THE PUBLISHER’S SURVIVAL GUIDE FOR THE POST-FACEBOOK ERA THE END IS NIGH. FACEBOOK IS MAKING MAJOR CHANGES TO ITS NEWS FEED THAT WILL, AMONG OTHER THINGS:

• Deprioritize publisher content • Potentially expose publishers to fraud • Promote friends and family content • Benefit for influencer marketing • Cause ad rates for brands to go up • Remake Facebook

The fallout of this latest change will continue to be felt for months to come. In this special Digiday guide, Digiday editors and reporters walk you through what to expect in the post-Facebook era.

2 TABLE OF CONTENTS

Facebook’s Terrible Year 4

‘We’re Losing Hope’: Facebook Tells Publishers Big Change Is Coming 6 To News Feed

‘Organic Reach On Facebook Is Dead’: Advertisers Expect Price Hikes 7 After Facebook’s Feed Purge

‘A Watershed Moment’: Publishers Find Hope In A More Rational 8 Post-Facebook Media Landscape

Advertisers See Merits Of The Facebook Algorithm Change 10

‘Awesome dynamic’: Influencer marketing gets a boost with Facebook 11 changes

How Facebook’s Feed Purge Could Expose Publishers To Fraud 12

News-Feed Change Raises Questions For The Future Of Facebook 13 Watch

‘He’s not a PR guy’: Adam Mosseri, Facebook’s head of news feed, 15 has become an unlikely good guy to publishers

Digiday+ Research 17 FACEBOOK’S TERRIBLE YEAR BY MAX WILLENS

Facebook had a terrible, horrible, no-good Facebook influenced the 2016 presidential The decline, which mirrors those observed at very bad year in the court of public opinion. election as a “pretty crazy idea.” several other publications, confounds Gessler and compels him to wonder, in writing, Agencies and brands thwacked it for screwing “Our job, our goal is to help people see the whether it might be time to reassess Face- up its video analytics, a problem it had been content that’s going to be the most meaning- book’s role in his distribution strategy. “If 1 of wrestling with since 2016. Publishers grum- ful and interesting to them,” Zuckerberg said. 3 Facebook posts isn’t going to be surfaced bled about declining referral traffic and paltry by the algorithm to a significant degree, Jan. 11, 2017: Facebook announces the payouts on the news feed videos they’d hired that would change how we play the game,” launch of the Facebook Journalism Project, a so many people to make. Gessler wrote on Medium. project designed to offer tools and training But Facebook is used to slings and arrows to journalists, spearhead the development May 17, 2017: Facebook announces, for the from the rest of the media and marketing of news products and promote news literacy, second time in 10 months, that it has changed world. In 2017, members of the mainstream among other things. its algorithm as part of an attempt to limit media, and even some lawmakers, came at the spread of clickbait in its news feed. The “We want to do our part to enable people Facebook with a much more serious charge: changes, which include assessing what do- That the filter bubbles it inflated were threat- to have meaningful conversations, to be informed and to be connected to each other,” main the content comes from and whether the ening the world’s democracies. Suddenly, the headline deliberately withholds information, cloud of ambient goodwill that the social net- Facebook director of product, Fidji Simo, writes in an introductory blog post. are greeted with cautious optimism by media work had floated on throughout its existence and marketing observers. seemed very thin. April 6, 2017: Adam Mosseri, Facebook’s vp of news feed, announces in a blog post “This will be Facebook’s eternal fight,” Nate Instead of being the thing that connected the Elliott, a marketing tech adviser, tells Digiday world, as CEO Mark Zuckerberg has long en- that Facebook is making an attempt to limit the spread of on its platform. The the next day. “Facebook will fight clickbait visioned, Facebook suddenly seemed closer every day for the rest of its existence.” to the digital equivalent of fast food or smok- original post, which will eventually be updat- ing: Unhealthy, unsafe, and frankly, kind of ed five more times over the next five months, Sept. 6, 2017: Facebook acknowledges that uncool. It’s hard to make the case that it was a describes Facebook’s efforts to partner with “approximately $100,000” worth of advertis- true annus horribilis. Facebook posted record third-party fact-checkers, shut down spammy ing was used to boost content connected to earnings of $10.3 billion the third quarter of accounts and promote media literacy through 470 different accounts. That content, accord- 2017, the most recent period reported to the News Integrity Initiative. ing to Facebook’s chief security officer Alex the SEC. But in the 12 months that preceded “We need to work across industries to help Stamos, was designed to sow divisiveness Facebook announcing it would reduce the solve this problem,” Mosseri writes. and tensions around topics including LGBT amount of publisher content it surfaced in rights, race issues and gun rights. its newsfeed, the platform took heat like it’s April 7, 2017: Kurt Gessler, a deputy digital never taken before. Here’s a quick recap. editor at the Chicago Tribune, notes that the Early estimates from social media analysts organic reach of his publication’s posts has estimate that as many as 70 million Americans Nov. 10, 2016: On stage at the Techonomy fallen dramatically, reaching a low it hadn’t were exposed to the ads. conference in San Francisco, Zuckerberg seen all year. dismisses the notion that fake news spread on September 18, 2017: Reports surface 4 that Facebook is actively suppressing posts Oct. 31, 2017: Colin Stretch, Facebook’s published on its platform by Rohingya, an general counsel, testifies before Congress that ethnic minority who were victims of what U.S. as many as 126 million Americans may have Secretary of State Rex Tillerson would later been exposed to Russian-distributed misinfor- describe as an attempted ethnic cleansing by mation through its platform. the Mayan Marese military. Nov. 22, 2017: The day before Thanksgiv- Sept. 21, 2017: Facebook announces it will ing, Facebook announces that it will create a turn 3,000 Facebook ads purchased by Rus- portal that users can use determine whether sians during the 2016 U.S. presidential elec- they clicked on any stories circulated by the tion over to Congress to aid in an investigation Internet Research Agency, the Russian hacking into the role Russian interference played in the team charged with spreading misinformation election’s outcome. during the 2016 U.S. presidential election. The page goes live two days after Christmas, “I don’t want anyone to use our tools to with no announcement. undermine democracy,” Zuckerberg says on Facebook Live. Dec. 18, 2017: Facebook announces it is cracking down on engagement bait. “We will Sept. 27, 2017: Writing on Facebook, Zuck- demote posts that go against one of our key erberg expresses regret for the comments News Feed values – authenticity,” a blog post made the previous November, hours after reads. President Donald Trump tweets that Facebook is “anti-Trump.” Jan. 4, 2018: An audience development executive tells Digiday that Facebook will “Calling that ‘crazy’ was dismissive and I “completely reprioritize” publishers in 2018. regret it,” Zuckerberg writes. Jan. 11, 2018: Digiday breaks the story that Oct. 24, 2017: Facebook announces the Facebook will drastically reduce the amount of launch of News Feed Publisher Guidelines, publisher content it shows in its news feed. a primer on how Facebook determines what content to share with its users, as well as a se- ries of do’s and don’ts on the kinds of content it expects publishers to distribute.

