Google Shouldn't Pay Us For the Right to Send Us Traffic
Looking at email as a platform & the cut in commerce commissions
|Jacob Cohen Donnelly||Apr 21|| 8|
I hope everyone had a great weekend and that your weeks are off to a strong start. There’s a lot to discuss in today’s issue, so let’s jump right in.
Media entitlement is a thing
It should be clear by now that I am pro-publisher. I believe publishers should find multiple sources of revenue to diversify their revenue so that they can truly be independent.
However, from time to time, the entitlement some media companies feel becomes too great. The New York Times published two separate pieces over the past couple days that have triggered this essay. First, the news:
The Australian government said on Monday that Google and Facebook would have to pay media outlets for news content in the country, part of an emerging global effort to rescue local publishers by moving to compel tech giants to share their advertising revenue.
The decision to mandate compensation for news articles displayed on Facebook pages or in Google search results — important drivers of traffic for those platforms — comes as the coronavirus pandemic accelerates years of advertising losses at media outlets large and small.
And then there is this Op-Ed from David Chavern, president and chief executive of the News Media Alliance:
We have argued for some time that the big tech platforms should be an answer for journalism, rather than a problem. They are the main distributors of news and they benefit greatly from the engagement that comes with it. Just think of all of the hundreds of millions of people who went to Google and Facebook over the last few months for information about the coronavirus.
First thing’s first… Can we have a conversation about audience? There is a level of possessiveness that publishers have regarding the people that come to their sites irrespective of source. We need to discuss what is and isn’t “our audience.”
A user that types www.amediaoperator.com into their browser is likely my audience. Why? I have done a good job getting them to know the brand. Even a user that types A Media Operator into Google and then clicks over could be argued as my audience.
However, when a user goes to Google and does a search for a certain topic and then clicks over to the publisher, that is not the publisher’s audience. That person is Google’s audience and Google is doing its job to direct users to the right kind of content. As the publisher, we are borrowing that user.
Now, if the user signs up for a newsletter, pays for a subscription or some other sort of engagement, then the user becomes the publisher’s audience as well. A relationship has started. But in no way are anonymous, flyby users our audience. That’s not how it works.
But that’s fine because Google sends a boat load of free traffic our way—in some cases, over 50% of a site’s traffic comes from Google—and so long as we are doing our jobs converting them to our other products, it’s an amazing channel to grow an audience.
Suffice it to say, there are some publishers that want to eat their cake and have it too. So, let’s look at the above two pieces.
First, the Australian news. Right now, Google takes an image, a title and a short snippet and displays it in its search engine result pages (SERPs). In exchange for this information, it drives traffic to your site by delivering the best information to its audience. That sounds pretty good to me.
To some publishers, it’s not. According to law, now publishers can negotiate with platforms for a cut of revenue in exchange for letting Google drive traffic to the publisher’s website. Earlier this month, France’s Autorité de la Concurrence told Google it had to negotiate “in good faith” with publishers over licensing fees. This comes after Google initiated its strategy of not showing any publisher content.
See this screenshot that Google shared with Search Engine Land:
If Google negotiates in good faith with French publishers and they still can’t reach an agreement, then by law, Google has to implement the above example. How does that help users or publishers?
To make matters worse, this hurts the little publisher. What if Google does reach an agreement with big publishers? What happens to the little publishers that can’t negotiate a deal with Google because Google doesn’t even pay attention? By law, that means Google can’t use their content and voila, the little publisher suffers.
Then there’s the op-ed, where David Chavern argues that the platforms should pay local publishers because local news is important. But how much?
The click-bait number is $4.7 billion. That’s the amount Chavern’s organization said Google News earned for Alphabet in 2018.
The thing about that study? It’s pretty bad. The amount of extrapolation the organization goes through to try and come up with the number is horrible. It’s old news now, but Mathew Ingram over at CJR does a good job summing it up.
But let’s say the number actually is $4.7 billion (even though there are no ads on Google News). Then what? How many legitimate media companies are there in the United States? 10,000? 100,000? If every single one gets an equal amount of money, that’s equal to $47,000.
However, it wouldn’t be equal. The New York Times would likely get a few million whereas the little, local publishers that we are trying to see saved? You guessed it… They’d get less because they aren’t clicked as much.
There’s this belief that if Google didn’t exist, all of that traffic would finally come back where it belongs: media sites. That isn’t how it works, though. If publishers want an owned audience, they need to do a better job building a relationship with them.
