Commentary

How To Dissect Google's Love-Hate Relationship With Publishers

Google this week warned Australian consumers and YouTube creators that a proposed law from the country's competition authorities will have negative consequencesfor them. Several publishers have dismissed the warnings as a scare tactic by the search giant, which faces the possibility of having to share revenue with publishers.

Readers of this column know I’m sympathetic to publishers and continually look for news and information that will help them thrive. However, I'm not entirely convinced that revenue-sharing arrangements with digital ad giants like Google are sustainable, without clarifying how value is exchanged between the company and publishers.

Google has a near-monopoly on internet search, a status it achieved by providing excellent service for free to billions of people. There are alternative ways to find information on the internet by using other search engines, like Bing or DuckDuckGo, but those rivals haven't gained more than a sliver of the "horizontal search" market, as general interest searches are known.

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Google faces stronger competition in "vertical search," such as when people first visit Amazon instead of Google Shopping to find products to buy, or book a trip on Priceline instead of Google Flights.

When it comes to news, only about 1% of searches in Australia are related to current events, the company claims. That slim percentage astounds me, considering I'm always using Google to look up news and information for work.

That dependence is also terrifying -- Google effectively controls much of the news I read. Changes to Google's indexing algorithm can reduce the likelihood I visit a news website. The power to drive website visits makes Google an essential tool for publishers that monetize web traffic with various kinds of advertising.

The key issue for publishers is whether Google dissuades people from visiting their sites, and benefits from showing snippets of their copyrighted material in search results. However, publishers need to show headlines and story descriptions to grab reader attention, weakening the argument that Google is unfairly using copyrighted material.

A more persuasive argument can be found in a recent white paper from the News Media Alliance, which represents more than 2,000 news organizations in the U.S. Among the claims in its report about how Google harms publishers, it found that Google a variety of snippets from various news sources, giving readers just enough information about a story to satisfy their need to read any further.

If that's the case, then the value that Google provides to publishers is greatly diminished. Otherwise, Google can make a strong case that it helps publishers more than it harms them.

2 comments about "How To Dissect Google's Love-Hate Relationship With Publishers".
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  1. Craig Mcdaniel from Sweepstakes Today LLC, August 21, 2020 at 3:12 a.m.

    Rob, you know me well as one of a few publishers who regular speak out about how to improve both advertising and search. I have been attacked I believe for doing so. Evidence? Every time I have for the last two years on Media Post, my AdSense revenue has been reduced for a day or two and usually by 30 percent. This years my end of month revenue has be reduced over 35 percent or more. The point is, if you speak up, you will be discipled by Google.

    My pet issues has been, programmatic doesn't produce well for many ads. Google restricts sweepstakes ads and publishers who publish them. Personally I was placed into a "Gambling Website" category even though I have nothing to do with betting. I am bigger than Google in sweepstakes ads in America.  This is their attempt to silence me. For those who don't know, sweepstakes are included in about 10 percent of all new Fortune 500 ads campaigns. That's the motive.

    Google has total restricted ads going to the open market through ad networks.  Ad networks were common 10 to 15 years ago.  Now, none are open to publishers. Why is this important? I could check daily to see if their were quality sweep ads that would pay going ad rates. Though ads are not available in the online markets today. Google wants the control of distributing ads by way of programmatic. This is hands free and in sweepstakes, this is a billion dollar a year business if I could get my hands the quality ads and let me distribute the clicks. It totally about control.

    So what has happened is online companies like Twitter and Facebook who have the abiltiy to create their own sales force that is nearly impossible for smaller to mid size publisher to compete, has fill a market void to a small extent. This is inpart one of the problems for the newspapers.

    The solution? Ad distribution needs to consider bringing back the trade desk. Real person to person sales of ads. In the old ad distribution world yes with people doing the sales what was also sold was security. I can personally say there has never been a fake ad placed on my website. Every ad is hand placed and reviewed. The same cannot be said with programmatic. Programmatic looks great on paper but doesn't live it to the standards expected. Futher some ads would be better for advertisers under a different pricing structure. Example lower pricing but based on higher volume. Meaning if I give the advertisers 1,000 click views (CPC/CPA) for the same total dollars spent for 100 views, why wouldn't that work? 

     

  2. Robert Williams from Mediapost replied, August 21, 2020 at 12:57 p.m.

    Craig,

    Thanks for the thoughtful commentary!

    Rob

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