Month: August 2022

As Instagram aims to incentivize the usage of Reels, the newer feature has been prioritized, and now generates more organic reach than other long-established features, including photos, said Brendan Gahan, partner and chief social officer at Mekanism. This means that if creators want to win at Instagram (at least for now), they’ll need to feed the beast, by creating and sharing more video content.

“Savvy creators and brands caught on to this quickly and capitalized on this. You’d have to be living under a rock to not notice that shift,” Gahan said via email. 

Influencer Ashley Gross, who goes by @ewdatsgross on social media and has more than 36,000 Instagram followers. Gross has shifted to regularly posting Reels content, and has even joined the Instagram Reels Play Bonus Program. While the move hasn’t significantly increased her follower count, Gross said she’s noticed better engagement as a result. 

“We’re exactly seeing that — people who solely invested in photos instead of video content are setting themselves up for failure as passive content (like video) becomes more popular,” Gross said in an email to Digiday. “Adapt or die, right?”

Over the years, Instagram has launched several new product features, like Stories and Reels, to maintain its competitive advantage over other social media platforms. Instagram has also introduced shopping capabilities and more ads to diversify its revenue streams.

In response to the changes, a number of influencers announced they would be quitting the platform, which they said has been sullied by sunken engagement and Instagram’s mysterious algorithm. According to Buzzfeed, it’s burnout from playing the “Instagram creator game.”

“People are creating more video because that’s the only way to get your content seen,” said lifestyle blogger Jessica Kirby. “It’s not because they want to create video. It’s because they know that if they don’t, nobody’s gonna see their stuff.”

Kirby, who goes by @jessannkirby, has more than 136,000 Instagram followers. While smaller creators leverage Reels to get their foot in the door, Kirby said the pivot to video, along with Instagram’s other changes, has pushed her to divest from the social media platform and instead invest in her own channels, like her blog.

Per Kirby, video is the future of social media. There’s no bones about it, but Instagram’s all-or-nothing push is too much. “Instagram is just trying to copy what other platforms are doing instead of carving out their own niche,” she said. 

On the agency side, there’s long since been a push for clients to embrace and produce video content, as things like Reels and TikTok pick up steam — according to both with Gahan at Mekanism and Joe Saw, director of operations at Fanbytes, a U.K.-based social media and influencer marketing agency. 

Saw said there will always be social media users who reject change, but “when you’re working on social you’re used to being reactive, being quick,” Saw said. “This change only highlights the importance of that.”

3 Questions with Ken Krasnow, CMO at Dr. Praeger’s frozen foods 

Dr. Praeger’s recently changed its marketing strategy, ramping up efforts by testing out new channels. Why now?

Vestar Capital Partners purchased Dr. Praeger’s in January. I was brought in and some other senior leaders were brought in to help the company grow even more. We’re bringing the next level of marketing thought leadership to the company. This was a family-run business. Some of the more traditional disciplines that you might pick up in a traditional CPG or elsewhere weren’t really leveraged. Building out a 360 cross-channel campaign, leveraging data in the ways to build audiences, to optimize our campaign in flight, these are things that weren’t done in the past. 

How does that impact media buying or Dr. Praeger’s media mix?

Looking at our target consumer [and] their media behaviors, we were really hyper-focused on fewer bigger, better investments. We decided that social would be kind of the center of gravity for this campaign with Facebook and Instagram being the primary place that we reached out to people to drive awareness. YouTube, obviously, would be a big piece of that as our target audience spends a lot of time there. And that provides us with a really great place to tell our story. Then we understood that we’re not going to get too far unless we drive conversion. We felt the best way to do that is to catch people when they’re in shopper mode. And so by working with a geo mobile spatial company, we’re able to serve ads to consumers when they are within a certain radius of one of our top retailers.

You mentioned social became big part of Dr. Praeger’s strategy. What makes social media an important part of Dr Praeger’s strategy?

Advertising today is a lot less about one-way communication. It’s a lot less about beating your chest, getting on the top of the tallest mountain screaming how great you are as a brand. It’s a lot more about listening. Social really enables us to listen and understand what the conversations are, the sentiment, what’s important and then create content that’s meaningful.

