The HUGE Issues With The Digital Ad Space, Corporations, Closures, & Understanding Diversification
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Date: 2019-11-01
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Comments and reviews: 9
Unedited Gamer
Patreon doesn't pay out anything, it's a 3rd party middle man who just skims off the top. They don't even have their own payment system, PayPal does the actual transactions and if anything Patreon as a business is nothing more than a convenience factor that offers quality of life services. Funny thing is PayPal has a free built in service exactly like Patreon which is free and always has been free. I could certainly see Patreon going under as they offer little to no real service. It might as well just redirect you to PayPal and have you set up a monthly subscription thru them and charge the content creator for the redirect. Patreon biggest accomplishment today is convencing folks it actually offers a service. Content creators fans give Patreon money, Patreon takes 10% and sends the rest too the content creator via PayPal. That's it that is 100% of what they do and the sad thing is they try to act like they are paying people out of their own pocket as if it was charity and the supporters do not even exist. They even recently started slowing down payment to their users (just holding onto the money longer and refusing to send it out in a timely manner) and complained how their business model is too generous. Now they are charging folks 30% for payment advances even tho you do not get the money early and the money only comes once the supporters pay them. They are just charging the content creators an extra 20% to avoid their now slower pay out times. Supporters hand Patreon moneyPatreon takes 10%-30%Patreon complains they are being too generous Patreon than forwards the rest of the money to PayPal and let's them sort everything out.
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Patreon doesn't pay out anything, it's a 3rd party middle man who just skims off the top. They don't even have their own payment system, PayPal does the actual transactions and if anything Patreon as a business is nothing more than a convenience factor that offers quality of life services. Funny thing is PayPal has a free built in service exactly like Patreon which is free and always has been free. I could certainly see Patreon going under as they offer little to no real service. It might as well just redirect you to PayPal and have you set up a monthly subscription thru them and charge the content creator for the redirect. Patreon biggest accomplishment today is convencing folks it actually offers a service. Content creators fans give Patreon money, Patreon takes 10% and sends the rest too the content creator via PayPal. That's it that is 100% of what they do and the sad thing is they try to act like they are paying people out of their own pocket as if it was charity and the supporters do not even exist. They even recently started slowing down payment to their users (just holding onto the money longer and refusing to send it out in a timely manner) and complained how their business model is too generous. Now they are charging folks 30% for payment advances even tho you do not get the money early and the money only comes once the supporters pay them. They are just charging the content creators an extra 20% to avoid their now slower pay out times. Supporters hand Patreon moneyPatreon takes 10%-30%Patreon complains they are being too generous Patreon than forwards the rest of the money to PayPal and let's them sort everything out.
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Isori
I think it is interesting to note how, even though there is a corporatization of the digital space, they all took very long to splash in the digital market, maybe because of their size and surreal ambitions. I suppose it was inevitable that the market would transform, but I also think that unless they unite to stifle every form of advancement or evolution, traditional media corporations will crack on their seams during their transition to the internet age. I assume most of them are rethinking the way they operate, but I wonder if they can do it fast enough to cope. Also, I am a part of the public that feel tempted to vilify corporations for everything, but I must say, in most cases it is not only amorality or lack of empathy, but incompetence and lack of foresight in the realizations that everything they do has the potential to break things (and themselves) every time they move just due to their size. The corporate structure is too easy to be corrupted and promote pretenders instead of leaders. Fyre, Theranos, if you go back for a bit, there is Enron. The Housing bubble. The University scandal. The incompetence of the Brexit efforts. All of them are symptomatic of a system that promotes cardboard cut-outs rather than substance. If there is a flaw in capitalism it is the assumption that efficiency means effectiveness and that the things that are done are right by nature.
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I think it is interesting to note how, even though there is a corporatization of the digital space, they all took very long to splash in the digital market, maybe because of their size and surreal ambitions. I suppose it was inevitable that the market would transform, but I also think that unless they unite to stifle every form of advancement or evolution, traditional media corporations will crack on their seams during their transition to the internet age. I assume most of them are rethinking the way they operate, but I wonder if they can do it fast enough to cope. Also, I am a part of the public that feel tempted to vilify corporations for everything, but I must say, in most cases it is not only amorality or lack of empathy, but incompetence and lack of foresight in the realizations that everything they do has the potential to break things (and themselves) every time they move just due to their size. The corporate structure is too easy to be corrupted and promote pretenders instead of leaders. Fyre, Theranos, if you go back for a bit, there is Enron. The Housing bubble. The University scandal. The incompetence of the Brexit efforts. All of them are symptomatic of a system that promotes cardboard cut-outs rather than substance. If there is a flaw in capitalism it is the assumption that efficiency means effectiveness and that the things that are done are right by nature.
