News in IT has always been an industry dominated by the old ad business model, a model that’s seen the rise of Facebook as an important platform for advertising revenue.
But with Facebook taking over as the most-visited social media platform on the planet, some industry watchers are questioning whether this new business model has the potential to make money for publishers.
“We’re seeing publishers are shifting their revenue model to Facebook,” said Ramesh Nanda, chief executive officer of online publishing company Penguin Random House.
“It’s very, very disruptive.”
Facebook has been experimenting with ways to monetize its online presence.
It’s used to paying publishers to create and share their news content, and it also allows publishers to advertise on Facebook directly.
Facebook recently introduced its own “pay for content” service, called AdSense, which it has been rolling out to publishers in the United States and Australia.
The company says it will pay publishers $10 per post on its platform and then make up the difference with advertising.
But publishers say that Facebook ads can cost as much as $10 to produce, and they are also getting the same kind of advertising from publishers that they’ve seen from Google and other ad-supported platforms.
“The ads we’re getting from publishers are just really terrible,” said Matt Smith, an ad tech specialist at the online advertising firm AdBlocker.
“They’re not worth the money, and you’re not going to get the same amount of revenue.”
Some publishers say they are being paid a fraction of the advertising revenue they’re getting on Google and Google’s own advertising platforms.
Some publishers are also unhappy with Facebook’s handling of news content.
“This is a company that’s been working on social media for a long time and has no problem with advertising,” said AdBlockers CEO Mark Boulware.
“But it’s just not right.
Facebook has the ability to have real and meaningful control over the content you see on Facebook, and then they’re going to put it on the site with zero editorial oversight.”
While it may be tempting to dismiss the changes Facebook is making, some publishers are concerned about the impact it could have on their business.
“If they get this big, and if they are so profitable, what’s going to happen to the publishers and the companies that do that?” said Nanda.
“Then it becomes very hard to get people to buy from them.”
The new Facebook revenue model may also change the way publishers sell their content.
Publishers who buy Facebook advertising can then choose to post their ads on Facebook as well.
That’s something publishers like BoulWare say is “not in their best interest.”
But he said it is possible publishers could see that revenue increase because they are making more money off ads that are viewed by Facebook users.
“When we’re paying a publisher for that ad, they are actually paying us more,” he said.
“So we’ll end up being paying more to Facebook.
And for publishers who want to remain independent, Facebook may not be the right platform for them. “
Facebook is a platform that has to be managed and controlled, and the way it’s been handled now could be very disruptive to the business.”
And for publishers who want to remain independent, Facebook may not be the right platform for them.
“As we look to expand and improve our business, we need to be careful what we’re buying from and what we can give away to Facebook to keep it relevant,” said Boulwery.
“I’m concerned that Facebook is going to be so dominant in advertising that we’re not likely to get anywhere near that level of success.”