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As Big Tech diversifies, what are the implications for publishers? Insights from WARC’s new report

WARC has published a new report, Carat’s ten trends for 2020: The year of all-conquering ecosystems. It features ten consumer, media and technology trends, and their implications in 2020. 

“Try to name an industry that is not threatened by tech disruption. Our 2020 vision for consumer, media and technology trends is centred in our belief that the marketplace is increasingly converging around the global tech-giant ecosystems,” writes Dan Calladine, author of the report, and Head of Media Futures at Carat.

Many of the trends presented in the report, “are the ripple effects of the diversification of these platforms away from their original specialism,” he explains. 

The more lines of business the big platforms develop, the more complex they become – and the further the ripple effects travel into the economy and society. 

Dan Calladine, Carat’s ten trends for 2020

And that’s why the driving trend for 2020 is ‘Colliding Ecosystems,’ which reflects the expansion of, and ultimately heightened competition between the big tech-platforms. 

Presented here are the trends publishers need to know:

“Always bumping into each other”

Earlier, the big tech companies like Amazon, Facebook and Google were focused on their own niches and did not cross paths. But that has changed in recent years with each of them diversifying in their bid for expansion. This has created direct competition between them in multiple areas. 

It used to feel like the tech-giants were on different train tracks, running side by side, but never meeting. Now they are more like dodgems, always bumping into each other. 

Dan Calladine, Carat’s ten trends for 2020

The report refers to YouTube which was earlier synonymous with online video. But now it’s facing competition from Facebook, Apple and Amazon who have made substantial investments in the category. 

“Facebook has introduced a ‘Watch’ tab which more than 140M people view daily. Video is also huge on Instagram, where 50% of stories feature an element of video. Amazon is ramping up its Prime video offering, and has started to film its Lord of the Rings series, the world’s most expensive TV show. Apple is also investing heavily in video with a $6B content budget, and its own AppleTV+ service,” writes Calladine.

This has direct implications for publishers who are increasing their investments in video. Many of them share their videos on YouTube, Facebook and Instagram, among others. All of which are fighting for users’ time (and increasingly, money).

Some, like Hearst, have already entered the SVOD space. The publisher launched a subscription based streaming video service last year. The product, called All/Out Studio, offers access to hundreds of on-demand workout classes with certified trainers. It is available on iOS and Android devices, as well as Apple TV.

“Cutting out the middleman”

Facebook and Google are also strengthening their presence in eCommerce, something that was mostly restricted to Amazon earlier. Facebook is selling via shoppable ads and through the newly introduced Instagram Checkout.

It’s also introducing tools for merchants to sell on WhatsApp, according to the report. Google has also introduced shoppable ads, and is moving into other areas, like allowing users to order restaurant deliveries. 

Many publishers looking at diversifying their revenues are banking on eCommerce. Now with the duopoly entering the space, publishers can take advantage of their reach, as well as strengthen their direct routes to consumers.

This is important as platforms are also becoming producers. Facebook, Apple and Google are ‘cutting out the middleman’ and introducing their own services based on what they can see happening on their platforms.

Moreover, Facebook, Google, Amazon and Apple have also introduced their individual payment solutions. Apple Pay is currently the biggest and is accepted in more than a million locations. The company has recently introduced a physical payment card as well. 

This increasing comfort with digital transactions which Calladine refers to as ‘invisible money’ can play an important role in users signing up for subscriptions, making micro-payments or buying items.

Now that most of the major tech companies are offering their own payment solutions, publishers are increasingly integrating them into their products to make the purchase process seamless. 

The report presents an interesting example showing how Fin-tech unicorn Klarna provides shoppers with more flexibility by separating the payment from the purchase. The company lets shoppers buy goods on eCommerce sites by just entering their email address and phone number. After 14 days customers can pay back Klarna–or return the goods.

“Invest in your brand, emphasize your authenticity”

According to the report, Amazon which has been selling products under its own label since 2009, has recently increased its scope, moving from low cost basics to more designed brands. It has also “been accused of showing ads for its own brands in its search results for competing brands.”

Calladine recommends building a direct route to the audience through own channels and sales platform. 

Don’t rely on marketplaces. Invest in your brand, emphasise your authenticity, your quality, your heritage and your point of difference. If you just compete on price, then you can’t compete.

Dan Calladine, Carat’s ten trends for 2020

“Form partnerships to create products exclusively for platforms under your own brand,” he adds. This is something that publishers including BuzzFeed and Hearst are already doing. 

BuzzFeed is also taking advantage of interactive videos. It has created shoppable videos in partnership with Ekois, an Israeli/US start-up. The company creates short films that ask viewers to make choices every few seconds. Interactive storytelling can boost engagement by involving the viewer in the action. 

“First-party user data is more valuable than ever”

The trend that can be advantageous to publishers in the long run is the decline of cookie usage. Fuelled by concerns over privacy and regulations major browsers have started blocking cookies

Where browsers do not accept cookies, it is hard for sites and advertisers to identify devices, and profile them; for example, to see what other websites they visit, and whether they have been exposed to advertising. 

Dan Calladine, Carat’s ten trends for 2020

It is also difficult to see the effectiveness of a campaign, and optimize them by moving ads from sites that are not driving response to ones that are.

Calladine comments, “It is very likely that cookie acceptance will continue to fall, as more browsers adopt strict policies, and legislators impose restrictions on tracking technologies.”

This can be beneficial for publishers who own first party data. They can also charge more for the audiences that they can track.

Access to first-party user data is more valuable than ever. Publishers will increasingly incentivise users to sign in, so that they can understand more about their audience, and monetize their visitors more effectively.

Dan Calladine, Carat’s ten trends for 2020

A related trend gathering steam, is the rise of dark social. People are increasingly more comfortable sharing in closed groups on social media platforms and messaging apps. According to the report, “over 50% of people in the UK, US and Australia have the highest privacy settings in their social media profiles.”  

This has led several brands to create their own groups, for example Peloton, whose group has over 200,000 members. Calladine writes, “creators are also able to monetize their work on a number of platforms, creating a divide between what all fans see, and what paying subscribers see.” 

This is a strategy that can benefit publishers and individual journalists. Creating closed interest-based groups for paying members featuring exclusive content, and other benefits. It can bring revenue, as well as stimulate engagement and loyalty.

That’s not all, the feedback gained in such a setting can be valuable for future projects. “Brands with super-fans will benefit most from this trend. These fans will want a closer connection to the brand and to other fans,” comments Calladine.

The report covers other trends including, gaming and esports, addressable TV and post-production advertising.

It can be downloaded from WARC
Carat’s ten trends for 2020: The year of all-conquering ecosystems