Responsibilities and wonders

19 Dec 2017  |  Bob Wootton 
Responsibilities and wonders

As advertisers, regulators and governments take serious interest in their behaviour, Bob Wootton argues that 2018 could be a watershed year for Google and Facebook

As all and sundry offer seasonal lists, I’ll resist the temptation for seasonal lightness of heart and instead dwell on an issue that’s getting chunkier by the moment.

Yes, even at Christmas, which came early with a new acronym - Goobook, so much more than a mere elision of names.

GroupM forecasts Goobook will attract 84% of the ~$100bn global 2017 digital adspend excluding China.

It also forecasts global ad spending will increase by ~$23bn, or 4.3%, next year, which puts global adspend at ~$550bn.

And it avers that the dominance of Google and Facebook comes at the expense of other traditional and online media companies.

The world’s biggest media buyer should know. The year is more or less complete and traded. They’ve probably already done their volume megadeals for 2018 by now so can predict 2018 with similar accuracy too.

So Goobook’s rising share of global adspend is approaching 20%. That is really significant market share and will be considerably more in some places.

(Advertisers used to worry about ITV’s 30-something per cent grip on the £4bn UK telly market. The now-redundant Contract Rights Renewal price control ISBA secured fourteen years ago is a lasting reminder of the scale of those concerns back then).

But while advertiser money continues to deluge in through every orifice, who can blame Goobook for shrugging off mounting concerns over their behaviours?

Even if there is an impending sense of a reckoning coming for Facebook and more precisely, Google’s YouTube subsidiary.

Both are now caught in the mires that are brand and user safety. Porn, grooming, jihad, children, fake news...stoked by a growing band of media of record which have suffered from their inexorable march, the tide of opinion is not going their way.

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But let’s not forget, both companies have created incredible things from scratch.

Launching in September 1998, Google sought to make all the world’s knowledge available to all, effectively replacing and demolishing global classified advertising with something far better and infinitely faster.

Just as Google sought to connect us to information, in February 2004 Facebook then sought to connect us to each other.

All of us - or at least 26% of the global population by mid-2017.

Google was the first crack cocaine for advertisers and many quickly became dependent on search to drive their businesses"

And a year later, YouTube came along as a means of posting and viewing video universally, quickly and cheaply.

Each service was free but needed revenue to operate.

Google was the first crack cocaine for advertisers. Many quickly became dependent on search to drive their businesses, notably those now known as ‘performance’ advertisers.

Facebook didn’t become a must-have until much later. YouTube’s day was still to come, but as dreadful dumb banners gave way to video, so it did too.

Both companies very wisely recycled fractions of their increasingly massive revenues into direct relationships and even embedding themselves within advertisers...

...who were only too grateful to have somebody who understood adtech within them, even if the ulterior motive was simply to sell them more stuff. So began the education and inculcation of a rapidly-churning marketing workforce from within. Brilliant.

Both sought access to capital as they grew. They went to the market, in turn making their senior executives, particularly the long-servers, wealthy.

This opened them up to the expectations of those markets, often fanciful and short-term.

Everybody was reminded that for revenue, read advertising, which led to a plethora of new advertising ‘products’ which continues.

They started to behave like the big corporations they’d become. Cunning, evasive. Tech can really dissemble when it wants.

They lured ‘top’ people in management, finance, legal and corporate affairs who knew how to structure for maximum revenue and minimum outgoings, especially globally.

Initial secrecy over, and later manipulation of, audience figures and elaborate, if legal, schemes to minimise tax, particularly where revenues were actually earned, followed. (Creator IP was also given low priority).

None of these, which many might consider morally questionable, are illegal. Rather, they’re what most large, multinational businesses do - to some extent.

National governments are also complicit, pitching as ‘good’ places to do business. Whether the Caribbean, our own Channel Islands or Switzerland, where the different cantons, similar to our counties, compete. (Zug became popular - Shell moved its advertising function there for this very reason).

Throughout, there was a mounting sense that Goobook’s senior executives had begun to see themselves above everything.

A rumour, taken seriously, circulated that Google wanted to buy a superannuated US aircraft carrier and convert it into a floating tech city hub outside any national jurisdiction.

Conspiracy theories hold that the US Government itself is in thrall to Google’s (and others’) vast computing power for major defence and other projects, which is why it has not yet been subjected to anti-trust scrutiny.

All the while, the march was to the mantra of “we’re a (tech) platform, not a publisher”.

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Thus with great power came...no responsibility whatsoever!?

I see this as the pivot of the whole safety and fake news pieces.

The pre-existing media channels have taken a beating at the hands of these new guys. Many were too slow (or too arrogant) to react. Some may never recover.

But all continued to provide accountable, often regulated, environments. In other words, they took responsibility.

I’ve long and publicly advocated that advertisers question exactly what they’re getting online and what their contractual recourse is in case of misadventure.

So I’m pleased to see advertisers, regulators and Governments alike taking a concerted interest at last.

(They’ve got to get on top of that so they can find time to turn their attention to not being closed down by some pressure group or other whenever they try to say anything).

I just hope it’s sustained and that 2018 sees the UK becoming the first major market in which Goobook continues to offer its wonders but also shoulders its responsibilities - whether voluntarily or, as is now more likely, regulated.

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