5 ‘WE’RE LOSING HOPE’: FACEBOOK TELLS PUBLISHERS BIG CHANGE IS COMING TO NEWS FEED BY LUCIA MOSES

The end is nigh. Facebook is planning a major Facebook has been taking steps in this direc- despite Facebook saying it didn’t expect to change to its news feed, that will decisively tion for some time, making tweaks to amplify roll out the test further. Founder Mark Zuck- favor user content and effectively deprioritize users’ content while weeding out spam and erberg has publicly acknowledged problems publishers’ content, according to three pub- clickbait. Publishers who have been briefed wrought by technology, including misuse and lishers that have been briefed by the platform by Facebook believe this latest move would abuse of the platform, which has amplified ahead of the move. cause a more dramatic decline in publishers’ the spread of hate-filled content and misin- ability to reach audiences in the news feed, formation and has been used to attempt to Those who have been briefed say that under though. Although Facebook isn’t the referral influence voters in the presidential election. the new test, Facebook told them it will favor source it once was for publishers, it remains Facebook has made a number of moves to content that’s shared by users or otherwise a major source of referral traffic for them, only stamp out fake news, but their results have actively engaged with. The thinking goes, recently surpassed by Google. been mixed. according to those briefed, that Facebook be- lieves prioritizing content that’s acted on will “They’re breaking the bad news one by one,” Another big downgrade in the news feed reduce the occurrence of fake and offensive said one person who was briefed by Face- won’t necessarily come as a shock to publish- content in the news feed. book on the changes, adding that along with ers, but it conflicts sharply with Facebook’s the user content change, Facebook also was public stance about how it’s trying to help Publishers still have many questions about the prioritizing its scripted Watch shows, its major publishers. That was the stated aim of the impending news feed change. Facebook told video initiative, as it tries to grab TV ad dollars. year-old Facebook Journalism Project, which them that content from reputable publishers “My impression is they’re going to move away Facebook launched to much fanfare about will also be surfaced. It didn’t specify how it from what we think of as Facebook videos.” helping support publishers’ business models. would define “reputable publisher” or how their traffic would be impacted, though. The As Facebook sends them less traffic, pub- worry for publishers is that such an approach lishers have been diversifying away from will have the unintended consequence of Facebook and fishing for traffic on other hurting high-quality content because a lot of platforms such as Google, Apple News and legitimate news articles, while they may get . Another downgrade in the news read, tend not to get shared or commented feed is likely to accelerate publishers’ shift in on. resources away from Facebook. Even some of Facebook’s strongest publisher boosters A Facebook rep wouldn’t confirm (or deny) express mounting frustration. “We’re losing these changes on the record but later ad- hope,” said one. dressed the plans in a blog post and to The New York Times. Facebook’s head of news Last year, Facebook tested a newsless news partnerships Campbell Brown informed pub- feed called the Explore Feed in six countries lishers of the changes in an email, in which outside the U.S., causing publishers to freak she acknowledged that the changes will “take out and spurring speculation that Facebook some time to figure out.” would replicate that approach in the U.S., 6 ‘ORGANIC REACH ON FACE- BOOK IS DEAD’ ADVERTISERS EXPECT PRICE HIKES AFTER FACEBOOK’S FEED PURGE BY SEB JOSEPH

