National Geographic was one of the first to publish an Instant Article on Facebook. Source: Facebook
Online publishers and Facebook have a symbiotic relationship. Facebook sends them traffic, and they provide content for Facebook users to consume.
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Last week, Facebook took a step to strengthen that relationship by introducing Instant Articles. The new format provides publishers with the ability to make their content stand out better on Facebook with features more akin to native apps than the mobile web. Facebook benefits from faster load times, claiming loading content from publishers' Web pages can take as long as eight seconds, which may cause some users to close the app before the page loads.
At the same time, Instant Articles has the potential to hurt other content distributors that publishers have come to rely upon, such asGoogle and Twitter .
An easy choiceThe terms for those wanting to post as part of Facebook's Instant Articles are actually quite friendly to publishers, considering the amount of leverage Facebook has as a distribution partner. Facebook is allowing publishers to keep 100% of revenue from ad inventory they sell themselves, and if they want Facebook to fill the inventory, the publisher still keeps 70% of the revenue. What's more, publishers are able to use their own analytics tools -- including Google Analytics -- if they so choose, and Comscore will count Instant Articles views as page views.
Publishers also retain control over the look and feel of their content, so a Buzzfeed article doesn't look at all like a National Geographic article. This is key as it allows publishers to keep their brand identity even as they cede control of how their content is delivered.
There could be a negative long-term impact on publishers, however, if Facebook changes its terms after it develops a critical mass of publishers using the format and users demanding more. Facebook is constantly tweaking its algorithm to ostensibly improve the user experience, and those algorithm updates are coincidentally also good for its business. Most recently, Facebook's update decreased the organic reach of pages, requiring them to buy more advertising to reach the same audience.
For now, partnering with Facebook seems like a no-brainer. The terms are mutually beneficial and the upside of more people actually reading content instead of shutting down the app when a page takes "forever" to load outweighs the risk of a terms change down the road.
Why Google should be worriedIf Facebook's test pilot of Instant Articles goes well, and it expands to other publishers and eventually everyone with a blog, it could put a real hurt on Google. Google generates about 20% of its revenue from partner sites filling ad inventory with products like AdSense. AdSense is especially popular among smaller publishers that don't have the time or resources to sell ad inventory themselves.
As more publishers shift to Instant Articles, there's a strong likelihood those ads would shift from AdSense ads to Facebook ads. Facebook still has a lot of work to do before it can get there, though.
Aside from expanding from just a handful of content partners to anyone who wants to work with Facebook, the company still needs to be able to work with publishers on ad targeting. Currently, Facebook is denying access to its valuable user interests and other targeting data for publishers using Instant Articles. That means the ads Facebook is selling in Instant Articles are some of its least valuable, which isn't a great proposition for publishers looking to maximize revenue.
Facebook has shown a willingness to share its well-targeted ads with publishers before, however, via its Facebook Audience Network. If Facebook opens up Instant Articles and its ad targeting data to smaller publishers, it could strike a serious blow to Google's mobile display ad business.
Stealing audiencesAnother strong potential for Instant Articles is for Facebook to use deep linking, to link directly from one app to Facebook's app. Instant Articles still provide a hyperlink, which allows users on desktop or Android devices (for now) to go directly to the publisher's website for the same content. The use of the link provides the potential for other users to copy that link and share it elsewhere, like on Twitter.
If a user copies a link from Facebook and shares it on Twitter, Twitter users that click on the link could eventually be transferred to the Instant Article content in the Facebook app instead of the publisher's website within the Twitter app. The same could be true of Google search results (although Google has more control over what links it displays). Needless to say, this wouldn't be a very good outcome for either company as it reduces time spent in their apps and increases time spent in their competitor's.
Eating the InternetFacebook's efforts with Instant Articles as well as its recent update to its search engine to surface shareable content means users will be spending more time in the app discovering and reading content. As a result, Facebook stands to increase its total ad impressions and take ad spend from Google. Meanwhile, Google and Twitter may see a decline in ad impressions as Facebook takes up more of people's time and could potentially hijack their audiences.
The article Facebook Instant Articles Are a Bigger Threat to Google and Twitter Than to Publishers originally appeared on Fool.com.
Adam Levy owns shares of Apple. The Motley Fool recommends Apple, Facebook, Google (A shares), Google (C shares), and Twitter. The Motley Fool owns shares of Apple, Facebook, Google (A shares), Google (C shares), and Twitter. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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