Study: Facebook and Google represent less than 5% of digital revenue for publishers

Dive Brief:

Facebook and Google, which generate the most revenue for publishers outside of over-the-top (OTT) services, together account for less than 30% of total distributed content revenue and represent less than 5% of the total average digital revenue for publishers, according to new research by trade association Digital Content Next made available in a press release.
In 2017, Facebook surpassed YouTube as the individual platform that generates the most revenue for publishers. The social network captured $1.5 million, or 59% of social platform revenue, in H1 2017, compared to $1.3 million, or 50% of total social revenue, in H2 2016.
Overall distributed content revenue represents 16% of participating publishers' digital revenues, up from 14% in last year's report. Distributed content revenue increased by 37% year-over-year for the companies providing data for DCN's report the past two years. Video represents 83% of the total, with TV and cable companies taking a disproportionate share of third-party platform monetization and growth through OTT and syndication.

Dive Insight:

Marketers and publishers continue to pour more resources into digital channels to accommodate the shifting habits of internet users, but the new report from DCN underscores how many in the space are still struggling to properly monetize those efforts. Search, syndication and OTT channels might deliver on more value for publishers, in particular, than social media does, according to the DCN. These findings also come as businesses, regulators and regular people are more critically examining the harmful effects of some of the major digital advertising and social media platforms on their users.

"The revenue earned from distributed platforms does not yet match the investment and tremendous value of DCN members' news and entertainment," Jason Kint, CEO of the DCN, said in a statement. "The report once again supports our members' drive for better economics which is now happening in parallel to a much larger global debate about the societal and economic harm from certain platforms."

Facebook and Twitter remain the most-used channels for publishers, with YouTube and Instagram following behind. These platforms continue to tweak their algorithms and publisher tools, which could majorly impact distributed content in the coming year. Publishers and brands remain unsure of the extent to which they'll be affected by Facebook's changes to News Feed, which will prioritize personal posts from friends and family over those of brands and media entities. This update could make Facebook's overtaking of YouTube as the most profitable social platform short-lived. Snapchat has also adjusted its monetization model and self-service ad manager API, which could affect publishers' already rocky relationship with the platform. The DCN report highlights marketers' continued interest in Snapchat as a means to reach younger consumers but also found that most disliked Snapchat's ad product, which has low average view times.

Premium digital content, specifically video, continues to be in high demand, but it's not always easy for publishers and marketers to monetize it. Even with YouTube's struggles with controversial or inappropriate content appearing next to ads, marketers didn’t fully turn their backs on the platform, instead taking their chances with brand safety in order to reach YouTube's billions of worldwide followers.