If any brands haven’t already shifted their roles of traditional social media marketers It seems like Facebook is returning to being Facebook strategy entirely to paid, then they encapsulated in the news feed update, he a social network rather than a news organiza- may have to soon. added. Not only “do you have to understand tion. In the enduring debate on Facebook’s brand and content,” marketers also require impact on post-truth politics, the social The social network is changing its news feed a key understanding of how to plan media network has continually denied it is a media to prioritize what friends and family share, campaigns on social. company. This algorithm change looks like a which will reduce the amount of content that step to confirm that, returning to the days of users see from brands and publishers. For many brands, the bigger challenge will wall posts and status updates. emerge from Facebook’s parallel war on Agencies believe brands will have to spend low-quality brand content, with the platform’s In terms of how this change will be pitched more on paid ads on Facebook in order to December announcement that it was depri- to brands, Edie Greaves, senior strategist at get the same number of views — further lining oritizing “engagement bait.” While agencies digital agency Possible, believes there will Facebook’s pockets. This is just the “final nail accept it will be difficult for most brands to be be a continuation of the stance from both in the existing coffin” of organic reach, said consistently “meaningful” — particularly when Facebook and that brands are “part- Doug Baker, director of strategic services at competing with treasured moments with ners,” not “advertisers.” digital agency AnalogFolk. friends and family — there is an opportunity Greaves believes Facebook will begin offering Facebook’s ad rates have risen by 35 percent to drive higher creative standards. “Those brands that look to add value to people’s lives brands new ways to communicate with in the last quarter alone. Agencies have people, but they will have to up their spend noticed a slow decline in organic reach on and invest in high-quality, original content will have the most sustained success,” Baker said. to get into the news feed. Perhaps Facebook Facebook for some time. Digital agency will follow in the footsteps of networks like Jellyfish said organic reach on Facebook is The risk could come once brands find WeChat that heavily restrict the role brands already around 2 percent across most Euro- loopholes in the algorithm. “I can see brands play in the news feed but give more free reign pean clients. John Hegeman, Facebook’s vp that tap into authentic conversations with to advertisers within messaging apps, she of product management, said in a statement a credible point of view will do well,” said added. on the news feed update that advertising on Chris Pearce, the CEO at digital agency TMW the social network will be “unaffected,” but Unlimited, “whereas others will be tempted to agencies disagree. be increasingly controversial or polarizing in order to stimulate conversation.” Far too many brands pump bland broadcast comms into mass-reach media buys on Face- Another risk is if posts are boosted. Ad book and spam millions of news feeds, said rankings on Facebook are not affected by the Mobbie Nazir, chief strategy officer at agency news feed’s overhaul. But as Kevin Chan, the We Are Social. Now, there will be far more integrated performance director at iProspect, onus on planning Facebook campaigns that pointed out, if a boosted page post is getting go deeper into media planning, campaign less organic reach due to these changes, then execution and optimization, and reporting on that might impact the auction. Engagement is various metrics, she added. a “very small” part of ad ranking on the social network, which relies on many other data “We all need to become better media points to determine what ads people see to planners, said Greg Allum, head of social at ensure relevancy and value, he said. Jellyfish. There’s a “fundamental shift” in the 7 ‘A WATERSHED MOMENT’: PUBLISHERS FIND HOPE IN A MORE RATIONAL POST-FACEBOOK MEDIA LANDSCAPE BY LUCIA MOSES

