Google and Facebook are blamed for many of the problems plaguing publishing today. However, “the truth is that, for most publishers, Google and Facebook are probably the two businesses that can have the largest impact on their revenue, controlling the largest number of both eyeballs and ad dollars,” writes James Hewes, President & CEO, FIPP in a new report Big Tech and You.
The report is a comprehensive survey of the strategies that publishers, platforms and legislators are using to deal with the challenges between tech companies and media.
Drawing upon the accounts of dozens of industry leaders from around the world, the study looks at the impact that players like Facebook and Google have had on the traditional media landscape, examining benefits, issues, and potential solutions.
What’s a poor publisher to do? Stop whining and start fighting. Stop demonising and start collaborating. Stop looking backwards and start innovating. Stop scapegoating and start exploiting.Big Tech and You, FIPP
“Successful, innovative and multifaceted approaches to Big Tech”
The growth of internet and tech companies was followed by the decline in print circulation and advertising revenues for publishers. Over time media and tech companies realized they needed each other. “But this “unavoidable partnership” between Big Tech and media that once appeared to be a fair trade within a balance of power—content for exposure—has degenerated into what many in media insist is an existential threat to the media’s very existence,” writes John Wilpers, Senior Director, USA, Innovation Media Consulting.
That said, the relationship isn’t entirely negative. We get love (traffic, exposure, revenue). But we also get abuse (content that generates revenue taken without compensation, mysterious algorithms, data secrecy, privacy abuses, ad stack monopoly, etc.).John Wilpers, Author, Big Tech and You
He adds that publishers who have developed “successful, innovative and multifaceted approaches to Big Tech, seemed to share what could be called a Big Tech Users Manual.”
They have focused on new tech, new revenue streams, creative collaborations, etc. to create sustainable businesses.
Their strategies can be divided into the following four steps:
- Lobby against Big Tech abuses while negotiating with them to your advantage
- Create innovative systems while maximising theirs for what they do well
- Fight Big Tech while working with them on collaborative ventures
- Innovate your own way out of crises while exploiting their innovations
“Media must lobby collectively not individually”
Publishers are free to cut their own deals with Big Tech, and some of the larger ones have done that. “But not everyone is inclined to do deals, or empowered enough to avoid being overwhelmed and underpaid,” notes Wilpers. Here’s where lobbying can help.
“To have an impact in legislatures around the world, the media must lobby collectively not individually,” says Alfred Heintze, COO, Burda International Holding.
We are competitors in the way we make people happy, but beyond that there are areas of shared industry and global interests where we are not competitors.Alfred Heintze, COO, Burda International Holding
Big Tech understands that there is strength in numbers, and they are inclined to pick off publishers one by one. “Their strategy is to negotiate one-to-one because it would be harder if we were together,” says Frederic Kachar, CEO, Infoglobo and Editora Globo.
For inspiration, publishers around the world can look at the EU, the UK, the US, and Canada “where national media organisations are lobbying for reform and regulations with teeth.”
“Our business models should be based on consumer happiness”
“We already know that the advertising-supported business model isn’t the answer,” Wilpers writes, “so we have to innovate our way around that.”
We must make ourselves independent from advertising revenues. That’s the lesson we’ve been learning since the 80s and 90s. All of our business models should be based on consumer happiness.Alfred Heintze, COO, Burda International Holding
Southeast Asia publisher Summit Media is a great example of how an innovative approach can help a publisher compete successfully with tech companies. Summit was dependent on Google for 70% of its digital revenues. When negotiation to collaborate with the company failed, Summit CEA Ashish Thomas decided to find solutions on his own.
“We took charge of our own data,” Thomas recounts. “We built our own data platform, did a lot of ‘firsts’ in the market. We hired many engineers and partnered aggressively with technology players to arguably make one of the best data management platforms in SE Asia.
“We were also able to create some of the best industry practices around innovative new capabilities, products, and solutions in the market.”
And then we started beating Google, delivering twice the CPM that Google delivers in the country! We did private deals giving more information to our clients and delivering better formats than Google.Ashish Thomas, CEA, Summit Media
In two years, the company’s dependency on Google for its digital programmatic revenue was reduced to 33%. This year the publisher is reducing its dependence on Facebook.
“The challenge in publishing business is that we don’t understand tech well enough,” adds Thomas. “There is a lot to be learned from Google and Facebook.”
“This should be a symbiotic relationship”
Many publishers have built profitable relationships with Big Tech, especially Google.
