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Can Australia save local journalism by forcing Google and Facebook to share out ad revenue?

The Drum 22 Apr 2020 10:59
Australia levels playing field between newspapers, Facebook and Google / prima91 - stock.adobe.com

The Sunraysia Daily is a tabloid newspaper that’s been published in the north-western Sunraysia region of Victoria, Australia since 1920. Staff there had been looking forward to celebrating the title’s centenary later this year, but on 24 March they were called into a meeting and told the 28 March issue would be its last. Until further notice at least. Directors and senior management informed staffers that they would be stood down as the publication suspended all of its traditional newspaper operations in the cities of Mildura, Swan Hill and Kerang due to the economic effect of the coronavirus pandemic.

It’s a fate all too familiar to journalists at the Yarram Standard, which is based out of Victoria’s Gippsland region and recently closed operations after more than 120 years. Elsewhere in Australia, News Corp has suspended the print editions of 60 local newspapers, including the Manly Daily, Wentworth Courier, Brisbane News and Mornington Peninsula Leader.

Now, the Australian government has decided to take steps to ensure these businesses remain viable. On Sunday, the country’s treasurer Josh Frydenberg instructed the competition watchdog Australian Competition and Consumer Commission (ACCC) to develop a mandatory code of conduct for Facebook and Google.

Luke Taylor, who is the founder and chief operating officer of ad fraud prevention company TrafficGuard, points out that without the code and without intervention from government, it is unlikely Google and Facebook would voluntarily agree to fairly pay for the content.

“I’d speculate that the hope here is to ensure that the remedy applied to Europe is also afforded to Australian media. Piggybacking off of the European effort adds strength to both their and our plight.”

“It is also necessary because of the way the pandemic is affecting news coverage. News stories and articles have become over-seasoned with terms such as ’pandemic’, ’infections’ and ’deaths’. It’s no wonder the overzealous, brand-safety conscious traders have done significant damage to revenue streams for publishers.”

What will the code change?

Mitchell Greenway, the director of publisher development for Australia and New Zealand at programmatic ad exchange OpenX, feels the code could spark a shift in how platforms define ‘good content’, leading to better journalism rising up over clickbait and resulting in news publishers earning more of the revenue they deserve. “Doing so could also allow publishers to pull back on some of their other costs, like content extension, and allow them to focus on producing more quality content,“ he explains. “Ultimately, steps like these are helping to ensure a sustainable ecosystem for publishers across the open web.”

“It is important to remember that platforms such as Facebook are not creators but ’distributors’, in Mark Zuckerberg’s own words. When you think about a normal distribution system, costs and risks are passed on to the distributor, but when it comes to content published on these tech platforms, the content isn’t bought and distributed, it is simply ’distributed’.”

“Take away the news from these tech giants and people will find it elsewhere. So the question is, who is set to lose the most here? Is it the publishers that use the social channel to attract people to their website, or the social distributors that use the news to attract people to their platform?”

He adds: “Perhaps this pandemic is the impetus needed for governments around the world to start to address these issues. It would be interesting to see what measures other countries will take, whether or not they will follow the Australian government’s lead and how this new code will ultimately benefit media companies in the long run.“

Instead, he suggests initiatives, like adtech firm Viztrade’s Local Media Fund that’s designed to encourage advertisers to support local media directly, is perhaps more sustainable for the local Australian media. The aim of the fund is to direct funding into independent businesses so they can improve and create new digital services, helping local publishing to better compete against Facebook and Google.

“The new code should therefore not reduce the need for news and media sites to continue to look at diversifying revenue streams. It has long been a focus of Rakuten Advertising to give content producers the ability to monetise their content in different ways. I hope that more scrutiny and focus on this issue will fast-track further developments here and that we’ll see movements in Australia in this area similar to what we’ve seen with the integration of content commerce in other markets such as the US and UK.“

In July 2019, the ACCC released its final digital platforms inquiry report calling on the government to act against the tech giants. The 600-page report recommended a code of practice for Facebook and Google that would give Australians greater transparency and control over how their personal data is collected, used and disclosed, as well as stop Google’s Chrome browser from being installed as a default browser on mobile, tablet and computer devices.

“The content distributors, in this example, have a goal of keeping people on their platform for longer, thus claiming a longer share of attention which directly conflicts with news publishers wanting traffic to their websites,” he explains. “The difference is that one pays journalists, while the other simply acts as a funnel for consumers’ attention in this scenario.”

Simon Larcey, the managing director of Viztrade, feels it will depend on the level of content the news publishers distribute. He suggests it will be a substantial revenue boost for the publishers that do use Facebook and Google as a distribution outlet. “I don’t think it will impact Facebook or Google too much,“ he says. “If you could get a comparison of news versus user-generated content, I think you could make an assumption from that. My opinion is that, while it will reduce their bottom line, if more publishers get on board it might balance out.”

Condogeorges notes after the French government’s ruling, Google’s response was to remove the listings as they were not willing to pay for content and would only display it if it were free. “Given that approximately 98% of searches are being done through Google in Australia, the monopolistic nature of the giant has revealed how they may respond here as well, holding website traffic ransom as a form of attrition. If you squint, this illustrates the intention of its business: to capture all the revenue possible in the advertising sphere regardless of the implications upstream.”

However, it remains to be seen if these measures will help the likes of the Sunraysia Daily and the Yarram Standard survive beyond the pandemic. For now, they have the code to look forward to.

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