Picture: 123RF
Picture: 123RF

Quit blaming Facebook, says a top executive at the social media giant. It isn’t Facebook’s fault that newspapers and magazines all around the world are in sometimes terminal decline.

Newsrooms and publishers should adapt to the changing business environment rather than complain about the new media that has snatched their share of the advertising pie.

Facebook’s director of news partnerships for Europe, the Middle East & Africa, Jesper Doub, acknowledges that traditional media are under enormous pressure because of "the dominance and success that Google, Facebook and others are having in the advertising world", he tells the FM.

But it’s too easy for media houses to simply shift the blame. He says publishers have a responsibility to protect and grow their own business, and change is a critical part of that.

Facebook has become public enemy number one for the newspaper industry. Traditional media argue that by luring away readers and advertisers, platforms such as Facebook are narrowing the news agenda and even, some would say, threatening the future of journalism as we know it.

But Doub says: "I know how tough it is for publishers to maintain revenue streams and find new ones, but blaming Facebook and Google for being successful in the advertising business [is unfair].

"I myself had conversations with my publishers in the early 2000s about whether we should build databases of our users and the publisher said: ‘No, we don’t need that.’ That was even before Facebook was founded."

Doub says Facebook does feel some responsibility to help and support publishers. "But it is very unlikely that we’re going to do this, while not looking after the success of our own business."

Still, it is facing a strong backlash from authorities in the face of job cuts and the closure of titles. Earlier this month a group of US states said it would launch an investigation into Facebook to determine whether it had stifled competition and adequately protected consumer data.

And last week, a group of 50 states said it would probe Google’s dominance of the online advertising market.

More decline ahead

Digital advertising’s share of the global advertising pie has more than doubled, going from just 15% in 2010 to 38% in 2017. And it is expected to soar to 60% by 2023.

That’s according to new research from the UN Conference on Trade & Development (Unctad), which released a report on the digital economy this month. And it says the ad revenue of newspapers in the US is set to decline further, from $24bn in 2014 to just $4bn in 2023. It was $66bn in 2000.

Unctad says 65% of all digital advertising was directed at the two tech giants in 2017. Though traditional media in the US has been most affected by the loss of its primary revenue source, SA has not been immune.

BrandsEye SA CEO Nic Ray says these trends reflect what has been going on in SA. Advertising is moving away from traditional platforms quite significantly.

"Businesses are going where the eyeballs are," says Ray, who worked at Quirk, one of the first digital advertising agencies in SA.

Print media is most affected, but radio and television have also felt the effects.

The "2018 State of the Newsroom" report produced by Wits Journalism paints a dire picture of the local industry, where advertising has shifted to online and social media.

"Fewer and fewer people are reading newspapers in SA. The circulation of daily, weekly and weekend newspapers dropped on average 20% from 2016 to 2018," the report says.

Local media houses, which rely on advertising revenue to keep the lights on, have had to grapple with these realities in recent years. The Mail & Guardian announced last month that it may have to retrench workers. Media houses such as Tiso Blackstar — owner of the FM, Sunday Times and other titles — has undergone a series of retrenchments in recent years thanks to falling circulation and shrinking advertising.

Then there was the surprise closure of Ndalo Media, publisher of Destiny and Elle, at the tail end of 2018.

This trend has forced journalists into the "gig economy". A significant portion, 15%, end up leaving the profession altogether with 42% opting for a mix of journalism and something completely different simply to make ends meet, according to Wits Journalism’s data.

That said, Ray says the saving grace for SA publications is that the rate of internet penetration is still low, meaning the full effects of the digital revolution have been mitigated somewhat.

According to Unctad, Facebook benefits from the "network effect", which has to do with the number of people using the platform. The more people use it, the easier it is for it to launch a new service that has a large user base from the start. For example: Facebook Marketplace is said to have already surpassed the world’s largest classifieds business, Craigslist, in terms of users.

There isn’t time for despair. McKinsey & Co partner Agesan Rajagopaul says SA is likely to lose 3.3-million jobs over the next decade as technology and new ways of doing business take over current roles and activities.

But Rajagopaul, who is the co-author of a new report on the future of work in SA, also says the digital economy will likely create about 4.5-million jobs, a net gain of 1.2-million opportunities.

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