Should the tech giants pay local media companies?

I can’t imagine that Google derives much revenue from displaying paid ads (its main revenue stream) for searches that bring up ‘news’ links or snippets. A search for cryptocurrency news might, but everyday searches for news are unlikely to do so. On the flip side these media companies obtain: 

• paid subscribers for free via Google
• users and impressions for free from Google that they subsequently monetise by selling banner ads
• revenue from Google by using its Ad Sense product to sell ad inventory that it cannot sell itself.

My personal view is that if the local media companies are concerned about how Google is using their content to help push its own agenda and drive its own revenue, they should de-index themselves from the search engine. A process that takes minutes.

Will Google pull out?

Although Mel Silva says it’s not blackmail how else can her comments be viewed?

It’s an aggressive response from Mountain View which started in January when Google hid some Australian news sites from search results. (I bet the media companies saw a drop in online revenue and subscriptions). Amazingly News Corp’s Group Executive, Corporate Affairs, Policy and Government Relations, Campbell Reid, told the senate hearing: “Their experiment shows how well controlled [Google's] machine is. One of the massive problems we face ... is their entire machine is a black box. How do you negotiate when they hold literally all of the information? They know more about our [online] businesses than we know about them ourselves."

The code feels like the free lifeline for the media companies when they should be working harder to remain relevant and, for me, Campbell’s comment ratifies that opinion.

From what we understand, Google is only talking about pulling search - not its other products. But so many of their products are integrated with ads, I’m not sure what we would lose. Google has a prior record of pulling out of markets; ones that are or could be far more lucrative than Australia, so we can’t take the threat lightly. Personally, I believe Google pulling out of Australia benefits no one and an agreement will be reached.

What does pulling out even mean?

Obviously, Google wouldn’t make this threat without thinking it through but how would it work? I think we really need to understand that before we can understand the effect it would have. There might be other scenarios but these are a few I can think of:

1. You cannot access any version of Google Search from an Australian IP – In essence, you cannot access Google whilst in Australia. This seems very harsh, highly unlikely but probably the only way that Google could truly pull out.
2. You cannot access a local Australian version of Google (e.g. Google.com.au) but you’ll be redirected to the default Google.com. So they are still here (maybe without paid advertising) but when you conduct a search your results would be localised towards America. What would happen if you conducted a search but included a location in it, e.g. 'local pharmacy in Surry Hills, Sydney'? Would you not get a relevant and therefore Australian result?
3. You cannot access a local Australian version of Google (e.g. Google.com.au) and all Australian focused content is removed. This would certainly be effective but whether it is achievable is questionable.

What about Global advertisers targeting an AU market? Will they simply not be able to reach us? Is there additional non-AU ad dollars that Google will miss out on? I’d love to understand what pulling out looks like and I hope in the coming weeks we’ll be provided with more clarity. 

What will the effect be?

As an avid Google and Android user, the thought of losing the ecosphere my life is tied into scares me. As a search marketeer who loves the medium and has been there from the beginning I say bring it on. Having one main option to work with is detrimental to my agency, our clients and their businesses. I miss the days when the search engines had to work hard for our client’s ad dollars, providing better service and results.

We all love Google from a technology perspective but as with any monopoly they have no need to provide a platinum service and I believe that the industry, clients and agencies alike suffer due to that. Unfortunately for us, we have no other options but to sing from their hymn sheet and competition would be a very healthy alternative.  

Depending on how it happens, Google pulling out would leave a void that simply has to be filled. Australians need national and local search results and they would have to find an alternative. So who are the potential competitors?

Will Bing fill the void?

Most of us don’t use Bing as it’s simply not a part of our vernacular. Bing works perfectly well and in some cases better than Google. If Google pulled out consumers would simply move across. It wouldn’t work as well as Google from the outset as advertisers haven’t paid it enough attention. But that would quickly change, for example Bing's map and review products wouldn’t be as comprehensive, but they would build over time.

For agencies, it would be a time of great change and with change comes opportunity. Although there are SEO standards that are universal (Schema, site maps, etc.), we still optimise and focus our reporting on Google. There would be a stampede of clients attempting to replace both their SEO and paid traffic quickly. For paid media, there would be a huge transfer of accounts and spend over to Bing. The question is whether Bing’s technology and service teams could cope with this mass influx. 

It would certainly be painful at the beginning but I’d like to think the pain would provide suitable gain.

What would Yahoo do? 

At the moment when we advertise with Google and its partners, we advertise on Yahoo. With this loss in revenue and a gap in the market, might Yahoo decide to align itself with Microsoft again or potentially even set up shop in Australia again, selling its own search ads rather than relying on a third party. 

Could Apple take advantage?

In recent months there has been a lot of talk around Apple's increased activity indexing the internet. Australia is often seen as a market testing ground  for similar markets such as the US and UK.  Could Apple use Google shipping out as a way to enter a market, build learnings, improve its technology and subsequently roll out globally?

Upshot: Competition would be healthy

I doubt it’ll come to fruition, but if Google does decide to leave the market I hope that the numerous competitors grab a unique opportunity to take market share, improve their offerings and provide Australian advertisers with the diversity and choice they deserve.