Facebook's Blackout vs. Google's Dealmaking 'Could Backfire'

Moves from Google and Facebook this week have publishers fretting as regulators globally keep a close eye on Australia's pending media law. Google and Facebook took opposite approaches to the proposed News Media Bargaining Code, which requires platforms to negotiate payment with publishers for displaying snippets of their content. Google’s decision to strike multimillion-dollar deals with Australia’s leading news media companies for its News Showcase leaves little oxygen for smaller publishers. These larger players will also sit out the legal processes for negotiating royalties, sources tell Adweek. Meanwhile, Facebook’s decision to block news pages and content in the country leaves a vacuum for misinformation to flourish. “It is surprising. I’m not sure what [Facebook] wanted to prove,” said Angela Mills Wade, executive director of European Publishers Council. “It could backfire by proving the enormous value of news media to their users and their platform, demonstrating the very reason why the Australian Code is necessary: to bring platforms with such market power to the negotiating table.” Australia’s proposed law is already having global consequences, igniting further investigation from regulators in Europe and the U.S. Some publishers have criticized its current form as being too restrictive and failing to address the platforms' dominant position in advertising, not to mention potentially harmful algorithms. Here are some other ripple effects from the platforms' power plays. Facebook’s retreat sharpens regulatory focus Australian publishers are already feeling the sting from Facebook’s blackout. Nielsen found that total sessions for the Current Events & Global News category fell by 16.1% on Feb. 18, the first day of the ban, compared with the average of the previous six Thursdays. Chartbeat found that Australian visits to publishers' websites driven by Facebook fell from 15% to 5% once the switch was made. The overseas impact is greater: Traffic to Australian sites from visitors outside the country fell day-over-day by 20%. “[Facebook] messes with us,” said one global publishing exec about the platform’s historical bait-and-switch tactics. Facebook, meanwhile, needs publishers less, with only 4% of the content on its network classified as journalism. The platform already contributes to a significant amount of traffic to publishers, sending them 5 billion clicks in the last year, valued at an estimated AU$407 million ($319 million). Rather than this protecting Facebook from taking part in the code, as German publishers saw when Google retracted Search and decimated publisher traffic, this is evidence of how Facebook’s market dominance is being kept in check as other countries circle with their own version of Australia's code. Without fact-based media, misinformation thrives A lack of evidence-based information on Facebook leaves a vacuum for non-news content like conspiracy theories to germinate. The Guardian reports that as news remains blocked, satirical sites are reinstated, and Qanon and anti-vaccination content continues to be unaffected. Satire sites Betoota Advocate and Chaser accounted for nine out of the 10 best performing link posts by Australian Facebook pages on Feb. 18. Facebook’s previous overzealous blocking of non-media Facebook accounts has caused the most frustration for Australians, with critical health and emergency services inaccessible when the country was in the midst of bushfire season and other extreme weather situations, not to mention the pandemic. A lack of reputable news sources “clears the way for the spread of misinformation at a time when facts and clarity are sorely needed,” said a Guardian spokesperson, adding, "public interest journalism should be as widely available as possible in order to have a healthy functioning democracy." Publishers like The Guardian have been steadily reducing their reliance on Facebook, but they need to play in that space to offer an antidote, they argue. Advertising constricts with limited segmentation and targeting Right now, Facebook's blocking of news content is not much of an advertising issue, unless audiences delete Facebook en masse, depressing inventory. With less fact-based, credible content available for people to share, advertisers' ability to target and segment audiences could be hampered. Publishers use Facebook to give traffic guarantees for campaigns booked directly. With that stymied, they will have to look elsewhere to fulfill those commitments. “Most likely, this will result in publishers immediately redirecting efforts internally to source other traffic guarantees, which could open up opportunities on other platforms,” said Adam Morton, managing partner of client services at UM London. People diversify their news diet, strengthening Google’s position One benefit for publishers is that, shut out from Facebook, consumers will navigate directly to their own sites, apps and newsletters for news. Chartbeat’s analysis found that no other platform was so far benefitting from Facebook’s Australia news blackout, but this is early data. Meanwhile, Morton believes Facebook's move "further strengthens Google’s position in the Australian market." Google’s other products, like its News Showcase, YouTube and coming audio and subscription products, are being developed with the help of News Corp, which is contributing content. The losers: independent journalism and smaller publishers Publishers and analysts are uneasy that News Corp’s global deal benefits exclusively News Corp, a juggernaut that made $261 million in profits last quarter, while hamstringing other publishers that don't have the heft to negotiate the same rates. This is no fair deal.Struan Bartlett, founder, NewsNow Google has also struck deals with Australian media companies reportedly worth millions. The concern is this money props up media companies' bottom lines rather than support and fund local journalism, as the code is intended to do. “This law seeks to promote the interests of only those media corporations with annual revenue in excess of AUS$150,000 ($118,000), and to co-opt the big tech firms into bankrolling their operations," said Struan Bartlett, founder of news aggregator NewsNow. "This is no fair deal for funding independent, pluralistic, public interest journalism.” Other publishers are more positive of the route forward, cheering Google’s ability to strike individual deals, and hope this ushers in an era where platforms are forced to be more transparent on how they actually support journalism. “There should be a premium for premium journalism,” said Owen Wyatt, recently promoted to head of digital and strategic relationships at DC Thomson. “I really see both Facebook and Google’s recent launches as just the start of relationships built on an understanding of the value, importance and impact of journalism, there is so much more to be done here."

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'It Could Backfire': Ramifications of Facebook's News Blackout and Google's Dealmaking

The conflict over news in Australia is a blow for media companies

Lucinda Southern

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Lucinda Southern