How To Boil A Frog: Facebook Is Killing Off-Platform Branded Content Distribution

September 12, 2017

How do you boil a frog? Slowly.

And in Facebook’s case, 14 months is the time it took them to get the pot of water boiling, with you (publishers) sitting inside.

Branded content is on fire, growing 35% year over year and is the key digital growth strategy for premium publishers. Branded content revenue growth has been higher than organic audience growth. To make up the difference, publishers heavily rely on paid distribution to deliver the reach marketers expect – and guess what? It’s mostly with Facebook.

Facebook’s recent announcement to allow brands to boost publisher posts they are tagged in has fundamentally changed the game.

Here’s a brief recap of Facebook’s activity over the past 14 months:

  • Q2 2016: Facebook introduces the handshake tool. They change their policy to require publishers and influencers to tag advertisers in promoted posts or branded content.  
  • Q4 2016: Social marketing agencies and platforms start to notice a decline in organic reach on Facebook. Any post tagged with the handshake tool have essentially dropped to zero. This is exactly what happened to brands in late 2013.
  • Q4 2016: Publishers start to pay Facebook even more money to boost posts for branded content to achieve audience distribution targets that their marketers expect.
  • Q1 2017: When a brand is tagged with the handshake tool, they get to see all of the performance data for the post, including how much the publisher paid Facebook to boost it. Initially buyers did not understand where to find this data, so Facebook’s account management team was directed to train and educate buyers on where to see the data. The net result? Buyers now question publishers on their massive margins and downward price pressure on publishers intensifies.
  • Q3 2017: Facebook announces that a brand who is tagged under the handshake tool can now boost the post directly with paid spend, using the publisher or influencer’s handle. The publisher margin will be cut to zero.

The water is now rapidly boiling and by next year, publishers will start to see the fallout from buyers reducing their direct spend on branded content and reallocating the distribution budgets directly to Facebook.

Given the complexities of the digital advertising ecosystem, it may take some time for the shakeout to fully surface. At any rate, premium publishers should start thinking about alternative strategies to grow their branded content business; one that relies less heavily on Facebook.

– Kunal

[Whitepaper] How To Boil A Frog: A Brief History of Facebook’s Monetization Strategy – Click Here To Get Your Free Copy

About the Author:

Kunal Gupta is the Founder & CEO of Polar. At Polar, Kunal leads a talented team transforming the media publishing industry with technology. He is passionate about leadership and finding focus in a modern era. Follow his leadership blog at Connect with him on LinkedIn, Medium or Twitter.



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