{"id":12697,"date":"2023-05-16T09:07:44","date_gmt":"2023-05-16T08:07:44","guid":{"rendered":"https:\/\/newsmediauk.org\/?p=12697"},"modified":"2024-05-03T10:23:53","modified_gmt":"2024-05-03T09:23:53","slug":"leading-academic","status":"publish","type":"post","link":"https:\/\/newsmediauk.org\/blog\/2023\/05\/16\/leading-academic\/","title":{"rendered":"Leading Academic Brands Tech Platform Estimates Of Value Created For News Publishers \u2018Disingenuous\u2019"},"content":{"rendered":"\n


The tech platforms\u2019 estimates of the value they create for news outlets are \u201cdisingenuous,\u201d with Google returning less than \u00a375 million a year to publishers despite the news sector driving \u00a31 billion in revenues for the platforms, a new paper from a leading academic has found.<\/p>\n\n\n\n

In a new paper published today by the News Media Association, professor Annabelle Gawer, director, Surrey Centre of Digital Economy at the University of Surrey, argues that estimates cited by Google are also unreliable because they fail to take account of the varying values of web traffic referred from different source<\/p>\n\n\n\n

Google does not need to rely upon \u201ctop-down gross estimates\u201d, such as the one used in a Deloitte study it commissioned, which was published in September 2019, as the platform has all the data and users required to provide precise numbers, professor Gawer said.<\/p>\n\n\n\n

In her paper, professor Gawer said: \u201cIt is disingenuous to assert that the Deloitte study provides a way to estimate the value created by Google (or other platforms) for news publishers.<\/p>\n\n\n\n

\u201cTo assess how much value Google creates for news publishers, i.e. how much readership is due to Google as opposed to merely navigation via Google as one of several possible alternatives to reaching a news site, it would be necessary to estimate the change to news traffic in the scenario where Google no longer refers users to any news sites.\u201d<\/p>\n\n\n\n

One of the purposes of the government\u2019s new Digital Markets, Competition and Consumers Bill will be to provide a framework to ensure online platforms such as Google and Facebook make fair and reasonable payment for use of news publishers\u2019 news content.<\/p>\n\n\n\n

NMA chief executive Owen Meredith said: \u201cProfessor Gawer\u2019s paper reminds us again of why the need for digital regulation in the UK is so urgent. For years, publishers have had to operate in completely unjust circumstances in which they are forced to accept unfair and unequal payment terms from the tech platforms. It is time for this to end.<\/p>\n\n\n\n

\u201cWith the publication of the Digital Markets, Competition and Consumers Bill, we have an opportunity to correct the scales and deliver fair reward for news publishers, paving the way for a truly sustainable future for high quality journalism.\u201d
Calculating payment will require accurate estimates of the value news content provides to the platforms, and the value publishers receive in return from traffic referred by the platforms, according to professor Gawer.<\/p>\n\n\n\n

Last year, Cambridge University professor of economics Matt Elliott calculated the value of news to the platforms to be approximately \u00a31 billion a year, of which Google accounts for \u00a3615 million – \u00a3840 million.<\/p>\n\n\n\n

In her new paper, professor Gawer estimates the value which Google returns to publishers is less than \u00a375 million a year.<\/p>\n\n\n\n

Professor Gawer discusses the 2019 Deloitte report quoted by Google last year in which the tech platform claims that web traffic delivers \u00a3500 million a year to UK news publishers, of which \u00a3370 million is referred by third parties, in particular platforms such as Google and Facebook.<\/p>\n\n\n\n

In her new paper, professor Gawer says this figure is out of date as news publisher revenues have declined since 2019. The value of web traffic now stands at \u00a3400 million a year, she added.<\/p>\n\n\n\n

Since 2019 news publishers\u2019 own apps have supplied an increasing proportion of traffic, virtually all of it direct. Referral traffic from Google currently stands at around 35 per cent of visits, putting a maximum value on Google\u2019s contribution to news publisher revenue of \u00a3140 million a year.<\/p>\n\n\n\n

But even this fails to take account of the fact that direct traffic (including that from apps) is much more valuable to publishers than referral traffic. Direct traffic generates five -10 page views per visit, whereas users arriving via Google read less than a quarter as many pages, and those arriving via Facebook less than a fifth. The reduces the value of Google referral traffic to \u00a375 million a year.<\/p>\n\n\n\n

Even this figure does not take account of two further factors which reduce the value of Google referral traffic.<\/p>\n\n\n\n

The first is \u201cbranded search\u201d where users simply put the name of the news publisher into the search bar as a navigational tool. This accounts for 50 per cent of some publishers\u2019 search traffic and it is reasonable to assume these users would find another direct route to the publisher if search was unavailable, professor Gawer said.<\/p>\n\n\n\n

The second is the value lost through users reading snippets in search and not clicking through to the news publisher\u2019s site. At present, there is insufficient research to quantify either of these effects, but they would take the figure for the value provided by Google to substantially below \u00a375 million a year.<\/p>\n\n\n\n