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Google boss knocks back industry calls for greater ad revenue share

SoEconf2017

The boss of Google UK has delivered a rebuff to industry calls for a greater share of the advertising revenue generated by newspaper publishers.

Trade body the News Media Association has backed calls for digital giants such as Google and Facebook to recompense publishers for using their content on its platforms.

But delivering the Society of Editors lecture in Cambridge last night, Google UK and Ireland managing director Ronan Harris insisted that most of the ad revenues generated by such content were already going to the publishers.

Mr Harris described as “factually incorrect” suggestions that Google was “stealing” ad revenue from publishers, saying that two thirds of the revenues generated by online content went to its originators.

“I’ve heard lots of people say that Google and Facebook are “ruthlessly stealing” all the advertising revenue that publishers hoped to acquire through online editions,” he told the gathering.

“There is no advertising on Google News. Zero. Indeed you will rarely see advertising around news cycles in
Google Search either.

“In display advertising, Google is a supplier of ad inventory to newspaper websites. In every deal we do, without exception, the publisher keeps the majority of ad revenue — typically more than two thirds but often more.

“In short, we only make money if you’re making money.”

Mr Harris appeared to differentiate Google’s activities from those of Facebook, suggesting it was unfair to lump the two digital giants together.

“They have always been a very different business with a very different business model,” he said.

Mr Harris stressed Google’s desire to work in partnership with local and national publishers, citing its Digital News Initiative and its efforts to help combat fake news.

“My message to you is simple: we care deeply about the future of journalism, we recognise that our futures are bound together and we are determined to be the best possible partner to the news industry,” he said.

3 comments

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  • November 13, 2017 at 12:32 pm
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    The publishers stabbed themselves in the back from day one, putting everything on the web for free and still doing so. Nobody else to blame.

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  • November 13, 2017 at 1:34 pm
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    Dave S, that’s not quite how I remember it.

    I recall many editors refusing to put exclusive content on their websites, with the reasoning ‘why would anyone buy the paper?’. I also recall them trying much shorter versions of non-exclusive stories online too.

    The fact is, most regional papers don’t have enough exclusive content to make this a viable business model.

    On top of that, local PR teams can now reach audiences more effectively themselves through their own websites, social media, newsletters, video etc.

    Quite simply, the medium of delivery and the method of distribution has changed so much and so quickly that it requires a new business model.

    I think the likes of Google, Facebook, Apple and Microsoft could help more by providing independent publishers with much more favourable terms. This might encourage more great journalists away from the regionals before they get pushed and move into another career.

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  • November 13, 2017 at 4:36 pm
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    Staggering stuff and yet to be totally expected. Advertising creates over 85% of Alphabet’s revenue and it’s not in their interests to change the existing model. They’ve got shareholders too.
    I find his “publishers get the majority of the revenue … on display” to be disingenuous. DFP (Double Click for Publishers) plugs into the Ad Network which perpetuates the arbitrage against the publishers. As a result, it is their lynch-pin position that facilitates the entire model and it’s undermining of the publisher’s value in the supply chain. i.e. If it wasn’t for the way the DFP tags work, none of the fraud, opacity, misplacement, inequity and lack of performance would happen. we’ve proved it innumerable times.
    There is a better way and Mr Harris has made it very clear that he isn’t going to supply it. GDPR thought gives him a BIG headache and Publishers a BIG opportunity.

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