TECH BYTE: Why you should fear the ‘digital duopoly’ in 2018

December 6th, 2017 | | news

Google and Facebook, the ‘digital duopoly’, account for 84% of global digital media and are growing while the rest are shrinking. That’s bad for society, but a mandatory break-up looks further away than ever.

Long shadows, overly emotional TV ads and the uniform presence of Christmas trees in every shop window mean only one thing in marketing land: it is time for media agencies to look back at the current year’s ad spend and also project their estimates for the one that awaits us in January.

That’s exactly what GroupM, the largest media agency in the world, did this week at the UBS Global Media and Communications Conference in New York. But that is not what made the headlines. Among a kitchen’s worth of pie charts and a forest of impressive histograms, only one statistic stood out.

According to GroupM the ‘digital duopoly’ of Google and Facebook will end the year with an 84% share of all digital media investments for 2017. Let me say that again, more slowly and with the sound of distant, menacing bongo drums in the background. Google and Facebook enjoy an 84% share of global digital media.

To be fair, GroupM removes China from its calculations partly because of state influence and also because both members of the duopoly are restricted from operating there. But that single 84% data point, and the incredible implications for marketing, should trouble you deeply – with or without China included in the billings.

It’s certainly ominous news for media agencies like GroupM. Clearly, one of the major threats for any media agency is Google and Facebook not only having the lion’s share of the digital spend but also going direct to clients and taking out the media agency completely. It’s already common for big clients to get direct attention from vertical teams at Google and Facebook. It’s an obvious move down the track towards removing agencies completely and establishing direct connections with the 20% of clients who represent 80% of the ad spend.

It’s even more concerning for traditional media who have no option than to play ball with the duopoly. The ‘first click free’ saga is a perfect example of what market power can deliver. You know the drill. You see an article you want to read online but after a one-second glimpse the newspaper informs you that your free articles for the month are up. Rather than sign up for a subscription you simply enter the title of the article into Google and you sail right past the paywall.

When you are solely dependent on digital media advertising and Google and Facebook are hoovering up most of the dollars, life is going to prove extremely difficult.

Despite the value of a paywall, most news media had to allow Google a free pass for all its users. If publications did not adhere to the policy their search results disappeared off a cliff. To be fair, Google recently revoked the policy and is now working more closely with publishers to respect their paywalls – but only after years of essentially allowing anyone a free pass around the charging mechanism that was essential for the future of the ‘fourth estate’.

And that decline in news journalism has come at a huge societal cost. Yes, newspaper editors were politically biased but they each held their responsibilities to inform their audiences very seriously. The era of Trump and the death of truth can be directly linked to the rise of the digital duopoly (45% of Americans now get their news from Facebook for example) and the subsequent decline in proper news media caused by the duopoly’s
I got in a row with my wife last week about how much sugar I was putting in my coffee (about eight kilos). So,

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