ACCC Inquiry: Google, Facebook focus on how they help media companies, advertisers

Arvind Hickman
By Arvind Hickman | 24 April 2018

Google and Facebook's submissions to the ACCC inquiry focus on the the fragmented and competitive media landscape, arguing that their platforms help rather than hider publishers.

Google's submission

Google Australia managing director Jason Pellegrino reiterated the company's position that Google is not media company.

“We at Google are not content makers, we do not employ people to work as journalists, and we have no intention of becoming a news publisher,” Pellegrino said. “But we share an important common vision with the Australian news industry, which is to ensure that people have access to quality news and information.

“This is at the heart of our partnerships with publishers such as Fairfax Media. It is also why we support the Australian Competition and Consumer Commission’s inquiry.”

Pellegrino pointed out that he is an avid consumer of the media and has “read the AFR every day since high school”.

AdNews can't verify such a claim, but knows Pellegrino to personally support a vibrant media while accepting that current media business models are under strain.

“The way I read it has changed from print to a computer and now to a smartphone. What has remained constant is my need to be kept informed, whether on breaking business developments or the latest cricket results. Technology is the news industry’s strongest tool in satisfying the basic human need for good reporting,” he added.

In a blog, Pellegrino listed the areas he says Google is helping media companies secure the future of journalism.

This includes expanding News Labs Fellowships, a partnership with the ABC to help journalists better use technology in storytelling.

Another initiative is partnering with publishers to help them increase revenue through digital advertising and subscriptions with a on-click sign-on called Subscribe with Google.

There's also efforts to promote trusted sources of news and helping webpages load quicker using Accelerated Mobile Pages, which some publishers say further entenches publisher reliance on the Google ecosystem.

In 2017, Google paid US$12.6 billion to partners on Google's Display Network, which constituted more than 70% of Google’s display advertising revenues. It also drove 10 billion clicks a month to publishers’ websites for free via Google Search, Google News, and other products.

In its submission, Google said that last year it sent more than two billion visits to news websites. It states that Google's business model is aligned with assisting media content creators.

Technology for monetisation: We partner with Australian media content creators to enhance their revenue streams through paid content and subscriptions, as well as through digital advertising.

Audience: We send billions of visits to Australian media sites by connecting users with relevant content.

Technology and know-how for publishing online: We help Australian media content creators integrate new technology and innovative tools into their work through Google’s News Lab and the First Draft Coalition (of which Google is a founding member).

Quality: We work to build user trust by supporting efforts to help users find high-quality content online, including strengthening and updating our ranking algorithms so as to surface more authoritative results in Search.

The submission says that internet has been responsible for expanding user choices and opening up competition to specialist entrants, such as Seek, and Gumtree. It has also driven a shift to targeted online advertising.

It points out that traditional media are also using their own data for targeting purposes and online subscriptions of major mastheads at News Corp and Fairfax are on the rise, helping some publishers, such as the Washington Post, become profitable.

Facebook's submission

Facebook says it operates in a “fiercely competitive, multi-sided marketplace” where it rivals a plethora of apps, media sites and advertising channels for consumer attention.

In its response to the ACCC's inquiry into digital platforms, Facebook says it represents a “small part of this diverse and expanding global media ecosystem” and that a significant portion of its revenue comes from providing entry level advertising to smaller organisations that in the past wouldn't advertise in newspapers, TV or radio.

In other words, it's creating a new advertising menu rather than eating traditional media's lunch.

Facebook's submission provides an insight into the scale of investment by businesses that use it for advertising. It said that in Australia, more than 350,000 businesses placing ads on Facebook spent less than US$100 while fewer than 150 businesses spent more than US$1 million.

It claims that more than one million small businesses have a Facebook page and 80% of Australian users are connected to a business through Facebook.

“Our goal is to be the best minute our advertisers spend. We are constantly innovating to make sure we deliver the best return on investments to our advertisers,” the submission said.

Facebook director of policy ANZ Mia Garlick tells AdNews the fragmentation of media meant that social media platform has to constantly innovate to meed user's expectations.

“We operate in a fiercely competitive, multi-sided marketplace where we – like all ad-supported businesses – must attract, engage and balance the interests of our community, advertisers and publishers to meet their rapidly-evolving preferences,” Garlick says.

“Just as Australians connect with community groups, causes, politicians and businesses that are important to them, they may also choose to connect to local news and media organisations to consume and share content online.

“Whilst news represents less than 5% of the content that is shared on Facebook, we are committed to working with local publishers to identify new ways that we can support them to report the news, monetise their content and engage with their audience.”

Facebook says it supports the efforts of publishers of all sizes to build their businesses on the platform through advertising, sponsored content and subscriptions.

Publishers have typically used Facebook to distribute content to wide audiences and interact with readers. Facebook says that publishers can monetise this traffic in a number of ways, including advertising, implementing a paywall or by further developing its user base.

“We also offer publishers advertising options on Facebook, including branded content, video ad breaks, and, in connection with Instant Articles, the ability to sell their own ads, develop a subscription offering and drive traffic.

Traditional publishers may present a different viewpoint to the ACCC inquiry, particularly around their ability to monetise traffic from Facebook and how this has been impacted by recent changes to its algorithm.

Seven West Media's submission pointed out that the Facebook algorithm has de-prioritised publisher content in favour of posts by family and friends, which its magazine arm, Pacific Magazines, claims has had a dramatic impact on its website traffic.

Facebook also pointed out its Facebook Journalism Project and new efforts to help publishers implement a paywall on Instant Articles, which is being tested in the US.

Yesterday, television lobby group Free TV said it wants regulators to force Facebook and Google to implement third-party Software Development Kits (SDK) to ensure transparent measurement of web traffic and level the regulatory playing field between the 'traditional' media companies and the largely unregulated digital duopoly. Read more here.

AdNews will continue to present different ACCC submission viewpoints from all corners of the media as and when we receive them.

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