comments section below. Or if you have a news story or tip-off, drop us a line at adnews@yaffa.com.au

Sign up to the AdNews newsletter, like us on Facebook or follow us on Twitter for breaking stories and campaigns throughout the day.

comments powered by Disqus