The warnings have been years in coming. Ever Justin Smith, CEO of Bloomberg Media, has out of business in three years, now it will be 12 since Facebook surpassed Google as the top warned publishers of platform dependency months.” Said another publisher CEO: “Any- traffic referral source in 2015, publishers have for the past two years. The move, in his view, one who listened to Facebook and optimized seen Facebook send less and less traffic to is fundamentally an “admission of vulnerabil- to reach in the feed is in tough shape.” their sites as it’s made tweak after tweak to its ity” by Facebook. While many will feel short- formula to favor users’ posts on over publish- term pain, the lasting impact of Facebook Forward-thinking publishers have been ers’ and brands’ posts. occupying a shrunken role in media is for a moving toward focusing on content that healthier industry that rewards loyalty, strong engenders loyalty and hopefully subscription Facebook dropped a bomb recently that it brands and sound business models. revenue. They’re also pushing to diversify would change the news feed to favor posts their traffic sources so they’re less dependent from friends and acknowledged that publish- “This move can be interpreted as one of the on Facebook, still the second biggest referrer ers would take a hit. Facebook is in the midst first cracks in the facade of the duopoly,” he of traffic just after Google. There are still many of an existential crisis, with the platform under said. “This development is very good for all of unanswered questions about what the chang- fire for offensive content polluting the feed media in the long run.” es will mean for different types of publishers and enabling the spread of fake news and and content, but it’s safe to say this diversifi- Russian meddling in the election. With Mark In the short term, of course, there is pain. But cation shift will accelerate as publishers move Zuckerberg talking about none less than his that pain will not be evenly distributed. from shock and dismay to asking what tactical legacy being at stake, everything signaled things they can do to insulate themselves from “This one’s really going to capture the atten- this was more than just another algorithm an increasingly newsless news feed. tion of publishers in the sense of, you can’t change but a fundamental shift away from build a business around the Facebook algo- promoting news posts, which was never core Many have adopted Facebook Groups as a rithm because you don’t know when it’s going to Facebook’s mission of connecting every way to deepen their connections with readers to change,” said David Chavern, president man, woman and child in the world in the in smaller numbers but with stronger engage- and CEO of the News Media Alliance, a trade first place. This decision, which sent tremors ment, for example. group representing newspapers from local through media companies, was not your outlets all the way up to Dow Jones and The “It’s time for us as an industry to look more average algorithmic tweak. New York Times. closely at the other ways to grow audiences,” “It’s all fallout from the election,” one publish said Matt Karolian, who heads social media - For publishers that have become too reliant er said, speaking anonymously to avoid irking for Boston Globe Media. “Does it make sense on a business model that relied on amassing to maintain all the pages you have now? I Facebook. “They’re tired of dealing with it big audiences with viral but undifferentiated and it’s not worth the effort internally.” don’t think you should be spending a lot of content, this newest news feed change is a time on improving your Facebook page 10 It also might mark the beginning of the end reckoning. A lot of publishers have audience percent when I don’t think that’s going to be a of the Facebook media era, where a social scale but little else to differentiate them- growth effort.” network became a chokehold on an indus- selves. What’s more, these publishers weren’t try, crowning new publishing upstarts who making much money off that scale — it was, in Boston Globe Media has been preparing itself mastered feeding the Facebook beast and left many cases, empty calories. for this day, shifting its focus from Facebook many publishers wondering what shoe would pages to other parts of Facebook including “Traffic chasers’ fall from grace will be severely drop next as Facebook kept changing its groups, that don’t have as large an overall au- expedited,” said Rich Antoniello, CEO of priorities from clicky stories to short videos to dience but have significantly higher engage- Complex Networks. “If they were going to be live videos to long-form programming. ment, Karolian said. 8 Even hard news, which many predict will take a watershed moment in terms of publishers a hit in the new news feed because users being much more cynical about their ability to don’t typically comment or share it, can still build a business on Facebook.” find airtime on Facebook if it’s framed in terms of how it impacts people’s lives, which can And for Facebook, the test will be whether then prompt people to share or comment on replacing news with more baby photos and it, he argues. status updates will help its business, which is predicated on obsessive user engagement. “Publishers will take all the energies and re- source into a low-return strategy and put those “The loser here is Facebook,” Bloomberg’s into different areas,” especially those driving Smith said. “I can’t imagine that taking off all direct relationships, said Smith. this quality news content and replacing it with personal connections experiences will result In the coming weeks, audience development in deeper engagement.” pros will be closely monitoring their traffic data to see if and how Facebook’s news feed change impacts them before reacting. Some will doubtless continue the Facebook tap dance to see if they can alter their strategy to give Facebook what it wants. Jason Stein, CEO of Cycle, predicts “a drawn-out period of experimentation.”

Still, there’s a growing sense that publishers are wanting out. It’s hard to find a publisher that’s happy with the money they’re making from all the content they put on Facebook’s platform. In a sense, this is just the latest in a string of half-steps and unkept promises by Facebook, whether it’s the ever-changing video strategy to fast-loading Instant Articles that haven’t provided enough monetization. For many publishers, the good will has run out. They’ll still post to Facebook, but have given up waiting for Facebook to become a significant revenue driver.

“If it’s a piece of the marketing puzzle, you model that very differently,” said Jason Kint, CEO of publisher trade group Digital Content Next. “You look at the costs and make sure you can justify it as a marketing expense.”

