Google and Facebook are in the process of destroying local media. Local media has accelerated its own demise with fifteen years of failed leadership, and failure to recognize the need for radical change. Leadership would stop competing and aligning with Google and Facebook. Instead, they would counter attack by leverage the power of local.
In an April 27th, 2017 report Business Insider details that Google and Facebook captured a combined 77% of digital advertising in 2016, an increase from 72% in 2015. The New York Times reports that Google & Facebook control digital advertising and they accounted for an astounding 99% of revenue growth from digital advertising in 2016 US.
It is essential to understand the dire nature of this media duopoly of digital advertising by Google and Facebook. First and foremost these two companies have brilliantly positioned themselves to take advantage of consumer trends and most importantly the shift to mobile.
Ineffective ads: Readers, watchers and listeners block out the endless stream of blah, blah, blah advertisements. Secondly, eWeek’s analysis suggests that a minimum of 30% of all digital ads are fraudulent. The amount of money lost to fraudulent traffic surpasses $5 Billion or one-third of the total $14.6 Billion in ad spend.
Real-Time Daily’s article, “Viewability + Fraud = You’re Wasting A Lot Of Money”, argues ad fraud via bots combined with viewability the fraud is catastrophic. The article reports that less than 50% of digital ads are even seen.
Low response rates, fraud & viewability are toxic for logical media and hint that Google and Facebook are fully aware they are charging advertisers money in a less than honest manner.
Google and Facebook have control over the revenue streams of local media companies and the industry rife with fraud and waste. And yet, local media’s survival has less to do Google and Facebook than the self-inflicted damage found in the cultures, systems, management, and leadership of local media companies. They are trapped in a spiral of failure, not only by their traditional way of doing business but more importantly by a failure to deliver results. Advertising as it is currently delivered does not work. Most importantly it does not work for the six million local businesses.
There are real solutions and new revenue streams to be found if local media companies would learn to partner with innovative companies and to recognize they are their own worst enemies.