Mark Ritson: Google’s lack of transparency should have us all worried

One of the great benefits of my job is an occasional free flight and a decent hotel stay in a sexy city in return for a quick presentation. So when the opportunity came to go to New York City earlier this year and deliver a talk at the prestigious INMA conference it took me all of six seconds to say “yes” and reach for the old maroon passport.

INMA stands for the International News Media Association and, with the exception of a few unknown interlopers like your humble correspondent, its conference attracts most of the senior people from most of the biggest news media brands in the world.

My talk was all about how news media managed to get so severely fucked by the digital duopoly of Google and Facebook, yes I used those words, and how some (certainly not all) of the remaining news media brands might survive the increasingly difficult days ahead.

One of my main arguments was that news media has been too slow to aggressively compete with Google and Facebook and now might be a good time to start properly punching and kicking. I made the point with a suitably vicious quote from Steve Jobs. I have seen a succession of bland and cheery epithets apparently authored by Jobs. You’ve seen them. “You hire smart people and then let them get on with it”, “Great things aren’t done by a person, they’re done by a team of people”. That kind of crap. I have no idea if Jobs actually did deliver any of this vanilla flavoured motivational bullshit. If he did, I doubt he was serious. The quotes that best capture the man also capture his rapacious and extremely aggressive hatred of pretty much everyone who competed with Apple. The specific quote I used at the INMA’s conference was from Walter Isaacson’s biography and came from the claim that Google’s Android phone was “stealing” ideas from Apple.

“I will spend my last dying breath if I need to, and I will spend every penny of Apple’s $40bn in the bank, to right this wrong. I’m going to destroy Android, because it’s a stolen product. I’m willing to go thermonuclear war on this”.

I read the quote in full and used it to extol my point that this was how you compete with Google. You go for the throat. The audience response inside the New York Times flagship conference centre was suitably bifurcated. About half the room gave me a clap, the others crossed their legs uncomfortably and wished they had missed this session. Both Google and Facebook were, after all, the two main sponsors of the INMA conference. Oops.

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With my talk over the next session began. One of the speakers, a senior manager from Google responsible for relationships with news media companies, was so impressed with my presentation that before she got onto her own talk she took time out to decry (very politely I might add) the talk she had just witnessed. Google, she passionately explained to the audience, was not an enemy of the news media, far from it. “Our mission,” she explained “is simply to organise the world’s information and make it universally accessible and useful. How could that be perceived as a threat to anyone?”

Let me be clear. I certainly think the executive from Google is a very good and upstanding person. I think pretty much everyone that works for Google is both very good and upstanding. Furthermore, I think she and most of her fellow Google people believe 100% in Google’s stated mission.

I just think that it’s the biggest pile of corporate horseshit I have ever seen. Even set against all the usual corporate hypocrisy and double standards endemic across most brand beliefs and mission statements, Google’s stated purpose is the ultimate stinker: The Everest of brand mission statements. One so full of itself and so incredibly contradictory to the true operations and strategy of Google it almost defies belief.

Dissecting Google’s brand mission

Sure, it’s a mission that justifies ignoring intellectual copyright laws and rendering almost all content that Google encounters as fair game. It also helps to conveniently bolster Google’s position that it is certainly not a publisher (and thus vulnerable to all the constraints and responsibilities that come with that status) but rather a platform designed to organise and share information and not take central responsibility for what that content might actually consist of. In those two ways, its mission works perfectly.

Where it works less well is when you apply it to the activities of the company itself. At almost every point of intersection with the external world Google employs the kind of sleight of hand and corporate fuckery that would have made Enron blush. There are too many examples to cite in a short column so indulge me with some of my all-time favourites.

There was that classic moment when the boss of Google’s European operation, Matt Brittin, was called in front of the House of Commons public accounts committee and asked what his annual salary was.

Brittin was unable to come up with a figure and so journalists scurried off to Companies House to scrutinise Google’s stated salaries. Every listed company, after all, has to disclose their senior executive salaries. But Google was way ahead of them. The company is publicly listed, but not in the UK, so the register for Brittin and his other fellow executives shows their salary as “nil”.

Clearly there are many executives who would bridle at being asked the same question. But my point here, and elsewhere in this column, is that if your mission is truly to organise the world’s information and make it universally accessible and useful you can’t obfuscate and omit this kind of information. In fact, you should have already made the information universally available to all. But that is not how Google play the game, far from it.

