Google turns adversity into opportunity

Google turns adversity into opportunity

Google has turned the ‘News Media Bargaining Code’ stand-off in its favour whilst Facebook held firm to their threats, courting controversy and contention.

Written by

Darren Friel

Published

9 March 2021

Categories

Acquisition

Marketing

  • In bypassing the ‘News Media Bargaining Code’ and negotiating commercial deals, Google has effectively made the media outlets reliant on them for brand awareness, traffic, subscriptions and analytics.
  • Readers will benefit from relevant news, suggested new publishers and aggregated content.
  • News Showcase provides Google with a new platform and new inventory to monetise.

You’ve got to hand it to them: Google has a knack for turning lemons into lemonade.

After threatening to withhold its search engine from Australians if the government’s proposed ‘News Media Bargaining Code’ came into law, Google’s dominant position in our search landscape now appears to be cemented with News Corp, Seven West Media, Nine Entertainment Co, Junkee Media, The Guardian and over 50 other Aussie publications partnering with Google on its News Showcase offering. In doing so, Google has by-passed the Morrison government’s proposed bill intervening in their relations with Australia’s major media players and avoided a scenario in which they would be made to pay for content displayed in search.

Google deemed the media code ‘unworkable’ for two main reasons. Firstly, they would have been liable to pay media outlets an undisclosed sum determined by a third party to feature their news articles, a sum which has been purported to be up to 20% of local ad revenue. The other main stumbling block was the government’s requirement that Google notify media outlets of algorithm changes days in advance, effectively forcing them to hand over Colonel Sander’s secret herbs and spice recipe. Google was having none of it, and it looked like Aussies were set to play DuckDuckGo or have a crack at Bing’ing it.

But, where there’s a will and a pack of the world’s cleverest minds on it, there’s always a way.

Media code becomes a showcase

Introducing News Showcase. In the words of Kate Beddoe, Head of News, Web and Publishing Partnerships APAC at Google, it’s “designed to bring value to both publishers and readers by providing a licensing program that pays publishers to curate content for story panels across Google services, and gives readers more insights into the stories that matter”.

Essentially, that means that Google negotiates deals with partner media companies to pay them to create content for use on the News Showcase platform.

In the case of News Corp’s partnership, it’s been revealed that their three-year deal includes “meaningful investments in video journalism” by Google as well as the development of a subscription platform.

While publishers are providing Google with previously pay-walled articles, Google has played its hand well. By orchestrating the deals in the way that they have, they’ve effectively made the media outlets reliant on them for brand awareness, traffic, subscriptions and analytics. Rather than being at the mercy of independent third-party decision-makers (à la Media Code), Google retains the upper hand.

The exciting thing to watch now is how SBS and ABC fare in the partnership ‘deal or no deal’. For this to be a genuinely equitable resolution to the media code stoush for media outlets and media diversity, our public broadcasters must also benefit from the sustained multimillion-dollar financial boost Google offers Australian publishers.

What is a News Showcase?

From the reader’s perspective, News Showcase acts like 2021’s answer to RSS feeds. You tell it which publishers you like to stay up to date with and the topics that interest you, and it aggregates related stories that you can click through to read (if not behind a paywall) or watch the full coverage. Add to this Google’s data on you (Gmail, search and cookies) and its powerful algorithm, and you have the perfect feed of relevant news, suggested new publishers and aggregated social web, image and video content. News creators are hyper-aware that relevance is a core value proposition in news take-up, and News Showcase is a powerful way of achieving previously unparalleled levels of personalisation and relevance.

The power of ‘News Showcase’ has increased, and Google has created a platform that benefits the consumer and media owners alike. For Google, ‘News Showcase’ provides the holy grail that it's striving for in 2021 – a new platform and new inventory to monetise. Google Ads has grown saturated, Google Display network has a lot of stiff competition and in recent years Google has efficiently monetised YouTube. Due to this, Google needs new products to monetise, and ‘News Showcase’ fits that need perfectly.

The Current State of Play

By cutting the government out of the deal and devising an alternative that benefits journalism, publishers and readers, Google also breathed new life into their News offering, which had previously been failing. On top of that, they’ve managed to create a new way to make money out of a situation that, up until last month, would have seen them ditch Australia (and the multimillions we pay to advertise on Google) altogether.

They’re already featuring News Showcase in the ‘Discover’ feed on Android, and, no doubt, News Showcase will carry ads soon enough.

After a tumultuous few months, Facebook has switched news back on and made repentant statements; the government has, no doubt, breathed a heavy sigh of relief that they’ve avoided arbitration, and we have a vivid picture in our minds of Rupert Murdoch chuckling into his foie gras…

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Written by

Darren Friel
The dog and bone.
Subscribe and be the first to hear about news and events.
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