Google vs EU pubs and Facebook’s New Trick
In the pay-for-snippets dispute, French publishers have opted for a tactical retreat, as Napoleon used to say. They are now betting on an antitrust action. In a timely way, Facebook decided to play its cards.
Context. Friday, October 25, the French law that tells search engines and aggregators to compensate publishers for content came into effect. This is the national translation of the EU directive, part of a broader copyright law. A month earlier, Google stated bluntly — but expectedly — that it will stick to its guns and never pay for snippets. Therefore, it said that it will stop displaying small abstracts underneath basic headlines, unless publishers explicitly opted-in for it, which would mean forgoing any compensation.
(See our previous coverage here and here)
The latest. Fearing a drop in the click-through rate (there were unsubstantiated anticipations of a 30 to 40 percent decline), French publishers decided to play a different game. The three trade organizations, representing newspapers, magazines, and specialized press, elected to go along with the opt-in system and allow Google to display the snippets. For now. This is simply a stop-gap measure aimed at avoiding a hit in traffic.
At the same time, French media filed a formal complaint to the Autorité de la Concurrence (the French antitrust body). Their argument, expressed by three publishers I talked to this weekend: “Google put us in an impossible position: either we give up the snippets and the visibility and then our page views take a hit, or we forgo the payment which is now carved into law. But Google didn’t play fair: in doing so, it put itself in a text-book case of abuse of dominant position. And we intend to leverage this. We are by no means backing down.”
Google’s hard-line temptation.
Right now, Google has all sorts of reasons to regret not having taken a firmer stance.
Over recent years, Google has been internally divided on how to deal with the press. Until now, partisans of a negotiated solution — essentially those in Europe and on the business side of the company— have been able to impose their views over the skeptics who are mostly on the engineering side, in California. Hence the hundreds of millions of dollars that have been poured in the industry worldwide—€80 million in France alone.
The hardliners, who defended a “whatever-we-do-with-the-media-they-will-spit-at-us” position, now feel vindicated. And they might push for a tougher posture, saying in substance: “After all, Google is under no obligation to reference any publication in its search engine. We do so because it is in our core mission to present the most complete and widespread panoramic view of the available information, but we shouldn’t do it against the will of the news providers. As for the compensation for snippets, we believe the value sent to the publishers under the form of clicks to their digital properties—€14.5 billion in 2018 alone — is fair compensation for displaying a headline and two mere lines of texts. The proof is that publishers spend astronomical sums in Search Engine Optimization to climb to the top of the search result pages”.
I heard this argument many times in Europe and the United States. My take is the previous conciliatory position will become much harder to hold given the current context.
Google search doesn’t need the media to work just fine
French publishers believe they have a strong position with the fact that Google allegedly needs their content to maintain the quality of its search algorithm. Without the quality of our production, they say, Google’s search engine will be a hodgepodge of incoherent links.
A factual analysis tends to dispute that. The German digital marketing firm Sistrix conducted interesting research on the matter. The result of their finding was totally unexpected, in three distinct ways:
• Finding #1: Only 0.11% of commercial search queries can be characterized as journalistic in nature.
Johannes Beus, founder, and general manager of Sistrix, explains his methodology (emphasis mine):
“We started out with the obvious question of how relevant journalistic content is for search queries on which Google actually makes money in their Google search (Google News does not contain ads).
For this, we measured the number of search queries in which domains from our list of 4,075 domains took up at least five of the usual ten organic search results on the first page. As an added indicator of how important a search is for Google, these search queries also needed to show ads (Google Ads or Google Shopping).
The result was surprisingly low: for the about 20 million search queries we evaluated (20,949,557 to be exact), only 22,923 search queries had a journalistic character as well as including ads. This means that only 0.11% of search queries with a journalistic character are also commercially relevant for Google.”
• Finding #2: Only 2.65% of search queries can be characterized as journalistic.
“Our next evaluation went after the question of how many search queries on Google could be characterized as being journalistic in nature. For this, we measured the search queries in which domains from our list made up at least five of the usual ten results on the first result page.
For the about 20 million search queries this was true for 554,350. This means that 2.65% of search queries on Google can be characterized as journalistic. We then ran the same evaluation again and looked how many search queries showed seven of the ten results with domains from our list and were left with 0.66% of search queries which can be characterized as strongly journalistic in nature.”
• Finding #3: 10.18% of all results from journalistic domains
“Finally, we wanted to know how many results are from journalistic domains, in general? We evaluated about 1.1 billion Google results (…) These Google results paint a representative picture of the search behavior in the United Kingdom on Google.co.uk
114 million results of those 1.1 billion results were from the list we defined in the beginning. This means that, based on our data analysis, currently there are 10.18% of Google results which would be affected by the new EU directive.
Interestingly, if we only considered the 50 most successful journalistic domains on Google, they would make up 3.01% of the Google results, by themselves. Which makes them responsible for a large part of the results affected by the directive.”
And Johannes Beus concludes:
“Based on our evaluation it has become clear that journalistic content is not commercially relevant enough for Google. When push comes to shove, Google will be able to live without these results in their hit lists.”
Another element might complicate the upcoming negotiation between Google and the French publishers (who will be backed by the Macron administration). Worldwide, media are far from being aligned when it comes to requesting compensation for a presence in search engine results pages. In United Kingdom and the United States, for instance, publishers, while concerned about the depletion of their digital ads market share, have chosen to take advantage of the referral power of Google. Other countries, such as Germany and Spain, have experienced first hand the loss of Google traffic. As for the Italians, Le Figaro quoted last week Ricardo Puglisi, an economy professor at the University of Pavia who says:
“Italian Newspapers have long considered that Google News was first and foremost an ally that brings traffic, visibility, a better knowledge of the readers, and that, in the end, their relationship was based on a mutual exchange of services”.
Facebook’s News Tab: It’s not a service, it’s a tactic.
Facebook coming to the help of the news industry is roughly like having the North American Meat Institute endorsing Greta Thunberg.
The News Tab is, by design, nothing but an opportunistic feature.
One, it perpetuates the same tactic deployed over and over by Facebook with publishers, in Europe, and in the United States: divide and conquer. By enrolling a small coterie of publishers who will be compensated for their content, Facebook tries to buy the favor of the industry, while ignoring the long tail of the publishing world. As always, details are sketchy, and no publishers have been told what will be the mechanism for compensation.
Two, it is clearly a move aimed at Google, which is swamped in the EU regulatory quagmire. By stating that content must be compensated, the social network wants to take a stance opposed to Google. The timing is no accident. Facebook needs to turn the media industry in its favor as it faces two critical moments: the defense of its universal cryptocurrency Libra (good luck with that) and the next US Presidential election — with high stakes for Facebook.
Despite the smokescreen of the News Tab, Facebook’s position on copyright regulation is as tough as Google’s. But the social network found its own way to elude the snippet pitfall:
Facebook is only playing politics and competition against Google here. By spending a relatively small amount of money to put forward the content of selected publishers in the News Tab, it hopes somehow to buy the favor of the industry by appearing as its savior. Facebook’s moves are always tactical and based on the factorization the PR/political benefit weighed by the associated costs. Expect nothing else. A group of “short-term visionaries” might think otherwise, before the inescapable disenchantment—as seen with every news product concocted by Facebook.