Facebook is a regulator of the news business without accountability, Chavern said. “It is

9 ADVERTISERS SEE MERITS OF THE FACEBOOK ALGORITHM CHANGE BY YUYU CHEN

While publishers are panicked by the loss of Face- Buors thinks brands can also surprise and delight book’s referral traffic, media buyers think brands will offline — a pizzeria can give each consumer a free be relatively unscathed by the algorithm change. soda, for instance — to encourage people to share their experience online. Or in a Facebook post, a For starters, brands have treated Facebook like a brand can ask questions like, “What feature do you pay-to-play platform for a long time, and Facebook think we need to add to our product?” to generate said the new algorithm won’t affect paid posts on interaction and debate, he said. the platform, although CPM rates for Facebook ads may eventually increase, according to agency It’s unclear if Facebook’s new algorithm will deprior- executives. However, they think the new Facebook itize Facebook Live. If it doesn’t, brands could use algorithm will filter out clickbait-style promotions it to get into the news feed, Buors and Richter said. (“Like our product if you think this dog is cute”), (Facebook was not available to comment at press which will pressure brands to create more meaning- time.) ful content over the long term. Agency executives say it’s too early to determine Brands already know that they get little visibility from the effect Facebook’s algorithm change will have on unpaid content on Facebook, said Brittany Richter, paid media. But James Douglas, svp and executive head of social media for iProspect. Most brand con- director of social media for Society, said CPM and tent on Facebook is in the form of posts that don’t cost-per-click rates for Facebook ads will likely in- necessarily show up on a company page and are crease because inventory on the platform will prob- distributed through ad filters, and ad ranking won’t ably decline if publishers take a hit. Facebook CPMs change under the new algorithm. vary based on ad formats and targeting parameters, but they can range from $1 to $15, according to Organic content doesn’t work as well as paid Douglas. posts on Facebook, but Mike Dossett, vp of digital strategy for RPA, thinks many brands still use it to “We will keep an eye on Instagram if we need to communicate with their fans. “Losses here could im- move clients’ [Facebook] ad budget around,” said pact if and how brands continue to invest in organic, Douglas. “We will also look at other alternatives like non-boosted content within their overall content Snapchat.” strategy,” he said.

Steve Buors, CEO and co-founder for digital market- ing agency Reshift Media, believes Facebook’s new algorithm will push brands to think less about what the company’s point of view and focus more on what their audience cares about, which will create opportunities for advertisers.

“Facebook is forcing people to create quality and relevant content,” said Buors. “Social was a means to one-on-one communications, but over time, people were becoming lazy. Those changes won’t impact brands that purchase quality content, but will hit those who chase viral, meme-like posts.”

10 ‘AWESOME DYNAMIC’: INFLUENCER MARKETING GETS A BOOST WITH FACEBOOK CHANGES BY SHAREEN PATHAK

The Facebook algorithm change that has “It’s now this awesome dynamic where brands already made that a fundamental filter for their publishers panicking may be good news for a show up less in the feed,” said Hansell, “and creative will absolutely need to do so — not certain group inside the industry: influencers what’s showing up is content coming from only to appease the algorithms, but to ensure and their followers. public-figure pages, friends and family.” that they have a natural, authentic role in what could be the newly characterized Facebook As Facebook decides to favor content from The “handshakes” — how Facebook shows experience.” friends and family over posts from (certain) customers that content was created by publishers, agency buyers are telling clients to influencers for brands — in this case wouldn’t Justin Moore, founder at Trending Family, sees focus more on influencer content. punish the brands. Instead, brands might one potential glitch, though. Facebook last get some overflow likes from people clicking year pushed many influencers on both Face- “By prioritizing [user-generated content], through to the brand page, too. book and Instagram to convert to “business” Facebook is giving brands an opportunity pages. (Most were previously categorized to double down on influencers that maintain Boosting influencer content could be great for as “public figures.”) There wasn’t any access authentic relationships with their audiences,” Facebook, which has long asked brands and to full analytics on Instagram without being said Corey Martin, who heads influencer agencies to create a paid strategy for influenc- a business profile, and for larger influencers, marketing at 360i. er content. By doing that, it can get more ad brand campaigns required whitelisting and dollars while getting credit for “cleaning up paid media access to an influencer handle. Martin said he takes Facebook’s explanation the feed.” of the news-feed change at face value — that And under the new algorithm, business pages would be punished. it wants to clean up a cluttered news feed and Noah Mallin, managing partner and head potentially cut down on fake news. Facebook of experience, content and sponsorship at “At at first blush, it does not seem like good is telling agencies they won’t see any major Wavemaker, said he expects Facebook to news,” said blogger Grace Atwood, who has changes for paid promotion, although ad explore ways to make influencers a bigger a business profile. rates might increase. part of the platform. While Facebook has plenty of influencer activity, it’s not as popular But influencer marketing seems poised to with influencers as Instagram or YouTube. But benefit the most from the change: When Mallin said that the same brand-safety issues done on its own, influencer content essentially that have impacted news also exist around mimics content from friends and family. influencers. “What are the safeguards around “I would tell clients to do more influencer that?” content,” said Martin. “Facebook has more Organically speaking, influencers rank better control over influencers and they have less than brands in the news feed, and depriori- control over media partners. I don’t think tizing news can be favorable for influencers. it’ll negatively impact buying ads within the And the new algorithm is expected to mostly Facebook environment.” punish clickbait-style language, which means brands will need to make meaningful and Marco Hansell, CEO at Speakr, said his com- “authentic” content, which creates room for pany found that influencer content performs more influencer partnerships. between five and 10 times better in terms of engagement when an influencer rather than In a note sent to its clients this week, agency a brand posts it. And if Facebook is already RPA said as much: “With this new directive removing brands from the feed, it increases at the platform level of making Facebook a engagement among accounts with organic place for facilitating and rewarding meaning- engagement. ful social connections, brands who haven’t 11 HOW FACEBOOK’S FEED PURGE COULD EXPOSE PUBLISHERS TO FRAUD BY ROSS BENES

