To control the fate of your business, resist the temptation to grow dependent on the many intermediaries who’d like to sit between you and your customers.
Search the phrase “every company is a media company” and you’ll get a litany of articles and posts from social media influencers about how digital content creation skills are the key to generating revenue in the network age. Their argument is that you win purchase consideration by creating content that gets found by prospective customers through search or social media. But if you think about it more deeply, it becomes apparent that while content is critical, the technology we use to locate and consume content is the bigger, more sustainable play.
How many companies can you count that reached billion dollar unicorn status by relying exclusively on a third-party technology provider for access to their customer base? If you depend on Amazon or a social network, you’re performing on someone else’s stage, and they can give you the hook at any time. Obviously, having the digital media literacy to create compelling content is important, but popular online destinations and customer contact information are much more lucrative assets. And this is the key distinction to acknowledge when making a digital pivot.
Nevertheless, there are still more small businesses reliant on Amazon to resell their wares than on Shopify, despite the fact that Amazon resellers can only sell at Amazon.com, while Shopify resellers can host an online store on their own web domain. There are 9.8 million Amazon marketplace sellers versus 500,000 Shopify stores. On Amazon marketplace, resellers pay a monthly subscription fee, a sales commission of 8%–15% right off the top (Amazon calls them referral fees), fulfillment fees, and a bunch of other miscellaneous charges. Shopify also charges a monthly subscription fee, but no sales commissions, and it has no fulfillment options. And Shopify doesn’t withhold your customer’s email address. Amazon does.
It’s content at an owned online destination that’s a transferable asset, not millions of followers.
It’s the same scenario on the social networks, which incentivize online influencers to create content for their platforms in exchange for a slice of the advertising revenue. Last month Clubhouse announced its Creator First Accelerator Program to help you promote your shows and get “support in building your audience.” But it’s not your audience. It’s theirs. And Clubhouse can throttle it up or down at any time. Creator programs at TikTok, Instagram, LinkedIn, and Substack are a way to build your personal brand, not a sustainable business. Because when you share your content on a social network, you retain ownership, but you forfeit any meaningful usage rights.
The social networks all have language in the terms of service policies that grant them a royalty-free, non-exclusive, irrevocable worldwide license to display your content in perpetuity. So even if you do decide to leave them at some point, they still get to retain your content. On Clubhouse, one early adopter who worked tirelessly to help grow the service’s user base from the very beginning, and who at one time had one of the biggest audiences, lamented to me that a recent algorithm change effectively halved his audience.
Content may be king, but technology is the queen. And she rules the throne. Last week Sara Fischer at Axios reported that DraftKings, the official sports betting partner of the NFL, installed Brian Angiolet, former senior vice president and chief business officer at Verizon, as the company’s first chief media officer to oversee the acquisition of content companies. DraftKings is acquiring media companies because “…owning content could be a cheaper long-term vehicle for accruing customers than paid marketing.” In order to be a desirable media acquisition candidate, it’s not just content that matters. It’s content at an owned online destination that’s a transferable asset, not millions of followers, as Trump learned when he was deplatformed from Twitter and Facebook.
Increasingly, building a sustainable online business requires an owned media presence supported by technology that doesn’t have its hand in your pocket, withhold email addresses, or steal your customer base with an algorithm tweak. Perhaps that’s why WordPress, the content management system built on open-source code, powers roughly 30% of all websites.
So if you’re gearing up for your a digital pivot, recognize that building a sustainable digital business requires an owned media presence on a platform you control, at an online destination you own. Otherwise, you’re not building a digital business. You’re building someone else’s.
Eric Schwartzman is a digital marketing consultant with structured programs for helping individuals and organizations pivot to digital marketing. His new book The Digital Pivot: Secrets of Online Marketing explains in simple language how to pivot from the old to the new way of doing business.
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May 07, 2021 at 06:00PM
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Every Company Is a Technology Company First and a Media Company Second - Fast Company
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