The New York Times reports that Google has an 88% market share in search advertising, Facebook (and its subsidiaries Instagram, WhatsApp and Messenger) owns 77% of mobile social traffic, Google & Facebook control 85% of digital advertising, Amazon has a 74 percent share in the e-book market and 43 percent of online retail. In classic economic terms these three companies are monopolies. Until traditional monopolies that put other midsized competitors out of business, these three are fundamentally changing the social, economic, and local community landscape for the worse.
Destruction of Local Media: Four critical factors:
- Consumer shift to online/mobile (this trend will not only continue it will accelerate)
- Ineffectiveness of traditional advertising regardless of the results and in complete denial of the long term consequences
- The refusal of media to recognize that by working together they can effectively fight back
- Refusal to understand they must grow their revenue base by attracting new customers to entirely new program, find ways to Local media revenue models have to change. A change that requires courage and innovation…two things sorely lacking in the industry.
Destruction of Local Retail: Amazon has stepped in and taken advantage of online retail sales by offering a better product. Local retailers continue to lose by wasting advertising dollars, refusing to work together, and directly attacking the Amazon model. How local retailers wins:
- They win by bringing to local shoppers a direct-in-store experience where shoppers discover behavior changing
- Recognize that by working together with other retailers they can create a powerful shop local mindset is how they all win. Paradoxically, Amazon uses this same method for online retailers by getting them to work together to create a search & shop Amazon first.
Monopolies will only get bigger: Without local media and local retail local communities wither away and the monopolies grow.
Leaders see reality. Sammy Papert, an enlightened expert on all things media, wrote in this month’s Wormhole about leadership. It dawned on me that Sammy was addressing the core problem at the media and retailer level – LEADERSHIP.
Three Papert quotes from his leadership article:
1. “And, let’s be 100% clear – there’s often a huge chasm between someone who is higher up in the organizational structure and a leader!”
2. “There’s a frightful dearth of leadership and it’s worrisome.”
3. “In my experience, about 50% of bosses aren’t in the right role. HALF!”
The government taking action won’t fix local media and local retail…they have to make the choice to change strategies.