And just so we’re clear, I’m not 100% pro Google. I’m certainly irritated about them starting to take more than just an image and a short snippet. We should push back on that. But to tell them they have to pay us for traffic?
How to build a relationship with your newsletter
Since we are talking about building relationships with your audience, let’s actually take a look at a great piece by Annemarie Dooling, Membership Engagement Product Lead at The Wall Street Journal.
She wrote a great piece, Email Is a Platform, which presents the inbox as more than just a means of sending basic communication. She wrote:
At the Journal, we’ve shifted our thinking to consider the inbox as a platform just like Apple News, Facebook or Instagram. Writing and developing for email is a specialty, just like designing a great email template. And, emails don’t automatically appear in the inbox after sending — as with other platforms, numerous factors influence what is seen. In email, everything from sender address, to volume, to past reputation can impact whether or not someone receives your email and where it lands in the inbox.
This is an incredible way to think about it. The inbox is a platform. If you are putting great things into it, the people that are using their email will appreciate it. That, in turn, will help you build a better relationship.
If we consider the email open to be akin to a unique visit to a web page, then focusing on opportunities to dive further into discussion with the reader is a good way to create habit and loyalty (i.e. return visits).
I had never really thought about it this way, but it’s a great description. It doesn’t have to be conversation, of course, but it’s a good place to start. There are a few ways that I believe you can experiment with this:
Allow users to email you. Some platforms don’t allow for easy “reply to” functionality, so put a CTA in the newsletter with your email. Reply to some of them too. That’ll really get them excited.
If you don’t want to reply to some of them, still allow them to send questions to a newsletter inbox and then cover those questions in a future newsletter. That’s still almost as good as getting a direct reply.
Put polls in your newsletters. Ask them to engage with the poll. Then, when the poll is done, write about the poll results.
Or, you know, do charity Peloton rides like Dan Primack at Axios has been doing with his newsletter. That works too.
We’ve discussed this in the past, but it bears repeating. The best newsletters are those that are treated like products.
I believe that, to do a newsletter well, it’s important to think about it as its own standalone product. Said another way, if your audience could only engage with your newsletter, how would you create it?
This is actually how to think about launching a new media company. A newsletter is a standalone product that can be a good place to start, especially in the niche world. Let’s use an example…
Just to close the loop on the previous section… If Google is sending you its traffic, how can you work to convert that into your audience? I firmly believe it starts with the newsletter, but to ensure the user is really engaged, how can you make your newsletter a must-have product?
Moving right along…
Commerce revenue gets hit by Amazon
According to a report by CNBC, Amazon notified members of its Amazon Associate affiliate program that commission rates were being cut starting today. According to CNBC:
Rates are being cut for a number of affiliate product categories. For example, the affiliate cut from purchases of furniture and home improvement products has fallen from 8% to 3%, while the commission rate for grocery products has slid from 5% to 1%, according to a document obtained by CNBC.
An Amazon spokesperson confirmed to CNBC that the company notified U.S. associates Tuesday of the fee change. The spokesperson declined to comment on whether the decision was a result of the coronavirus pandemic.
It’s interesting that this is happening now, but if there’s one thing publishers can expect, it’s that when we’re down, someone will find a way to kick us.
Max Willens at Digiday wrote a good piece on how this is effecting publishers, starting by giving the history of why there was a shift to commerce:
Back in 2017, after the painful Facebook algorithm changes, which had followed the similarly traumatic pivot to video, publishers large and small declared they’d gotten serious about revenue diversification and being free of platform dependence.
Yet one of the brightest spots of diversification — tapping into affiliate programs with shopping guides and other product recommendation content — was for many publishers just another form of platform dependence.
I’ll be honest… I never viewed the growth in commerce revenue as the saving grace for diversification as some publishers thought for two connected reasons.
First, diversification is about derisking your revenue profile. However, many publishers took the route of working with the largest player in town, earning large amounts of revenue from a single source. How does that derisk the profile?
Second, these affiliate links are just another form of advertising. Instead of charging on a CPM basis, you’re charging on a cost per acquisition basis. That’s still advertising.
There’s nothing wrong with that second point, of course. I’m a big fan of advertising. However, the real problem is that publishers have depended on the big players—Amazon, Walmart, etc.—to do the heavy lifting. With a single click, a publisher can gain access to a huge variety of products.
Now publishers are going to have to go out and cut deals with various brands one-by-one. It’s more of a grind, but if you have an audience that wants a specific category of goods, it could be a good opportunity for you to start building a higher quality, diversified profile of commerce revenue.
Are you already planning this?
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