Sheffield: 'When Google sneezes the rest of the industry gets a cold'

Arvind Hickman
By Arvind Hickman | 29 May 2017

News Corp’s digital boss has hit out at the “contradiction” between what YouTube presents to advertisers at Brandcast and the “Reverend Hate”-style content creators with large audiences that also populate the digital video platform.

Nicole Sheffield said that YouTube parent company Google needs to take greater responsibility over the good and bad content that appears on its platform, much like a traditional media company, if it wants to present a “shiny, sexy” curated image to advertisers at its annual Brandcast event.

“The reality is you put one image out to advertisers and media clients about what you are and this is only one part of the overall audience you are attracting,” Sheffield said.

“[You’re] having events like Brandcast where you have the shiny, sexy stars when actually those audiences are potentially going to be purchased around environments that are like ‘Reverend Hate’."

Sheffield said this contradiction is at the heart of the brand safety problem with digital and that issues with popular user-generated platforms had a halo effect on the whole digital media ecosystem.

“That’s where the contradictions continue. And, unfortunately, when Google sneezes the rest of the industry gets a cold,” Sheffield continued.

“You can still get those big revenue growths while we are still trying to explain the value of our local market to the local industry. That’s when you absolve yourself of those local responsibilities.”

Sheffield was speaking alongside Google Australia managing director Jason Pellegrino at the AdNews Media + Marketing Summit in Sydney recently. There are still tickets available to the next Media + Marketing Summit in Melbourne on 2 August.

Is Google a media or tech company?

In a respectful and at times heated debate, Pellegrino said YouTube was founded on the principle of allowing a diversity of voice and opinion, and is proud about that.

“YouTube from an advertising perspective was honestly thought of as cats on skateboards. What we are trying to say is there is massive diversity out there whether it’s [popular video blogger] Casey Neistat or elements that I personally disagree with,” he said.

Pellegrino explained that Google doesn’t go to market on the basis of individual videos or channels in the way that a television network might sell spots against a specific TV show. YouTube’s focus is on “audience and engagement”.

“We’re never going to get into a position where we turn YouTube into TV. YouTube is not TV, it never will be, it coexists really well, but we won’t change our approach,” he said.

“We’re not going to go out to a Caisey Neistat of the world and say ‘this is the content you need to produce and if you don’t produce this we’re not going to distribute your content’.

“That’s a very different model on a traditional media publisher that takes the risk on the curation of content.

“We take responsibility and we've stepped up on brand safety to make sure when we are matching advertisers with audiences we are doing it in a brand safe environment but what we're not doing is taking the principal risk on making sure we have the content.”

Comparing apples with oranges?

Pellegrino points out that most of Google’s revenue comes from its search business, which he describes at the “ultimate performance product” where advertisers have a “full control” over their ROI on the platform.

“You're not comparing apples with apples when you're suggesting that its 80% or 90% [of digital media growth] comes from Google and Facebook,” said.

“A substantial proportion of the advertisers on search have never spent on any other media channel. They use search as a sales channel – it's a cost of sales. This could be small, medium or large businesses who are using it to activate an audience.

“You can't say that the money that is coming through that proportion of search is being grassed or cannibalised from other organisations.”

Sheffield acknowledged Google and Facebook have changed their tune in the past 12 months, she argues “previously, you’ve been very arrogant in saying ‘we are a tech company and a tech company only’ but very comfortable in taking the marketing dollars of those big organisations”.

“I agree there are elements of that where it's a new revenue stream…but in the past you’ve absolved yourself of any requirement to be part of an industry or be part of metrics," she added.

“It’s great you’re changing your tune, but you can’t say that because of the SMEs or the people using performance marketing that never used to spend that allows us to just be a tech company.

“You are definitely a tech company but you do have to take responsibility for the role you play in the marketing landscape.”

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