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16 November 2017

Industry Figure Rebuffs Harris’ Society of Editors Speech

Jason Kint, Digital Content Next chief executive, has launched a scathing point by point rebuttal to Google UK and Ireland managing director Ronan Harris’ speech at the Society of Editors Conference in which he said suggestions that Google was “stealing” ad revenue from publishers were “factually incorrect.”

In his speech, Mr Harris said Google cared deeply about the news media industry and was determined to be "the best possible partner" to the industry. He added: "We agree broadly with the Society of Editors - who do such great work in this area - that government over-regulating free speech is not a good idea. The law of course does step in with libel, hate speech, child protection, copyright and so on. And those same laws apply to us, as they should."

His comments come as Culture Secretary Karen Bradley confirmed that she was having "regular discussions" with the tech companies about their relationship with the news media industry. During oral questions in the House of Commons this morning, John Whittingdale MP asked the Culture Security if she shared, "my concern about the decline of local newspapers and the consequences for local democracy?"

He added: "Will she welcome the launch by the BBC of the local news partnership, which will support the employment of local democracy reporters? Does she agree that, perhaps now, Google and Facebook, which also profit from local journalism, could support that initiative?"  

Ms Bradley responded saying that Mr Whittingdale: "Deserves great credit for the work that he did on the BBC charter, which included this local news initiative now being carried out by the BBC. The idea that we might lose our local newspaper - the voice for local people - is of great concern to all Members of this House. I have regular discussions with the internet companies on precisely the point that he has raised."

Following Mr Harris' speech earlier this week,  Mr Kint launched a thread on Twitter challenging Mr Harris’ arguments about Google's relationship with the industry, saying: “Apparently Google is using UK market to test pushing back against the duopoly/competition narrative. Their UK chief's remarks are nothing short of foolish and disingenuous to the current and future of web. Regurgitating Google's old playbook.

“Google UK chief's main point seems to be that publishers only share a minority of the revenue from their own sites with Google. This is an argument from a decade ago and fails to recognize Google’s dominant lock-in for search and data collection across the web.

“Yes, most publishers keep a majority of the ad revenue on their own sites once you get past the significant costs for programmatic/automated delivery. Put that aside for now, this argument (surfaced by Google) is about Google’s role in the duopoly.

“Data. Google has trackers (data collectors) on more than 750,000 of top one million sites. This data collection allows them to target audiences using the cheapest inventory and cheapest suppliers possible. Yes, Google still serve ads on Breitbart and there are much worse sites.”

In his speech, reported by Press Gazette and HoldtheFrontPage, Mr Harris suggested that those who argue that Google and Facebook are stealing publishers’ ad revenues are “conflating” search and display markets.

Mr Kint responded on Twitter:  “In this way, Search and Display are not actually that different. They are targeting direct marketing ads based on data collection. This is what most of digital advertising is run on. Facebook and Google control it. Harris's statement is ridiculous.

Mr Kint added: “Revenue mix. Additionally, over the past five years, Google’s own revenue mix has migrated from Google's network of publishers (where they have the lowest margins) to Google's owned and operated businesses (where they have highest margins). Google controls this effect.”

Responding to Mr Harris’ point that there was no advertising on Google News, Mr Kint wrote on Twitter: “Google News argument is BS. Google UK chief regurgitates line “but we don’t even serve ads on Google News.” Google serves significant ads/revenue on Search, YouTube, elsewhere where news discovery is happening.

“The fact there is a "Google News" vertical is something most people outside of industry don't even understand. They're searching, discovering news and information through many channels where Google drives revenue/profit/data.”

He continued: “Duopoly. I can’t emphasize enough how much Google (and Facebook) hate being lumped together in the “duopoly.”  They argue “but we’re different.”  They're not.

“Facebook and Google share same core business has nothing to do with the free service stacked on top. It’s the data collection across these services in order to micro-target advertising. Exact same business.

On ad blocking, Mr Kint said: "Some EU pubs lose more than 30 per cent of their ads to ad blockers. Google has admitted to subsidizing major ad blockers in order to whitelist Google’s own ads."

Responding to the point that Google drives traffic to publishers “for free” Mr Kint said: “Argument (Facebook also makes) they "drive traffic for free" is offensive. Google has 96 per cent of mobile search market. It would not exist without publisher content. Any other engine (if it was possible for another one to materially exist) would also drive that traffic to pubs.”

Mr Kint concluded his thread by posting: “I'm offended, publishers should be offended and Google should change their PR tactics here immediately.”