Yes, Virginia, Media Economics Is Still Zero-Sum

Michael Hedges March 20, 2017 Follow on Twitter

If disruption is the key to success, these are the best of times. Nothing is as it was a year ago, even five minutes ago. Blame social media. Blame the web. Blame the moon. But all that lovely disruption comes at a price. No worries: inflation will reduce the risk.

The UK subsidiary of big ad company Havas has suspended ad placement through Google Digital Network and video portal YouTube. Talks between Google UK representatives and Havas Group UK fell to impasse, according to a statement reported by the Guardian (March 17), over “specific reassurances, policy and guarantees that their video or display content is classified either quickly enough or with the correct filters,” meaning one or more clients threw a fit seeing their ads in or next to “questionable or unsafe content.” The announcement came on the heels of UK daily The Times (March 16) reporting big brand advertisers finding their messages placed near or on websites and videos associated with hate speech and hate preachers.

The UK government also suspended ads placed on YouTube and through the Google Digital Network for the Home Office, BBC and Transport for London as well as recruitment spots for the Royal Navy, Royal Air Force and Metropolitan Police “until the problem is resolved,” reported the Financial Times (March 17). Cosmetics company L’Oreal, retailers Sainsbury's and Argos, McDonalds, Audi, Channel 4 and Guardian News and Media Group followed suit. Havas Group UK represents the BBC, telecom O2, Domino’s Pizza, automaker Hyundai and the Royal Mail, placing about GBP 500 million annually.

Google UK representatives were called to the Cabinet Office at the end of the week for a chat on the subject and, reported Business Insider (March 18), apologized profusely. They promised to review their nifty programmatic ad selling and placement system. "It is totally unacceptable that taxpayer-funded advertising has appeared next to inappropriate internet content,” said a government spokesperson, “and that message was conveyed very clearly to Google.” The Cabinet Office scheduled another meeting in a week to review progress.

The Havas Group UK decision came as a surprise, interestingly, to the Havas Paris home office. “I think it’s fine to propose to clients to remove ads on a case-by-case basis,” said CEO Yannick Bolloré, quoted by Le Monde (March 17), “but I think it’s a little extreme to do so for them.” The corporate office, he added, will conduct an investigation “to try to understand what has happened at our UK subsidiary.” A spokesperson, later, explained that the company “will not be undertaking such measures on a global basis.” Google money is, of course, money.

Among other UK brands finding their ads “next to extremist and hate-filled videos,” Guardian News & Media Group, publisher of the Guardian, informed its media buyer to cut off Google’s AdEx programmatic placement service. “The decision by the Guardian to blacklist YouTube will have financial implications for the Guardian in terms of the recruitment of members to fund our journalism,” said chief executive David Pemsel. A spokesperson for UK TV Channel 4 “pulled all advertising from YouTube with immediate effect” for “being placed alongside highly offensive material.”

In a curious press statement (March 17), News Corporation chief executive Robert Thomson pointed, again, at digital media generally - “artificial audiences and pretend page views” - rather than hate speech. "Ad fraud is being perpetrated ad nauseam.” News Corporation, principally owned by the Murdoch family, publishes through subsidiary News UK The Times, Times on Sunday and tabloid The Sun. The Times article eliciting these negative reactions - “Taxpayers are funding extremism” (March 16) - focused on government spending, always a favorite, flowing into the coffers of “rape apologists, anti-Semites and banned hate preachers.” 21st Century Fox, also principally owned by the Murdoch family, operates the infamous US Fox News cable channel known more for right-wing conspiracy theories than facts.

Reining in Google - now Alphabet Inc - and other giants of internet technologies has long frustrated publishers and the governments who love them. Not only are they very talented with codes and algorithms, very popular with internet users and very rich, largely through cheap digital ads, they have armies of very smart lawyers. Unable to win legal and legislative battles to tap into the digital revenue streams of others through copyright claims publishers have been reluctant to aim directly at dodgy content easily found on the Web, except for kiddie porn and overt terrorist recruitment.

The European Commission’s new tact is on the consumer protection front. Commissioner for Justice, Consumers and Gender Equality Vera Jourová wants to protect EU citizens from the “frauds and scams” pervasive on the Web and, obviously, indexed by search engines as well as in display ads. “Social media has become part of our daily lives and a majority of Europeans use it regularly,2 she said in a statement (March 16). “Given the growing importance of online social networks it is time to make sure that our strong EU rules, that are there to protect consumers from unfair practices, are complied with in this sector.” Facebook, Google, Twitter et.al. have 30 days to comply.

Huge fines could be levied against the internet giants for removing too slowly “criminal content” such as hate speech after consumer complaints, announced German Justice Minister Heiko Maas. “The biggest problem is that the networks do not take the complaints of their own users seriously enough,” he explained, quoted by Die Welt (March 14). “For companies to take on their responsibility in question of deleting criminal content, we need legal regulations.” German publisher Axel Springer chief executive Mathias Döphner bristled at the suggestion of the State setting up a “ministry of truth.”

If ethics were part of media and tech industries daily ritual, they would certainly find themselves complicit in the hate speech supply chain. Most in the media sector - generally but not exclusively publishers - want nothing interfering with their business models, specifically targeting content for audiences that can be monitized. The tech sector - typically and inaccurately defined by Google and Facebook - want nothing to disrupt their business model, especially cost inflation from hiring inefficient human hands to cut out transient garbage. The ad people just want to be happy.

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