Google and some in the news media are finding themselves on the same side, actually lining up against a new study claiming the first is taking the latter’s lunch money.
The search and tech mammoth on Monday came out against new research from the News Media Alliance, a trade association representing more than 2,000 newspapers in North America, which claimed that Google pulled in at least $4.7 billion last year “from crawling and scraping news publishers’ content — without paying the publishers for that use.”
Based on findings from Keystone Strategy, a hired consulting firm, the NMA’s report went on to argue that news is “key” to Google’s consumer engagement strategy and that the amount of news that shows up in search results is high. The group said about 40 percent of clicks for “trending” queries and about 16 percent of clicks on “most searched” results are news items, based on a year of research of the first pages of randomized search results in the U.S. NMA also called all the figures in its study, including the billions in revenue, “conservative estimates,” noting that “the actual value of news content to Google is more difficult to quantify because of the various ways that company uses news content to drive traffic, develop its products and entrench its dominant position.”
Google, which did not participate in the study, has jumped on the report as made up of “back of the envelope calculations,” calling it outright “inaccurate.”
“The overwhelming number of news queries do not show ads,” a Google spokeswoman wrote in an e-mail, pointing out what would be an important element to NMA’s financial math that does not appear to have been considered in the study. It’s worth noting that most of the financial math appears to be based on a public estimate Google made in 2008, saying it made about $100 million from Google News. The NMA study referred to this as its “benchmark.”
“The study ignores the value Google provides,” the Google spokeswoman went on. “Every month, Google News and Google Search drive over 10 billion clicks to publishers’ web sites, which drive subscriptions and significant ad revenue. We’ve worked very hard to be a collaborative and supportive technology and advertising partner to news publishers worldwide.”
But NMA president and chief executive David Chavern dismissed Google’s criticism, telling WWD in a Monday email that it’s come “without offering a view into what’s actually in the envelope.”
“The news industry has been asking for these numbers for years,” Chavern wrote. “It is incumbent upon Google to be transparent about their income derived from news. In fact, we call upon Google to share this data on their quarterly 10-Q reports and discuss this on their earnings calls. Doing so would be in the interest of ensuring vibrant democracies and free press around the world.”
In recent years, Google has worked to get in front of criticism that it’s taken over the ad-based business model news relies on. It started a direct subscription service to drive paid subscriptions for publishers and launched its News Initiative in an effort to support journalism and its relationships with news publishers here and in Europe. Indeed, Google has faced criticism in Europe especially, where a new copyright rule was recently voted into effect that will give publishers and opportunity to make content use deals directly with the conglomerate.
While NMA admits in the report that traffic driven to news sites through Google Search is up 25 percent since the start of 2017, its math differs with Google here, too, claiming Google drives about 1.6 billion visits per week. That would equal less than eight billion visits per month.
Nevertheless, Chavern said in a memo on the study that the results show Google is “responding to an increase in consumers searching for news, creating and tailoring products that keep users within its ecosystem.”
“This means more money goes back to Google and not the publisher producing the content,” Chavern added. Also of note: Chavern is due before Congress tomorrow to push for the passage of the Journalism Conservation and Preservation Act, which aims to give publishers as a group the ability to essentially collectively bargain with platforms like Google and Facebook.
But some of the media cognoscenti, including many former reporters and journalists, were surprisingly not at all pleased with NMA’s study, taking to the Internet to air their disagreements. One such is Jeff Jarvis, now a director of entrepreneurial journalism at CUNY’s graduate journalism program. He took to Medium to call the study out as “humiliating” and said “the real problem here is news publishers’ dogged refusal to understand how the Internet has changed their world, throwing the paradigm they understood into the grinder.”
Raju Narisetti, a director of Columbia’s journalism program and a former ceo of Gizmodo Media Group, on Twitter called a story by The New York Times on the study that appeared to only include the side of the NMA “dangerous even if one wants to be sympathetic to the cause,” citing a disproportionate amount of “ink” and “very little data.”
Emily Bell, a founding director of Columbia’s digital journalism program, admitted that Google’s dominance over the ad market has “made it very difficult for reporting organizations to be sustainable through advertising,” and that platforms spend a lot of money on lobbying to protect their place in the market. Still, she wrote, referring to the NMA study: “It’s not about a bogus $5 [billion] figure. It’s about having plan and finding the funds to do it.”
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