Confirmation bias is a hell of a drug. If you’re told something that confirms a pre-existing belief, you’re more likely to accept it uncritically. That’s what happened last week, as the New York Times ran an article based on research published by the News Media Association, which claimed that Google makes $4.7bn from the news industry in 2018.
As was immediately made apparent, that figure was largely plucked from the air, with critics of the piece noting that it appears to have been ginned up from a single comment made by Marissa Meyer, a former Google employee, eleven years ago. N.B. as yet, the News Media Association has yet to respond to my request for clarification on how that figure was arrived at, though it has responded to Thomas Baekdal.
Regardless of its veracity, confirmation bias carried that $4.7bn figure far beyond the bounds of the report. It is in the headlines of the NYT, in the Guardian, the UK’s Press Gazette, among others and, while those articles do acknowledge that the maths is spurious, the unfortunate reality is that most people will not read beyond the headline and, as presented, fewer still will question the figure. The suggestion has been planted in people’s minds – and probably especially in the minds of the legislators that the NMA seeks to reach – that Google is in some way hoovering up $4.7bn in revenue off the back of publishers, who deserve a cut, and that the situation is still an adversarial one.
Instead, this article is about how we got to this point and why, if the discourse does not change, it will be the public both sides profess to serve who suffer most. Nobody specifically is to blame but, at the same time, both sides of the debate will bear equal responsibility if that happens.
The magic eye painting of digital advertising
If news publishers were in rude health, the dialogue around Google and Facebook’s digital advertising success would be far less toxic. In reality, as audiences shift online, most of the larger news organisations are struggling to adapt to a publishing environment in which they do not have sole custody of audiences at scale. The Duopoly’s assumption of the role of gatekeeper is undeniable, regardless of whether you feel they usurped publishers’ place or just ‘built a better mousetrap’.
In the UK, where a crisis around local news businesses has been building for years, a government-backed review into the digital ad ecosystem set out to determine whether ‘the market in which publishers now operate a fair one, or has the rapid growth of the big online [platforms] – especially Google and Facebook – created distortions that justify government intervention?’, and found there was sufficient cause to justify regulators looking into the matter. Regulation in the EU has seen the balance of power shift somewhat back towards publishers, though as continued gripes show, some news publishers are still advocating they receive a greater share of revenue from Google. This is not a new argument, nor is the blame being thrown around entirely unfounded: Google has not always acted in the best interests of news publishers.
The $4.7bn figure cited by the NMA, then, is just the latest in a string of definite numbers arrived at by either Google or publishers’ advocates. For instance, over the past few years it has been widely reported that the Duopoly of Google and Facebook has been the main beneficiary of all digital advertising growth – in an interview I did with Google’s head of news ecosystem development Madhav Chinnappa two weeks ago, he argued that is based on a misconception:
“If you look at things like the eMarketer data about the different types of digital advertising, what you see there is both search and display are growing, and actually display was growing faster than search in Europe and in the reports that I looked at.
“When you look at display, which is the relevant part, that’s the piece where we’re a supplier. We are not a competitor. You can put a pound into a publisher, and if we are a supplier, we’ll take a little piece of that, but the vast majority of that will go to the publisher. If you put it into the Google Display Network, again we’ll take a piece of that, but the vast majority will go to where that ad ends up being displayed on the publisher side.”
So the issue is that Google and publishers can look at the same situation and, because of their different priorities, come away with a very different interpretation of who is the primary beneficiary and who (if anyone) is the loser. Cynically, you could suggest they sometimes do it deliberately to shift the blame for publisher woes.
As a result, a lot of the discourse around the topic of ‘publishers vs. platforms’ is based around definitive numbers that spectacularly fail to reflect the complexity of the digital advertising ecosystem. The discourse is like a series of cherry-picked statistics advanced by both sides – if nobody knew what a cherry looked like, or whether you’d choke if you swallowed one.
A language of nuance
It is true that Google’s priorities as a search-based company will never truly align with those of news publishers. It is equally true that Google is developing tools and services based on the demands of publishers, and that the Google News Initiative is helping fund experiments that might ultimately help publishers make more money from their users.
It is true that Google has an incredible amount of power over publishers and that sometimes that power has a deleterious impact on the success of one or more publishers, just as it is equally true that around 40% of its search results direct audiences to publisher content, and that publishers could recuse themselves from appearing among the search results if they really wanted.
The relationship is remarkably complex. Dubious releases like those advanced by the NMA in an attempt to condense it down to an outrageous figure do nothing to communicate that complexity. Arguably, they exacerbate the issue by antagonising both parties and making any future attempts at collaboration less likely. As Jeff Jarvis, professor at CUNY’s Newmark J-school, has pointed out, that is more or less guaranteed to restrict the amount of quality news to which the public has access, right at the time it needs it most.
Whether it’s cynically motivated or just talk at cross-purposes, publishers and platforms need to stop cherry picking arguments in an attempt to blame the other for a fractious relationship. Instead, each must acknowledge that they need the other – and the public needs them both.
Download WNIP’s comprehensive report—50 Ways to Make Media Pay—an essential read for publishers looking at the multiple revenue opportunities available, whether it’s to reach new audiences or double down on existing super-users. The report is free and can be downloaded here.