What do New York Times Publisher Arthur Sulzberger, Jr. and Facebook CEO Mark Zukerberg have in common? Certainly not age or how they dress up for the office but each have something the other one wants. For the New York Times it’s eyeballs and for Facebook it’s legitimacy and great content. But, how does Facebook gain the legitimacy and content that these news power houses offfer without “cheapening” the news organizations brand. This week, several news reports including one in the New York Times reported that Facebook is in talks with several news organizations including the New York Times, Buzzfeed and National Geographic about how it can host these news sites’ content. But, news organizations have some reservations. The New York Times reported:
“Such a plan would represent a leap of faith for news organizations accustmed to keeping their readers within their own ecosystems, as well as accumulating valuable data on them.”
Yet, the upside might be too appealing for publishers when you consider their smaller and declining audience (New York Times Sunday circulation dipped to 1.2 million, down 3%) and Facebook’s 1.4 billion eyeballs. Today, when Facebookers click on a news article, the viewer is taken to the news site’s website and that gets counted as a unique visitor thus driving up the news sites’ traffic. This increased traffic leads to higher digital ad rates. So, when these click throughs are taken away, there is a large loss of ad revenue. To entice news publishers to “house” their news content on Facebook, the deal now includes ads which will run alongside the news content with ad revenue going to publishers.
Reports suggest that for Facbooks it is mostly about enhancing the user experience on Facebook because members will no longer have to leave Facebook to view the news content. It will load automatically and be immediately available. Less well-reported is the the fact that Facebook will now also gain all that additional personal data. Now, it addition to knowing all about your interests and friends, etc. Facebook will also know that you are interested in a vacation to Nassau because you read that New York Times travel article. That’s big data at work.
In the end, there are wins and losses for Facebook and publishers in this deal. Publishers don’t want to make the same mistake again when they learned the hard way that putting up high walls around their content doesn’t work. But they also know that good content drives engagement, and good content is expensive to produce. Both organizations need each other and no doubt will strike a deal that suites each ones needs. Social media and its audiences sometimes make for strange partnerships but increasingly this convergence will continue if both organizations want to suceed.