The significance of this week’s news that Google’s Australian advertising revenue may have reached $1 billion a year lies not in the potent size of that number, but in what it reveals about the seminal destruction being inflicted on the old media establishment.
The idea that a new media invention could steal almost 10% of the entire Australian advertising pie, within barely a decade, would be fictitious if it hadn’t happened. Google now generates more ad revenue than the entire Australian radio industry; a lot more than the three Fairfax flagship newspapers combined; more than any of Australia’s TV networks; almost as much as all magazines in Australia.
Google has rewritten the lore of media. In doing so it ridicules the commentary from complacent newspaper and television executives who continue to argue that their respective mediums are not under threat of structural extinction. To take this view, as Fairfax CEO Brian McCarthy did last week, is to abdicate responsibility for the urgent requirement to reinvent themselves in the face of a clearly-defined, existing enemy on the march.
Google’s attack on the media status quo isn’t only structural, it is also cyclical. At a time when “old” media revenues are in deep decline, Google continues to grow at double-digit levels.
Nothing that is happening within the media landscape more sharply crystallises the threat posed to established models than the rise-by-stealth of Google. The idea that traditional content platforms can withstand an assault of this scale and speed, and return to their former levels of success after the recession is over, is fantasyland.
As for the impact of the Google phenomenon on quality journalism, think about this. In barely a decade Google has created annual advertising revenues of around the size of those of The Australian, The Sydney Morning Herald, The Age, the Financial Review, the Courier-Mail and the Adelaide Advertiser combined — all without creating one word of original journalism.