One unintended consequence of Facebook’s feed Jonathan Mendez, board member of ad tech firm purge is that it may make publishers more vulnerable Yieldbot, said that when Facebook and Google to ad fraud. change their algorithms to reduce organic traffic, a swath of publishers reacts by purchasing cheap With Facebook favoring user content and depriori- clicks from traffic brokers. Getting industrywide data tizing publishers’ posts in its news feed, publishers on this effect is difficult because publishers typically will turn to traffic resellers to make up for the clicks don’t publicly admit to buying traffic, even though they’re losing from Facebook, said independent ad the practice is common, and getting data from the fraud consultant Augustine Fou. The traffic brokers traffic brokers requires sleuthing. found through online forums and LinkedIn tend to specialize in low-cost traffic that’s of low quality, Facebook at least has real human users, which can’t though. More than 90 percent of the sites that be said of many traffic sellers. If publishers turn to DoubleVerify flags for having high levels of fraud traffic sellers as a shortcut to replace their declining purchase clicks from traffic resellers. referrals from Facebook, then they’ll likely end up with a high amount of fraud that drives down their An exec at a digital lifestyle publisher, speaking on CPMs, Mendez said. the condition of anonymity, anticipated buying more traffic to make up what his site loses from organic Of course, publishers aren’t blameless in this scenar- visits. This publisher has people devoted to making io. Nobody forced publishers to become depen- money on paid Facebook traffic through arbitrage dent on Facebook, just as nobody is going to force and has gotten the cost down to a few cents a click. publishers to buy cheap clicks when Facebook rips the rug out from underneath them. But platform-de- Publishers that don’t already focus on buying pendent publishers that are already feeling strained Facebook traffic won’t be able to afford those prices are likely to look for a new source of cheap clicks, at scale, so they’ll likely turn to traffic sellers whose according to an ad fraud exec, speaking anony- costs per click are under a cent. mously.

Publishers that pay celebrities like George Takei and “If the publishers are running light on traffic, they will Lil Wayne to promote their content on Facebook take steps to buy the traffic, and so they are contrib- are also likely to find themselves in a precarious uting to fraud,” the ad fraud source said. “In their situation. Facebook has told publishers that people desperation, they may make the entire ecosystem will see less content from celebrities in their news worse.” feed. Facebook did not reply to an interview request for this story.

“Publishers that rely on celebrities will scramble and turn to lower-tier traffic markets,” the publisher exec said. “Those that don’t know how to do proper audience targeting [with paid Facebook traffic] will get crushed.” 12 NEWS-FEED CHANGE RAISES QUESTIONS FOR THE FUTURE OF FACEBOOK WATCH BY SAHIL PATEL

