When controlling advertising means controlling the news
Historically the nexus between advertising and news media ownership has been strong. This is why Google and Facebook should be disrupted
Notes from a deep green conservative
When a lone gunman live-streamed on Facebook the massacre of 49 Muslim worshipers at two Christchurch mosques in New Zealand last month, political leaders and media around the world were once again quick to chastise the dark side of social media.
But amid much justified calls for tighter regulation and possible breakup of the tech giants, one important issue seems to be continually overlooked.
And that is the potential, based on even a cursory reading of media history, for western news media to become concentrated in the hands of just a few global players in the near future.
Because if one key axiom has emerged over several centuries of media evolution, it is that whoever controls the advertising also controls the news — or at least has the ability to do so.
And currently Facebook and Google control around sixty and percent of global online advertising, according to Bloomberg.
A recent spate of commentary about how little Silicon Valley cares about pending environmental and biodiversity crises is disturbing, considering its influence
Amazon is catching up fast as it moves into the grocery business where the really big ad spenders like Coca-Cola hang out (Amazon founder/owner Jeff Bezos already owns the prestigious Washington Post newspaper).
If you take China out of the online advertising equation (where the big three have a much smaller footprint) their share of sales in the west is correspondingly higher — around 75 percent by many estimates.
One reason this market concentration is often dismissed as being of little importance is the perception that techs are so focused on replacing human labour with algorithms that they just don’t have the desire to involved themselves in the complexities of news media.
But the future can happen quickly in our hyper-paced world.
Once the tech industry matures from its current rapid growth phase, it won’t take long for savvy political operators to realize the immense power that could be achieved by gaining some level of partisan control over these assets.
Imagine, for example, the influence Donald Trump could wield if he held a controlling interest in Facebook. Or, closer to home, if some of Pauline Hanson’s wealthy acolytes gained a financial slice of Google Australia and its algorithms (a far-fetched idea, I admit, but you get the picture… ).
As for the techs, awash with advertising generated cash as they currently are, it’s not beyond the realms of possibility that Google, for example, could establish a highly professional news operations like Al Jazeera using their own media channels.
After all, there are plenty of highly talented, professional journalists out there looking for jobs.
With a few algorithmic tweaks they could block unwanted opposition and dominate the global news market in the same way they dominate advertising.
One interesting outcome of the current debate over big-tech regulation is that it has partially clarified how news media is evolving.
In fact, Facebook has already flexed its political muscle. US presidential candidate Senator Elizabeth Warren, a fierce advocate for breaking up big tech, had some of her anti-tech advertisements temporarily suspended recently. Facebook claimed, according to the Economist, that it was due to trademark issues.
Last year’s Cambridge Analytica scandal shows just how interwoven big tech has become in contemporary political and news processes.
From a deep green perspective, a recent spate of commentary about how little Silicon Valley cares about pending environmental and biodiversity crises is disturbing when one considers just how influential they already are.
So did we get to this? Well, first a very brief lesson in the economic history of media.
Back in the days of old media, classified advertising revenues were known in the trade as the ‘rivers of gold’.
This constant inflow of cash paid for thousands of journalists and their fat expense accounts, and supported the foundations of a robust system of both quality and yellow journalism.
It had its beginnings in the early nineteenth century when the press had become powerful enough to embed itself as the “fourth estate” (the other three estates were the clergy, the nobility and the commoners).
More importantly, it developed a symbiotic relationship with the political classes and, when not in cahoots with them, at least helped keep them honest.
The rivers of gold also fueled the rise of extraordinary media dynasties like the Fairfax, Murdoch and Packer families in Australia and similar empires across the world.
But over the past twenty years these cash inflows have dwindled to scarcely a trickle. Initially they were taken by online sites like ebay, Gumtree, Tinder and the like.
But the main winners have been Facebook (with the lure of social media) and Google (with the lure of search and YouTube).
As a result, thousands of journalists have lost their jobs in old media, and even large organisations like Rupert Murdoch’s News Limited have been reduced to a niche market spruiking of alt-right conspiracy theories just to stay afloat.
Some, like Fairfax (where I learnt my craft then left the business before it left me), have been devoured by other media organisations seeking to concentrate their remaining advertising revenues.
One interesting outcome of the current debate over big-tech regulation is that it has partially clarified how news media is evolving.
While the format and distribution of news has changed dramatically, the traditional nexus between advertising and news production has been highlighted as a continuing, and critical, financial relationship.
It is also one that will require considerable regulation if we are to maintain the benefits of a free and diverse news media into the future.
Peter Denton is the author of Use The News — A Guide to Communicating Through the Media and How to Write and Pitch Your Press Release
