As posted on Why newspapers want to band together to take on Facebook and Google
Newspapers have long considered Facebook and Google their frenemies.
On the one hand, they rely on both to distribute their words and ads to a mass audience as print ads and subscription dollars plummet.
But by doing so, the two tech giants have now ballooned in size to the point where there’s little room left for anyone else in the industry to breathe.
Facebook and Google now collectively control around $.70 of every dollar spent on digital ads. The portion of three remaining dimes that isn’t vacuumed up by other platforms like Twitter, Snapchat or Verizon-AOL-Yahoo! or any number of ad tech middleman is split between hundreds of media outlets each competing for a sliver of a cent.
The huge imbalance doesn’t give the news media much bargaining power when it comes to working with these platforms. Facebook and Google do ultimately need the media and the content they produce to fuel their platforms. But when the two titans are the only two information distribution channels of any significance in town, they can easily pit news outlets against one another to get the best deal for themselves.
The huge imbalance doesn’t give the news media much bargaining power …
That prisoner’s dilemma pushed news publishers to do something unusual this week. Behind the banner of the News Media Alliance — a trade group that encompasses more than 2,000 newspapers, including the New York Times, Wall Street Journal and Washington Post — they are asking Congress for permission to act as a team in negotiations with the two platforms.
Without a specific pass from the government, the coordination could run afoul of antitrust laws, which are meant to prevent monopolies and maintain competitive markets. The request is therefore a bit ironic, considering that its goal is to confront existing duopoly powers.
The bid could be a long shot in a Republican-controlled Congress under an administration that’s not exactly on good terms with the country’s news media.
But the news industry is getting desperate. In an op-ed published in the Wall Street Journal on Sunday, News Media Alliance CEO David Chavern said the threat posed by Google and Facebook dwarfed that of the president’s relentless efforts to delegitimize and undercut the press.
“The only way publishers can address this inexorable threat is by banding together,” Chavern wrote. “Antitrust laws are insulating Google and Facebook from market forces.”
The newspapers aren’t the first to recognize the need to make peace with competitors in the face of Silicon Valley might. Ad-sharing agreements and controlled exchanges to buy and sell them have been increasingly common among media companies. Three of the biggest ad tech firms forged an unprecedented alliance to pool their data earlier this year.
And even the heads of the world’s biggest advertisers are calling for a unified front as they face down the two heavyweights on a laundry list of grievances, including transparency in how their ads are measured, where on the web they are placed, and how fraud is kept to a minimum.
“The only way publishers can address this inexorable threat is by banding together”
“The days of giving digital a pass are over,” Marc Pritchard, chief marketing officer of Procter & Gamble, the world’s biggest advertiser, said in a call to arms at an Association of National Advertisers meeting in January. “It’s time to grow up. It’s time for action.”
According to Chavern’s op-ed, the group was emboldened by a landmark antitrust ruling in the European Union in which Google was fined more than $2.7 billion for “abusing dominance” in the search market. European regulators are often seen as a bellwether of approaches that might eventually cross the Atlantic.
But there are definite risks if the government won’t grant the group antitrust exemption. A handful of print publishers butted heads with antitrust regulators when they tried to form a similar arrangement to work with Apple on an ebook competitor a few years ago.
For their part, Facebook and Google have paid lip service to the need to incentivize quality journalism and granted publishers some minor concessions. An ad filter built into an upcoming version of Google Chrome, for instance, will include a way for readers to choose to pay publications directly instead of blocking their ads. There are also reports that Facebook is working towards a paid subscription model for its Instant Articles program.
“We’re committed to helping quality journalism thrive on Facebook. We’re making progress through our work with news publishers and have more work to do,” Facebook’s head of news partnerships, Campbell Brown, said in a statement on Monday.
Google echoed the sentiment.
“We remain deeply committed to helping publishers with both their challenges, and their opportunities,” a spokesperson said in a statement.
Publishers are now ready to test that commitment.