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16 February 2017

Robert Thomson: Distributors Profiting At Expense Of Content Creators

News Corp chief executive Robert Thomson has launched a verbal attack on digital distributors and aggregators accusing them of profiting at the expense of content creators and of truth and accuracy in a world of fake news.

Mr Thomson also was critical of ad agencies and their programmatic networks because they at times “artificially aggregated audiences” and plied them with content of dubious origin, NewsMediaWorks reported.

His criticisms followed hard on the current dispute over a lack of transparency over the measurement of views on social media sites, such has Facebook.

“Advertisers want reassurance that their products are displayed in suitable surroundings,” Mr Thomson said. “In the ad market, there has been an awakening and there will surely be a reckoning.

“We are in an era in which integrity is priceless, yet digital distributors have long been a platform for the fake, the faux and the fallacious, highlighting an issue which we have long stressed – that they have eroded the integrity of content by undermining its provenance. Put simply, content distributors are profiting at the expense of content creators and at the expense of veracity."

Following revelations that brands are unwittingly funding Islamic extremists, white supremacists and pornographers by advertising on their websites through programmatic advertising, The Times reported this week that big brands had suspended their digital advertising because of concerns around context.  

In a lengthy article, which cites the News Media Association's report by Deloitte, on the news media industry today, the Financial Times pointed to figures demonstrating the difficulties faced by publishers in competing with Google and Facebook.  

"The print decline has not been cushioned by a corresponding inflow of digital dollars, in part because most online spending flows to Google and Facebook, which account for about two-thirds of the digital ad market.

"Brian Wieser, analyst at Pivotal Research Group, estimates that in the second quarter of 2016, they captured 116 per cent of non-search advertising growth — meaning the rest of the market actually shrunk by five per cent."

The article pointed to the resilience of print as an advertising medium: "This is backed up by hard cash. In a foreword to a December report by Deloitte on the UK news industry, the News Media Association quantifies the lower monetisation of news brands’ digital audiences as compared to their print audiences.

"The industry’s average annual revenue per print media user is estimated at around £124 currently, while that per digital media user is estimated at just £15.50, it said."

Writing in Campaign today, acting UK editor Maisie McCabe reported on calls for urgent action to be taken to address the problems with the transparency of programmatic advertising and the damaging effects on news media publishers.

She wrote: "We all know that the way digital ads are bought and sold is one of the reasons why many premium newspapers are in serious trouble. Brands and their agencies buy digital ad slots based on online users’ previous behaviour rather than the environment they’re going to sit in. Spots next to fake news or beheading videos can look the same as those on premium publishers’ websites." 

Mr Thomson added: “There are clearly social, as well as commercial, consequences to this contradiction and the issue is far from being resolved – a tweak to an algorithm, or a fact check here or there, does not address the basic problem.

“Ad agencies and their programmatic networks are also at fault because they have sometimes artificially aggregated audiences, and these are then plied with content of dubious provenance – the agencies win, the fabricators of the fake win, and advertisers and society both lose.

“Affinity and integrity are core elements of a sustainable relationship between advertiser and consumer, and yet affinity and integrity are far too often missing in the modern marketplace.”

Mr Thomson said audiences were craving integrity, which was why many of the company’s mastheads had reported strong growth in readers and subscribers.

He noted that The Wall Street Journal had experienced a significant increase in paid digital subscribers through the US presidential election, surpassing the one million mark in the fourth quarter of 2016. The New York Post digital network also had an audience of more than 76 million in November.

“This reflects an increased appetite for quality journalism in an era of remarkable upheaval,” he said.

Mr Thomson said that News Corp was testing its own digital ad network, “which will provide a measurable, high quality audience for advertisers, who are increasingly wary, and rightly so, about the murky, tenebrous world of digital advertising.”