Publishers felt the diminishing power of Meta's Facebook to drive audience referrals long before the social media platform claimed its users don't use news.
The social media giant says it won’t renew its three-year agreements to pay local publishers for their news appearing on Facebook and will shut the news tab.
According to Meta, the number of people using Facebook News in Australia dropped by over 80% last year. Analysts say this is more to do with the platform's algorithms deciding what users see than with a trend.
Almost two-thirds (63%) of a survey of 314 news leaders from 56 countries and territories by The Reuters Institute for the Study of Journalism said they were worried about the decline of referral traffic from Facebook and X, formerly Twitter.
Three quarters (77%) will focus more this year on the distribution channels they have direct control over, such as websites, apps, newsletters and podcasts.
And publishers are moving to alternate platforms, including Whatsapp, Tiktok, Google Search, Youtube and Linkedkin.
Tim Duggan, chair of Australia's Digital Publishers Alliance, a not-for-profit industry body for digital-first publishers, says social traffic to publishers has been declining, both in quantity and quality of the audiences, for many years.
This is part of a shift to keep audiences on the platform and not sliding off to other sites.
“Both Facebook and Twitter are mature social mediums in Australia, and there doesn't seem to be much growth left in either of them in new audiences, so they are trying to drive more growth internally instead of externally,” he told AdNews.
"These trends have been long flagged and widely expected, and most publishers have been building up alternative traffic sources for years to make up for the shortfall in traffic."
James Young, regional director for ANZ at PubMatic, says publishers are not only diverting more resources towards cultivating their own channels but are also turning to programmatic advertising as a potential solution to drive increased monetisation from each impression.
"Programmatic advertising leverages data insights to enhance the user experience by displaying ads relevant to the audience, keeping users on site," he says.
"Additionally, with header bidding and unified auctions, publishers can increase competition for their inventory resulting in higher CPMs."
Scott Purcell, co-founder at men's lifestyle media company Man of Many, says the decline in referral traffic can be largely attributed to the ramifications of the News Media Bargaining Code, a law governing payment by digital platforms for news.
“It was introduced with the intention of supporting the news media industry, but its execution seems to have missed the mark, especially for smaller independent publishers like us,” he says.
“In its current form, the code leans heavily in favour of larger, traditional news publishers.”
Purcell says that this skew has stifled the growth of media diversity and made it increasingly difficult for media businesses to cultivate and expand their audiences on platforms that are now more inclined to reward individual creators with less bargaining power and political influence.
With Meta’s recent cancellation of the agreements between itself and news publishers, which pump tens of millions of dollars into news publishers' budgets, media groups in Australia are now looking to the federal government and the code, which can apply fines of up 10% of annual turnover for failing to bargain in good faith.
Purcell says Man of Many’s journey under the code has been fraught with challenges.
“Attempts to engage in meaningful commercial negotiations with major digital platforms have been unfruitful, leaving us at a distinct disadvantage compared to the larger listed corporations that have managed to secure significant deals," he says.
"This disparity in commercial power under the code has been disadvantageous for us and the broader independent media sector, which finds itself in an increasingly competitive and uneven playing field,” he says.
“Instead of fostering a diverse and competitive media landscape, it has entrenched the dominance of larger media companies. As we look towards the future, it’s clear that a reevaluation of the code is imperative.
“It's crucial to ensure that it serves its intended purpose of supporting a diverse and competitive media industry, where independent publishers have an equal opportunity to thrive in the digital space, particularly in the realms of social media and online engagement.
Mitigating strategies being put in place
Brian Florido, MD of Val Morgan Digital, says while the decline of referral traffic from Facebook is a major challenge for publishers, his company is mitigating any loss of traffic, reach and revenue through Community+ where Val Morgan Digital has a better insight into its audience.
"We've also spent the last 18 months developing tactics to reach readers, and we’re fortunate to have an outdoor sister brand, VMO, to push our stories to passionate readers at scale across retail, health clubs, service stations and office towers," he told AdNews.
