South Africa has become the latest country to demand that Google reveal how much information and revenue it takes from news publishers.
Media organization Caxton, along with the country’s Freedom of Expression Center, have provided legal requirements for Goole to “provide transparent answers to a well-considered list of questions”, said Paul Caxton. Chairman Jenkins told me.
“There has never been a time when our ability as news organizations to hold governments accountable and report on society has been more threatened,” he said. “Journalism is in crisis.”
He argues that programmatic advertising cannot distinguish between real news and misinformation, or real users from click farms.
“Digital advertising follows the human eye and doesn’t differentiate between clickbait, fake news, and cutting-edge journalism,” said Jenkins, who is also chairman of CTP Publishers and Printers, one of the nation’s largest printing companies. he says.
“It is no melodrama to say that, like the climate crisis, news and freedom of expression as a public good is at a tipping point,” he added.
Caxton’s question is about publisher content and how Google uses it. These are precisely the questions that media around the world are seeking answers to, but we face a complex maze of secrecy behind which secretive organizations like Google hide.
Mr Jenkins added: “We are determined to use South Africa’s generous Constitution to protect the rights to freedom of expression and information, and to provide access to the data necessary to protect these rights. Masu.”
“We do not accept the metaphor of commercial secrecy as an excuse for confidentiality.”
Google owes news publishers
Last year, academics estimated that U.S. publishers owe between $11 billion and $14 billion a year from Google and Meta.
“Big tech companies argue that news is not essential and that they are lucky that their platforms can drive traffic to their sites and convert that traffic into subscriptions,” said Harris Mateen, an assistant professor at the University of Houston. “There is,” he said. Anya Shiffrin is a senior lecturer in international and public affairs at Columbia University.
Their study, published in November, found that technology platforms are “resistant to paying traditional license and copyright fees” and are less willing to deliver viewership and impression numbers. The academics found that their payments were “meager” and were often made through small grants or private deals with only large news operations.
“Naturally, Google and Meta have been enriched by the advertising revenue they receive from drawing global attention to their sites by keeping the cost of goods sold (news) low.
“Meanwhile, news deserts are a global problem, and news organizations are suffering from a decline in income. new york times And that guardian – We were able to offset our losses with subscriptions and other income. ”
Similarly, a study conducted in Switzerland last year found that Google derives as much as 40% of its revenue from media content. This “equates to approximately $176 million a year in Switzerland alone,” writes Courtney Radosh, director of the Center for Journalism and Freedom and a fellow at the UCLA Institute for Technology, Law, and Policy.
The study, conducted by FehrAdvice & Partners, concluded that Google searches using media content generate an estimated annual revenue of approximately $440 million.
“The value of news is much higher than policymakers and publishers realize, at least in Google search, which accounts for the bulk of Google’s $280 billion in annual revenue,” Radsch wrote about the FehrAdvice study.
destroy local media
As I wrote last year, programmatic advertising is killing South African media.
The cost per impression (CPI) for programmatic advertising in South Africa is ZAR0.08, of which publications like Stuff You will only receive ZAR0.01. This represents only 12.5% of advertising dollars that actually reach media publishers. (1 South African Rand [ZAR] It is worth $0.05, which is equivalent to 1 penny per cent. )
This is clearly an unsustainable business model, but subscription fees and paywalls keep news out of reach for the majority of South Africans who cannot afford it.
I believe programmatic advertising is the opiate of the marketing masses.
Media planners have relied on programmatic advertising for so long that they no longer question whether it will truly be successful. The advertising industry uncritically believes that metrics that have been repeatedly proven are incorrect.
According to a 2018 U.S. government lawsuit, Facebook exaggerated the number of video views by 900%. What’s worse, the company knew these numbers were wrong for a year, but didn’t warn advertisers during that period. wall street journal It was reported at the time.
Last year, Google was sued by the Justice Department over its control over advertising, and 38 states sued the company. “Everyone talks about the open web, but the reality is we have Google Web,” Microsoft CEO Satya Nadella said when he was called as a witness last year.
Programmatic advertising is the opiate of the marketing masses.
“I don’t believe a word that comes out of Facebook,” Bob Hoffman, a writer who criticizes the U.S. advertising industry’s deception of programmatic advertising, told me.
“Facebook’s metrics have proven to be completely unreliable. Anyone who believes them is a fool.”
That’s if someone reads a programmatic ad. “That metric has been exaggerated, misrepresented and proven to be false,” Nicholas Bednar, former CEO of South African advertising agency BBDO Cape Town, told me.
“The Association of National Advertisers estimates that 70% of programmatic media spend is invisible,” said Bednar, co-founder of South African digital agency Gloo.
Roberto Cavazos, a professor at the University of Baltimore, said at least 20% of the world’s digital advertising is fraudulent. “The estimated value of fraud across various platforms in 2020 is conservatively $28 billion. It could potentially be more than $50 billion.”
Technology platforms dominate
Mateen and Shiffrin believe that the Australian News Media Bargaining Code, established in 2021, is a good working model for how Google and Meta should compensate media organizations. Meanwhile, Canada has introduced similar legislation.
Google and Meta are forced to pay Australian publishers A$200 million a year, which they did not before Meta restricted access to Australian government websites, including health services, during the coronavirus pandemic. .
“News publishers around the world are trying to estimate how much Google and Meta owe by distributing news written by Mateen and Shiffrin to their viewers.” This is a difficult challenge because of the lack of data and lack of competition that makes price tech companies pay artificially low prices for news.”
Jenkins said Caxton, like other news organizations in South Africa, has been struggling with the digital revolution for nearly 25 years, during which time the “giants of the digital world” have dominated the industry without adding the same value to society. It is said that it became like this. Just like the media does. Currently, he says, the average American spends seven hours a day on screens. As Jenkins argues, “Journalism is in crisis.”
Disclosure: My first job in journalism was working for a community newspaper in Caxton and my small media company. thingrents offices in a building owned by Caxton in Johannesburg.
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