If paid search is a drug, social referral traffic could be worse

Industry Contributor 19 Aug 2019 - 2 min read

If paid search is a drug, social referral traffic could be worse

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Tags: Facebook, news, ACCC

Less than a week after finally announcing a range of partnerships with local Australian news publishers Facebook signals intent to change the game…again (Wall Street Journal).

Key points

Facebook is again looking to play in the news space attempting to licence content for a news section that is likely to launch later this year
Reportedly outlets pitched by Facebook on its news tab include Disney, ABC News, Wall Street Journal, Dow Jones, the Washington Post and Bloomberg.
News executives say they would be willing to pay as much as $3 million a year to licence entire stories, headlines and previews of articles from news outlets

We know Facebook have built a newsfeed, encouraged news organisations to put their content on the platform, changed their algorithm so that less traffic was seeing that content, realised they couldn’t find a suitable monetisation method and built a second video product called Facebook Watch with no more success commercially.

A few months ago Facebook started thinking a little differently and offered up an alternative model – the provision of funding for the creation of content bespoke for the platform. It’s not a long term proposition but did result in a raft of grants being announced for local Australian media companies who ultimately will give anything a try in an attempt to find a model that does work.

Now, just as all those local media companies start implementing new workflows and reallocating resources, it seems Facebook's talking about launching yet another, different, dedicated news site. Reports suggest media companies will be approached about a news-licensing deal for the platform for a three-year period.

There’s an element of déjà vu here. News outlets will be asked - again - to spend time and money working out how to make this platform work with no guarantees of being able to monetise the content, no control over the algorithm and as a result, no ability to build a strategy that enables conversion audiences reading their content on Facebook into a loyal consumer. As Stu Tucker last week told Mi3, paid search is a drug. Social referral traffic is exactly the same, maybe even worse. It provides you a one off click from a big audience - but they aren’t engaged in your brand and they don’t stick around. Using content to drive traffic to your platform which then bounces back is a race to the bottom.

If Facebook launches another news product and pays for content from news organisations for a three year term it will be so habit forming for the consumer that they will no longer access news outside Facebook. It seems unlikely the license fee paid will be enough to cover the falling revenues news organisations will face unless Facebook engages constructively to build a new sustainable model.

Thankfully the ACCC is also proposing a code that will hopefully support this. Without that, it’s almost guaranteed that some local news outlets would not survive forever compromising the availability of insightful and necessary public discourse.