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TransparentLabyrinth
Fascinating point about trust. I hadn't really thought about it that way, but it helps explain why it's so difficult for newer creators to succeed in the digital space. It's not just the competition; it's the trust-building of the brand and going viral on a regular basis doesn't necessarily build that trust in the long-term. I do think it begs the question: How do you build trust? Most people don't have ten years of finances to sit around building trust with an audience. Whether independent or a startup, there are bills to pay. And it seems many of the creators who succeeded in such a long-term capacity on this platform were successful because they were able to do something else on the side for money for a while and do this as a hobby on the side (and competition wasn't as fierce, nor the algorithm so cruel about how long it takes to produce new content, so there was a lot more room to take your time with things. Now you have all these new people coming in who are looking at the prospect of either trying to do something like youtube as a full-time job from day one, or only doing it as a hobby and never trying to make it into a business. Cause there isn't a lot of room for middle ground.
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Fascinating point about trust. I hadn't really thought about it that way, but it helps explain why it's so difficult for newer creators to succeed in the digital space. It's not just the competition; it's the trust-building of the brand and going viral on a regular basis doesn't necessarily build that trust in the long-term. I do think it begs the question: How do you build trust? Most people don't have ten years of finances to sit around building trust with an audience. Whether independent or a startup, there are bills to pay. And it seems many of the creators who succeeded in such a long-term capacity on this platform were successful because they were able to do something else on the side for money for a while and do this as a hobby on the side (and competition wasn't as fierce, nor the algorithm so cruel about how long it takes to produce new content, so there was a lot more room to take your time with things. Now you have all these new people coming in who are looking at the prospect of either trying to do something like youtube as a full-time job from day one, or only doing it as a hobby and never trying to make it into a business. Cause there isn't a lot of room for middle ground.
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Alec Loeb
Great stuff as always Phil. I do digital marketing for a big e-commerce site and see the struggle against the duopoly every day. One major reason is the ability to measure success (usually sales. Facebook and Google are so good at direct response marketing, or getting people to buy stuff immediately in a way companies can track and prove. Its the reason people see so much retargeting on Facebook or Display. Its MUCH harder to see the impact of an article or video a media company makes for you. Most people read/watch and take more time or more ads to convert. Doesnt mean that sponsored content wasnt worth it, just means connecting the dots is really hard. And when your bosses see Facebook/Google with good ROI and everything else super low, they frequently go for the better numbers. The tides starting to turn though. Were testing and discovering ways to better understand the true value of sponsored and affiliate content vs Facebook/Google through things like (this will sound nerdy) Multi-Touch Attribution systems and incrementality testing. Always happy to talk more if youre interested. Theres ALOT going on in this space right now
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Great stuff as always Phil. I do digital marketing for a big e-commerce site and see the struggle against the duopoly every day. One major reason is the ability to measure success (usually sales. Facebook and Google are so good at direct response marketing, or getting people to buy stuff immediately in a way companies can track and prove. Its the reason people see so much retargeting on Facebook or Display. Its MUCH harder to see the impact of an article or video a media company makes for you. Most people read/watch and take more time or more ads to convert. Doesnt mean that sponsored content wasnt worth it, just means connecting the dots is really hard. And when your bosses see Facebook/Google with good ROI and everything else super low, they frequently go for the better numbers. The tides starting to turn though. Were testing and discovering ways to better understand the true value of sponsored and affiliate content vs Facebook/Google through things like (this will sound nerdy) Multi-Touch Attribution systems and incrementality testing. Always happy to talk more if youre interested. Theres ALOT going on in this space right now
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Indigo Black
Big corporations are gonna have to go through a lot of growing pains. They need to fully realize that the old format for advertising and building a business doesn't work the same in an online space. They need to try and adapt to this new format and change how they approach their business. Big corporations aren't gonna get anywhere long-term if they just try to force their old system to work in a vastly different environment like the online world. Also, big companies need to realize that building a long-term, stable online business is not as easy as it looks. Anyone has the potential to be a viral hit. However, it takes a lot of patience, hard work, and long-term development to cultivate a community that trusts you and wants to stick with you for a long time. Trying to build an online presence/business isn't a numbers game; it's a community builder game.
