How Flipboard Could Disrupt Media Advertising

Advertisers now have many of the same tools as publishers and traditional media companies. Photograph by Getty Images

Flipboard, one of the leading magazine-style news apps, on Tuesday released an update with a number of interesting features, all of which are designed to make it easy for users to curate content and create their own custom magazines. There was a lot of press about the launch, but I think most of the coverage missed a couple of crucial aspects of the new features and how disruptive they could be—not just to traditional media but to all kinds of media.

As we tried to point out in our post, Flipboard’s new version is more than just an evolution: It’s a significant departure from what the service was all about. Until now, it’s been about making it easy to discover and consume content from multiple sources, but the new features are aimed at turning readers into publishers by giving them curation tools like those used by Flipboard’s own editors.

Flipboard’s move may seem like an obvious step, one that combines some of the appeal of such services as Pinterest or Tumblr. But depending on how Flipboard decides to proceed with these features, they could be disruptive indeed. Here are a couple of ways how:

Advertising. Flipboard’s curation and publishing tools are not just for individual users; they’re also for corporations, existing publishers, and brands—and one overlooked element of the launch is that Flipboard is building e-commerce functionality into the app. According to Chief Technology Officer Eric Feng, some advertisers are already creating their own magazines using both their own ads and content from other sources. Those magazines could then be selected and highlighted by Flipboard’s algorithms just like any other effort by a Flipboard user.

We’ve written a lot about the phenomenon of “native” advertising (and will be talking more about it at our paidContent Live conference on April 17 in New York), as well as related concepts such as sponsored content and what some call “brand journalism.” The idea is that brands and advertisers now have all of the same tools on which traditional publishers used to have a monopoly—i.e., the ability to create and distribute interesting content and reach audiences directly. If a brand can curate content itself, and have its own ads with e-commerce features built in, why does it need a traditional magazine?

Revenue. Flipboard already has partnerships with some media companies in which it gets to use more of their content directly in the app (instead of showing just short excerpts and then a “Web view” in a browser) in return for a share of advertising revenue. When I asked Feng whether Flipboard might consider doing a revenue share with individual users if they create compelling magazines from curated content, he said: “That is something we are thinking about doing at some point in the future.” That’s not a promise, but it’s still an interesting idea, and potentially disruptive in a number of ways.

If Flipboard provides the content and the tools, and the users who curate that content are generating a lot of value in terms of page views, “Likes,” or whatever metric you want to use, shouldn’t those users get some benefit? Where this gets problematic is how Flipboard decides who gets what share of the revenue. If the ads come from a traditional media outlet, does it get the largest share, or does Flipboard? And if media companies don’t want to play ball, does Flipboard just monetize their content anyway, the way Huffington Post and other aggregators do?

Advertisers now have many of the same tools as publishers and traditional media companies, and readers and consumers of content also have much more power over that content than they used to. These are two inescapable facts about the new media landscape, and Flipboard has just staked a claim to some significant territory on both of these fronts.

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