The Need for a Free Press How “Tech” is Really Bad Advertising
20 for 2020 is a newsletter sent to 20 people in preparation for the U.S. Presidential election of 2020. This is the tenth newsletter it is part two of a two part series on the internet and its impact on the change in medium for news.
An objective, competitive, decentralized and independent press is important in a democracy so citizens can readily be informed of issues of concern by multiple means or sources. In the United States, News is a business. Most news and news vehicles, historically and currently, are supported by advertising revenue.
Last week the Federal Trade Commission announced it is going to examine a decade’s worth of mergers and acquisitions by the five largest tech companies: Apple, Amazon, Microsoft, Alphabet (the parent company of Google) and Facebook. The commission said its probe “will help the FTC deepen its understanding of large technology firms’ acquisitions activities and whether large tech firms are making potentially anticompetitive acquisitions of nascent or potential competitors.”
Though the tech companies don’t necessarily consider themselves media companies, it is important to note that they compete for advertising dollars with media organizations so in a very real sense and way, they have an impact on media organizations. A newsroom commanding less ad revenue likely has a decreasing budget for news. A 2019 Pew Research Report states that 55% of U.S. adults get their news either sometime or often from social media and 9 out of 10 Americans see that social media has some control over the news they see.
Internet advertising revenues are highly concentration with anywhere from 69-77 percent of the revenues going to the top 10 firms over the past ten years. Search is the largest advertising category with over 45% of internet advertising dollars and this is dominated by Google. According to a Morning Consult chart on Alphabet’s earnings, Search & Other revenue totaled $98.1 billion of the organization’s $165 billion in revenue.
In 2019, Internet Advertising at $132 billion comprised over 50% of all advertising revenue which came in at $240 billion according to Statistica. Mobile advertising, a subset of internet advertising came in at $93 billion. Below you will find a look at Advertising Spend landscape in 2018. Virtually all of the growth, and it is astounding growth is in internet or digital platforms.