It’s been just over a week since the Australian government passed ground-breaking legislation which would essentially force tech companies like Google and Facebook to pay news publishers in order to continue having access to their news content on their platforms.
For the last decade or so, the advertising model under which news publishers once thrived has come under threat as advertisers spend more and more money with social media companies, something the new Australian laws have tried to address. Some critics argued the laws didn’t go far enough, however most hailed its introduction as a blue print to future and further regulation.
But the real purpose of this new law – to protect Australia’s news industry and their ability to fund high quality journalism – has essentially been met. Both Google and Facebook managed to strike deals with Australia’s leading news publication (including Rupert Murdoch’s News Corp) which means they will receive some form of payment/compensation from these tech companies on what is seen as lost market share in the digital advertising space. In the UK alone, Facebook and Google account for approximately 80% of all digital advertising spend, with many industry leaders calling into question how they have been allowed to create a duopoly of sorts. The whole point of legislation like the one introduced in Australia is to help stop this gap from growing bigger.
Why is this important for advertisers?
Our main aim is to meet business and client objectives in the most effective way possible, regardless of method or channel. Whilst social media has and will benefit advertisers immensely (sheer reach, conversion tracking, powerful algorithms, etc), it’s important to remember traditional news media (online and offline) can still be just as reliable. Even on the issue of “trust in advertising” – advertising on websites and in newspapers is still seen as more trustworthy than social media. A recent YouGov survey found that only 10% of the UK population trust advertising seen on social media, vs 18% for websites and 43% for newspapers.
Looking to the near future, the gradual removal of “cookies” also means news publishers can provide advertisers with more reliable audience targeting thanks to their 1st party data. Google and Facebook will (and have started to) find their own solutions, but news media can compete just as well as their social media counterparts. Even initiatives like The Ozone Project (which was conceived as a solution to the dominance of social media companies), provide advertisers with a sound proposition, using high quality data for effective audience and contextual targeting.
The legislation is clearly significant for helping news publishers stay competitive in the advertising space, among other similar reasons, but I want to go back to the second part. It’s also there to help fund high quality news and journalism, something which is truly valuable given the current global climate. A healthy, well supported news industry allows journalism to thrive and do its job as effectively as possible. And as the Covid-19 pandemic starts to (hopefully) come to an end, it’s vital for us to acknowledge how important the role of journalists have been in providing accurate, relevant information, and asking the necessary questions to those in power.
An Ofcom report on UK news consumption found that “traditional news media” was overwhelmingly the most-used source of news and information about the coronavirus (87% of people surveyed). On the opposite side, the use of social media as a news source saw a decline during the pandemic, whilst social media has often been cited in fuelling misinformation about the pandemic, vaccine, and more. Ironically in trying to “make a point”, misinformation about Coronavirus was even more prevalent as Facebook removed news content from their platform in somewhat of a protest against these new laws, highlighting just how negative a role the lack of quality journalism can have on public behaviour. In a time when factual and quality news was most important, news publishers delivered and the public have benefitted immensely.
Like most industry experts continue to say, legislation for big tech companies is on the way whether they like it or not. But what we should take away from Australia’s stance is less about social media companies being the “bad guy” (because they are certainly not and provide us with immense benefits), but the advertising AND societal importance a well-funded news industry and high quality journalism provides to the advertisers and ultimately, the general public.