60 Distribute and Be Damned
an emphasis on news – as well as leading to extremely damaging effects
in the 2016 election that will be considered in the next chapter – had
led to increasing anxiety and unhappiness as people were subject to a
constant barrage of “human misery and news of the world”,
76
leading
the company to reduce the frequency of news content from January 2018
onwards. Not that such changes could prevent a series of woes for Facebook during 2018: if it had been the largest IPO ever in 2012, then in
2018, it suffered the largest ever stock market drop as it lost 20 per cent
of its value, or $119 billion. In part, this drop was caused by a shift in
focus away from the News feed to its Stories feature: the fallout from
the Cambridge Analytica scandal, along with the realisation that it was
increasingly alienating its users, led Facebook both to pay more attention to user privacy and to de-emphasise the flow of news stories, two
features that contributed to projected declines in Facebook’s earnings.
77
The fact that Mark Zuckerberg could lose $16 billion personally as a
result of this fall and yet only drop from fourth to sixth on the Forbes
list of the richest people in the world demonstrates just how significant
his company has become to the global economy.
Mark Ritson has described the impact of Google and Facebook as a
“digital duopoly” that emerged in 2016 and which he expected to become even more influential in subsequent years. While discussing the
effect of the two media giants in terms of marketing, the impact of such
spend extended through a multitude of media outlets. Writing in December 2017, Ritson observed that together these two companies were anticipated to account for 84 per cent of all digital media investments for the
year: this does not, it must be admitted, include China – which operates
in its own, restrictive system – but the effects on legacy media have been
dramatic. In the field of marketing agencies, Ritson expressed particular
concern that an entire industry would be swept away by disruption as
the two companies removed the need for a middleman, but the effects
had only been slightly less dramatic in other areas of media production.
As he observes, traditional media “have no option than to play ball with
the duopoly”, and when those two companies are effectively vacuuming up nearly all digital media spends, it makes it extremely difficult
for other organisations to run their businesses profitably.
78
Evans and
Schmalansee have argued that “winner-takes-all thinking does not apply to the platform economy”,
79
but Barwise and Watkins disagree: in
the past decade, the rise of these two means that for any advertiser who
wishes to reach both hyperlocal audiences and to have a chance (China
aside) of scaling up to global readerships, there are only real options:
Google and Facebook.
80
Ritson presents a compelling example of how Google’s platform dominance had an immediate effect on media producers for the best part of
a decade: in 2008, Google implemented a policy called “first click free”
(FCF), first on news searches and then on general web search. Prior to
an emphasis on news – as well as leading to extremely damaging effects
in the 2016 election that will be considered in the next chapter – had
led to increasing anxiety and unhappiness as people were subject to a
constant barrage of “human misery and news of the world”,
76
leading
the company to reduce the frequency of news content from January 2018
onwards. Not that such changes could prevent a series of woes for Facebook during 2018: if it had been the largest IPO ever in 2012, then in
2018, it suffered the largest ever stock market drop as it lost 20 per cent
of its value, or $119 billion. In part, this drop was caused by a shift in
focus away from the News feed to its Stories feature: the fallout from
the Cambridge Analytica scandal, along with the realisation that it was
increasingly alienating its users, led Facebook both to pay more attention to user privacy and to de-emphasise the flow of news stories, two
features that contributed to projected declines in Facebook’s earnings.
77
The fact that Mark Zuckerberg could lose $16 billion personally as a
result of this fall and yet only drop from fourth to sixth on the Forbes
list of the richest people in the world demonstrates just how significant
his company has become to the global economy.
Mark Ritson has described the impact of Google and Facebook as a
“digital duopoly” that emerged in 2016 and which he expected to become even more influential in subsequent years. While discussing the
effect of the two media giants in terms of marketing, the impact of such
spend extended through a multitude of media outlets. Writing in December 2017, Ritson observed that together these two companies were anticipated to account for 84 per cent of all digital media investments for the
year: this does not, it must be admitted, include China – which operates
in its own, restrictive system – but the effects on legacy media have been
dramatic. In the field of marketing agencies, Ritson expressed particular
concern that an entire industry would be swept away by disruption as
the two companies removed the need for a middleman, but the effects
had only been slightly less dramatic in other areas of media production.
As he observes, traditional media “have no option than to play ball with
the duopoly”, and when those two companies are effectively vacuuming up nearly all digital media spends, it makes it extremely difficult
for other organisations to run their businesses profitably.
78
Evans and
Schmalansee have argued that “winner-takes-all thinking does not apply to the platform economy”,
79
but Barwise and Watkins disagree: in
the past decade, the rise of these two means that for any advertiser who
wishes to reach both hyperlocal audiences and to have a chance (China
aside) of scaling up to global readerships, there are only real options:
Google and Facebook.
80
Ritson presents a compelling example of how Google’s platform dominance had an immediate effect on media producers for the best part of
a decade: in 2008, Google implemented a policy called “first click free”
(FCF), first on news searches and then on general web search. Prior to