Facebook’s auto-play ads: Why they could be very bad news for the media.

Facebook Has Been Very Good for the Media. That May Be About to Change.

Facebook Has Been Very Good for the Media. That May Be About to Change.

Innovation, the Internet, gadgets, and more.
Jan. 13 2015 8:41 PM

Facebook Is Eating the Media

How auto-play videos could put news websites out of business.

Facebook vs. the media
Facebook is cutting out the middle man.

Photo illustration by Slate. Photo by Thinkstock/Screenshot via Facebook

Imagine for a moment that you run a website. You sell advertisements on the site, so you make money when people visit it. If people stop visiting your site, either you’ll have to find a new business model, or you’ll be out of a job. (For Slate, this does not require a great feat of imagination.)

Will Oremus Will Oremus

Will Oremus is Slate's senior technology writer. Email him at will.oremus@slate.com or follow him on Twitter.

In the early days, people came to your site directly, by laboriously typing in your URL—let’s call it yoursite.com. Your most loyal readers bookmarked it and checked back multiple times a day to see the cool new stuff you had posted.

Search engines like Google and aggregators like Google News came along, and some portion of your readers began to search for their information there rather than bookmarking a bunch of individual sites like yours. That was OK, however, because you found that you could also get a slew of new readers from Google. This was especially true if you were willing to learn how to play its game.

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Playing Google’s game involved tailoring your headlines to match what people were searching for, making sure your pages had all the relevant keywords, and getting other reputable websites to link to yours. If you really wanted to win the game, you could even start molding your content to match popular searches, producing articles with headlines like “What Time Is the Super Bowl?” That probably wasn’t what you had in mind when you started your website, but hey, you’ve got to pay the bills, right?

A few years ago, the game changed. This time it was social media rewriting the rules, with more and more people getting their news and entertainment from their Twitter, Pinterest, and Facebook feeds. By last year, Facebook had solidified itself as the second-largest driver of traffic (i.e., people) to publishers’ websites, behind only Google. And in many ways it was more disruptive.

Whereas Google’s rankings largely mirrored existing hierarchies of stature among websites, Facebook could make just about anything go viral if it plucked the right neurons. The social network’s algorithms were both more democratic and easier to game. The result is that the New York Times’ carefully balanced coverage of a major news story could be drowned out by screamy headlines and clever listicles from sites you’ve never heard of. By the same token, a wonderful and emotionally resonant story or video on yoursite.com finally stood a chance of reaching the mass audience it always deserved.

Again, if you wanted to keep your job, you had to play Facebook’s game. That meant trading search-engine optimization for social optimization. The role of headlines shifted from convincing Google’s bots of their relevance to enticing casual Facebook users to click, like, and share. Search-bait gave way to clickbait and share-bait. And again, some sites went all in, building not only their distribution models but their very substance around Facebook’s distribution model. BuzzFeed and Upworthy became the new Huffington Post. Websites that didn’t play the game—whether due to a lack of foresight, an abundance of scruples, or the constraints of a print-focused brand—floundered. But many others thrived. Yoursite.com probably adapted and did just fine.

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But the game may be about to change one more time. And this time, you might not like the new rules one bit.

Last week, in a blog post innocuously titled “What the Shift to Video Means for Creators,” Facebook explained to its partners in the media that it’s seeing a big increase in people watching videos in its news feed. That’s no surprise: More people are watching videos everywhere, now that our smartphones can play them without much difficulty. Websites love videos, because the video ads that play before and after them are far more lucrative than the banner ads that typically run alongside photos and text.

It’s also no surprise because Facebook recently began playing videos posted to its news feed automatically, rather than waiting for users to click on them. Facebook videos now leap out from your news feed and grab your eyeballs, rather than waiting demurely for your click.

Here’s the catch: Videos only auto-play on Facebook when you upload them directly to Facebook. If you upload them to YouTube—or, I don’t know, yoursite.com—and then share them on Facebook, they’ll appear only as static thumbnails in your friends’ and followers’ news feeds, with an outbound link to the site that hosts them. So if you want to win Facebook’s game, you now have to let Facebook host your videos, rather than hosting them on your own site and posting links to them on Facebook.

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As a website owner, perhaps you can already see the dilemma that John Herrman astutely highlighted in the Awl. You know that yoursite.com’s relevance depends on playing Facebook’s game. But Facebook’s game is now cutting your website out of the equation entirely when it comes to videos, the fastest-growing and most lucrative online medium. If you post a video on your site, it is likely to be received poorly on Facebook, and very few people will see it, so you won’t make much money. If you post it on Facebook, it may be seen by millions. But your advertisements are back on yoursite.com, remember? The advertisements in Facebook’s news feed belong to Facebook, not you.

