How Content Moderation Can Improve Your Bottom LineNovember 30, 2022 | Image Moderation, Video Moderation, UGC
Content moderation is seen as a necessity for many online platforms that welcome user generated content. All kinds of websites and applications from dating apps to games to social media sites use content moderation to keep users safe and happy. Like purchasing a website domain or running sponsored promotions in the app store, content moderation is seen as another necessary cost for many online platforms.
While business owners may think of content moderation as just another service to pay for, a recent study has shown that, while there is a cost associated with it on the front end, content moderation actually drives revenue.
How does content moderation actually make companies money? Read on to find out!
Ways in which moderation can help drive revenue
In this recent study “Implications of Revenue Models and Technology for Content Moderation Strategies,” researchers Yi Liu, T. Pinar Yildirim, and Z. John Zhang from The Wharton School looked at various social media platforms and their content moderation strategies with relation to their revenue models. Particularly for apps with an advertising revenue model, platforms were able to keep and gain more users by employing a moderation strategy.
While content moderators may just seem like “the custodians of the Internet,” taking out the proverbial trash that is hate speech, violence, and a laundry list of offensive content, these researchers argue that moderation isn’t just about being altruistic:
“Our analysis shows that a self-interested platform does not need to care about any social cause to actively engage in content moderation. It can use content moderation as a tool to perform two marketing functions: to expand its user base and to increase the willingness-to-pay of the users on its platform.”
Here are 3 ways that content moderation serves as that tool to help you maintain and grow your user base as well as improve your bottom line.
Moderation helps users feel safe
For platforms using an advertising revenue model, users are generating the content for the site. They join the platform specifically to read what others have posted and to post themselves. Without users, these sites would have virtually no content. While you might think that moderation turns potential users away, in the long run, it gives the majority of users a better experience. In the aforementioned study, for example, 80% of users wanted to see hate speech removed from platforms, 73% wanted to see videos of violent crimes removed, and 66% wanted to see depictions of sexual acts removed.
Content moderation may force users with extreme and violent viewpoints off of platforms, but it helps maintain those who are more moderate. Researchers Yi Liu, T. Pinar Yildirim, and Z. John Zhang stated:
“The user base is expanded through pruning extreme users to get more users of moderate opinions. Content moderation can also increase users’ willingness-to-pay by reducing their reading disutility from extreme content. This result establishes content moderation as an effective product design and positioning tool.”
These moderate users that no longer feel threatened by the presence of extremist users will then feel more comfortable to post and comment. In this way, content moderation increases engagement. Postdoctoral Fellow at the Social Science Research council and Affiliate Fellow at the Stigler Center for the Study of the Economy and the State Rafael Jiménez-Durán recently studied Twitter engagement with relation to moderation. By randomly reporting half of 6,000 tweets containing hate speech, he found that when offensive tweets are reported, those who had been attacked spent, on average, 13 more minutes (a 13% increase) on the platform per week.
Source: Rafael Jiménez-Durán, “The Economics of Content Moderation on Social Media.“
Additionally, since users join these platforms to interact with each other, happy users will introduce their friends to the platform as well. Users that feel safe will not only stay on your platform and keep it active, but they will help increase your number of users.
Moderation helps you learn more about your users
You can learn a lot about your users and what they need by monitoring their behavior on your site or app. With the increased engagement gained from an effective content moderation strategy, you can better understand what your users want and where they are in the buyer’s journey. If you see that a particular type of content is especially popular among your users, you can target them with more relevant (and higher priced) ads while also attracting new advertisers to your platform. By understanding what your users are interested in, you can help both them and your bottom line.
Even if your app does not rely on advertising to monetize, understanding user behavior is crucial. The more that you understand what your users want through their increased engagement, the more you can accommodate them, thereby gaining more customers, or even brand ambassadors who will endorse your brand.
Moderation can help your search engine rankings
Search engines are designed with users in mind. Whenever someone searches something, the search engine will give them the most relevant and helpful information possible. Search engines now also prioritize sites that they know will be safe for users. Therefore, if the content on your platform is monitored and not offensive, it could rank better, bringing more people to your site.
How lack of moderation can lose your company money
Above, we’ve seen how content moderation can help drive revenue. On the flip side, lack of content moderation can actually reduce revenue for your company. The Anti-Defamation League recently published a report detailing the harassment and hate faced by people who play online games. This report showed that of the 53% of the US population that play games online, 74% have been harassed and 19% of those who have been harassed have chosen to discontinue playing completely after facing said harassment. Users who would have otherwise continued to use and spend money on the gaming platform left because of the discomfort they experienced.
Furthermore, these lost users are extremely unlikely to help spread the word to friends, thus diminishing network effects and costing you future users too. When it comes to consumer trust, brand reputation is everything. If your website or app is known for allowing misinformation to spread or violent content to be posted, potential users may steer clear from your platform. No one wants to face harassment online, and those who worry about harassment, especially those in marginalized communities, may not even consider joining your platform if they don’t believe they’ll be protected.
There is also one specific type of content (beyond NSFW content) that, when left unmoderated, directly impacts a company’s bottom line: disintermediation. The act of disintermediation, or “eliminating the middleman,” is a common challenge for brands. One example would be users of a dating site sharing personal details to move the conversation away from the platform or a product listing on an e-commerce platform directing buyers to their own personal site to purchase the product. Moderation is essential to protect brands from disintermediation. Upwork, for instance, would suffer significant losses if companies could hire freelancers from their site then pay them privately for their work as opposed to using the Upwork system where the platform receives a commission.
Content moderation does not come without a cost. Companies spend thousands of dollars on their content moderation strategies and programs in order to ensure their platforms are safe. While this expenditure may seem like it’s only a cost center, content moderation and the safety it affords helps sites keep current users from leaving and potential users from turning to other, safer platforms.
Sites and platforms without moderation strategies are vulnerable to losing both current and potential users, while those with strong content moderation strategies maintain and gain users.
At the end of the day, a good content moderation strategy will earn your company far more money than it will cost.