Why is Australian media dithering on alliances to compete with Big Tech?
Digiday has framed the way European publishers and broadcasters are responding to GDPR, which has strengthened the competitive position of the global platforms by wiping out the use of third party data. As a result, only those media companies with access to scaled supplies of first party data (often known as “declared data” derived by users “logging in”) can survive and thrive in this new “privacy” compliant world.
Key points:
- GDPR was supposed to be a way to level the playing field but in fact turned out to hobble local media companies even further. This has led to the “mushrooming of publishers establishing so-called login alliances that enable people to use a single account to register with multiple sites”.
- At the heart of a “login alliance” is the recognition of the importance of “declared data” in creating any effective form of “addressable advertising” and all the benefits that roll on from there – the data and insights, the ability to effectively target, the removal of wastage etc. In Europe the race towards a common “login” has been necessitated more suddenly by GDPR, but discussions on how these alliances would occur have been bubbling around the European market for over 10 years now.
- Digiday tracks the progress of various attempts made in Germany (Net ID/Verimi), Portugal (Project Nonio), France (MediaPass), Finland (Media Key) and a yet to be named Swiss collaboration.
- Despite best intentions, each of these alliances has been hamstrung by competitive concerns, technical snafus and data-sharing disagreements. And these alliances aren’t even tackling the really big question: how the commercial structures would operate in ways that are equitable between former arch rivals.
Why are Australian media companies procrastinating instead of building alliances to compete effectively with the global platforms, particularly in this already consolidated media landscape?
On face value, the idea of the remaining large media companies in Australia uniting to create scale of either inventory, data, analytics, tech and ease of transaction (or all of the above) seems like a no-brainer. Various attempts have been made and despite repeated calls to arms and even blueprints for how to get it done over the years from various industry heavyweights, little progress has been made.
The reality of publisher alliances is that they are plagued with complexities that make progress slow and difficult, a fact demonstrated by this recent Digiday article:
The conundrum faced by local publishers is that they need to compete with the global platforms in four ways:
- Scale of inventory
- Data and analytics
- Engineering innovation
- Ease of transaction (i.e. self serve)
Any one of these elements is difficult to tackle. The log-in alliances are a first step in tackling the data issue, but unless these alliances lead to something more they won’t tackle the other three. And it’s the other three where solutions get very tricky.
As Anthony Fitzgerald laid out in his call to arms back in 2018 at the Future of TV and reiterated a couple of weeks ago, this is only going to happen with strategic foresight, attention to detail and an appetite for collaboration we’ve never before seen on these shores. We should not forget the local publishers/broadcasters in Australia have two powerful advantages in their favour:
- An already consolidated market
- Engaging, high quality and locally produced content
ThinkTV is already making the right moves distancing BVOD from “social video”. Parlaying this into an understanding that social and PGC “professionally generated content” in all its forms performs different functions in the marketing funnel seems to be well on its way. Conceiving a structure where scale, data, engineering and ease of transaction can be harnessed is the logical but most difficult next step.
Nine and News as two of the biggest owners of declared data in this market continue to grapple with the issue and I hear the Townsend project, which was conceived for exactly the same reason as the European alliances, continues to make progress, albeit slow. I know from the outside it looks like a no-brainer, but this issue is one of the thorniest facing local publishers worldwide and as yet no one seems to have found the silver bullet.