Publishers: Stop expecting handouts from Facebook and Google, start innovating
Facebook and Google direct enormous volumes of traffic to news publishers. But instead of paying for the privilege, like other brands do, publishers expect to get paid. Simon Larcey says that instead of the ‘last-ditch, half-assed cash grab’, media companies need to, unsurprisingly, innovate.
Hey, if you can’t beat them, then just throw a tantrum and demand they pay you a percentage.
In a nutshell, this sums up the ludicrous move by the Australian Competition and Consumer Commission and local news publishers, which have demanded that Facebook and Google cough up cash for any news content that the digital giants share across their platforms. And with Google agreeing to play ball last week, it looks like these demands are being met.
Great article Simon. If the handout is perceived more like a grant than a business model any reason why publishers can’t do both?. ie. take the handout from major tech and use it to fund the innovation that is so desperately needed.
And….in the late 1800’s, a candle-making factory in London asked the local power company to instal their new-fangled electric lighting so that the factory workers on the night-shift could see a lot better and make more candles….
Well may “Facebook and Google direct enormous volumes of traffic to news publishers” but there is a flip side of that coin.
Most people who click-through to a News site read-and-run. They are difficult to monetise, so the volume of traffic becomes a large cost but with low income.
F&G also take away a lot of browsing time on the numerous News websites with no (though that is changing) direct compensation for the content creator (i.e the original publisher).
It is not a one-way street but the street is far from even.
Well said Simon. I’m no fan of the Tech Platforms either – but I’m even less a fan of building business models that rely upon non-sensical ‘revenue’ models (eg. the ‘hand-out’). The Tech Platforms don’t owe the media a dime for providing a mechanism to funnel traffic through to their sites. And like you said – many of us pay them big coin for this same privilege.
The concept of linking the sustaining of quality journalism in AUS to the Tech Platforms making big bucks out of enabling these audiences to get to the Publishers’ sites is also a complete con job.
News Publishers have never had bigger audiences. They should be generating bigger revenues than ever. They just cannot compete using their existing Ad Products (and more importantly – their old ‘CPM’ commercial models which were dragged from the off-line world into the Digital space).
I agree – it is going to take Ad Product innovation – but it’s also going to take a leap of faith commercially to transition across to models that are more performance based (like much of the Tech Platforms, Aggregators and Affiliates use) and where those Publishers have to have some skin-in-the-game. This is ultimately what it comes down to. And while ever they are getting hand-outs (to ‘sustain’ quality journalism in AUS) – their businesses will not be able to compete and they’ll be stuck in in 2nd or 3rd gear.
God this article reeks of someone who has never worked in publishing.
As someone who has for all of their career, I assure you publishers are working hard to innovate – but without the financial support google and facebook has this can prove challenging.
What the industry needs instead is support from media agencies who are lazily directing their budgets to google and facebook to build publishers back up again. Time and time again FB has been proven as an ineffective media channel but because it is cheap and easy to buy, agencies continue to invest.
When traditional publishers went Digital/Social, they started chasing easy impressions (cats, botox, celeb fails).
Coupled with a tired CPM-based inventory model, this fundamentally, this lead to the demise of investigative journalism.
As a result, the niche publication was born – the comparison site, the affiliate, the influencer.. They knew how to value their inventory/content/context and instead of chasing attention, they fulfilled context. They sold on CPC models or CPL…
You made your bed pubs! X
While I agree the media industry should be embracing innovation to compete with the walled gardens offered by Facebook and Google, and that a common marketplace like Viztrade and increased transparency in programmatic from platforms like Fenestra are a start, I think it is disingenuous to classify the payments as handouts. It demeans the value of the public interest journalism that these publishers produce. In the Senate hearings into the Public Interest Journalism, I shared the example of what would be the outcry if the ABC Four Corners program was rebroadcast by a commercial channel with advertising and no payment was made back to the ABC? This is compensation by Facebook and Google for using content created by others to generate advertising revenue.
If readers from FB and google cut and run from the publisher sites, then how is that the platforms’ fault? I think it says more about the publishers’ (in) ability to engage those readers when they land on their sites. If publishers really believe their content is so valuable to the platforms , and that the traffic they get from them is really not worth much, then there’s a very easy solution – they can stop posting to FB and block google from crawling their pages. I think we all know who would lose most if they were to go down that route.
Can you please provide sources that Facebook is an ineffective media channel? It should be easy considering it has been proven ‘time and time again’
I hate Facebook but I am forced to put advertising dollars there because it so effective
Adapt or die (except when you have a stranglehold on the news media in Aus and you can push your agenda to influence government until they bend to your demands, because you couldn’t adapt).
Pretty straightforward…
There is not evidence of this. Forcing platforms to pay for traffic that they are sending to publishers who would otherwise not receive the volume is clearly a short-sighted solution. Governments may side with publishers but this is only delaying the inevitable demise of non-innovating newsrooms. Instead, there should be a call for broader tech solutions to get newsrooms to the 21st century, where short-form content is king.
Where are this guy’s media credentials? …Oh wait, he has none.
The ABC Four Corners example is not really a valid comparison with what is happening with the platforms and the publishers. The platforms are not running (or “rebroadcasting” in your analogy) the publishers’ content in full. They are running snippets (and the publishers can restrict or even stop this completely if they choose) and linking users to the publishers sites for the full story, thus generating very significant traffic for the publishers. A more valid analogy would be a commercial channel running a short promo for an ABC Four Corners story and prompting viewers to go watch the full story on the ABC.
Why are you not a fan of the tech platforms?
I personally believe Zuckerberg is a trickster. Larry and Sergei are a lot better and imho Google was the foundation stone, which changed the game. The cultural revolution we see today is because we can ‘Google’ anything, use our noggins a little also (critique) and become informed.
Google is freeing us up from mental slavery.
My 10 cents. I love the tech platforms. You watch the fact checking come on leaps and bounds in the next 5 years – it is going to be huge and Rupert is going to hate it !!!
@Sam wins the thread with this comment, shut the thread down pls mod.
Remember when Nine (then Mi9) has that spinning cube ad unit? Oh the annoyance to the reader, but my god… the cut through! And the ridiculously high CPM!
Now that was innovation!