Why Google will start paying media companies more and more

Google finally gave in and officially decided to pay media companies for the content they are crawling.

It is a big compromise wrapped up in a new news app they are building. I think it is just a piece of the battle as things will change more in the future, whereas Google will start paying more and more for the right of crawling media websites.

Let me explain.

While the right of freely crawling a news site is debatable in principle as it’s also a free distribution channel for the said media, for Google it is strategic to get access to the media content.

That is for a simple reason: its ad layer, which is where it makes money from, is useless without having access to data to make it work. A very good part of that is gathered from the media assets and the data associated with it.

The data points collected from crawling websites are richer than the regular guy would be able to tell. The sites content and its meta are corroborated with the behavior data extracted from the Analytics and with the one from the cookies tracking the user journeys throughout the entire internet. The more data points connected over a longer period of time, the better.

And bonus, if you give Google your inventory for placing ads (a very common scenario in media business) that would be an extra data boost.

And one more bonus: if you browse while you are logged in with a Google account (YT, etc) that history data is equally valuable, dully tracked and thrown into the Google matrix.

That’s just an overly simplistic view - suffice it to say that an AI-based software product, such as the ad stack built on top of Doubleclick, is useless without the data you feed it with. The more data you feed it, the better the output becomes.

That data is a result of the content access - that is why it is strategic for Google and it will start paying for accessing content more and more.

Add to that the scenario that media properties started getting paywalled and thusly become unavailable to Google’s spiders.

And getting paywalled combined with DTC (newsletters) and good brand can make for an interesting strategic play trading off free inbound traffic from search engines.

Which inbound traffic you:

i) convert into ads, which is a one time play because that traffic is lost if you don’t have ads to serve and bounce rates are very high anyways - that is the standard go-to-strategy for media biz

or

ii) convert onto getting customers to pay for content or at least create an account, if you have a pure SAAS play that is - publishers are terrible at this tactic btw.

The more bloated and horrible the reading experience of a media property is, the more a publisher optimizes for the first. And that includes the cookies the GDPR enforced warning about, which are a must only if your business needs to use tracking cookies, which are for ads purposes.

Also why Google Analytics, which is a very powerful analytics product, has a compelling free version which is pretty much standard for publishers - that data is also feeding off Google’s ad tech, building sophisticated consumer behaviour models based on which it serves ad products.

And, of course, that is also the reason for which Google pays a few billions a year to both Apple and Firefox just to be one of the search engines in their browsers.

No data to feed its ad stack with, no business for Google.

PS. Weirdly fitting to this is that my son randomly asked his friend Google last night:

Hey Google, do you have a brain of your own?
G’s answer: have a good night!