His salary was not the main reason for his appearance in front of MPs that day. He was there to try and explain why advertising sales made by Google’s UK staff to British advertisers were not classified as UK revenue. Brittin’s explanations resulted in the then chair of the committee, Margaret Hodge, concluding that Google’s behaviour on tax was “devious, calculated and unethical”. That’s not just inconsistent with Google’s mission, it’s about as diametrically opposed as you can get.

It was a similar story last month in Australia where a select committee of Australian senators attempted to ascertain what Google’s actual revenues were in their country. Google’s most senior Australian-based executive, Jason Pellegrino, told the Committee that his company’s revenues for the previous year were $1.1bn. The might sound a large sum but given most analysts estimate Google has around a 20% share of the $15bn advertising business down under, there seems to be a shortfall of several billion dollars between what Google stated and what they actually generated.

When pressed by the senators on this disparity, Pellegrino – who incidentally is a spectacularly nice person – was indefatigable. “Senator, I’m not in a position to speculate on those numbers,” he explained. “We have a policy globally of not reporting numbers in a specific country, and I’m not in a position to break that down any further”.

Again, let’s pause and appreciate the irony of a company that openly claims its mission is to make the world’s information open and accessible to all not breaking down its revenues to the country level. And refusing to do so when requested to do so by some of most senior politicians in one of its key markets.

The secrecy strategy

The whole corporate strategy of Google is quietly founded on internal secrecy. Last month, for example, in a move missed by most, Google changed its status from a corporation to limited liability company. The move reflects Google’s new status as simply one of the brands with the holding company known as Alphabet. But the shift also potentially means  a whole bunch of information that would have to be disclosed annually if Google had continued as a corporation could now be hidden within its new LLC structure. The move could wrap Google, which accounts for 99% of Alphabet’s revenues, in a secret accounting cocoon that means it has not obligations to release any financial data on its size, growth or performance.

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That’s potentially very handy because Google and its duopolistic nemesis/partner Facebook are heading at lightning speed to a place where we have never been before. Indulge me with a simple task over your lunch break today. I promise it is worth it. Use Google’s search engine (of course!) to work out four separate figures.

First find an estimate of the UK total ad spend for 2016 or even the projection for 2017. Next, run a new Google search and calculate what proportion of that spend will go on digital communications in 2017. Then search for a suitable estimate of Google’s share of digital media through both search advertising and its YouTube business. Lastly, have a look for how fast Google is growing its annual revenues.

You should have four figures in front of you. Now work out what Google’s share of total ad spend is in this country for 2017 is. Impressive eh? Now apply that annual growth rate for another five years and look at what share Google will have by the year 2022. No, your numbers are not wrong, it really is that big. And Facebook will likely have a similar share.

The fact that Google is so secretive while hiding in plain sight under a corporate mission that suggests openness and transparency is a contradiction that even Kafka would struggle to accept.

That’s why this topic is so important. Google’s growing power means that its lack of transparency at almost every turn is a recipe for societal disaster. Most of the research I did for this column was done with Google. I watched many of the moments I have described in this column on YouTube. In a moment, I will email it to my editor with Gmail. I’ve paused twice while working on this to look at photos of my daughter using Google’s photos app. This is a company that maps my every move using its apps and even tells me where my car is parked. A company that is currently installing listening devices, that we pay for, into homes all across the country. These are all great products, and globally successful as a result, but they are also products being made by a company that is increasingly hidden from view and not fit for the societal responsibilities it now faces.

Three years ago one of Google’s founders Larry Page admitted the company’s mission, one that he partly came up with when the company launched, was increasingly out of step with the direction of Google today.

Can I suggest it is still half applicable. Google’s mission remains to “organise the world’s information and make it universally accessible and useful” but we must append it with the caveat “while ensuring none of that transparency or accessibility ever applies to Google itself”.

We are heading into dark, dark times. Two companies will control the global media and with it much of the advertising revenues across the globe too. There is not a lot anyone can really do about this state of affairs. But the fact that one of them, Google, is so secretive while hiding in plain sight under a corporate mission that suggests openness and transparency, is a contradiction that even Kafka would struggle to accept.

Professor Mark Ritson will be teaching the next class on the Marketing Week Mini MBA in Marketing from September 2017. To find out how it could make you a more confident, more effective and more inspired marketer, and to book your place, click here.