By the numbers

Over the last few months, marketers and advertisers have busied themselves trying to carve out space for themselves in the metaverse. That’s everything from launching a brand presence to experimental projects. Companies are also hiring creative talent to bolster metaverse efforts, and they’re willing to spend big, according to a new report from creative job platform Creatively, made exclusively available to Digiday. According to the report, “the jobs with the highest proportion of creatives commanding more than $150 per hour — the equivalent of $312,000 per year — were Web3 /metaverse creative roles.” Find more from the report below:

• 49% of those who responded to the survey say they’re hiring more creative positions in 2022 than in 2021, while 28% are hiring fewer positions.
• 53% say the job market for hiring qualified creative talent has become more competitive in the past year, while 29% say it has become less competitive.
• 55% have seen an increase in wages requested by creative talent thus far in 2022, while just 27% report a decrease.

Quote of the week

“The big multinationals are still spending and that’s helping the agencies. Moreover, the U.S. consumer — while polarized — is still generally accepting the price increases being pushed through which is encouraging the brands to spend.”

— Ian Whittaker, an equities research analyst at Liberty Sky Advisors, on the economic landscape amid the downturn.

What we’ve covered

• After organic success on TikTok, more DTC brands are diversifying their budgets
• The downturn ad economy: A tale of two narratives
• Experts weigh in on the challenges of marketing TV shows in the crowded streaming space

Wasted advertising is likely to top that list — and for good reason. Not only is it a notable source of potential savings but, more importantly, it can help businesses unearth pockets of growth. 

“Based upon our clients feedback, advertisers are concerned about the ROI they are currently experiencing from walled garden platforms (Snapchat, Twitter, Facebook, Google, etc),” said Mark Walker, CEO of ad tech group Direct Digital Holdings. “Clients are reassessing their spends and searching for more cost efficient digital advertising sources that are more transparent and open in their measurement in delivering an efficient ROI.” 

The earnings updates from the largest online media owners last week alluded to it. Then attempts to explain those updates made it abundantly clear. Turns out, ad dollars weren’t just being slowed over the first half of the year. They were being rationalized and invested in the areas that really work. 

“Advertisers have begun to question the big online platforms but still rely heavily on them for their advertising activity,” said Jide Sobo, director of digital solutions and partnerships at Ebiquity Group. “We see little evidence of brands backing away from these platforms based on our client spend. Nevertheless, brands continue to challenge the platforms over brand suitability and responsible practices.”

That would explain why search advertising has held up so far this year. To the point where there’s a clear divergence in growth between search and display ads. 

Search ads are highly effective, and the data signals search relies on are robust (it’s basically contextually targeted). It is seen more as a cost of sales than an optional expense. No wonder it’s the last thing to be cut by brands worried about the short-term bottom line. The numbers back this up. Growth in ad spending on YouTube, Twitter, Meta and Snap has slowed relative to advertising on Google search and Amazon, per data collated by Enders Analysis. 

To be clear, these cuts are likely to be uneven. What the current rationalization of ad spending is making unequivocal is that not all direct response advertising is created equal. If anything, it’s driving a divide between higher and lower funnel direct response advertising, said Jamie MacEwan, media analyst at Enders Analysis. 

There are, however, arguments for both sides. It’s no secret that higher funnel advertising is harder to link to purchases (increasingly so, given stricter restrictions around third-party addressability), has lower short-term returns and is susceptible to more wastage. That said, marketers need to generate new demand (irrespective of a recession) and that can’t be found at the lower end of the funnel. 

“Our ability to improve effectiveness of reach and quality of reach is allowing us to drive cost per effective reach down both in digital and TV,” Procter & Gamble’s chief financial officer Andre Schulten told analysts on the company’s earnings update last week. “We have developed a strong capability to target better both on TV as well as in digital. Our ability to improve effectiveness of reach and quality of reach is allowing us to drive cost per effective reach down both in digital and TV.”

The dilemma every senior market at these advertisers is grappling with is how much online ad dollars to cut and where to spend what they have left as there’s no consensus on the state of the economy. 

Its not a new problem, of course. Digital advertising is historically an area marketers turn to make cuts as it’s always been easier to pull back digital dollars than TV (particularly upfront) commitments. While marketers could exercise their option to pull money out of the linear TV market, fortunately for TV networks in the U.S., it’s an election year, and the surge of on-air political ad spending may help compensate for any negative impact. Online media owners, on the other hand, may not be as fortunate.

This spending reappraisal is a tall order for marketers. Not least because it means eating a big slice of humble pie. They have to admit they’ve spent tens of millions of dollars on advertising that at best is inefficient and limp, at worst fraudulent. These are tough issues to reconcile for marketers. Maybe that’s why they find it so hard to rein in online advertising — against their better judgment. That said, the results speak for themselves. 

