Navigating Risk in an AI-Powered Media Landscape

Written by:
Arvid Tchivzhel, SVP of Product
Joel Medford, Data Analyst and Team Lead at Mather Economics

 

Publishers prioritize growing and monetizing their audiences, but achieving this consistently remains challenging. Dependence on platforms adds risks and uncertainties. 

Mather Economics has analyzed data from over 200 brands using their Listener™ platform. They found a 13% year-over-year decline in page views among publishers.

 

The chart above represents a subset of 60 publishers with consistent data over 13 months. 

 

While direct and search referrer page views generally follow the overall trend (search traffic recovers after a dip in summer 2023 with only 1% decline year-over-year) page views from social platforms show a significant decline, dropping 40% year-over-year. Proportionally, social media platforms account for 18.6% of visits in 2024, declining from 25% in 2023 for the set of publishers analyzed in each period.  The trends reflect publisher disinvestment in social platforms and Meta pivoting away from local news as a part of its engagement strategy.  

A Fair Bargain? 

Much has been written about the relationship between publishers and platforms. A 2019 report by INMA highlights key findings that remain true in 2024. Two relevant takeaways are: 

  1. Publishers should continue to invest in their own value proposition and prioritize their own digital networks to build and monetize their audience.  
  2. Publishers should engage with platforms, though remain cautious about overinvestment of resources and expectations 

The bargain between publishers and platforms is the value exchange of content and audience as well as the mechanics of how and where that exchange is monetized.  

Platforms, through their scale and product innovation built massive audiences and proved they can deliver meaningful impact to publishers (benchmarks show about 2/3rd of referrer visits for the average publisher site are from search and social).  Publishers deliver high-value local content used by those platforms. 

 

However, the value for this exchange continues to be negotiated and regularly reevaluated. Even more importantly, both platforms and publishers realize the long-term value of keeping engagement and monetization within their own ecosystems. Direct relationships with consumers are gold and will continue to be a point of friction in the bargain between publishers and platforms. 

Publishers should also keep in mind the potential to monetize audiences from each platform and where each platform fits in the conversion funnel. Beyond top-funnel page views and advertising revenue, the reader value (as future subscribers) varies significantly. Compared to social referrers, users from search referrers convert 4X greater and users from direct referrers convert 7X greater. As social platforms decline in relevance for publishers, search takes a more prominent role and therefore even greater risk as Google invests in their on-platform AI product, Bard. How will the new AI-powered landscape impact visits from search engines? Will referrers from AI products drive meaningful visits and will those users have a high propensity to subscribe? 

 

Managing Risk for 2024 and beyond.

History repeats itself with different names and products. OpenAI (and Microsoft) have brought AI use cases and their seemingly endless potential (and seemingly endless venture capital) to the fore. Bard is Google’s response to retain its dominance established from their search engine, making headlines with its “code red” by Sundar Pichai 

Publishers now must navigate these players and products in their bargaining. Determining the proper value for the exchange remains a difficult task. Microsoft and OpenAI have clearly taken cues from prior interludes between publishers and platforms, quickly striking deals with many of the world’s most prominent brands. Local publishers in the United States will take cues from The New York Times as lawyers hammer details on a fair bargain 

The full impact of AI-driven products is full of unknowns. The value to platforms is clear – original content to train LLMs enables delivery of new products and opens new revenue streams at scale. For publishers, the value (beyond the direct payment for content) is still not clear. 

 

Besides revenue from deals for local content, will the new products built by AI platforms deliver a meaningful audience back to the publisher sites that can be monetized? Social platforms allowed community-building and promoting a mix of free/regwalled/paywalled articles to drive audiences back to publisher sites. Search engines indexed quality content and required users to click to a publisher site to read beyond the byline and small snippet of text.  

As Google and Bing are infused with AI, will platforms seek to reward publishers beyond their initial payment by delivering audiences to publisher sites? Why would platforms willingly send audiences away from their own ecosystems? Will links to publisher sites remain clearly visible and will users be incentivized to click them if the AI engine fully answered their question?  

Whether the LLMs will accurately answer user questions is a topic for another blog post, but if the answers on the AI platforms are presented as fact-checked, presented as accurate, and seem reasonably accurate to the average user, will users ever feel the need to click to the original publisher source? 

So far, visits from search engines have remained unchanged over the last 13 months for the average local news publisher. Google remains a dominant and consistent source of page views for many publishers. Microsoft’s Bing search engine remains relatively small for the average local news publisher as do platforms like LinkedIn and TikTok.  New products built by the platforms, consumer habits, and time will tell if the deals struck in 2023-24 hit the mark on the value exchange.  

 

A “dual mandate” is not a new concept for publishers. They need platforms to bring audiences to their sites and maximize advertising revenue opportunity. However, building direct relationships with readers undoubtedly leads to the greatest subscription revenue opportunity. Investing in core products, such as newsletters, apps, and unique content remain keys to success for reader revenue.  

The good news? LLMs, over time, will need fresh data from publishers to drive the next round of innovation and maintain their competitive advantage. When the bargain needs renewal, if platforms have been successful in monetizing audiences built on top of unique local content, publishers will have an advantage at the negotiating table. 

 


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