About 200 newspapers have joined forces to sue Google and Facebook for manipulating the advertising market

In the past ten years, Google and other technology companies have made a lot of money from advertising, and the resources and funds of local newspapers in the United States have shrunk to nothing. The latter is surviving in the Jedi.

Axios reported that about 200 local newspapers across the United States have filed antitrust lawsuits against Google and Facebook. They claim that these two companies have monopolized the digital advertising market, obtained revenue that would have flowed to local news, and directly harmed their publication. situation.

These lawsuits started a year ago and were originally small-scale, but now they have evolved into a nationwide movement involving dozens of states.

▲ Picture from: Axios

One of the lawyers, Clayton Fitzsimmons, stated that the litigation has two goals. One is to "recover damage to newspapers by large technology companies," that is, to obtain compensation; the other is to "build a new system to make newspapers competitive again." He cited laws in Australia and other places that forced technology companies to pay publishers for their content.

Concentrated prosecutions in newspapers are relatively rare, but they don’t seem surprising. Because the decline of newspapers is not a day or two.

A study by the Pew Research Center last year showed that the circulation of American newspapers fell in 2018 to the lowest level since 1940, and newspaper advertising revenue fell from US$37.8 billion in 2008 to US$14.3 billion in 2018.

In addition, between 2008 and 2018, the number of employees in the news department of American newspapers decreased by 47%, from approximately 71,000 employees to 38,000, which put the newspaper industry into a vicious circle.

And companies like Google have always had a steady stream of advertising revenue. CNBC reported that in 2020 alone, Google’s advertising revenue reached US$147 billion, more than 80% of total revenue.

▲ Picture from: Agence France-Presse

Google believes that the decline of American journalism is not directly related to it:

These statements are wrong. The online advertising space is crowded and competitive, our advertising technology costs are below the reported industry average, and publishers retain most of the revenue they earn when using our products. We are one of the world's leading financial supporters of journalism and have provided billions of dollars to support quality journalism in the digital age.

Google is not without responsibility. The rise and fall of the two are of course related, but they are not the only cause and effect of each other.

From the past to the present, we can always buy newspapers at a cheap price because it is priced below cost. Its profit in the past appears to be the use of advertising revenue to make up for the loss caused by the pricing issue, but in fact it essentially relies on the "second sale":

The first sale is to sell the newspaper to readers. Readers buy information, and what they value is the timeliness of the information; the second sale is to symbolically "sell" readers to advertisers, and what advertisers "buy" is The reader's reading time and attention.

▲ Picture from: getty images

How large the circulation of a newspaper is and how much "attention resources" it can gather, means how valuable its advertising space is. But now, this "second sale" chain has been broken.

On the one hand, the "attention resources" of newspapers are becoming more and more limited. The information we take in is no longer limited to the framed newspaper pages, and there is no need to focus on a certain self-media. How massive and territorial is the information on the Internet It is no longer necessary to say how vast it is. Washing and transporting are also characteristic phenomena.

All of these good and bad things make it easier to obtain information, whether it's time-sensitive and low-professional newsletters or in-depth reports.

▲ Picture from: unsplash

On the other hand, we are buying more and more online, and the exposure and personalization of online advertisements provided by technology companies are better than newspaper advertisements. This is helpless and natural.

According to eMarketer, Google has been the market leader in online advertising for more than a decade and is expected to account for nearly 29% of global digital advertising spending by 2021.

Over the years, Google has established and acquired a large number of advertising technology tools, which can make money through advertising on Google Search, Google Maps, Gmail, Google Play, YouTube and other channels, as well as through advertising management platforms such as Google Ad Manager.

▲ Google Maps advertisement. Picture from: CNBC

Advertisers can bid based on criteria such as search keywords, target location, language, and audience. Google Maps’ advertisements associated with local businesses have actually replaced the value of local newspapers; and YouTube’s video advertisements are also a huge blow to TV advertisements.

In addition, according to a survey conducted at the end of 2018, Americans knew very little about the financial challenges faced by local newsrooms. Only 14% of them had paid for local news in the past year, whether through subscriptions, donations, or membership.

If these 200 newspapers can get compensation, it may only be a temporary relief. The final outcome may be a successful transformation into a professional media with a profit and loss, or being absorbed by a technology company as a content department, or only silently launching the stage of history. But the first ending will not be too much. Just as Hu Yiqing, a professor at the School of Journalism and Communication of Nanjing University, said:

In an era where regions have disappeared, there is no need for media that rely on local knowledge for a living… Those very few professional media with distinctive content will have room for them to survive. In recent years, some of the top professional media in the West have found their own roles and balance of payments. They are still professional social observers, so they are still irreplaceable, but their number is currently extremely limited.

▲ References:
1.https://www.axios.com/1-local-newspapers-lawsuits-facebook-google-3c3dee3a-cce3-49ef-b0a2-7a98c2e15c91.html
2.https://www.pewresearch.org/fact-tank/2020/02/14/fast-facts-about-the-newspaper-industrys-financial-struggles/
3.https://www.cnbc.com/2021/05/18/how-does-google-make-money-advertising-business-breakdown-.html
4. Hu Yiqing, Li Jing. "The Fourth Wall": The Convergence Process of Traditional Media from the Media Perspective[J]. The Press, 2020(04):57-64.DOI:10.15897/j.cnki.cn51- 1046/g2.20200513.006.

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