When Procter & Gamble turned off $200 million in online ad spending in 2017, the marketers there saw no change in business outcomes. The same year, Chase’s marketers cut the number of sites it advertised on from 400,000 to just 5,000 and saw no change in business activity. When Uber’s marketers turned off their paid app install budgets in 2017, the app installs continued. There’s a lot of ad spending inefficiencies out there.

“Advertisers need to retake control, and start tracking their ad spend, key media metrics and KPIs themselves,” said Philippe Dominois, CEO of media management firm Abintus Consulting. “Having their own media performance tracking allows them to identify ad spend inefficiencies right away and optimize their media performance & ROAS over time.”

No, these aren’t new issues. Marketers have long bristled at the fact that they have to trust that ads bought on platforms like Google and Facebook are as effective as they say they are. It’s just harder to accept this fact when the c-suite won’t. 

“Quite frankly, I think what you’re seeing is those platforms becoming less attractive to advertisers as their limitations become clearer,” said Ian Whittaker, an equities research analyst at Liberty Sky Advisors. “It’s a structural not a cyclical thing.”

The key numbers:

• $665.9 million in total revenue, up 9% year-over-year
• 433 million monthly active users, down 5% year-over-year
• $43 million in net losses compared to $69 million net income year-over-year
• $542 million in U.S. and Canada, up 7% year-over-year
• $22 million in “rest of world” category, up 71% year-over-year
• 92 million monthly active users in the U.S. and Canada, down 8% year-over-year
• 10% of time users’ time on the platform is spent on watching videos
• Average revenue per user was $1.54 globally, up 17% year-over-year
• Average revenue per user was $5.92 in the U.S. and Canada, up 20% year-over-year

Highlights:

For years, advertisers have said Pinterest hadn’t focused enough on the e-commerce side of the business, but the company has been quickly looking to change that perception. Revenue from shopping ads is growing twice as fast as overall revenue year-over-year, chief financial officer Todd Morganfeld said on Monday during the company’s quarterly earnings call. He added that there are also now 1 billion shoppable products in Pinterest’s system thanks to partnerships with Shopify and WooCommerce.

Although there was “softening” demand from CPG brands, big box retailers and mid-market advertisers, Pinterest saw “strength” in demand from retail and international advertisers. Morganfeld also noted that the company had 25% growth in spending commitments from joint business partners in the first half of 2022 than 2021, suggesting that the non-binding agreements were a sign that advertisers are seeing Pinterest as more than just an “experimental” platform.

Pinterest is also seeing momentum with its own pivot to video. Morganfeld said 10% of user time on the platform is now spent watching videos through organic user content and paid partners such as Tastemade. Other key areas the company is looking to build out include more organic shopping experiences that marketers can buy ads for along with new capabilities for automating campaign-level marketing.

When asked for his thoughts as the newcomer on how Pinterest has fallen short in the past, CEO Bill Ready said the first 20 years of e-commerce were focused on “solving for buying more than shopping.” Now that more shopping is starting online, Ready said it’s no longer just about whether a sale is completed digitally or in a store. He said context and timing also matter, explaining that Pinterest is more focused on intent-based content than “entertainment” — an apparent reference to competitors like TikTok and YouTube.

“When we talk about going from inspiration and intent to action, there are a lot of different ways we can take people to action,” Ready said. “Some of the efforts I’ve seen across the industry can at times get hung up on did you complete a purchase on the platform.”

Key context:

Pinterest’s second-quarter results also mark the company’s first major milestone since its June announcement that Ben Silbermann — the company’s co-founder and longtime CEO — would be replaced by Ready, a former Google and PayPal executive. Prior to leading Google’s payments and e-commerce efforts, Ready was chief operating officer at PayPal — where he also led commerce and product teams — and before that spent years as CEO of Venmo.

Pinterest has also been in the spotlight after news last month that Elliott Management had reportedly taken a 9% stake in the company, leading some to believe the activist investor could soon pressure Pinterest to make more changes.

Some advertisers say they’ve seen the appeal of Pinterest putting more focus on creators, search, trend predictions and various other tools. Others say it’s coming up less in conversations and that it’s still “too niche” or has a “lot of catching up to do” on the e-commerce front. However, the platform is still overall seen as relevant for content discovery, especially for fashion, food, home decorating and other categories.

