At the current state of the Internet advertising market,Google and Facebook have established what many consider a duopoly. While the online advertising space has grown exponentially, netting $72.5 billion in 2016, 99 percent of that growth was attributed to Google and Facebook combined.
According to Mashable, the two tech companies generate 70 cents/dollar spent on advertising, with the remaining 30 cents divided among hundreds of other media companies. In response to this dynamic, a newspaper industry trade group called The Alliance will attempt to earn an antitrust exemption from Congress to collectively negotiate with the two firms. The Alliance ranges from national newspapers such as The New York Times to regional papers like The Star Tribune in Minneapolis.
In the past, both Google and Facebook have made promises and enacted new policies in order to bolster newspapers in the online space. Google’s new stand against subpar online advertising and automatically blocking ads on Google Chrome will give readers a way to directly pay news outlets instead of blocking their ads. Facebook’s new Instant Articles features will also reportedly offer a paid subscription model.
The dynamic between large media outlets and the digital advertising networks has yet to take its full form. Newspaper publications, which have long relied on their own distribution networks to deliver their content to readers,are now heavily relying on digital advertising to generate revenue, as subscriptions and physical advertising numbers fall. Publications are now somewhat dependent on these platforms to help uphold quality journalism. Facebook most recently implemented a fact-checking system to filter out and flag potential “fake news” to users. In a similar manner, Google and Facebook rely on the strength of its participants but, because of the strong duopoly in the market, can pit publications against each other.
Google’s previous altercations with antitrust legislation and allegations could alter the outcome of The Alliance’s campaigning with Congress. Most recently, Google found themselves battling a potential $2.7 billion fine based on allegations of “abusing dominance” in the search market by EU regulators. The changing dynamic of the digital era isn’t retained exclusively within nationwide newspapers.
Local publications have also begun to support their own CMS sites as well as third-party e-Editions. The latter are digital replicas of the print product, built from PDFs and turned into an interactive format that lives on the newspaper’s website. Dirxion allows customers to lock their e-Editions behind a subscription login, allowing only subscribers to access the print pages. Widgets can also be added to e-Editions, giving Dirxion customers the tools to independently sell advertising space to businesses within their local market.
