Facebook’s investment in newsletters confirms the future of data sales is owned media

Facebook is building a newsletter and website platform to compete with Twitter’s Revue acquisition and subscription newsletter services like Substack and MailerLite.

Facebook Landing Page and Email Newsletter

Facebook recently announced it’s building a blogging and newsletter platform to support small journalism and creators. The news was rumored in January right after Twitter invested in newsletters by acquiring Revue, but Facebook confirmed their plans in a blog post in mid-March.

In the U.S., we’ll introduce a new platform to empower independent writers, helping them reach new audiences and grow their businesses. We will start by partnering with a small subset of independent writers. The platform will include a variety of support focused on content creation and audience growth.

Campbell Brown, VP, Global News Partnerships and Anthea Watson Strong, Product Manager, News at Facebook

Facebook shared how its newsletter features would be integrated with current business and creator features within the main app, including Pages and Groups. The main self-publishing platform will include robust styling options to create individual websites and an email newsletter.

It’s a smart play. Small businesses and creators that already have a thriving Facebook following can add on to the current Facebook tools without needing to transfer their email lists or teach their fans to follow them to a different platform. If Instagram’s integration into the larger Facebook ecosystem is any indication, the tools should work seamlessly, directing newsletter readers to the online Groups to comment on posts, giving easy access to signups through the creator’s page, and displaying recent posts in users’ timelines.

This investment in providing small businesses and creators a platform for owned media is nothing new. Substack raised $65 million in Series B funding at the end of March. Patreon, Memberful, Vimeo, online courses, streaming services, subscription sites have all exploded in popularity with creators who are looking for ways to monetize the content they create. 

But not all of these creative monetization platforms are the same, and not all treat data generation the same, either.

The risks of borrowing a platform

The risks have been increasing for small businesses and creators who use third-party media platforms like social media sites to help them access a wider audience. Many small businesses don’t realize that they don’t own the audience they attract, the data they produce, and in some cases the content they post to apps.

This has become more and more apparent as social media users report getting shadowbanned from Instagram, TikTok, and other major social media sites. When social media works for you, it’s easy to forget that it’s run by an algorithm that doesn’t care about your bottom line.

And people are worried about how companies use the data they collect. They love the targeted advertising that they receive when companies use their data, but they don’t love the idea of being the product itself. This has led to various companies moving toward greater privacy controls, including Apple’s new app data warning and Google deciding to ban the third-party cookie in its browser by 2022. 

These changes have put Facebook into a full-page-ad-buying tizzy about the future of data, which makes this move into semi-owned media all the scarier.

Why owned media looks so good to Facebook

Owned media has long been the gold standard of marketing. Social media is great for small businesses who struggle to make their website or app compete against the big players, but ultimately the company email newsletter is what gives the highest conversion rates. When you use an email platform like MailChimp, you get to keep your data. Email platforms make their money on subscriptions to their product, not on the data you store there.

When you own your email list, your sales data, and your customer behavior information, you can add it to your analytics tools (whether BI or CRM or both) and you’re able to better understand who your customer is, when they purchase, and how well you’re serving them.

Facebook Ads have traditionally done so well because they’ve provided CRM segmentation and marketing automation targeting as a service. You purchase the ad space and set the targeting, and they bring you the traffic. You pay for this service with your data instead of a monthly subscription fee.

Facebook’s reputation soured because it couldn’t just be happy helping businesses sell products. Its decision to sell huge amounts of data to the likes of Cambridge Analytica and others has made both businesses and individuals skeptical of giving Facebook their data.

The future of social media is semi-owned

It’ll be interesting to see what Facebook, Twitter, and others do with the newsletter tools. Currently, Substack makes its money by taking a portion of the subscription price from writers and creators. If you write on Substack (and I do), you own your email list, you own your content, and you can take all of that with you if you go to another newsletter or blogging platform. The same is true of LetterDrop, MemberSpace, and other similar services. 
What I assume is that—considering its long history with gobbling up data to repackage and sell as a product to marketers, data mills, and others—Facebook will not be happy with turning newsletters into another revenue stream. My guess is that the email lists, reader data, writer data, and reader behavior will eventually be repackaged as another data product.

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Tamara Scott is a writer and content strategist based in Nashville. With a background in English education, she plans and writes clear, instructive content for marketers and technology users of all skill levels. Follow @t_scottie