Tech giants won’t change their spots, no matter how hard the government, ACCC, and publishers try
Flimsy brand boycotts and attempted government intervention won't be enough to hurt Facebook and Google, Sabri Suby argues. And the ACCC's plan to make the tech giants pay for news will ultimately hurt, not help, news outlets, he says.
Earlier this week, the ACCC announced it’s taking Google to court for allegedly misleading Australians to get more data to use in targeted advertising. And by the end of this week, the watchdog is expected to publish draft rules forcing Facebook and Google to share revenue generated from news with the original publishers.
Over in the US right now, there’s yet another Senate hearing featuring Facebook’s Mark Zuckerberg and Google’s Sundar Pichai. These are just a few more examples of governments trying to force the tech giants to change: attempts that have failed at every turn.
Australia’s Digital Platforms Inquiry, the U.S. Senate hearing, and various brand boycotts have all resulted in nothing but tiny shifts that made absolutely zero dent in Facebook or Google’s bottom line.
In 2017, Facebook made USD$40bn in ad revenue, then USD$55bn and then USD$70bn. Clearly, government intervention and Senate hearings aren’t doing anything to damage Facebook’s earnings potential.
Facebook has been attacked by campaigners – mobilising around the #StopHateForProfit campaign – for months, but even their plan for advertisers to boycott the platform for 30 days was only predicted to cost Facebook just USD$250m in ad sales – a tiny portion of the tens of billions it makes annually. And if brands are only willing to step off the platform for 30 days, what does that say about how important Facebook must be to their business?
The ACCC’s latest plan to make Facebook and Google pay for content will ultimately hurt, not help publishers, and will result in nothing but traffic flatlining and news businesses dying. Like it or not, Google and Facebook have the duopoly on attention right now, and forcing them to pay for traffic will spell nothing but bad news.
This isn’t just my opinion: it’s a historical precedent. When Spain told Google to pay publishers for excerpts and snippets in 2012, Google shut down Google News in Spain rather than pay.
Facebook has already made it incredibly clear how they feel about Australia’s orders. Facebook ANZ managing director, Will Easton, said the social media giant was “disappointed by the government’s announcement”, and pointed to a global $100m fund to support journalism during the COVID-19 crisis and $5m in Australia to help news platforms monetise audiences via Facebook.
Media outlets are ultimately in the business of selling advertising, and they need all the eyeballs they can get on their content. Media outlets need to focus on innovating and looking for other ways to monetise, so that journalists can continue providing the vital service that Australia loves and continues to rely on. This includes trying to monetise their services at the front end.
Facebook and Google have built killer digital marketing systems, but many publishers have become addicted to the drug. The truth is, your digital strategy should be strong enough to survive without Facebook and Google. If it isn’t, then you’ve got far bigger issues to worry about.
When publishers blame algorithms and decreased organic reach on their social media fails, what’s really happening is a failure to understand how people think. If you can fully understand a potential customer’s psyche and drill down into what drives them, it’s still possible to gain traction on social.
But in order to fully future-proof their businesses, publishers need to find ways to monetise that don’t rely on anyone else. They need to spend time and money building their marketing stack, pulling in email subscribers, and finding ways to share their stories that are 100% in their control.
Almost every other business in the world has accepted that they need to pay to play on Facebook and Google. The opportunity these platforms provide is simply too good to miss out on, and they’re willing to buy ads to be seen.
If publishers don’t want to play this game, that’s fine. They just need to find a new way to attract readers to their content, to keep them interested, and keep them actively engaging with their articles.
At the end of the day, Facebook and Google are massive public companies with shareholders to please. They’re not going to bow down and completely deform their business model to suit the whim of the government, and any attempt to force their hand will only harm publishers instead of helping them.
This is why having channels that you can control is so important. Rather than trying to change a leopard’s spots, publishers need to learn how to change their own.
Sabri Suby is founder and head of growth at King Kong
Suit the whim of the government? Government provides legislation, privacy & protection of its citizens so we can function in a democratic society. It’s well-documented there is negligent misuse of that information by big tech and why the most important ANTITRUST hearing of the century is currently taking place in Washington. Traditional TRUSTED media publishers have lasted decades and 15 years of “historical” social & search “media” companies who have made billions in revenue off the back of these media without paying for their content are wallowing in DISTRUST- FB the most distrusted brand in Australia. Legislation is coming and big tech is on notice.
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I agree. And you’re suggestion is the practical one if you want to survive.
But I think the bigger issue is that most advertisers (clients) measure an impression as an impression simply due to ease of reporting. Regardless of who, what, where, how, time-spent, or even if it was actually seen. 0.1 secs of exposure to a person with no money, is just as good as 3 minutes with a person who has a willingness to spend, come powerpoint time. Hell, even in real time.
It’s an audience valuation issue, and a media space validation issue. Created through sheer data laziness. And publishers copped the hit.
You’re right, but there’s no point having a loyal, unique following of 100,000 people if that audience is valued the same way clients value a bikini model influencer’s 100,000 followers. That’s the real challenge facing publishers.
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Well said.
The companies will just be given a fine but there will be no changes to the very issues they are being questioned on.
The companies get fined pocket money and the businesses it directly impacts remain out of pocket due to the abuse of anti competitive laws which were last changes in 1950.
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So, journalists and news providers get paid by big tech to publish their content, and big tech can now source content and become a trusted channel. Surely this is a step in the right direction for all parties, not to mention connecting consumers and brands in a credible way.
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This is such a typical comment from someone who has most likely spent their entire career at a traditional media owner.
As in the article above and the comments below, there will simply be a fine and the world will keep turning. Big tech have already agreed to toss journos a crumb, so be grateful.
Finally, if you want to talk about “TRUST”, ask the average person how much they “TRUST” anything NewsCorp publishes. I rest my case.
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With enough will, the US Government will push anti-trust and force them to break up. That will hurt their bottom line. Big tech knows this and is therefore inclined to make attempts to play nice.
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Ah Google, acts like a monopoly against competition. But a benevolent social good when it comes to PR.
On the whole have contributed a net negative to the world so let the legislation continue.
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A heap of obvious and broad strategic advice in here for traditional media owners without any specific or actionable points they could actually use. No value in this article for anyone that isn’t operating a business which makes majority of its revenue from working with the two big tech platforms. Wonder HOW the author would go about fixing these problems for news publishers rather than just outlining WHAT needs to be fixed. Yawn.
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With the Google/FB news deplatforming coming real soon now, Murdoch and Nine need to diversify their income streams away from celebrity pap, graft, government handouts, blackmail and extortion.
Perhaps they could invest into actual journalism instead of peddling worthless propaganda and clickbait that consumers won’t pay for. Just a thought.
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