The old thinking: social media channels like Facebook and Twitter will be the death knell of traditional publishers.
The new thinking: they need each other desperately. And just maybe, they can actually generate a worthwhile amount of ad dollars and audience engagement through mutual benefit.
That was the consensus at the opening panel of the final day of the 4A's Transformation: The Idea Effect conference in New Orleans, which also delivered a bit of news, by way of Rob Norman, Chief Digital Officer, GroupM. Norman introduced Michael Zimbalist, the NYTCo's VP, research & development operations, by asking, "So, you're in the ad tech business now?"
Well, not quite, but The NYTCo did just add Condé Nast's 26 magazine and digital properties, including Vanity Fair, GQ, Epicurious and others, along with Time Inc.'s People Digital, Forbes and Advertising Age to its Ricochet contextual advertising system. (See today's release.)
Nearly a year ago, The NYTCo unveiled Ricochet as a tool to help the newspaper publisher meet the challenges and opportunities created by the rise of social media. Instead of fighting the tide, the NYTCo was going to use the immediacy and breadth of social media's reach and engagement to help marketers share the ride that the company's content would take through users' sharing.
Ricochet was developed by the NYTCo's in-house R&D team as a self-serve contextual ad tool that lets marketers pick specific content from the NYTimes.com -- and at the time, Boston Globe’s sites and About.com, since divested -- and attach an ad to it from outside those NYTCo domains.
For example, if a company finds a NYTimes.com piece -- or in this case, a Forbes post -- and places it on its official blog, on its Facebook page or tweets about it, the marketer can place an ad on that linked item, even if another marketer has an ad on the original NYTimes.com or any of its partners' pages. Ricochet was joined by a social media monitoring product called Cascade, a visualization tool that lets an advertiser see how an article was shared across a specific period of time. It’s meant to appeal to advertisers who want to identify “key influencers” across Twitter and either reach out directly to them or at least help them better understand how content that's relevant to their business and audience is being shared and discussed.
"Social has been woven into the fabric of what we do across the enterprise," Zimbalist said on the panel this morning, which was moderated by Norman. "If Willie Sutton robbed banks because that's where the money was, then we use social because that's where the audience is. We use each of the social platforms differently. We've done Hangouts on Google+. We use Facebook as a publishing platform. Twitter is an audience engagement platform."
At the same time, Zimbalist defended the role of professional journalists and content producers, saying, "Human editorial judgment will trump everything." Still, the power of social media as a distribution mechanism and as the ultimate arbiter of "what is important and relevant" cannot be ignored.
For example, Zimbalist noted that social referrals still represents a small segment of inbound traffic, after readers who go direct to the homepage or use search, but it's the fastest growing area.
Incidentally, Zimbalist gave a shout out to Condé Nast's social news reader Reddit is the NYT's number three social referrer, after Facebook and Twitter.
It's not clear how much ad revenue is being produced by Ricochet or what the eventual upside will be. That said, many publishers have been wary of the practically infinite amount of ad inventory that social media channels end up creating and the dilution of CPMs that tend to result from over-supply. And since social media isn't simply going to wither in the face of paywalls or other attempts to recreate the scarcity of print, the feeling among panelists today at the 4A's was that publishers must not only make peace with social media, but figure out how to become one with it.
For example, marketers have embraced the "newsroom model" themselves when it comes to using social media as a commercial vehicle. And so newsmakers must return the favor.
Also on the panel was James Gross, the former Federated Media executive who co-founded social media marketing company Percolate. He noted Red Bull creates 100-200 tweets a day. As more companies loosen the controls over their social media activities -- no company can afford the time and expense of taking two days to vet a tweet -- publishers will have to find ways to collaborate and assist these marketers or risk losing out.
"There was an argument in 2010 that Facebook would own social, as if it were a zero sum game," Gross said. "There are other platforms. Tumblr is important for creative outlet, for more privacy. Pinterest is creative. Google+ shows that Google will be relevant there because of their size and products. LinkedIn has made the move to being a content platform."
Adam Bain, president of global revenue for Twitter, spoke about how the company has positioned itself at the intersection of publishing and advertising. "The retweet is an interesting act to consider," he said. "I'm sure no one has taken a screen shot of a homepage takeover and said to their followers and friends, 'You've got to check this out.' But that's the kind of thing that happens every day on Twitter. The most retweeted item last year came from a marketer."
And Blake Chandlee, VP Global Partnerships for Facebook, also spoke about the ways social media is disrupting the established -- and widely despised -- idea of "the click" as the currency of online ad success.
"There is zero correlation between a click and how the marketing message ultimately performs offline," Chandlee said. "About 18 months ago, we looked at how to drive boxes off the shelves. We spent a lot of time with Nielsen and Datalogix, and aggregated studies about the impact of Facebook."
He said the Samsung Galaxy S3 smartphone launches was one of the biggest ever on Facebook, and the three-week ad campaign it worked on reached 105 million households. According to Chandlee, the people exposed to the ad on Facebook were 85% more likely to buy the device than those who were not.