The battle for control: Publisher versus walled garden | M&M Global

The battle for control: Publisher versus walled garden

Publishers that cede control to ‘walled gardens’ and distribution gatekeepers may find themselves at a disadvantage, writes Allen Klosowski, vice president, mobile and connected devices at SpotX.


The task of monetisation continues to increase in difficulty for publishers.

They’re under siege on many fronts, from ad blocking threats to the growing power of web giants. The struggle to innovate at the same pace as technology advances is real, and shrinking revenues make newsrooms, or content creation, difficult to sustain.

There is a battle for control underway. Facebook, Google and Apple, as well as other distribution platforms, are trying to strong arm their way in between publishers and their audiences. These ‘walled gardens’ seek to control the whole transactional layer, like they’ve managed to do to a large extent with books, music and so on. They threaten to commoditise publishers’ content and, in effect, displace publishers from the consumer’s value chain.

The implications are wide reaching. Without full control of monetisation, funding editorial teams, let alone innovating to improve user experience and build for the future, becomes increasingly difficult. For newer, still “emerging” platforms, like mobile or connected TV (CTV), a number of players are vying to take a cut from the value of audiences.

Facebook, Google and Apple: The mobile chokepoints

Google and Apple have become the primary content distribution chokepoints for mobile. They control the rules on their respective platforms, particularly in app environments.

Say a publisher wants to sell a news subscription in their app. To do so, they need to let the platform process the payment, control the data and take a revenue cut, leaving the publisher with the bare minimum information about the new subscriber. As a result some publishers, like the Financial Times, have turned to the mobile web. But even there, they are at risk.

The initial decentralisation of the web, that lay the foundations for open access, is under stress. To reach users inside walled gardens, companies like Facebook are pushing publishers to publish directly to their platform, instead of owned and operated (O&O) sites.

“These trends continue to undermine the traditional publisher subscription model by actively stripping the reader relationship and loyalty away from content producers”

The reasons quoted are speed and user experience, but this further pressures the publishers and advertisers who are being disintermediated. Similarly, Google’s Accelerated Mobile Pages (AMP) Project has been sold on promises to reduce mobile web load times by reducing JavaScript, but the trade-off is embracing yet another format that also reduces the ability of advertisers to track and verify their own metrics. Advertisers also have concerns with AMP because they can’t verify critical metrics like viewability with their own tools, similar to other Google and Facebook owned environments.

These trends continue to undermine the traditional publisher subscription model by actively stripping the reader relationship and loyalty away from content producers. It’s going to be a very difficult new world for publishers if the model moves to distributing content to these platforms in exchange for a revenue cut, ahead of the control of O&O properties.

CTV and telecoms: The distribution gatekeepers

It’s not just the big platforms that are wreaking havoc on the media. Distribution channels and telecommunications providers are starting to see the potential of becoming gatekeepers.

Major CTV, set top box and gaming console platforms are seeing the growth of over-the-top (OTT) content, and are pushing their own ad serving solutions for a cut of the revenue. In these new environments, most publishers don’t yet have the expertise to develop for all of the endpoints where viewers are watching their video content.

An easy route to take is to use the built-in ad serving technology offered by the platform for a revenue split. But this raises many questions around who owns the data and audience relationships. Publishers need to be wary of ceding control to these new platforms in order to access new audiences, or risk more walled gardens growing, like they have on mobile platforms.

At the same time, even content delivered over the open internet is at risk, with telecommunications carriers embracing ad blocking – such as what is happening in Europe with Three and Shine. These arrangements could signal a zero-rating style arrangement with carriers billing advertisers for user data consumption. Verizon is experimenting with a similar strategy in the US with its Free Bee program, and while it doesn’t interfere with publisher ads directly, these gatekeepers are increasingly playing in the ad space.

The death of the bundle?

Underneath all the changes and disruptions, when the platforms themselves each have a unique integration, with a different method for delivering content and advertising to the audience, publisher sales teams are compromised. Their ability to execute a unified strategy for forecasting and audience segmentation, and generate a unified currency for selling and addressing their audiences, is reduced.

Mobile video should be valued no differently than CTV or desktop video. The ability of advertisers to buy very specific audiences becomes more central every day. The delivery method should be a means to an end, not a strategy in itself. After all, media works best when it’s sold holistically across devices.

“Publishers that cede control now will find themselves at a disadvantage against competitors that have a cohesive data and access strategy”

Cutting deals with each different platform fragments the inventory, and creates unique challenges in selling a cohesive bundle to reach advertisers’ audiences. Publishers that fragment themselves will encounter challenges trying to sell scale, particularly when geo-targeting is in the picture.

The reality is publishers are being stripped of the power to manage their own distribution and monetisation, and it’s getting harder to exist outside of the locked platforms or app stores that require a revenue share.

Publishers must look to solutions that enable a single point of access to their audiences across all platforms. The ability to sell an audience regardless of device is critical. Publishers that cede control now will find themselves at a disadvantage against competitors that have a cohesive data and access strategy into every environment they serve.

Allen Klosowski

Vice president, mobile and connected television, SpotX

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