Monday 20 November 2017

Steve Dempsey: Media firms must resist calls to follow Google and Facebook and create their own plan

Former Guardian editor-in-chief Alan Rusbridger’s copycat digital advice is flawed
Former Guardian editor-in-chief Alan Rusbridger’s copycat digital advice is flawed
Steve Dempsey

Steve Dempsey

Alan Rusbridger has an idea. Speaking at Ad Week Europe last week the former editor-in-chief of the Guardian said media companies should be learning from Facebook and Google. Why? Because the tech giants continue to forge trusted relationships with consumers and gobble up what once was publisher ad revenue.

"It's very easy to say Google and Facebook are stealing money. They are and they're awful, but they seem to have a relationship with people at large that the press ought to be thinking about," Rusbridger reportedly said. "We need to rethink how we can build more trust, and at the same time harness the power that exists out there because that's what Google and Facebook are doing."

So can publishers plug themselves into the online mainframe like Google and Facebook? And is Rusbridger right to advise media outlets to try to imitate technology firms?

Any publisher that wanted to try would need to stop caring so much about content. Facebook and Google have both been at pains to point out that they're not media companies. And while it's a mealy-mouthed line, in many ways, it's also true. They employ algorithms, not editors, create digital products not daily editions. While they certainly have skin in the content game, they are far more focused on engineering. Content may be king, but digital distribution is the kingmaker.

Both Facebook and Google have been on the shift to mobile. Mobile ads accounted for 80pc of Facebook's $5.6bn ad revenue in Q4 2016, while Google has split how it indexes the internet, making mobile its primary index. All these efforts are underpinned by massive investment in technology. So if a media company really wanted to do as Alan Rusbridger is suggesting, it would need to start spending heavily on research and development. How heavily? Well, Facebook spent $1,563m in the last quarter of 2016.

Google, for its part, has been focused on artificial intelligence - another costly exercise. In 2016 the company launched over 350 products powered by machine learning. Artificial intelligence has been added to search, maps, messaging and Google Translate. It may be artificial but it ain't cheap. Google has acquired 11 AI companies in recent years. One, DeepMind, snapped up in 2014, cost $400m. Publishers that want to follow Google and Facebook's lead not only need to stump up that sort of cash, they also need to start collating monumental amounts of data which can power their machine-learning efforts. Its doubtful that any media company has the data or the deep pockets for this sort of investment.

Let's move onto the issue of trust, also raised by Rusbridger. Certainly it's a problem. The 2017 Edelman trust barometer found that trust in media had dropped to 43pc and is at all-time lows in 17 countries. In the US Gallup recently found only 26pc of those aged 18 to 49 said they have a great deal or fair amount of trust in the mass media. This was down from 36pc last year. So yes, trust is an issue.

But is it an issue for technology companies? Yes, of course it is. Both Google and Facebook face a challenge in relation to the spread of low-quality content from clickbait to fake news. But trust is a function of utility from their perspective. They don't need to focus on building trust if they build the best, most useful digital products. Create the best email services, the best mapping tools, the social network where all your friends are, and trust comes as a matter of course.

So perhaps media outlets shouldn't be trying to imitate Facebook and Google. But they do need to figure out how to play to their strengths and co-exist with the tech giants, which have stolen a march in terms of digital distribution.

Justin B Smith, chief executive of Bloomberg Media, published a survival guide for the platform era this week. "While Google and Facebook may have won Round 1, the real fight is coming up, as $250bn in brand advertising locked up in TV and print floods into digital across the coming years," he said. "Publishers were built for brand advertising, with great content, beautiful environments and strong, trusted brands. Meanwhile, platforms are showing more and more vulnerabilities due to fake news and environments that aren't 'brand safe'. Publishers can still carve out valuable, lasting businesses, but they need to execute a clear plan."

Smith is offering better advice than Rusbridger: have your own plan and execute. Don't play the imitation game.

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