Digital Media

Technology, Digital Analytics, and the new Monopoly


As time and technology march on, occupations, professions, and major market players adapt or fade away. I can recall as a freshman in college being told that newspapers had already had their heyday decades ago.

News isn’t going away, but paper is being replaced by screens the size of your hand and much, much larger, with speed (but not really depth) that travels around the world in split seconds.

Congressman Charles Brownson
Congressman Charles Brownson

Former Congressman Charles Brownson (obscure Indiana Republican) is quoted as saying “I never quarrel with a man who buys ink by the barrel.” Soon enough, the vast majority of the public will not understand what that saying means.

The barrels are fewer and the previously unchallengeable media giants have already been eclipsed by digital reporters. The digital giants make the venerable, unchallengeable old-school giants look like ants crawling on the shoes of the new giants, ready to be crushed. Previously, harsh criticism on the front page of the New York Times meant the end of a public career, while now it’s a ten-second blurb on Facebook.

I loved reading the New York Times on Sundays, even though I cannot say I have done that lately, mostly because of work, not for lack of desire. For one thing, the Sunday New York Times Review of Books was a place to read some of the brightest writers commenting on some of the most significant books. It was fascinating and added a lot to my understanding of the world.

I don’t see Google or Facebook doing this for me, though I must confess I Google for information in research, and I Facebook not at all. We are at a turning point. The digital media is a wave that will carry us into the future, and the remnants of the older, broken media giants will wash up on the beach, overwhelmed by the digital tidal wave, like it or not. The question before us is whether we will allow certain monopolies to carry too much influence, at least on a regional basis.

The smallest of the traditional media, the local community papers, have been hit hardest. As the costs of ink, paper and distribution rose, readership and advertising revenue went down, spelling the demise of the community newspapers.

Advertising went digital from paper and ink, and target marketing (if you weren’t aware of Google Analytics) went so specific that it had names of potential customers on lists in databases. Paper and ink couldn’t survive very well in that environment.

According to a report by CNBC, Google and Facebook are dominating “83% of all digital ad revenue growth and 73% of all U.S. digital advertising.” Those numbers are hurting more than the hometown local papers; they are taking apart the advertising business as we know it, and the tech-savvy digital publishers are having almost as hard a time as the old paper and ink media firms.

Alphabet & Facebook Revenues
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Google, that lovable teddy bear internet firm that espouses “to create the happiest, most productive workplace in the world” (as quoted by an unnamed vice president) is taking over the news market, with Facebook close on their heels.

Jonah Peretti, CEO of digital publisher BuzzFeed says that Google is “paying content creators far too little for the value they deliver to users.” And here I thought working for Google would be a dream come true. Like much writing of that nature, it is probably “work for hire” where the writer dashes out the work and the publication owns the material, unless otherwise specified.

In 2017, Google’s YouTube lost millions in revenue as firms like Verizon and Walmart pulled their ads because their ads were being run next to videos promoting hate speech or extremist views, as was reported The Guardian.

Fortune magazine reported in 2017 that all of the growth in digital advertising has gone to Google and Facebook. Jason Kint of Digital Content Next estimates that growth for Google and Facebook was a whopping 89% in 2016. If you can think of any business in the U.S. that is expanding by 89%, please let me know, and also forward to me their Human Resources department email.

Pivotal Research analyst Brian Wieser stated: “as the two rose to capture 77% of gross spending vs. 72% in the year ago period, with 99% of industry growth attributable to the two companies.”

They’re good, they’re smart and savvy.

They offer “targeted marketing” meaning that you aren’t spending money on a billboard hoping that one of the thousands who drive by might want your product; you’re spending advertising money on targeted potential clients who show a confirmed history of tendencies to buy your product.

If there are any numbers I do not have, it is the increases in revenue when it transfers its advertising to Google or Facebook, but people making the decisions think they are important. I have yet to witness the testimonial of any firm claiming that Google or Facebook doubled or tripled their sales; not that it hasn’t happened, mind you. Have you ever seen Google or Facebook advertising for your business? Where do you contact then? Are they hiring salespeople? Or is all this just some subplot trying to undermine our economy?

In the past, the government restricted media firms from controlling too much of any market within certain areas, in fear of undue influence and a monopoly on news.

Facebook and Google have, in quite a short time, managed to gain great influence on media that would have never been allowed by past regulation had they been a traditional media player.

While it cannot be said that Google or Facebook are forcing people to use their media, undue influence is rearing its ugly head. The number of people who are reading newspapers is dwindling, and is substantially down from years past, and their numbers keep shrinking as the traditional newspapers and magazines go digital and try to make enough money to stay in business. Many of the local smaller-circulation papers have already closed up shop, for reasons already mentioned.

It is rather obvious that Google and Facebook have not done well with controlling “fake news” and the 2017 YouTube accident where respectable brands were too closely associated with extremist views and hate speech was not kind to Google.

The Russian meddling in the 2016 presidential election should give any thinking person pause, to consider what these firms are doing. While we would not wish to deny them the ability to make money, it is rather obvious that they have not exercised due diligence in their allowing customers to post things on their media.

Admittedly, they’re new at this, but that is one of the problems. Being new, the older news reporters and editors of the almost obsolete media who are being cast aside could probably do better, if given an opportunity. But that opportunity is not likely to arrive.

The Wall Street Journal, February 26, 2018: “U.S. antitrust laws, designed to promote fair competition, and prevent consolidation, actually make it harder for traditional news outlets to compete with Silicon Valley giants. Under current law, for instance, news publishers cannot get together and agree to withhold their product unless they receive a return on their investment…News publishers should be able to use their collective in negotiations with big tech.”

In 1982, AT&T was forced to break up because it was, in effect, a monopoly. If you haven’t lived long enough, you will notice that competition made phone fees much lower. Businesses choose Facebook and Google because they have a competitive advantage, and that’s fine for now. Like any business model, other will see it and hopefully bring on some competition. In the meantime, according to The Wall Street Journal of March 2, consumer products producer Proctor and Gamble slashed their digital advertising budget by $200 million last year, after they concluded that such spending was “largely wasteful.”

I have suggested for some time that someone will make a fortune by designing software that blocks all of the clicks and then offers the clicks to firms like Google and Facebook, for a price. Internet users are at present just giving away valuable information crucial to advertisers like Google and Facebook.

Perhaps with all of the technology and all of the geeks in Silicon Valley and elsewhere trying to get rich on the internet, someone will design the software that allows the consumer to sell their clicks for money or free merchandise.


Jeffrey Neil Jackson

Jeffrey Neil Jackson is an
Educator & Literary Mercenary


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