New Challengers?

Social risks extinction by regulation, operating at a trust deficit.
Are media owners and brands new challengers again?

The animated disagreement over moderation between President Trump and Twitter, reignited the debate on the role of social in elections, resulting in an Executive Order challenging the indemnity protecting social platforms from content created by online users, known as Section 230.

It’s the end, or is it?
If the FCC agree, it’s the end of todays social platforms as we know them, but more likely is the prospect of extinction by regulation, driven by Europe and the US over the past decade, making it easier for media-owners and brands to own conversations for themselves and monetise newly authenticated audiences, as for the most progressive media brands, its a game changer.

Too many global media brands don’t make money
It’s well documented that online ad markets are dominated by social and search who displaced media-owners using scale and targeting generating recurring revenues. Despite building large audiences, too many media brands, struggle to make money, whilst social audience values can be significant.

One global media-owner with a social audience generating an estimated $248m of annual recurring revenues for social platforms, equating to a 37% of revenues whilst they to break even. Even at modest levels of penetration, it’s a game changer.

Who funds social?
Brands fund the entire social ecosystem, and face escalating cost to interact with audiences since 2015, without data transparency, or owning the conversation. This trend has encouraging direct to consumer, and whilst paid social is strong for awareness, brands building audiences on social, will pay recurring fees to access them. Agencies can be incentivised by platforms.

Extinction by regulation
Progressive regulation for social platforms includes the eCommerce Directive, GDPR defining how personal data is accessed and used, extended in the US with CCPA regulation to include household data, this week courts in Germany ordered Facebook to stop collecting data and using it across their apps, but the most significant challenge for social platforms is the prospect of content regulation.

The UK Online Harms consultation is an example of regulation aiming to define harm online to individuals sometimes with tragic consequences, with businesses and data breaches, dealt with by other initiatives, that will increase moderation and the consequences.

Suddenly volume has consequences
Social platforms created a precedent and are optimised to maximise impressions now averaging 6000 tweets on Twitter, and 4m likes per minute from anonymous audiences, making any demands for timely moderation resulting from content regulation very difficult.

Authenticated audiences
The genie is out of the bottle for social platforms to authenticate audiences and limit the unintended consequences of the abuse of anonymity, illegal content, brand safety, hate speech, and managing expectations of veracity that can dilute trust. The consequences of more stringent content regulation will result in moderation tsunami that AI isn’t going to resolve by itself.

Its proven difficult for AI to moderate centralised unauthenticated audiences that can effectively filter out illegal content online; and is likely to be even more difficult to operate content removal systems, distinguishing between legitimate news material, disinformation, and abuse.

Are media-owners and brands about to turn the tables?
The likely outcome will be an evolved social ecosystem with the most progressive media-owners and brands, challenging to monetising their most engaged social audiences, for themselves.

Media-owners and brands can leapfrog using new collaborative partnerships where they retain control, adopting agile diversified business models on demand, including all subscription derivatives, all ad options including affinity marketing, real-time safeguarded data, and eCommerce, operating for each element of the taxonomy on demand, as easy as iTunes.

Authenticated audiences can be engaged using a progressive range of content, interactive, video, and TV formats, to engage audiences including a new ARPU measurement, reinvigorating balance sheets and investors.

Media-owners have the distinct advantage of trusted content as a pivot to own the conversation with their most engaged audiences, and the opportunity to revalue brand relationships. Some media-owners won’t change and will face an uncertain future.

Precision competes with volume
Social platforms are today’s legacy, and will surely retain the unassailable mass market anonymous audiences they have built, with more stringent automated moderation. This will be complimented by real-time data-driven precision that challenger media-owners and brands can achieve, able to personalise every interaction with speed, quality, and value.

Fact checking and brand safety are the added focus for social platforms dependent on mass market ad revenues. This risk has to be managed and previously prompted a wave of brands to pull advertising from YouTube, and currently Facebook has civil rights groups encouraging major brands to pull ads, and they candidly admit there is a trust deficit.

The new challengers?
Social platforms will manage the threat of extinction by regulation, and if media-owners are to become challengers, it’s going to include leveraging trusted content to own the conversation with authenticated audiences, and operating agile business models on demand. Media has a game changer that can improve balance sheets, and crucially make money.

Similarly, brands can combine paid mass market reach using social platforms whilst building and monetising audiences for themselves that return control, revenues, and data transparency working within the context of acquisition, engagement, conversion, retention, and advocacy. Brands get to have creative, media, distribution and data on their side of the equation for the first time.

Measurement
Media-owners and brands can include a new measure of Social ARPU in reporting, reflecting a new category of audience asset, thats a game-changer.

In talking to prospective partners we invariably ask what annual recurring value they place on social audiences, and most have not calculated it, now just might be that time…

Simon Hellier is the CEO of GlobalDrum