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Big corporations are gonna have to go through a lot of growing pains. They need to fully realize that the old format for advertising and building a business doesn't work the same in an online space. They need to try and adapt to this new format and change how they approach their business. Big corporations aren't gonna get anywhere long-term if they just try to force their old system to work in a vastly different environment like the online world. Also, big companies need to realize that building a long-term, stable online business is not as easy as it looks. Anyone has the potential to be a viral hit. However, it takes a lot of patience, hard work, and long-term development to cultivate a community that trusts you and wants to stick with you for a long time. Trying to build an online presence/business isn't a numbers game; it's a community builder game.
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LeviathanHomeCooking
So. People don't trust corporations because corporations lack humanity and are often far removed from the actual realities and beliefs of their customers. To get brand loyalty you either have to develop relationships with your customers (which is impossible because of the bureaucratic nature of corporations) or provide a good product/service, both which corporations don't seem to care about because you literally see corporations talking down to their customers on social media when their customers complain about being served a shit product. So no offense but I could care less if a corporation suffers losses because they're inept, especially news sites who make money off of publishing lies, slander, and social division for the clicks. Yeah a lot of good people will lose their jobs, but we can't let corporations act unethical just to save jobs.
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So. People don't trust corporations because corporations lack humanity and are often far removed from the actual realities and beliefs of their customers. To get brand loyalty you either have to develop relationships with your customers (which is impossible because of the bureaucratic nature of corporations) or provide a good product/service, both which corporations don't seem to care about because you literally see corporations talking down to their customers on social media when their customers complain about being served a shit product. So no offense but I could care less if a corporation suffers losses because they're inept, especially news sites who make money off of publishing lies, slander, and social division for the clicks. Yeah a lot of good people will lose their jobs, but we can't let corporations act unethical just to save jobs.
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Melissinha73
I think this topic is tied to the issue of getting money out of politics. We see large TV Networks cowtowing to their. Investors, advertisers and ultimately those parties keep them tied to corporate interests and these outlets choose to downplay stories and people who challenge that power. Thats why small companies like Rogue Rocket are so awesome, they make what they want and support themselves through diverse streams of revenue which allow them to have a unique non-influenced voice. Having sponsors or advertisers that work directly with the creator is better because it is a mutual agreement where YouTube is not involved in the agreement.
reply
I think this topic is tied to the issue of getting money out of politics. We see large TV Networks cowtowing to their. Investors, advertisers and ultimately those parties keep them tied to corporate interests and these outlets choose to downplay stories and people who challenge that power. Thats why small companies like Rogue Rocket are so awesome, they make what they want and support themselves through diverse streams of revenue which allow them to have a unique non-influenced voice. Having sponsors or advertisers that work directly with the creator is better because it is a mutual agreement where YouTube is not involved in the agreement.
reply
Grady Toland
A lot of valuable information. Appreciate your candor & insight. It is valuable to me as a viewer to be given a peek behind the curtain. In a sense, this validates viewer's critical role and the importance of loyalty over corporate production power. Making the public aware of dualopoly (and monopoly) is the first step to any genuine push back. Its a long haul and I really don 't want to loose the internet's sense of alternative or respite from media deathstars. I know keeping a cloquial or community sensibility in a massive global space seems impossible; but we can hope and keep trying. Thanks again for educating us.
reply
A lot of valuable information. Appreciate your candor & insight. It is valuable to me as a viewer to be given a peek behind the curtain. In a sense, this validates viewer's critical role and the importance of loyalty over corporate production power. Making the public aware of dualopoly (and monopoly) is the first step to any genuine push back. Its a long haul and I really don 't want to loose the internet's sense of alternative or respite from media deathstars. I know keeping a cloquial or community sensibility in a massive global space seems impossible; but we can hope and keep trying. Thanks again for educating us.
reply
Kelly Kellner
Phil I've been a fan for years. Currently I'm studying finance and I'm fascinated by this video. I think that human psychology is overlooked when trying to make a community online. Take T-Series vs. PewdiePie for example. People naturally gravitate towards a person rather than a company. We don't know your employees but we don't really care because we come for you. At this point you don't even need to write for your show anymore. You could just be the talking piece for your stories but as long as you give the illusion that you're not we'll still be here.
reply
Phil I've been a fan for years. Currently I'm studying finance and I'm fascinated by this video. I think that human psychology is overlooked when trying to make a community online. Take T-Series vs. PewdiePie for example. People naturally gravitate towards a person rather than a company. We don't know your employees but we don't really care because we come for you. At this point you don't even need to write for your show anymore. You could just be the talking piece for your stories but as long as you give the illusion that you're not we'll still be here.
reply
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