Academic brands tech platform estimates ‘disingenuous’

The tech platforms’ estimates of the value they create for news outlets are “disingenuous,” with Google returning less than £75 million a year to publishers despite the news sector driving £1 billion in revenues for the platforms, a new paper from a leading academic has found.

In a new paper published yesterday by the News Media Association, professor Annabelle Gawer, director, Surrey Centre of Digital Economy at the University of Surrey, argues that estimates cited by Google are also unreliable because they fail to take account of the varying values of web traffic referred from different sources.

Google does not need to rely upon “top-down gross estimates”, such as the one used in a Deloitte study it commissioned, which was published in September 2019, as the platform has all the data and users required to provide precise numbers, professor Gawer said.

In her paper, professor Gawer said: “It is disingenuous to assert that the Deloitte study provides a way to estimate the value created by Google (or other platforms) for news publishers.

“To assess how much value Google creates for news publishers, i.e. how much readership is due to Google as opposed to merely navigation via Google as one of several possible alternatives to reaching a news site, it would be necessary to estimate the change to news traffic in the scenario where Google no longer refers users to any news sites.”

One of the purposes of the government’s new Digital Markets, Competition and Consumers Bill will be to provide a framework to ensure online platforms such as Google and Facebook make fair and reasonable payment for use of news publishers’ news content.

NMA chief executive Owen Meredith said: “Professor Gawer’s paper reminds us again of why the need for digital regulation in the UK is so urgent. For years, publishers have had to operate in completely unjust circumstances in which they are forced to accept unfair and unequal payment terms from the tech platforms. It is time for this to end.

“With the publication of the Digital Markets, Competition and Consumers Bill, we have an opportunity to correct the scales and deliver fair reward for news publishers, paving the way for a truly sustainable future for high quality journalism.”

Calculating payment will require accurate estimates of the value news content provides to the platforms, and the value publishers receive in return from traffic referred by the platforms, according to professor Gawer.

Last year, Cambridge University professor of economics Matt Elliott calculated the value of news to the platforms to be approximately £1 billion a year, of which Google accounts for £615 million -£840 million.