So far this summer, Pinterest has made several shopping-related announcements including the acquisition of the AI-powered shopping startup The Yes and new ad formats for creators and advertisers. (On Monday, it also announced a new moodboard-making app called Shuffles.) Ready said content creators “appreciate the uniqueness of our platform” even if Pinterest doesn’t “match dollar-for-dollar with larger platforms.”

“I think it leads to different types of opportunities for how creators can engage on our platform and the kinds of content and user engagement that can come from that,” Ready said. “It also means we can play our own game on how we work with content creators.”

After taking a look at publishers’ activity on Facebook and Instagram in previous weeks, the number of publishers actively using TikTok might seem far behind: 51% of respondents to Digiday’s survey said their titles posted content on TikTok in the past month, compared with 99% who had posted on Facebook and 86% who had posted on Instagram. But that 51% is a big jump from last year, when only 35% of publishers said their titles had posted on TikTok in the past month.

Not only are more publishers using TikTok, but those who are using it are also using the platform more often. Respondents who said they post content on TikTok every day jumped from 18% in 2021 to 34% in 2022. Meanwhile, those who said they post at least once a week dropped from 74% last year to 54% this year. It’s likely that many of those who said they posted at least once a week last year increased their frequency to every day this year, causing the shift.

One interesting finding from Digiday’s survey is that, while publishers are posting more frequently on TikTok, the number of respondents who said they don’t invest at all in original TikTok content has jumped significantly since last year. In 2021, 0% of publisher pros said they don’t invest any money in original content for the platform. In 2022, that number is up to 19%.

On the flip side of that, of the remaining spending categories offered to survey respondents, every one indicates that spending on original TikTok content is down except for those who said they spend a lot on original TikTok content. That category saw an increase from 12% last year to 19% this year — adding to the complexity of publishers’ use of TikTok.

To complicate things even further, Digiday’s survey found that publishers are also not investing in advertising on TikTok. Out of the 72 respondents, only seven (or 10%) said they purchased ads on TikTok in the past month. So not only are publishers not investing a whole lot in original content on TikTok, but they’re also not really investing in ads on the platform, either.

The lack of publishers’ investment in TikTok is likely due to the fact that TikTok doesn’t seem to bring in a lot of money: Digiday’s survey found there was a significant drop in those who said TikTok is valuable to driving their titles’ revenues. Only 12% of publisher pros said TikTok is valuable or extremely valuable to driving revenues, down from 21% last year. Interestingly, though, the number of respondents who said TikTok is either not very, or not at all valuable, to driving revenues remained relatively unchanged: 56% this year, compared with 54% last year.

Publishers’ complicated relationship with TikTok took a swing in the complete opposite direction regarding brand-building, however: 44% of respondents to Digiday’s survey said the social platform is either valuable or extremely valuable to building their titles’ brands, while only 19% said it’s not very or not at all valuable for brand-building. This is not significantly different from last year’s survey results, when 50% of respondents said TikTok was valuable or extremely valuable for brand-building and 21% said it was not very or not at all valuable. But it does indicate that publishers clearly continue to see the importance of TikTok when it comes to building their titles’ brands.

The number of publishers who said TikTok is not at all appropriate for their titles’ brands is also down significantly this year: Last year, 12% of publisher pros said TikTok is not brand-appropriate, compared with only 3% this year. However, we can’t end this deep dive without complicating things just a bit further: The number of respondents who said TikTok is only somewhat brand appropriate soared from 15% last year to 50% this year. Meanwhile, those who said the platform is extremely appropriate fell from 32% last year to 22% this year, and those who said it’s appropriate fell from 35% to 19%.

“There are evolving needs of the workforce to attract and retain talent, and agencies are looking to answer that in a few different ways,” Sean McGlade, svp of talent and learning solutions at the American Association of Advertising Agencies (4A’s), told Digiday. “[They] have to be more receptive to getting people up from the ground and … give people a sense of belonging right away.”

In the coming months, 4A’s will continue rolling out its so-called agency accelerator program, designed to support agencies that may have gaps in their resources and training programs. It offers four certifications for onboarding as well as foundational training for new hires and newcomers in the first three years of their careers.

But the wealth of online training materials alone can be overwhelming, from business schools to online providers like Udemy or Coursera, which means the agencies are challenged to find content that’s relevant, current and high quality. Agencies could actually help employees cut down on time searching for resources by creating their own content, McGlade added said.

