Google has just pledged to invest $300 million in more efforts to help publishers, like ads for subscriptions, more visibility, news literacy, and more. However, Facebook made a similar commitment last year, but it didn’t last.
Why’s that? Well, Google’s and Facebook’s core business model is competing against publishers for ad money. So, trying to boost your rivals with a $300 million pledge looks like a drop in the ocean, when you consider the damage that was already done.
In fact, no amount of money will help publishers as long as you are running a free service that puts many of those publishers out of business. You are reading this story online, for free, and you should know better.
Publishers survive if they manage to lure in more users and keep them coming back. They need more people interested in their content to make more money off advertising.
Facebook, Google, and Publishers All Fighting for the Digital Ad Dollars
This is the business model for Facebook and Google, as well, but these two tech giants are more effective in doing it. Most virtual ad dollars go to their pockets and publishers fight for what’s left.
This is why many news organizations are trying to offset the losses via subscriptions. Yet, that is a daunting task as consumers are not that willing to part from their money when there is a free alternative out there.
What’s more, the problem looks without a solution since Google and Facebook are so powerful that only another tech giant could compete against them and win. This may be why the two companies are trying to put things straight by investing millions of dollars in publishers.
Google pledged $300 million for the effort, but that accounts for 1% of its ad revenue over a period of three months. Plus, the money won’t go to the publishers directly. So, simply buying them off would look like a more effective course of action.
Image Source: Flickr