Man of Many says it's been "very lucky" that organic social has always made up a relatively small proportion of overall traffic, about 6.1%, with the majority coming from search, direct and its own email newsletter.
"We've never been solely reliant on any one platform and largely missed the 'golden age' of Facebook, where publishers could grow huge audiences on the platform." says Purcell.
"Of this social traffic, only ~40% comes from Facebook, which is down around 35% compared with 12 months ago, similar to trends we are seeing across other publishers," he says.
Purcell said to mitigate this, Man of Many has focused on enhancing engagement on social media and other channels.
"Our approach includes investing in original short-form video content and improving website engagement strategies," he says.
"Notably, our social following has grown 75% over the past year to over 750,000, and our engagement rates have dramatically increased by over 1,230%. Our Facebook engagement specifically grew by 978% but this has yet to necessarily result in more traffic coming to our site.
"Social platforms are more and more focused at keeping users engaged on-platform than sending them elsewhere. We've achieved a 7.2% increase in average time on page, and our email subscribers have grown to over 150,000, with an open rate increase of 45%."
ACCC raised concerns over five years ago
At the end of 2017, the then treasurer Scott Morrison directed competition watrchdog the ACCC to conduct an inquiry into digital platforms. The inquiry looked at the effect that digital search engines, social media platforms and other digital content aggregation platforms have on competition in media and advertising services markets.
The inquiry looked at the impact of digital platforms on the supply of news and journalistic content and the implications of this for media content creators, advertisers and consumers.
“Facebook is a vital distribution channel for a number of media businesses, particularly those seeking to target particular demographic groups,” said the regulator in its final report.
The ACCC said that news content enhances users’ experience of the Facebook platform, providing a significant benefit to Facebook.
“While the number of referrals from Facebook to news media businesses has declined since the preliminary report, it remains the case that many news media businesses in Australia would likely lose significant revenue, with adverse impacts on their business, should they forego referrals from Facebook,” it said.
“The opposite is not the case for Facebook. Access to the news content of any one news media business is unlikely to have a material effect on Facebook or its users.”
Vanessa Lyons, CEO of the news media industry body ThinkNewsBrands, says that social media platforms often make algorithm changes, and these can cause referral numbers to jump around at any given time.
"But if you take a longer look at Facebook over the last six years, there has been an upwards trend in referrals to large publishers like Australia’s news publications. This broader trend aligns with the fact that news consumption and distribution via social media is entrenched in Australia," she told AdNews.
"Independent research shows 53% of readers access news content via social media on a weekly basis and half of all consumers discuss news articles shared on social media at least once per week. Studies also show that younger generations are increasingly using social media as a pathway to get their news.
"We expect the ubiquitous sharing of news content on social media in Australia to continue and we expect social media to continue to be a strong source of referrals for media publishers into the future."
Joyce Seah, head of client services and account management, APAC at Quantcast, says consumers still spend a lot of time on social media and what publishers need to take advantage of is the change in a content format that companies are observing consumers move towards and showing a strong preference for.
“Depending on the target audience of your content, different social media platforms can still play pivotal roles in delivering success for publishers and brands alike,” she says.
Duggan at the Digital Publishers Alliance says that social media is still a semi-valuable way of building brand awareness and reaching wide audiences, but times have changed. As a traffic driver, it's no longer as important.
“There are some media brands, however, like The Daily Aus, who have still been able to build impressive brand recognition and audiences off the back of strong social media presences, which they are new parlaying into a cross-platform media company,” he says.
“So, it can still be done, but it's becoming more rare."
Florido at Val Morgan Digital says social media is still an important traffic source, and it still forms part of Val Morgan Digital’s publishing mix, but the company is less reliant on clicks and more focused on exclusive content.
“We're exploring platforms like TikTok, Instagram, YouTube as well as environments like Substack. We’re also leveraging VMO's network as an IR,” he says.
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