In the fourth decade of the digital media and advertising revolution, too many industry voices still insist on making a commotion about the zero-sum game in advertising, where some can win only as others lose.
That in-built media assumption remains, even though it belies our own experience in the digital age. We all know the days when media was a flat, static and disconnected means of information delivery, which in turn generated attention and audiences sold to advertisers, are long gone. But we seem to have a harder time accepting what it means now that players have become an interdependent, even codependent, web.
The complementary, interrelated character of media today—the “press” inalterably transformed by digital—has never been more clear. That’s why the launch of the Google News Initiative (GNI) came as no surprise to me. Google collaborated with the Washington Post, the Financial Times, Harvard’s Shorenstein Center, the Local Media Consortium and many others to come up with tools designed to help publishers increase revenue from their content.
GNI will direct $300 million to support three declared major goals: elevate and strengthen quality journalism, evolve business models to drive sustainable growth and empower news organizations through technological innovation. Publishers expressed particular interest in the announcement of new subscription tools that aim to make paywalls easier to navigate and potentially help news publishers be more profitable online.
Self interest can benefit others
Why would Google do that? Just to be good citizens? If we dig a little deeper, we can see it’s clearly in Google’s self-interest. Its business relies on the health of other media players. Google needs high quality information to direct users to, and publishers need to expand their audiences and have readers directed to them through Google.
Call me foolish, but who would still be using Google if it directed us only to untrustworthy content?
The similarly self-motivated AMP (Accelerated Mobile Pages) Project surely provided benefits to Google, as well as wider benefits to the industry and consumers as pages loaded faster in mobile. A Google-commissioned study from Forrester Consulting found that AMP leads to a 10 percent increase in website traffic and a two-times increase in time spent on pages. Not zero-sum …
Even more powerfully telling in the announcement of GNI was a mostly overlooked fact–Google reported that last year it paid out $12.6 billion to its publisher partners. So, in all the panicky tweets over the last couple of years about dominance of certain players in media, people aren’t doing, it would seem, all the math—that $12.6 billion accrued in reports to Google’s portion of online ad sales is passed through and back to other publishers, out of the $17.5 billion in network ad revenues it generated in 2017, as evidenced here on pages 28 and 35 of the Alphabet 20K for 2017.
A careful read of that 10K from Alphabet shows the platform takes home less than a third of the revenues it derives from its targeted advertising—making it look less like a revenue driver at the expense of others and more like a play for sustainability and partnership.
Complements in media
In this new media world, by calling every publisher that sells advertising “direct competitors,” we lose sight of what has really happened and conflate dissimilar things. The old publishing theory that all sellers are competing for a finite pie of dollars for finite slivers of attention got blown up in front of our very eyes when, for instance, attention itself got fragmented in multiple forms of media from multiple geographies simultaneously.
The business of media has advanced so far from the rolled-up papers delivered once upon a time to our doors that I wonder if we’re doing ourselves a disservice calling it and thinking of it as one thing anymore. It simply isn’t true that the two biggest media players are advantaged by the diminution of, or even eventual disappearance of, the smaller, more traditional ones. All forms of media are complementary. They need one another—platforms need publishers and vice versa—like never before. To get past the old thinking in media, we need to find new ways to bridge the gaps.
Tech isn’t going away, and every player in media needs to consider what tech can tell us about consumers want and how they behave. The voices calling for carriage fees or government regulation miss the point altogether. The real path forward is through partnerships that leverage the respective expertise of publishers and tech companies so they can serve consumers better together.
Learning from each other to reflect the new reality isn’t a choice for anyone who wants to survive.
