It’s time agencies and advertisers asked themselves serious questions about the media world they are creating through their investment decisions, writes Tess Alps
I’m sure many of you will have recently joined me in a bit of 2012 Olympics nostalgia by re-watching that soul-lifting opening ceremony. So many inspiring moments. One of the many that drew a tear was when the suburban house flew up to reveal Sir Tim Berners-Lee, inventor of the world wide web, sitting at his laptop and, across the audience, the phrase “This is for everyone” shone out.
What a vision that was: an open technology that would benefit all humanity by connecting everyone and everything.
Amid the quasi-religious philosophy and optimism that early internet evangelists invoked, people could see that there would be disruption for many on the road, but we were told that the pain would be worth it to create the democratic, meritocratic Nirvana on the horizon.
It’s well-documented that newspapers have suffered more than most media businesses in this transformation, in print advertising revenue at least. Looked at more positively, internet technologies – web, mobile, apps – have allowed them to reach many more people across the world. And, in a thriving online advertising market, this should at least offset some of the losses that print advertising is suffering.
Last week’s results from the Guardian Media Group were a shock; not only did its print advertising decline, its digital advertising was also down despite growth in online readers. On the same day Facebook announced that its first quarter 2016 net income had tripled (yes, tripled) and that its margins had increased from 26% to 37%.
So, after we’ve all congratulated Facebook and commiserated with the Guardian, what should we make of this?
There are two enormous issues here: the first is about the developing advertising landscape and how it impacts advertisers, agencies and media-owners; the second is linked but arguably even more serious and relates to democracy and culture.
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It is reported that 90% of the growth in mobile ad revenue is going only to Google and Facebook. You can see how that might happen. These two global behemoths are force fields so magnetic that they suck every penny towards them.
They talk at the highest levels to global companies (and governments – more of which later). Their huge revenues and margins allow them to be so well-resourced that they are omnipresent, not just within media agencies but within marketing departments and creative agencies too.
They offer their expertise for free and they have loads of their in-house data to share. They are lavish entertainers and at the drop a hat will whiz CEOs off to the West Coast or somewhere else lovely.
They are generous sponsors so are able to put their name everywhere and buy up the goodwill of many influencers. The Guardian has been replaced as the headline sponsor of the Edinburgh TV Festival by YouTube (an ironic twist from the company that is telling advertisers to take large sums of money out of TV.) They are mostly staffed by talented and delightful people whom many of us know well and trust.
Everyone wants to be their friend – or at least no-one wants to be their enemy.
I blame Google and Facebook for none of this. They’re just doing their job.
Do agencies and advertisers really want a world where there is no national, quality, journalism or culturally specific entertainment to place their ads in?”
What must agencies and advertisers do in the face of this? Agencies’ responsibility should be first to their clients, not just for today but for the future too. If they don’t do this they will have no business in a few years.
So it’s essential that media agencies invest only the money that is justified on a day-to-day basis, based on independent and impartial metrics. It is surely not acceptable that Google and Facebook – and others – define their own metrics, count their own inventory and even analyse their own ROI.
We need agencies, marketers and industry ruling bodies to demand quality, impartial research and to challenge publicly the hyping of any trends. Internet media should be subject to the same scrutiny and scepticism that every other medium receives.
We also need agencies to ensure that their own income is not influencing their planning decisions and this probably means working with procurement more openly to rewrite contracts or to change their fees to business-based ones.
Advertisers must make sure that their contracts allow agencies to be profitable without resorting to other ‘practices’ and then they will be able to trust the advice that comes from those agencies again.
But we also need agencies and advertisers to consider the longer-term effect of where they decide to spend media money. Do they really want a world where there is no national, quality, journalism or culturally specific entertainment to place their ads in? That will be the inevitable consequence if the Guardian and many other media like it cannot monetise the hard-won audiences they have built online.
The internet was supposed to be ‘for everyone’ but the idealism of an open web has mutated into an increasingly closed and unpoliced world of apps, and a world dominated by a very few quasi-monopolies.
This is where we start to go way beyond our world of marketing into some seriously heavy duty public policy issues. Katharine Viner’s recent ISBA speech highlighted just how dependent newspapers have allowed themselves to become, reaching readers increasingly through the social media gatekeepers.
That has many revenue implications but even more editorial ones. Now that news articles are being served up based on unknown ‘personalised’ algorithms these giant tech companies are in effect acting as editorial organisations while posing as neutral distribution platforms.
Democracy is at risk. If it was any other medium, regulators such as Ofcom, national governments and international bodies would expect to shape very closely how this scenario develops. Some things are happening here, particularly in the sphere of privacy and data, but the wheels grind slowly. In the meantime, valuable media companies are being starved of vital and deserved revenues while others wallow in cash.
While we wait for official organisations to grasp this giant nettle there’s plenty the industry can do by using media investments more wisely. These could not be more crucial. We all need to examine our consciences and strategies. Let’s be brave enough to engage in some open debate. This really is an issue ‘for everyone’.
Tess Alps (@TessAlps) is chair of Thinkbox.
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