Big Tech companies including Google, Facebook, and Amazon, hold sway over important industries. Journalism, digital marketing, retail, and more are at their mercy. But new developments are breaking open opportunities for other players. In this article, I’ll examine how the Tech Giants affect old industries, as well as alternative outlets for digital marketing.
History shows us that breaking monopolies is good not just for competitors, but the former top dog as well. In his book The Four, Scott Galloway discusses the antitrust breakup of Microsoft around the turn of the century, and remarks that Microsoft is bigger than ever now. The book is primarily about the Big 4 tech giants Apple, Amazon, Google, and Facebook. Galloway argues at the end that these corporations must be broken up as well, since they control not only major sectors of the economy, but our politics.
CNN Business reports that 47 State Attorneys General have joined an antitrust case against Facebook. It was begun in September by Letitia James, the Attorney General of New York. The case obviously has bipartisan support. The officials are investigating Facebook’s anti-competition practices, data and privacy breaches, its acquisition of other startups, and whether Facebook’s market share of digital advertising has raised its cost.
But Facebook isn’t their only target; the article says, “The meeting shows how law enforcement officials are increasingly probing specific business behaviors that they believe could support an antitrust case, rather than discussing tech giants purely in the context of their size.”
The Federal Department Of Justice opened an antitrust investigation against Google this year. It’s not connected to the one against Facebook, but it follows similar lines of inquiry. There are conversations of Google, whether intentionally or not, swinging the outcomes of elections. The YouTuber Tim Pool carefully dissected this topic in August; watch his video and decide for yourself if this is a legitimate concern.
For years, Google and Facebook have enjoyed a duopoly in online advertising, but Amazon is breaking into the space as well. This report from Geekwire.com details how Amazon is building its ad business:
“Amazon has quietly built a multi-billion dollar advertising arm that generates revenue by charging companies to promote their products on Amazon properties.
“Advertising drives a majority of revenue for Google and Facebook, which charge advertisers to have their marketing content appear on search results or news feeds.
“Amazon employs a similar strategy, but instead with its online marketplace and other platforms, giving vendors, authors, and others a way to reach potential customers. One of its main competitive advantages is the data it has on purchasing habits. It’s also replacing Google as the de-facto destination for product searches.”
More recently, the Google/Facebook/Amazon nexus has raised the costs of digital advertising. This means other apps and sites can charge lower rates and carve their own space in the market. The Motley Fool just suggested Pinterest can do this; they write that Pinterest can offer better returns on ad spend in the realm of search advertising. The article says it helps to think of Pinterest as a search engine rather than as a social network, one that lets users curate information about all manner of products and creative pursuits.
“The two digital advertising tech giants are big enough that they don’t have to worry about Pinterest stealing business, but it could have an impact on how high average ad prices climb on those platforms as marketers seek better returns on their investments. For Pinterest, it doesn’t really need to steal much from the industry leaders in order to grow revenue. Management expects to generate just $1.1 billion this year, which is just a fraction of what marketers spend on Google and Amazon.”
Advertising is the primary revenue source of news media. Much has been said about the collapse of mainstream journalism in the Digital Age, but a big factor is the chase for web traffic and t.v. ratings. With cable and broadcast television in decline, the networks are driving up sensationalism.
With Facebook and Google (and Twitter to a lesser extent) dominating web content, news websites have been dependent on them for traffic. A few years ago, they found they could get clicks and shares through stories inspiring anger. Both mainstream news sites and “content mills” followed this strategy. “Fake news” is both a genuine concern and a pretense for disregarding articles one doesn’t agree with politically. Today, most Americans actively distrust the media, or at least tune it out.
Perhaps journalism isn’t in decline so much as it’s changing. The Establishment Media (print, broadcast television, corporate news companies) are giving way to individual citizen journalists with blogs, podcasts, and YouTube channels. The big media companies aren’t the gatekeepers of information anymore, although Google and Facebook definitely are. Thus, the government is investigating them.
Where can a blogger go for news leads? This brings us to another news development, the acquisition of Cision by the investment firm Platinum Equity. What is Cision? It’s the parent company of PRNewswire and Help A Reporter Out (HARO). These are two resources for news journalists and bloggers to get tips, interviews, and press releases. Platinum Equity’s investment has boosted Cision’s stock according to Motley Fool.
As an avid YouTube consumer, I watch a lot of news content by individuals commenting on mainstream news articles. If Cision and other tip clearinghouses can boost their online profiles, citizen journalists can more easily get their leads directly from the source.
If the government successfully breaks up the Big Tech monopolies, audiences will need to diversify their news sources. In a way, we can make progress by going back. I advocate joining forums, message boards, and RSS feeds. These were very popular before Facebook took over the world, and are still chugging away in their corners of the web. You can search for individual forums based on your interests, as well as join Reddit, which is a network of forums. You can sign up for Feedly.com and get article feeds from participating websites. If you have a blog, consider submitting it to Feedly for traffic.
The changes in media and antitrust cases against Big Tech have implications for other industries, mainly in how they market and advertise. With the decentralization of media into millions of blogs, a business can really drill down its targeted advertising across the web. Blogs are monetized in other ways, too, such as sponsored content and affiliate marketing. If you want to sell products online, you would do well to make your own online store and enable affiliate marketing. Let bloggers pitch your goods, and let them earn commissions so you only spend money on successful sales!
We shouldn’t want to do away with Google, Facebook, and Amazon. They do plenty of good and make modern life easier. But when an organization is capable of great good, it’s equally capable of great harm. We should appeal to their better angels.
In the interests of disclosure, I’m very entrenched in a couple of these companies. I run Google Adsense on my site, and Facebook is major part of my website’s traffic. Facebook and Google’s subsidiary YouTube are my main sources of entertainment, ever since I cut the cord and don’t watch television anymore. When I critique them, I’m not biting the hand that feeds- I’m encouraging them to be better so society can enjoy more freedom and prosperity.