The duopoly of Google and Facebook, and their hold on digital advertising dollars, has been a frequent source of consternation among news outlets looking to keep their businesses operating in the age of online news.
But to help the general public understand the impact of this, several Canadian newspapers today are giving a peek at what the future would look like if big tech doesn’t start paying what publishers believe is a fair share: that headlines would disappear.
Ryan Adam, a senior advisor at the Toronto Star, says Canadians have been made well aware of the importance of quality journalism in recent years, which has been made even more clear through coverage of things like the COVID-19 pandemic, the dangerous rhetoric of politicians like Donald Trump in the U.S. and the fight against online misinformation.
“Rather than be endlessly derivative about the benefits of journalism, we wanted to show Canadians what it would be like if the news and those benefits weren’t there when they needed it,” Adam says.
In addition to running blank front pages, participating newspapers are running a full-page letter to parliament from John Hinds, president and CEO of News Media Canada, which points to the fact that Facebook and Google alone take in an estimated 80% of online digital advertising revenue in Canada, despite generating that revenue through ads on content that they do not make. The campaign also has a digital component, which lets users click through to a page that will let them write to their local MP.
The campaign was spearheaded by Torstar and News Media Canada, and is appearing on the front page and digital platforms of the Toronto Star and all 70 of Torstar’s community newspapers. But they have also created an alliance of other publishers to participate, including Postmedia, which is running the campaign in The National Post and 16 of its local dailies, and Black Press’ dozens of community papers. A handful of other independent papers, including La Presse, aren’t “whiting out” their front pages for the campaign, but are running the full-page open letter from Hinds.
The goal of the campaign is to rally public support and put pressure on the federal government to follow through with plans to make big tech give up some of the revenues they generate through advertising on news content, a process that can be somewhat opaque to the public and one which the campaign aims to communicate in understandable terms.
Google and Facebook do not generate revenue simply through traffic or clicks; rather, their ad networks bring in revenue from display ads and banners that appear on other websites, including those for news outlets. In its Q4 results on Tuesday, Google parent company Alphabet reported $46.2 billion USD in revenue from advertising, up $9 billion year-over-year. In its Q4 results last week, Facebook reported $27.19 billion USD in advertising revenue, nearly $7 billion higher than the same quarter in 2019.
Canadians have seen the value in paying for news, but have typically seen that in terms of subscriptions, and the campaign also aims to show that means tech companies sharing their revenue.
Michael Beckerman, chief client officer at Torstar, says the subscription side of its business has stayed strong as Canadians see the value of paying for quality journalism, but advertising is just as important to the business model, if not more. As more subscribers come in, that creates an even larger pool of eyeballs advertisers are interested in, and Torstar – like many other organizations – have been investing in data, analytics and AI to provide the best experience for both the reader and the advertiser.
“All of that is well and good, but the challenge is that advertising dollars we generate are still drifting away,” he says. “There is a cost of running a newsroom, and we are investing in our investigative capabilities. But if it’s an unlevel playing field, and ad dollars are going to big tech – it makes it a pretty significant challenge.”
While Beckerman could not disclose how much the recently private Torstar brings in from digital ad revenue, he says the company’s share of the pie has remained relatively stable since last year, but the sustainability of the company and publishers like it would require ensuring that the pie itself increases – namely by infusing money that is currently going to Facebook and Google.
Hinds’ letter specifically calls out what is now being referred to in media as “the Australia model.” In December, the Australian government introduced legislation to create the News Media Bargaining Code, which would force big tech companies like Facebook and Google to negotiate with news media companies on how much to pay for using their content; if an agreement cannot be reached, it would go to binding arbitration. For their parts, Google and Facebook continue to fight against the legislation – Google has said it will no longer be able to make its search engine available in Australia if the Code passes, while Facebook would no longer allow users to post or share news stories.
Canada’s government has previously said it is exploring ways it could make tech giants pay for news content it generates revenue from. Heritage Minister Steven Guilbeault said in an interview with The Logic on Monday that the government was preparing to introduce legislation in the coming weeks that would moderate hateful conduct on social platforms, with separate legislation similar to Australia being introduced to get big tech companies to pay. He also said that he would be meeting with counterparts in France, Australia, Germany and Finland to discuss a “coalition” that could more effectively force the companies to change and push back if they were to make threats similar to the ones in Australia.
Despite these positive signs, Adam says rallying public support is important to ensure other MPs support the efforts, as well as maintain public support. Keeping the public on their side may be important if tech companies counter regulations with threats similar to those they have made in Australia – and the campaign is clear that the money for news outlets would not come at the expense of the taxpayers, but from the pockets of “corporate giants” who can afford it.
Torstar worked with strategic consulting agency The Greater to come up with the creative idea for the campaign. The agency was founded in December by Matthew Logue and Matthew Klar, both of whom previously worked at MKTG, where Beckerman was an exec before joining Torstar.