With algorithmic changes underway for Yet there is some hope that Facebook won’t Watch at this point in time,” said the second Facebook’s news feed, which will devalue completely cut off Watch programming from Watch partner. “They wouldn’t have hired most media content in favor of posts shared the news feed. the executives that they have. I don’t think by users, the future of Facebook Watch will be Facebook is going to be fickle about their tied to how well Facebook and video makers “Facebook has made it clear that they want long-term play in Watch.” can get people to click over to the Watch to reward intentional viewing and deprioritize section to view shows. accidental or passive viewing,” said a second The hope for Facebook and its media part- Watch partner. “The whole philosophy ners is that Facebook can develop another Right now, the vast majority of Watch viewing behind Watch is intentional viewing: It’s more YouTube-esque platform where users actively happens inside the news feed, according to premium, well-produced video that’s meant go to watch videos. Under this scenario, four media companies that have sold shows to elicit a stronger reaction and repeated Facebook would likely spin off Watch into its to Facebook. When users follow a particular viewership from Facebook’s audience.” own app — similar to what the company did show, new episodes are then seeded inside with Facebook Messenger once it hit a critical the news feed like content from any other Other Watch partners said Facebook has told mass. Facebook already has a dedicated Facebook page that a user might follow. them it will favor videos and shows that users video app for connected TVs, but it’s easy to choose to watch, with the thinking that this imagine a scenario where that app is available “No one’s going to the Watch tab; no one’s would make them more likely to show up across platforms in the form of a spun-off going to your Facebook page, either,” said a in the news feed. Facebook already favors Watch app. publishing executive. “And that’s the issue; Watch shows that have repeat viewership, if our videos are not going to show up in the which indicates people are choosing to But that’s merely fantasy until Facebook news feed, how are we going to get people watch the show. That’s a type of engagement can convince its users that it, too, is a video to go over to Watch?” that Facebook would support, along with platform. programming that viewers interact with in Facebook has been experimenting with a few some fashion. (Facebook is also testing a new “At the end of the day, Watch has yet to tools designed to get people to go to Watch. feature called Watch Party, which allows mul- become a thing,” said an executive at a TV For instance, when a user follows a show, they tiple users to watch and interact with video at and digital media giant. “There’s a lot of work will see a red notification when a new episode the same time.) that needs to be done before we can tell you is available. Shows can also be featured at the whether we’re bearish or bullish on it.” top of the production company’s or media Another view is that whatever happens to the brand’s Facebook page, which usually have news feed, Facebook has committed enough One point made by several Watch partners is larger followings than Watch pages dedicated resources to Watch and video in general that how little Facebook’s algorithm change will to individual shows. it’s not likely to kill it just five months after affect how much they’re making from their launching, said one Watch partner. This is Watch shows. There are two primary ways But both of these tools have been available even after what many consider to be a misfire for video makers to earn money on Watch: since Watch launched in August, and neither by Facebook to kick-start Watch with cheap getting Facebook or an advertiser to fund has helped create a habit among most and unscripted short-form shows. the show. In both instances, creators can turn Facebook users to go to Watch for the latest a profit off of the production margin — and programming, multiple Watch partners said. “There is really no logic to them shuttering in Facebook’s case, if the show makes more 13 money from pre-roll and mid-roll ad revenue previously was able to sell sponsorship for one a long leash after its decision to nuke the news than it cost to produce, creators get 55 cents of its Facebook-funded Watch shows but was feed, the video creators making shows for of every additional dollar made. rebuffed by Facebook. Watch will arrive at a similar decision at some point. Privately, some Watch partners are will- Facebook’s ad program has not driven any “When someone makes that kind of pivot or ing to acknowledge that making Watch shows meaningful revenue for most media partners, acknowledgement, then it’s easier for us to is driven by Facebook’s willingness to pay for though, which means the only dollars that vid- lean in because they eliminated that friction,” it — not because they’re certain Watch is the eo creators see is from the margin they bake said the TV and digital media executive. next big thing in video. into a show’s budget. Some Watch partners “Think about where Hulu used to be and also have the opportunity to make additional where it is today: Hulu used to be about “Honestly, I’m very down on it,” said the first money by redistributing the show on other [selling] Hulu [ad inventory] first; then they Facebook Watch partner. “I just don’t see platforms after Facebook’s exclusivity runs out, realized they probably have a greater chance people on Facebook caring about long-form but even here, Facebook is pursuing stricter at success by giving media companies more shows, and I don’t know how many people deal terms that either give it longer periods of flexibility to monetize their shows.” anyone can convince to do that [on Face- exclusivity or total ownership of the show. book].” The common refrain among most media exec- There is some hope on the horizon: Face- utives is that Facebook has the money and the book is warming to the idea of letting media power to do anything it sets its mind to. But partners sell their own ad inventory, including it’s set its mind to video for several years now, that available inside Watch programming — and the company hasn’t had much to show something many partners have pressured outside of a few viral video clips and the LaVar Facebook to do for months. This would allow Ball-starring “Ball in the Family,” which many media companies to sell broader, multiplat- industry sources consider to be the sole hit form ad packages that could include sponsor- out of Facebook’s initial crop of funded shows. ships and ad slots inside Watch programming, according to one Watch publisher, which If publishers are less willing to give Facebook

14 PUBLISHING ON FACEBOOK ‘HE’S NOT A PR GUY’: ADAM MOSSERI, FACEBOOK’S HEAD OF NEWS FEED, HAS BECOME AN UNLIKELY GOOD GUY TO PUBLISHERS BY LUCIA MOSES

