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What the Facebook news ban means for businesses and digital advertising

If you’ve managed to miss the changes to Facebook over the past week you must be living under a rock.

Aside from the extensive media coverage, most Facebook feeds have had a huge shift in content as our friends are banned from sharing articles, and our favourite publishing sites have more or less been wiped from the platform.

Why?

Because like the ongoing negotiations between Google and the Australian Government over the controversial and highly problematic News Media Code, Facebook are refusing to be strongarmed into paying for news that is shared across the platform.

To prove their point, last week Facebook actioned a complete ban of news and publishing sites.

The impact has been immense, as we always knew it would be.

It’s not just your standard news sites that have been affected. Any business that publishes and shares news on the platform has been banned.

This, unfortunately, included a huge number of health advisory platforms, charities, government and local council pages. Even Facebook themselves.

No one can share articles with their friends, and small publishing sites – regardless if they are traditional ‘news’ or industry media sites have gone blank.

What does this mean for businesses?

For businesses that rely on Facebook to distribute their content, it’s an absolute disaster. Many small publishing businesses including online marketplaces, directories and community groups rely on Facebook to reach their audiences.

The ban has blocked Australian news businesses from having their content seen anywhere in the world – not just Australians. It’s also blocked all Australian’s from accessing ANY news content through Facebook, including from international publishers.

There is very little Australian businesses can do until Facebook reaches an agreement with the Australian Government, which is looking like it could take a while, despite treasurer Josh Frydenberg claiming to have constructive conversations with Facebook CEO.

On Sunday 21 Feb the federal government announced it would be pulling all advertising from Facebook. To put this into context in 2019-2020 the federal government spent $42million in Facebook advertising. So it’s not an insignificant move.

What’s going to happen?

The crux of the feud and the motivation behind the News Media Bargaining Code is money. The Australian Government claims (that are echoed by governments across the globe) that big tech companies and digital platforms have too much power, and have decimated the news and media industry by removing the necessity for paying for print news content.

Traditional media companies are missing their revenue, and the big tech giants have plenty of money. So the code essentially exists to force tech companies to pay media companies for any content that is shared on their platforms. Despite the fact that the tech companies – Google and Facebook – don’t actually publish the content and instead act as a free distribution channel.

While there are certainly good reasons Governments should be pursuing tech companies to contribute financially, there are perhaps better ways to go about it – like taxing them appropriately, but let’s not get into that.

But as with everything in life this is steeped in politics. And at the end of the day, the big media companies like News Corp, Nine Entertainment, and Seven West Media who have influence over both government and private corporations will be able to negotiate payment directly with the tech giants, as has started happening with Google.

While smaller businesses who rely on these platforms will be locked out of the negotiating room. The current situation does little to achieve higher competition amongst digital platforms, nor does it achieve or encourage equitable financial remuneration for publishing companies. Or media diversity for that matter.

The knock-on effect for digital marketing – and small businesses will be significant.

How this plays out is yet to be seen. The ramifications are extensive – if publishing companies cant reach their audiences, their value and effectiveness for advertisers disappear. Without small and mid-sized publishing sites there is a significant lack of affordable digital marketing avenues and niche platforms for businesses to talk to their target markets.

Tactics such as affiliate marketing, display ads, banner marketing, interstitial ads and social media partnerships are either destroyed or rendered unviable if the publishers can’t distribute their content to new target audiences.

Again – this knock-on effect will impact small businesses, events, communities and the like far more than big businesses who can continue paying large media outfits.

If you are a business that relies on digital advertising across media platforms and you’re worried about the future, reach out to our team or sign up for our newsletter to stay across the developments.

We can help talk through alternative digital strategies to minimise your future risk and start reaching your audience again.

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