GroupM University opened its school this past March with a $15 million commitment over three years to provide training, career coaching and personal enrichment classes for employees. Launch Pad participants complete a 12-week curriculum, offered both online and in-person, focused on topics in media foundations, building networks and business communication. The first cohort in the U.S. began this June and marks the first year of the program launched in North America.

Brian Dashew, named GroupM’s head of learning and development for North America in July, designed the curriculum. Coming from Rutgers University and Columbia University, Dashew sees continuous learning as personal to that employee’s career experience. GroupM tailors programming to a person’s profile to recommend content at different stages of their career.

“This is more than training,” Dashew said. “The media industry is not a space in which anybody can ever really claim to be done learning.”

GroupM University’s program may eventually get linked with internal credentialing at the agency. The goal of their training is to help people understand their career paths within GroupM and provide the tools and resources for them to grow in their roles. Career development and goal-setting are built into the various learning pathways in order to support the individual’s development.

“We are imagining new ways of offering internal credentials that make mobility across the organization more viable,” Dashew said.

Similarly, Kepler Group’s Kepler University offers a mix of 50 in-person, live and on-demand courses designed for marketing experts to advance into advisory and consulting roles. Kepler has offered internal learning and development since its founding in 2012, according to the company, and it has continued updating the content with the help of subject matter experts within the organization.

“We haven’t let it go stale,” said Karinna Maldonado, director of learning and development for Kepler. “Career development is a hot topic.”

Kepler’s courses cover a range of subjects, from brand safety to campaign analytics, and follow several different learning paths with a course structure, not unlike universities. But unlike a college class, lectures are not just instructors presenting to a room of students — students are guided by peer-to-peer learning, self-reflection time after class, and other practice exercises, such as working in sandbox environments on platforms.

Maldonado emphasized that organizations have to make time for learning. Kepler newcomers, for example, get three uninterrupted weeks for onboarding and learning. And with Kepler’s 2020 acquisition of Infectious Media, based in London and Singapore, the company has had to think globally about expanding its learning tools.

“It impacted how we think about our employees,” Maldonado said. “We localize content where it makes sense … such as [General Data Protection Regulation] for advertising.”

While Kepler did not provide an investment figure (it estimated a cost “in the millions”) for its university programs, developing people comes at a cost to organizations. With a potential recession looming, 4A’s’ McGlade pointed out training is often “the first casualty” in budget cuts. But asked whether Kepler foresees any cuts in this department, Maldonado said only that they will “keep investing” in employees.

GroupM echoed that it has “no intention to scale back” any committed spending on learning. “There is absolutely a high cost associated with developing talent, but the reality is that there is an even higher cost associated with not developing talent,” Dashew said.

The job description for a chief revenue officer at a media company doesn’t resemble what it used to a decade ago. 

“There was a time where the lion’s share of my job was just going out on sales calls,” said Mia Libby, revenue chief of The Daily Beast, who’s held that position for nearly five years. That was back when she considered the CRO title as more of the head of ad sales given the fact that advertising was the primary source of revenue for the company. 

Now, about half of her time is spent in internal meetings with the product, editorial, audience and subscription teams, in addition to sales, to find a healthy balance of how advertising, subscriptions, licensing and commerce all work together, Libby said on the latest episode of the Digiday Podcast. 

Heading into 2022, The Daily Beast wanted to find a more efficient method of monetizing the site’s users, from one-time visitors to paid subscribers. This meant creating more of a pipeline for converting readers to subscribers, but also by finding ways to collect first-party data in the process. 

With an economic slowdown creeping up on the horizon, however, Libby said that strategy is being looked to as the way of withstanding the potential headwinds, which could last a lot longer than the pandemic-induced recession of 2020.

Below are highlights from the episode, lightly edited and condensed for clarification. 

The changing CRO job description 

The role has changed because of this proliferation of diversified revenue streams. You know, 10 years ago — even less in many instances — when I got to the Beast, advertising was the primary, if not only, source of revenue, and we have [since] diversified that to a great extent across multiple different revenue streams. And I think CROs now are running businesses that have multiple revenue streams, as part of their overall pie, and have to be thinking about the user much more and the user experience in a way that I don’t think that they did before. 