Publishers that find themselves at the end of by a partnerships team they doubt has lots of seen Mosseri in person at a handful of events. their rope with Facebook have found favor sway at headquarters. “He’s calm, steady, comes across with with one person there: Adam Mosseri. authority and knowledge and has incredible “Adam is willing to come on our turf and credibility because he is in charge of the news Mosseri, 35, has been at Facebook about 10 engage us where we are,” said Ben Smith, ed- feed. It’s a fine line between acknowledging years, serving as product vp for the last two. itor-in-chief of . “He’s not a PR guy.” there are issues but without taking too much His main responsibility is the news feed, the of the blame. And he manages to do that.” core of most users’ experience on Facebook Mosseri’s goodwill tour comes at a time when and therefore the main distribution artery for publishers feel they have few allies at the plat- At the International Journalism Festival in publisher content. The spotlight has been form, from Zuckerberg on down. Campbell Perugia, Italy, last year, he surprised listeners on the news feed in recent months, first with Brown, Facebook’s head of news partner- by speaking openly about changes Facebook Facebook acknowledging it was testing a ships, was brought on ostensibly to improve was thinking about making to the news feed. newsless news feed in six countries outside relationships with news outlets, but many feel “He said, ‘I’m sharing this with great reluc- the U.S., then announcing earlier this month the results of her main initiative, the Facebook tance because we don’t usually talk about that it would deprioritize news content in Journalism Project, have been mixed and see things we’re thinking about because they the feed and use user surveys to help decide her as sticking to the Facebook public rela- might shift course,’” Schiller said. “I appreciat- which news sources are legitimate. tions script. Dan Rose, vp of partnerships, has ed that he said that, as opposed to, ‘You’ll be a big constituency, of which publishers are the first to know.’ It was very unplatform-like.” Those moves have thrust Mosseri into the just one small part. (Facebook wouldn’t make spotlight, as he’s written blog posts about Mosseri available for comment for this article.) Facebook, along with other tech companies, the changes, given interviews to the likes of has been blasted for its lack of transparency, Wired and others and gone back and forth “[Mosseri is] the only Facebook exec anybody especially when it comes to how it decides with journalists and publishing folk on Twitter, can stand talking to because he seems not to how it orders the news feed, but Mosseri of- where his candor and willingness to engage lie all the time,” fumed a publishing exec. fers a sharp contrast. On Twitter, his exchang- have won him fans in the publishing crowd. Mosseri has gained visibility over the past es function to explain Facebook’s thinking to the journalist, engineering and audience de- On Twitter, a platform known for bringing year, showing up at publisher events and newsrooms as part of the Facebook Journal- velopment world, which he can do because out the worst in people (and not his own he comes from a position of credibility. company’s platform), Mosseri comes off as ism Project. He’s known as not just a good exceedingly polite, responsive to problems listener, but someone with real pull within “I’ve tweeted Adam with specific problems, and self-deprecating. Mosseri reports to Chris Facebook and who is willing to go beyond questions about major changes to news-feed Cox, Facebook’s chief product officer, who’s common Facebook talking points. rankings and even looped him into prob- just one rung down from CEO Mark Zucker - “He has a stunning capacity to not come lems I’ve seen other people on my timeline berg and has hundreds of people under him across as defensive at all,” said Vivian Schiller, raising,” said Ziad Ramley, a digital news just on the news-feed team. That matters to a former NPR and Twitter news exec who’s consultant and former social lead at Al Jazeera publishers, which are used to being handled English. “Ninety percent of the time, he 15 responds quickly, even on weekends. If you’ve him. At this level of problem and the concerns followed him on Twitter for a significant length we expressed, it would have been expected of time, you’ll regularly see him responding to he would call or email. His tweets were simply tagged posts or big articles about Facebook replies to comments along with the rest of the in the media. Sometimes, his responses feel public. I’m not criticizing him personally, just like official Facebook PR, but for the most part, saying when something is a priority, it’s a prior- they seem genuine. I don’t know other Face- ity. This hasn’t been.” book people who are so senior and so open to having real, public discussions with critics.”

“He seems to be the only person functioning in this semiofficial capacity, like a back-end communication source for Facebook,” said Aram Zucker-Scharff, ad engineering direc- tor at . “He’s an ideal ambassador. He’s in the company but not too high up; he understands the core problem; he seems to be on top of the editorial and engineering concerns. If there’s one thing I’d criticize is, and there are limitations on Twitter, but I wish there could be more detail on the whys.”

If there are other criticisms of Mosseri, it’s that if he doesn’t break promises, he also doesn’t solve publishers’ problems. And that’s no sur- prise: Facebook has clearly decided the news feed’s reason for being is to promote so-called meaningful user interaction, not solve publish- ers’ distribution and monetization needs.

“I’ve never met him. He’s never called or emailed me,” said Jason Kint, CEO of Dig- ital Content Next, a trade group for digital publishers. “That’s all you need to know about

16 At the Digiday Publishing Summit, we surveyed 49 publisher executives on their companies’s approaches to making money in the era of the duopoly. Here are their responses.

17 Thank you for downloading this guide. In the spirit of the post-Facebook era, we’d like to offer you a guest pass to the Digiday+ Slack channel, where you can chat with others dealing with this new world and find out how others in the industry are thinking. Look for a link in your email to the channel, normally open exclu- sively to Digiday+ members.

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