Platform Precarity
The acceleration of change in tech is making the world more dependent on a small number of companies and models. What can advertisers do about platform dependency, and how can platform precarity be overcome?
It is a truism that the pace of change in modern life has accelerated. Sometimes this is for the best, but not always. The full impact of accelerated change is only just beginning to emerge and it will have far-reaching repercussions.
When people talk about precarious working conditions, they are often referring to zero hours contracts, companies like Uber or Deliveroo with their legal wranglings over the definition of an employee, or the fear of automation. However, precarity is increasingly moving into areas long regarded as more professional or even elite. And the main driver of this is dominant platforms that are redefining the terms of doing business in the modern world.
Shaping Content
Early signs of this disruption occurred across media: TV, Print, Film, Music. The career of a musician or the fortunes of a publication may never have been the most stable, but the business models they operated within were well understood. No longer.
Print has been decimated. Where once a magazine got stocked in a shop and bought or not, now individual content aggressively competes for attention. For the consumer we have access to more content than ever before, but we also have click bait and an unreliable relationship with the truth. For the content producer, we have uncertainty over how to get paid. It’s not just a question of “will my content be popular next week” it’s “will my business model exist next week”.
This uncertainty is already having unintended consequences for what gets made - inevitably shaping content in every form. For example, Spotify has concentrated more income in the hands of fewer artists than ever before (partly due to a model that splits the royalty pot based on share of total streams, not based on an individual subscribers streams; this favours artists listened to obsessively by a teenager above an artist listened to sparingly by an older subscriber). In theory it’s easier than ever to release a record. In practice, music is becoming more dominated by the middle classes who can support a precarious existence for longer. It’s also generating a shorter average record length (royalties are split by number of listens, not duration of listens). The dominance of Spotify means that seemingly innocuous decisions made by a private company have a profound impact on the music being made globally.
‘Creative Destruction’
We’ve become used to the “creative destruction” of the tech giants. What it brings is not just a new business model, it’s often a much less stable one. With platform dominance increasing in ever more areas, the precariousness and vulnerability of having your business model destroyed is increasing everywhere too. These may be deliberate decisions by a platform at your expense, but you could just be collateral damage. Let’s look at some of the more extreme examples:
Amazon sellers whose sole route to market is through Amazon itself find that it can change its terms, its algorithms, and its vendor structure overnight. Or even copy your products itself if it chooses. Ultimately though, your ROI is capped by the platform you’ve built on.
Visa came very close to removing adult content from OnlyFans in Oct 2021. That an unaccountable private company might have the power to shut down a legitimate $2bn business that connects 85M users to 1M content creators who rely on it for their income, is a scary thought.
Google is constantly tweaking the algorithm that decides who is on the first page of the search results, and has a long history of relegating businesses down the rankings which they rely on for traffic with no warning nor recourse.
What’s a Marketer To Do?
There’s no reason to expect that platforms will become less dominant or capricious. So advertisers need a methodology. Here are some key considerations.
Keep The Mix
The first pillar is not to become too platform dependent. Inevitably, some channels will work better, but as long as there are secondary channels too, then the channel mix can be optimised according to performance. Doing this, means that your core KPIs are aligned to what you want to achieve, and from this stand point you can optimise and judge channels accordingly.
Trial New Platforms and Technologies
User behaviour changes quickly - new platforms come and go, but some of them stick. They’re worth testing, rather than assuming your audience isn’t there yet. User demographics also change as platforms expand. TikTok may skew towards younger users, but as platforms take off, their user base expands through all demographics. Don’t forget that Facebook began as an app for college students.
Branding
Dependence on a platform can happen for many reasons, however. A start up based on a marketplace model provided by Amazon or Etsy, let’s say, reaches customers and grows despite its crucial vulnerability. Can you build a brand which can take you outside and beyond the incubator you’ve built your business within?
Some brands exist only within Amazon - niche electronics brands, for example, but some of these have found they also work on TikTok. The power of branding can carry a business across platforms, and this is where clear brand values and communication are core, before you put any budget into a brand awareness plan.
Uncertain Futures
The plan for advertisers should be to recognise which platforms your business is dependent on, and then work out how to optimise the mix, or move beyond a single platform. In this sense, this is a deeper development of the older problem of being stuck in one vertical or in one geographical market.
For the wider world, should we worry? Probably. Innovation is often great, change is inevitable, but it is not healthy to live in a world of constant uncertainty.
Regulation can’t be the answer by itself. Even assuming the best of intentions from our governments, current attempts are inevitably piecemeal, and fall behind the pace of change in tech. Privacy changes, for example, are important, but they don’t make us less precarious and less dependent on a small number of advertising platforms. Meanwhile, the decisions of competition authorities often have unintended market consequences when trying to split apart monopolies.
How about this for a solution: Universal Basic Income, but funded by the platforms which control our lives? Instead of eliminating uncertainty - an impossible goal - this might at least reduce it and its impact on all of our lives. The mechanisms which drive our lives forward need to be shaped, in turn, for the public good. It’s clearly a time when options for how things could be done differently need to be placed on the table for discussion.
By Secret Digital Veteran