Facebook does not intend its video push as a power play against yoursite.com. If anything, it’s a power play against Google’s YouTube, which controls a huge share of the online video market. But Facebook will tell you it’s really just another way to improve the news feed for its users, and that is also true. It really is nicer to watch a video directly in your feed than to have to click a link to some other website, wait for the page to load, and hope its video plays properly on your device. That goes double if your device is a phone.

But the side effect of posting a video on Facebook, as Herrman observes, is to make Facebook the publisher of that video and to demote yoursite.com to the role of producer. Any advertising attached to the video will likely be controlled by Facebook, not by you, as it would be if you had hosted it on yoursite.com. The only question is whether Facebook will deign to share any of that money with you.

It will have to share at least some, presumably. If it didn’t give publishers at least some incentive to put their videos on Facebook, they wouldn’t do it, and then Facebook would have no good videos to auto-play in its news feed. And again, Facebook is not trying to put yoursite.com out of business. Facebook is run by people who care about the media, and sites like yoursite.com, and know that you need money to survive. But they aren’t running a charity, and they aren’t going to share any more revenue than they have to.

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What’s interesting—and scary, for yoursite.com—is that Facebook might not have to share nearly as much of the proceeds from its videos as you might think. The reason is that Facebook has become far bigger as a platform for news and entertainment than any media site. That means each media site needs Facebook more than Facebook needs it.

Sure, if the media as a whole threatened to pull out of Facebook unless it shared a fair portion of its video revenue with them, Facebook would be forced to negotiate. Publishers in some European countries, for instance, have joined forces to fight Google News, albeit belatedly. Media in the U.S. are growing wary of Facebook’s power, as the New York Times’ David Carr reported in an October column outlining the social network’s latest plans.

But the U.S. media are not going to negotiate with Facebook as a bloc, even if it were legal under antitrust laws. That’s partly because Facebook has been very good to the media so far: The company’s enormous power as a traffic driver has earned it the grudging trust of many publishers even as it has righteously burned brand pages that had spend years chasing likes.

Besides, some media outlets are already buying into Facebook’s shift to native news feed videos. In an early test, the social network partnered with the NFL on some auto-play news feed videos sponsored by Verizon. “This is a small video sponsorship test, and we will be evaluating how people, publishers, and marketers respond to this kind of co-branded video content on Facebook,” a Facebook spokesperson said. The company did not say how the revenues would be split.

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Here’s what will happen instead. Facebook will set the terms for the sharing of revenue from videos posted in its news feed, and those terms will be very favorable to Facebook—probably more so than the terms set by YouTube, which for all its success is far less important than Facebook as a portal to the broader Web. And then each website will have to decide for itself whether to accept those terms.

Many will resist, recognizing that they can’t possibly make as much money from videos posted on Facebook as they did back when Facebook generously linked out to videos hosted on their own sites. But some will accept, eager to be on the leading edge of the latest trend in content distribution. Some already are accepting, including BuzzFeed, whose business model is fundamentally different from that of yoursite.com. (BuzzFeed doesn’t make money by running ads on its own videos and articles but by making separate, “native” ads that stand on their own.) Many others are likely to follow over the coming year.

Some may lose money on the deal, but that doesn’t actually matter. Because those that accept will be, by and large, startups backed by venture capitalists who are willing to lose money for years as long as they’re winning market share. (Amazon.com, to pick an extreme example, is still losing money in pursuit of market share, even as it drives previously money-making rivals out of business.) That market share will come, of course, at the expense of all those websites that refuse Facebook’s terms. The holdouts will hew as long as they can to their outmoded practice of posting links on Facebook instead of full videos, but eventually they’ll either give in or lose out.

And video may be just the beginning. If Facebook and its users find that video works better when it’s embedded in the news feed, they might soon find that the same principle applies to gifs, listicles, photo essays, and even full news articles. Facebook could start by displaying a short preview in users’ news feeds, as it does now. Then, when the user hovers over the preview, the rest of the post could drop down.

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Posting full articles on Facebook, rather than just linking to them, would of course be optional for publishers like yoursite.com. But it isn’t hard to imagine a Facebook blog post in late 2016 innocently advising partners in the media that full stories posted directly to the news feed appear to be doing quite well on the social network.

At that point, yoursite.com’s sole hope will be that some other platform emerges as a viable alternative to Facebook—that the teens really are right about it not being cool anymore. It’s a slim hope, however, because whatever rises in Facebook’s place—Snapchat, WhatsApp, a revamped Twitter or YouTube, some site not yet imagined—is unlikely to go back to the clunky, circa-2000s practice of forcing users to follow links to outside websites to view videos and articles.

So, what’ll it be, website owner? Would you like to change your business model, or be out of a job?

Hey, I hear BuzzFeed’s hiring.