Search the phrase “every business 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 key to generating revenue online. network era. Their argument is that you gain buying consideration by creating content that is found by potential customers through search or social media. But if you think about it deeper, it becomes clear that while content is essential, the technology we use to locate and consume content is the most important and enduring game.
How many companies can you count that have reached billion-dollar unicorn status by relying exclusively on a third-party technology provider to access their customer base? If you’re dependent on Amazon or a social network, you’re playing on someone else’s stage, and they can give you the hook at any time. Obviously, being digital media savvy is important to creating engaging content, but popular online destinations and customer contact details are far more lucrative assets. And that’s the key distinction to recognize when making a digital pivot.
Nevertheless, there are still more small businesses that depend on Amazon to resell their wares than on Shopify, despite the fact that Amazon resellers can only sell on Amazon.com, while Shopify resellers can host an online store. on their clean web domain. There are 9.8 million sellers on the Amazon Marketplace versus 500,000 Shopify stores. On the Amazon marketplace, resellers pay monthly subscription fees, an 8% to 15% sales commission upfront (Amazon calls them a referral fee), fulfillment fees, and a bunch of other fees. various. Shopify also charges monthly subscription fees, but no sales commissions, and it doesn’t have fulfillment options. And Shopify doesn’t retain your customer’s email address. Amazon Is.
It is the content of an owned online destination that is a transferable asset, not millions of subscribers.
GrubHub’s business model is pretty much the same. The company also charges a 15% sales commission, plus a 10% delivery commission, while essentially double-charging by charging the same fee to customers, despite calling them by a different name. So if you’re a restaurant owner, you can post the world’s most beautiful photos of your meals, but you’ll still depend on the food delivery app to access your customers and you’ll still give it to them. 15% of your profit margin. And GrubHub keeps the client’s mobile number to itself also. Same offer on Uber Eats. This way, you will always depend on their platform to do business, making them the most sustainable, not you.
It’s the same scenario on social media, which incentivizes online influencers to create content for their platforms in exchange for a share of ad revenue. Last month, Clubhouse announced its Creator First Accelerator Program to help you promote your shows and get “support to grow your audience”. But that’s not your audience. It’s theirs. And Clubhouse can speed it up or down at any time. Creator programs on TikTok, Instagram, LinkedInand Sub-stack 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 lose any significant right of use.
Social networks all have language in the terms of service that grants them a worldwide, royalty-free, non-exclusive, irrevocable license to display your content in perpetuity. So even if you decide to leave them at some point, they still keep your content. On Clubhouse, an early user who worked tirelessly to help grow the service’s user base from the very beginning, and who at one point had one of the largest followings, lamented to me that a recent algorithm change has effectively halved its viewership.
Content may be king, but technology is queen. And she reigns on 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 commercial officer of Verizon, as the company’s first chief media officer to oversee the acquisition of content companies. DraftKings acquires media companies because “…owning content might be a cheaper long-term way to acquire customers than paid marketing.” To be a desirable candidate in media acquisition, it’s not just the content that counts. It is the content of an owned online destination that is a transferable asset, not millions of followers, as Trump learned when he was removed from Twitter and Facebook.
Increasingly, building a sustainable online business requires a proprietary media presence backed by technology that doesn’t reach into your pocket, hide email addresses, or steal your customer base with a algorithm adjustment. Perhaps that’s why WordPress, the open-source code-based content management system, powers about 30% of all websites.
So if you’re preparing for your digital pivot, recognize that building a sustainable digital business requires a media presence on a platform you control, on an online destination you own. Otherwise, you are not building a digital business. You build someone else.
Eric Schwartzman is a digital marketing consultant with structured programs to help individuals and organizations pivot to digital marketing. His new book The Digital Pivot: The Secrets of Online Marketing explains in simple language how to switch from the old to the new way of doing business.