“If you take the cynicism away, actually, magic can happen,” says Lorna Willis, CEO, Archant Media. Her collaboration with Google helped the company get the most advanced voice infrastructure in UK media. 170 years of the publisher’s archived content is now accessible through NLP.
It began with Willis’ idea of making all of Archant’s current and archived content available via audio and enabling users to create their own story paths through voice. This was before the introduction of Siri and Alexa in car dashboards.
“I anticipated that audio text was going to be standard in cars and therefore we needed to make sure we were there as well,” says Willis. But the company could not go ahead with the project because it required substantial investment.
Then Willis came across Google’s DNI project and decided to try her luck. It worked, Google liked the idea and gave 700,000 Euros for the project.
This also led to a significant cultural shift in the company, creating a new “confidence that now resonates through the businesses pushing them to innovate and move forward rather than retreat.”
That single realisation, that Google really believed in what we were trying to do, changed the way in which we thought about the award. Suddenly, they were looking at what’s possible.Lorna Willis, CEO, Archant Media
“This should be a symbiotic relationship. We need each other. And there has to be constructive conversation to make it work,” suggests Willis.
“Steer Big Tech to your advantage”
Another strategy employed by some publishers is to use Big Tech’s capabilities for their own benefit.
“It doesn’t make sense to publish content on Facebook and drive people to read your news on Facebook,” says Danish Media analyst Thomas Baekdal. “It takes people away from your site. On Facebook News and Google News, readers don’t care or know what publication the story is from. And if you’re doing it for the ad revenue, it is so low it doesn’t make any sense.”
Baekdal recommends publishers to exploit the platforms for what they are good at, and that is exposure.
Facebook and Google provide us with exposure, so we should think about them as advertising. And if it turns out you can’t convert that audience to a sale, don’t do it anymore.Thomas Baekdal, Media analyst
“As a publisher, I believe that Facebook is the best test bed you can think of if you want to evaluate your product, new pricing policies, and stuff,” says Frederic Filloux, Media analyst.
“When you have an idea for a product you want to launch to a segment of your audience, go on Facebook, find the right segments of that audience, and test it. Facebook is unsurpassable in that regard.”
“Sometimes exploiting a system is a healthy relationship,” notes Wilpers. He shares the example of the 95-year-old Indian publisher Vikatan Group. The company has had a positive relationship with Google’s YouTube.
“We’ve had a three-year arrangement with YouTube, and it’s been a very, very fruitful association,” says Srinivasan Balasubramanian, MD, Vikatan Group. “And especially at a time, during COVID, when things were really down and out, and we couldn’t produce and couldn’t put fresh content online, they continued to honour their deal with us. That helped us really.”
If you do have the willingness to go the distance, dialogue and showcase your uniqueness, then I think there is scope for you to actually steer Big Tech to your advantage.Srinivasan Balasubramanian, MD, Vikatan Group
“How do you build a business in the era of the platforms?”
Demonising Big Tech can be distracting and take publishers’ attention away from how they can use their capabilities and work with them. M. Scott Havens, Chief Growth Officer, Bloomberg Media suggests publishers focus their time and effort on figuring out the 21st century digital business model.
“It’s hard for me to blame the, you know, Eric Schmidts and Sergey Brins and Mark Zuckerbergs of the world for building a pretty good product,” Havens says.
“People are using these platforms to find stuff, to connect, to share. And it just so happens that activity can turn into huge referral traffic. I don’t find anything wrong with this phenomenon, as long as the platforms are not acting in a way that is restricting growth.”
“But what I get frustrated with is blaming the platforms for the destruction of the media business,” he adds. “What is our industry getting out of all the complaining if the goal is to save your business, to make sure that its legacy is protected for the next generation? What good is it to run around spending any bandwidth blaming these guys for the destruction of your business? I find no value in that.”
Havens has spent the last 15-20 years innovating and creating new business models. Instead of worrying about Google and Facebook he explores how to use them to grow the business.
“I couldn’t run Bloomberg Media without the partnerships we have with Google, Facebook, Twitter, Instagram, YouTube, Apple. YouTube is a huge partner for us, he adds. “Apple news is a huge partner. We’re making tons of money and reaching tens of millions of executives working with these guys.”
The question which we must spend more time on is—How do you build a business in the era of the platforms? Not how to block, restrict, or attack platforms so that your business is better off, but how to figure out how to work with them.M. Scott Havens, Chief Growth Officer, Bloomberg Media
The full report can be downloaded from FIPP:
Big Tech and You