Why too much google can seriously damage your wealth

Media owners struggling to monetise the exclusivity of their content face an uphill battle against Google’s ever-increasing influence

Stuart%20SmithI’m not talking about the stern lecture delivered by eminent psychologist Dr Aric Sigman in an article published last week by Biologist. No doubt Dr Sigman is on to something: a little less time spent interfacing with Facebook and Google and a little more engaging in personal interaction would be no bad thing.

However, the warning I have in mind comes from Robert Thomson, formerly editor of The Times and now managing editor of the Wall Street Journal.

Thomson, who is highly influential within Rupert Murdoch’s inner circle, recently fired a devastating salvo at Google. “Google devalues everything it touches,” he said. “Google is great for Google, but it’s terrible for content providers because it divides that content quantitatively rather than qualitatively.” For “devalues”, read monetary devaluation; what he means is that Google doesn’t distinguish between the quality of the content around which it serves ads: it’s all about quantity, not quality.

These few words encapsulate the dilemma of those, not only in newspapers and news magazines, but broadcast media as well, who struggle with increasing desperation to monetise the exclusivity of their content.

It was all so much easier in the cosy offline world of traditional media, wasn’t it? An oligopoly of supply, governed by the high cost of economic organisation (for example, printing presses and limited-spectrum broadcast distribution) once ensured that a very few were able to build authentic brands around careful differentiation of their content.

With the advent of the internet, we now have a much more open playing field, one consequence of which is the commoditisation of information. Almost any high-quality piece of journalism will soon find itself posted on Google, where it can be accessed free of charge. Additionally, advertisers no longer need to be held to ransom by individual media companies because Google offers them the opportunity to serve ads on millions of other websites cheaply. Market power gives Google the ability to force everyone else’s ratecards down.

So, stuff the status quo ante. The new world order is a win-win for consumers, who don’t want to pay subscriptions and don’t have to when they can get high quality stuff free on the net. And it’s a win-win for advertisers who, thanks to Google Adsense, are no longer paying through the nose.

But not so fast… Quality costs and if consumers are unwilling to pay for content and advertisers are spreading their smaller budgets more thinly, what we will eventually get is not quality but pap.

Just as pertinently, Google Adsense – where a click is simply an undiscriminating click – is not all it is cracked up to be from an advertiser’s perspective. Inexpensive is not necessarily value for money. Popularity (“quantitative” measurement, in Thomson’s language) does not necessarily equate to quality.

To be fair, advertisers and their agencies are becoming increasingly sceptical about whether advertising on the web really is persuasive and sells in the way it does in print and particularly on television. That, at least, is the recently aired opinion of Shelly Lazarus, head of Ogilvy & Mather.

Not that we should expect Madison Avenue executives to be overly warm and cuddly towards the “frenemy”. Google technology, especially Google TV Ads, has been effective at highlighting some of the archaic Spanish practices that riddle the present system of buying ads. These include having to pay for TV ads – normally in bulk – months ahead of the programmes airing, and the need for expensive (usually Madison Avenue) middlemen to advise on prospective programme ratings and fix the relationship with media sales folk at the Big Four broadcast networks. How much simpler if, as a client, you could rely on an automated process such as Google TV that enables you to buy ads by auction around one programme at a time without the disagreeable need for middlemen.

For the moment, however, Google TV is likely to remain a minority option, of interest to very few big advertisers (an exception being Lenovo) because the big TV networks are still strong enough to lock Google out, which means it has access to only a small number of TV-viewing households. In other words, we are still waiting for the video technology that will enable Google (or someone else) to do unto the traditional broadcast fraternity what it is currently doing unto the print.

In the world of print, by contrast, corporate life is now far less cosy. Thomson’s paper, the WSJ, and its rival the Financial Times, are the privileged ones. Why? Because they specialise in must-have information that is not easily commoditised. In other words, they can, with varying degrees of rigour, operate a subscription model that will partially offset the now rapid decline in advertising revenue.

If only the same could be said of general and local newspapers. This is the crucible of the Google experiment: many well-known brands will find themselves consumed in its flames. 


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