Tech firms’ advertising take still on the rise

Tech giants have increased their share of online advertising revenue in the time since it was announced there would be laws to force them to pay for their content.

Treasurer Josh Frydenberg in Canberra on Tuesday. Picture: Gary Ramage

The tech giants have increased their share of online advertising revenue in the time since Josh Frydenberg announced he would deliver pioneering legislation to force Google and Facebook to pay Australian news outlets for their content.

The News Media and Digital Platforms Bargaining Code — described as a world first — will force the tech giants to negotiate agreements with media companies to pay for news and share their data-collection methods.

Unveiling the “huge reform” on Tuesday, the Treasurer said that for every $100 of online ­advertising spend, $53 went to Google, $28 to Facebook, and $19 to other participants.

This is a spike on the revenue raised by the tech giants in 2019-20 when $47 went to Google, $24 to Facebook and $29 to other participants.

Mr Frydenberg said traditional media outlets had seen their profits dwindle since the advent of digital media, with the dollars traditionally spent on print advertising plunging by 75 per cent since 2005.

“In that same time, dollars spent on online advertising has increased eightfold,” he said.

Mr Frydenberg said a long ­investigation by the Australian Competition & Consumer Commission had found an unequal bargaining position between the digital platforms and traditional news businesses, prompting the government to intervene through the code.

News Corp Australasia executive chairman Michael Miller told The Australian advertising dollars were continuing to flow away from journalism towards the tech giants. “While more advertising dollars have migrated away to the platforms, consumers have been attracted to us due to our journalism,” he said. “So it’s payment for that journalism that has been the fundamental basis for these discussions, and the code.”

Communications Minister Paul Fletcher said the ABC and SBS had been added to the final code and confirmed the ABC would invest any additional revenue raised through the mechanism into regional journalism.

Regular updates of algorithm changes, a significant commercial liability for traditional news outlets, will also be included under a series of “minimum standards”.

Mr Fletcher said that the final version of the code had been amended so that digital platforms have to give news outlets 14 days’ notice of any changes to their ­algorithms, rather than 21.

“We restricted it to conscious changes to algorithms that would have a significant impact on ranking,” he said.