Frankly, with advertising, you’re much more focused on hitting your revenue goals. And in some instances, I think people are willing to sacrifice that user experience to put another ad on the page [because] that’s more revenue. But now, in my role, I really have to focus on what impact that extra ad is going to have on the page: Is it going to mean that people aren’t going to scroll more? Is it going to mean that people don’t like coming to the site because we have too many ads? One of the things that we really have to think about because we have streams of consumer revenue, is ensuring that the user experience is really strong and that we’re constantly building engagement and loyalty.

Monetizing the ‘great middle’

It’s a much more user-centric business [that we have now]. User experience is incredibly important to us, but now we think about the best way to monetize each user, and that is completely dependent upon the depth of their engagement with The Daily Beast. So we know that there are people who are incredibly loyal to us who visit us directly to the homepage. Those are people that we are earmarking for subscription and we think they have a high likelihood to subscribe. Then there are people who have never been on The Daily Beast before. Those are people that we know are not necessarily going to sign up for a subscription, so our goal is to try to get them to come back again — to get them to become more and more familiar with The Daily Beast so that we can actually turn them into one of those loyal users one day. 

And then there’s a great middle. That’s somewhere in between those two ends of the spectrum. And in the middle, we have myriad opportunities to monetize those people. And we can start driving them into what we’re calling ”known user products”: those are newsletters, our app, our push notifications on site. If we can get them to register without paying, those users then become much more valuable to us than they were before. Our data shows that they come back more often, and therefore we’re able to monetize them more regularly, even if we don’t get them to subscribe.

Keeping the 2020 playbook on the shelf

In 2020 Q2, obviously, it was not a great quarter for us. But it felt like we really grasped what our readers needed from us and we were able to deliver there. Now I think we’re dealing with a lot of unknowns surrounding the economy and in politics and we’re just trying to, again, make sure that our user experience is really strong, make sure that we have a product people want to continue to come back to and make sure that we are serving our advertising partners in an uncertain time. So I would say that these two [periods of time] don’t necessarily line up from a business perspective, except that it just takes ingenuity to survive. You cannot keep doing the same thing over and over again. And if we were to try to just rip out our Q2 2020 playbook, it wouldn’t work right now. We need to be constantly reading the market, we need to be constantly understanding what users want from us and then responding.

Instagram’s expansion of Reels payments to media companies has taken some media executives by surprise, with payment amounts varying and the platform not making clear to media companies how the amounts are being calculated.

“It’s very all over the place. You don’t know that it’s getting turned on; it just gets turned on and you’re like, ‘Oh, I guess we’re eligible,’” said one media executive.

“It’s been a bit of a black box,” said a second media executive. “Candidly, we haven’t got too much information into the mechanics. We’ve just gotten a dashboard that is starting to show revenue pouring in every week — not pouring in but a meaningful amount.”

The payment amounts made to media companies vary by account, but they are based on the number of views that an account’s Reels receive and are capped each month. For example, a media company may receive $200 for the first 1 million Reels views on a given account, then $100 for every 1 million views after that with the payment maxing out at $1,200. In some cases, the maximum payouts can surpass $20,000 per month, according to the media executives.

While some media executives described the payment amounts as nominal — “It’s nothing,” said a third media executive — others see them as a welcome incentive to produce more Reels as the short-form vertical video format gains popularity across TikTok, Instagram and YouTube.

“We’ve been encouraged by [the payments going to] one of our accounts, so that will definitely influence the amount of energy that we’ll start putting into Reels,” said the second media executive.

Instagram is incentivizing media companies to post Reels as the platform attempts to compete with TikTok. That undertaking has not been easy going for the Meta-owned platform. Most recently Instagram reversed course on a test to make its user interface more closely resemble TikTok’s. And it’s unclear to what extent the publisher payment program will succeed in incentivizing media companies to post Reels.

Short-form video payment programs have been losing their luster among video makers because they pale in comparison to actual revenue-sharing programs. As creator and VidCon co-founder Hank Green covered in a video he posted to YouTube earlier this year, these payment programs put arbitrary limits on the amount of money that platforms pay to video makers, whereas revenue-sharing programs like YouTube’s AdSense program provide a sustainable source of money that scales with viewership. 

For now, media companies are content to cash Instagram’s checks, but if the platform really wants to reel them in, those payments will likely need to be larger and more reliable over the long run, especially as media companies grow wary of investing in short-form videos potentially at the expense of the long-form videos that already generate recurring revenue for them on platforms like YouTube.

“If you are an individual creator, if this is your side gig or something, a couple thousand dollars per month — it’s fine. But for a [media company]? I mean, no,” said the first media executive.