Facebook-Instagram: 3 takeaways for publishers

Don't concern yourself with all the hand-wringing about Facebook's $1 billion acquisition of Instagram, which Facebook CEO Mark Zuckerberg announced Monday, on Facebook of course. In and of itself, the deal won't have much impact on publishers' digital strategies.

The acquisition does, however, reinforce three important lessons for digital media companies.

1. Social and mobile are a powerful combination - and a threat to existing content models

Facebook is the dominant social media platform, but Instagram had carved out a significant niche in the mobile-social space - to the tune of 30 million users with a single photo-sharing app that until last week was available only on the iPhone. Facebook considers this space so important that it was willing to pay $1 billion for a company with no revenues and no discernible business model.

The UK's Guardian tracked 8 million unique visitors from Facebook to its website in a recent four-week period - accounting for more than 30% of referral traffic and surpassing Google for the first time. Tanya Cordrey, the Guardian's director of digital development, described the milestone as "a seismic shift".

Pinterest has become a top social referrer for many women's magazines. Mashable reported last month that Pinterest traffic to Cooking Light's website is up 6,000% over the past six months, and the social bookmarking site on track to become the second highest traffic driver, after Google.

Mobile's growth is explosive as well. Data traffic from mobile devices is expected to more than double this year, according to networking company Cisco. In 2011, mobile passed print for the first time in terms of time spent with media. eMarketer estimates that consumers spend an average of 65 minutes a day on mobile devices, compared to 44 minutes a day for print magazines and newspapers combined.

2. There's value in utility apps

Magazine replicas are publishers' path of least resistance into mobile, but Instagram's success clearly demonstrates the value of utility apps as a way to increase engagement with mobile users. The concept of Instagram is mind-numbingly simple: take a photo, share it with friends. Media brands need to think beyond the print replica and look for more innovative ways to package their content and expertise for mobile use.

The possibilities for free or paid utility apps are virtually endless. Consumer brands including Cosmopolitan (sex positions) and Men's Health (nutrition) have found success here, as have B2B publishers such as IDG (white papers) and UBM TechWeb (live events).

3. Don't cede ground to startups

Last fall, Instagram CEO Kevin Systrom described Instagram not as a photo-sharing app, but as a media company. From Business Insider:

"I don't want people getting stuck with the idea that Instagram is a photo-sharing company. Instagram is a media company. I think we're about visual media. I explain ourselves as a disruptive entertainment platform that enables communication through visual media."

Key word: disruptive. There's disruption happening all around you - but there's no reason to let startups have all the fun, and take business away from you in the process.

We've written before about the need for media companies to think like tech startups. Embrace the disruption - use your expertise to capture some of these emerging opportunities instead of ceding share to non-traditional competitors. (One commenter on Zuckerberg's Facebook post announcing the deal noted, "A few guys and some Red Bull could pound out an Instagram clone in less than a week for less than 1% of what was payed for Instagram.")

Bob Carrigan, CEO of IDG Communications, talked about this approach last week at the Newspaper Association of America's Media Xchange conference in Washington, DC.

"The curse of the media business is that too many companies concede very high value segments of their markets to Internet startups," Carrigan said, citing classifieds is a classic example. Closer to IDG's sweet spot, ad networks represented a significant threat to IDG's business - so IDG launched its own third party network, called the IDG Tech Network, which now serves 450 publishers outside of IDG.

"We're not going to concede the network space to the big horizontal networks that are coming in," Carrigan said. "We know the category, we have the domain expertise, so our message to advertisers is, why would you go to those horizontal networks?

"Some forecasts show ad networks and exchanges capturing 30% of all display advertising," he added. "I don't want 30% of the opportunity in our category to go to venture-backed startups."

Carrigan's message to publishers: Define your market expansively, beyond your owned and operated sites, and figure out ways to capture new opportunities in that market.

Sound advice for an industry in the midst of constant disruption.