Week in Media: the resurgence of trusted media
Week in Media
The endgame must not be for two or three companies to control all advertising spend, writes the editor.
In 2017, it was estimated that Google and Facebook would control 20% of the world’s advertising spend.
This week, WARC forecast that Google, Facebook and Amazon would control 50% of global adspend in little more than a year’s time.
For many this outcome and the speed of its fruition will seem like NSS (the third S is for Sherlock). Few commercial media platforms are truly global in scale, but when they are they tend to be poorly-regulated tech monopolies that are able to pay very low amounts of tax relative to their turnover.
These companies have become superpowers, for the most part, because they’ve created wildly effective businesses that drive provable results for brands and have overrun any competition that was there in search, social media and affiliate marketing. The last decade has been defined by a wave of businesses that have been able to grow “direct to consumer” simply by advertising on Facebook/Instagram, Amazon or Google.
But at the same time I can’t help wondering if this proves Rory Sutherland is right when he warns we are entering a “dangerous world where efficiency has come to stand in as a proxy for effectiveness”.
Speaking at Magnetic’s recent Spark conference, Sutherland talked about “the Doorman Fallacy”, a cautionary tale about “quantification bias” in which a luxury hotel chooses to get rid of the doorman because they can save money by putting in an automated door instead (disclosure: I also moderated a panel at Spark earlier in the day).
It’s fallacious because you can’t quantify the value that the doorman creates by acting as a quasi-concierge, fostering brand loyalty, and making the hotel appear justifiably expensive because they can afford to employ him (or her/them – the term ‘doorman’ should really be replaced by doorperson).
This is true because context matters – if I wrote this column in lipstick on your living room window, you likely wouldn’t give is as much consideration as you are now because it’s written by an editor from an established trade media site.
Or, as Nick Manning writes in the conclusion of his excellent two-part series on how to fix the Internet, advertisers are known by the company they keep.
As we move into the obligatory season of trying to predict what’s going to happen next in our industry, I wonder if this week provided a sneak peek into how this industry might turn a corner from this trend of diverting more money into platforms. What if this decade was defined by the resurgence of trusted media?
Future continues to tell a compelling story, as its latest financial earnings showed this week, after acquiring GoCompare, TI Media and consumer titles from Dennis. Discovery and recommendations should be given much greater value in ecommerce when the infinite space of the internet is your shopping centre.
We need magazine publishers and news brand publishers to provide objectivity and accountability when it comes to what are the best products and which companies are ripping us off. Anyone who has bought crappy £15 headphones on Amazon because they trusted “user recommendations” (as yours truly has, to his shame) knows there are pitfalls to shopping online, often with brands you’ve never heard of.
The penny seems to have dropped too for our larger retailers. This week Tesco announced it will launch a media and insights platform to make more of the wealth of information it has about customers via the Clubcard loyalty scheme. Boots announced a similar-ish offering earlier this year. The US giant Walmart has essentially been doing this since 2018.
The point is that there should be reputational damage if Tesco serves you a a fraudulent ad, or if a journalist for MoneyWeek recommends a dodgy ISA.
But, as I wrote last month, there is no such thing as reputational damage when it comes to Big Tech. The rules of the hotel doorperson do not apply to them.
Perhaps in our funny way, this is our collective will in action – we all implicitly seem to accept there should be some part of media that resembles the Wild West because the efficiency and innovation it unlocks is too powerful to hold back.
But the endgame cannot and must not be for two or three companies to control 65%, 75% or even 90% of all advertising spend by 2030.
Because then we would no longer have a market. We would have feudalism.