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Fighting for quality news media in the digital age.

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September 19, 2017updated 20 Sep 2017 12:19pm

Why the European Union’s General Data Protection Regulation directive could save the journalism industry

By Jim Chisholm

At first sight, the European directive: “General Data Protection Regulation” seems a massive constraint on all digital interaction and transaction.

In fact, it is the greatest opportunity for content publishers to recover the revenues and relationships lost in the eleven years since I wrote in Press Gazette: “There needs to be a united industry response to act as a counter to Google.”

As news publishers’ traditional revenues have plummeted and we’ve failed to convert our considerable audiences into revenue, we have enabled (not simply allowed) Google and Facebook to monopolise the digital economy and turn our data, copyright and IP rights to ashes.

The principle behind GDPR is that every individual must provide permission for their personal data to be used, in context and form. Every database holder must demonstrate such permission and also permission for that data to be shared with another holder.

GDPR effectively prohibits any party from holding, processing or sharing any data collected through cookies placed on a website, or any other harvesting, to which the individual concerned has not consented. So, Cookie sharing, without the original person’s agreement and understanding of use, will be banned.

GDPR is set to come into force in May 2018 and will apply in the UK regardless of Brexit.

Where once there was a simple value chain….

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Advertiser > Publisher > Reader

…. today, in the digital world, it looks like this:

This anarchy was best described in April, 2017 by Procter & Gamble’s chief brand officer, Marc Pritchard:

“[We  need] simplicity in the agency business, which has become increasingly fragmented…”

He continued:

“[There is] too much complexity, crap and cost….It raises the question of whether it’s worth investing in advertising at all.”

Take this:

“Complexity not only leads to fraud, brand unsafety and other challenges….[At one time] P&G spent 50 cents or more of every ad dollar on… fees…”

Then in mid-August this year, the World Federation of Advertisers concluded that:

[too many advertisers] “realise they have lost control of their media activity.”

Marc Pritchard’s figures are modest. I reckon these intermediaries are sucking out between 75 per cent and 90 per cent of the revenue in the chain between the advertiser and the publisher.

We are not alone in our tardiness.

Here a recent email from a colleague at the Poynter Institute:

“There is a flavour of paralysis in US industry response….over the last 18 months.”

And from WAN-IFRA:

“Institutions and representative bodies move slowly due to their collective nature, whereas we should move fast.”

Johnny Ryan, ‘head of ecosystem’ at PageFair (a tech company which claims to enable publishers to serve block-proof ads), told Digiday (A must read) that: “[the regulations could] rip the digital ecosystem apart”.

I say good! For the stakeholders that matter – readers, publishers, advertisers –  the system is bankrupt, opaque and value-negative.

A perfect example of this consternation was an article in The Times by Alexi Mostrous, demonstrating that legitimate companies are finding themselves on various loony websites.

Here: travel company Sandals appears (credit: The Times) next to an appeal to Jihadis thanks to targeting the word “Kenya”.

Even the UK Telegraph, found itself on an ISIS recruiting site, Sunnah:

The fiasco of ‘programmatics’, ‘key-words’, ‘cookie-based’, ‘real-time-buying’ is exposed. Billions of pounds traded on a Ponziesque fairy tale.

Today: Alphabet (which includes Google and its ubiquitous Double Click ad-serving business), Facebook, Microsoft and Apple, globally control (my estimates based on various sources):

  • 95 per cent of the world’s operating systems
  • 72 per cent of browser experience
  • 95 per cent of search
  • 85 per cent of social media
  • 98 per cent of admin (AKA MS Office) systems
  • 80 per cent of video throughput
  • 94 per cent of mapping
  • And an increasing share of retail/finance/travel….. not to say social influence and debate, particularly among the next generation.

It hasn’t been lost on the European Commission that all these companies are American.

Donald Trump is pictured below (credit: Reuters) chairing his American Technology Council 19 June 2017.

Microsoft chief executive Satya Nadella and Amazon founder Jeff Bezos are pictured with him. Alphabet’s Eric Schmidt was in the room as was Apple’s Tim Cook. Mark Zuckerberg was “otherwise pre-occupied”.

For governments, issues of copyright, privacy, IP, are worthy causes; that these Forbes Top 10 monopolists are destroying the viability of news is an inconvenience.

The intermediaries are keen to ‘partner’ with the ‘legitimate’ content media. Google’s News Innovation project has so far generously shelled out €74m: half in investment to established players and half to new ventures (in return for their intellectual property).

Facebook and Twitter appear similarly keen to work with the news industry on journalism projects.

These intermediaries should be good partners, but our laxity in the bargaining arena has turned them into threats.

Our goal must be for advertisers and real content providers to define transparency and agree objectives and methods of trading.

GDPR presents the opportunity to detox publishers and advertisers from the opiate of these value suckers. GDPR compliant trading systems already exist – such as Addaptive.

This alone will transform our industry’s finances while also dramatically increasing the ROI of advertisers and their media buyers.

It will also remove the abuse/theft of publishers’ and advertisers’ audience data and control.

In the ten years since I first raised the Google ‘threat’, I’ve learned that local or publisher initiatives are pointless. The Commission’s GDPR action and Google’s €2.4bn fine for “abusing dominance” demonstrate that only pan-national initiatives work.

With no disrespect to local publishers, and associations, the solution is for the global power players – publishers and advertisers – to determine what they and their customers want, and have the balls to stand up to this existential threat, and re-write the rule book. Starting in May 2018.

The journalism industry delivered Watergate, MPs’ expenses and the Panama Papers – yet we seem incapable of sorting a system that is damaging far more of society than just news.

Jim Chisholm has been a media consultant for 25 years.

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