November 1, 2017 Last Updated 11:29 am

Publishers moving from reliance on print to digital ads may be impacted by social media debate

Unless publishers can convince ad buyers that their inventory is worth more than that of the social media companies, ad rates will continue to fall for everyone

The performance of the social media companies before Congressional committees has been painful to watch. Facebook, Google and Twitter decided it best not to roll out their executives before the committees and instead presented their legal representatives: Colin Stretch, Vice- President and General Counsel, Sean Edgett, Acting General Counsel for Twitter, and Kent Walker, Sr. VP and General Counsel.

(Sen. Angus King (I-Maine) started his questions today by expressing his disappointment that the CEOs of Facebook, Google and Twitter did not appear before the committee.)

But Senators are not buying the act because the social media companies are treating the oversight of their companies as a mere inconvenience, stonewalling revealing as much as possible as long as they can until they no longer can hide the full extent their businesses have been built on phony member numbers.

For traditional publishers, this shouldn’t just be a chance to rub in salt in the wounds of the big social media companies. Traditional publishers rely too heavily on social media to drive new readers, but there will be a real impact on revenue due to the continued decline in digital ad rates.

At a time when many publishers, such as Gannett and GateHouse Media, are expanding holdings with the strategy that they will be able to attract more national digital advertising which will replace lost print advertising. But digital ad rates are already low, in comparison to print, and they are going lower, not higher.

Publishers understand the way ad rates generally work: they go up due to increased reach, or because of inflation. They go down due to lower readership or poor economic conditions. But what if the value of all advertising drops because confidence in the actual reach or value of the reach is now questioned? That effects everyone selling digital advertising, not just Google and Facebook.

Note: Sen. Roy Blunt (R-MO) during the hearing tried to dismiss the whole notion that Russian advertising may have influenced the 2016 election by comparing the dollars spent by the Clinton and Trump campaigns versus the dollars (or rubles) spent by Russian agents.

Here is the problem with his argument: the dollars spent are really unknown, all we have is the amounts given by the social media companies themselves, and those numbers keep changing.

But in the end, the amount of advertising spent is irrelevant since the real danger isn’t Russian advertising, it is the millions of fake accounts promoting divisive politics. Twitter’s legal counsel said the company deletes “millions of accounts” each month. That is astounding, though he may have been speaking loosely (he seemed in over his head most of the time). If this is true, then Twitter really needs to radically change its account policies.

It would be nice if politicians can concentrate on the issue of member accounts. Advertising will be taken care of by the changes companies like Twitter are making. In fact, if the social media companies could take care of the fake account issue they may be able to rescue their ad rates. If not, there may become a time (though one doubts it) that ad buyers will wake-up to the enormous amount of waste in their current digital ad schedules (which are heavily skewed towards Google and Facebook).

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