Spanish publishers may be forced to renegotiate online ad deals with agencies in the wake of Google News pulling out of the country, according to chairman and executive board director of the European Media Agencies Council Jonathan Chase.
Google revealed it was pulling its News service from Spain after fresh legislation was passed there stipulating that the search giant must pay for the privilege of running content from Spanish media outlets.
At the time it stated its reasons were that it would be commercially unsustainable to continue running the service there in light of the new law, given it doesn’t monetise its News service. "We’re incredibly sad to announce that, due to recent changes in Spanish law, we will be removing Spanish publishers from Google News and closing Google News in Spain 16 December,” the company said in a statement.
Spanish newspapers have since appealed to reverse the new law, with many already reported to have seen traffic drops of up to 15 per cent within days of the service pulling out. Although there are no in-depth official figures being released yet as to how much traffic has slowed, there could still be repercussions for publishers' ad rates.
Speaking to the Drum Chase said the traffic losses to website will result in page impressions dropping, which will have a knock-on effect to CPM rates, and could lead to publishers having to renegotiate ad deals with agencies.
“Of course Google News doesn’t carry advertising, so there is zero direct effect there for advertisers is limited, but there will be indirect effect to sites as a result of the loss of Google News [as a discovery platform]. The amount of impressions on sites may well reduce and advertisers may look to try and reduce the price of advertising on the sites, or could even stop using a certain site altogether,” he said.
Spain is not the first country to call Google to account for using publishers’ content for free - Germany had a similar issue with the search giant last year. However, it instead stipulated that Google must seek consent from sites, rather than demanding a monetary fee.
Chase said this option was a more “logical” approach to the issue, rather than Spain’s more “Draconian” efforts.
He added that the law was “unlikely” to spread to the rest of Europe including the UK, but if it did that Germany’s approach would be the one most likely to be considered.
Andrew Girdwood, head of media innovation at digital agency DigitasLbi, who has previously worked with Spanish newspapers, and runs his own network of blog sites, said Google had no choice but to pull out. “Google News really had to leave Spain. It was a free service that helped the Spanish newspaper. The newspapers made it impossible for Google to help out.”
He agreed that publishers hit by major traffic losses as a result of the changes, will take a hit on advertising deals as a direct result. “In the UK I’ve seen newspapers that are 70 – 80 per cent reliant on Google News for traffic.”
He also said publishers will notice the difference in quality of traffic, not just quantity as a result of the changes.
“Google News doesn’t just bring in quantity of traffic it can help bring in a certain quality of traffic to. In this day and age of audience targeting, pay more for a better audience, that’s significant. For example, someone reading up on a piece of breaking business news is more likely to be in business than someone researching it months later or someone reading about a new games announcement is more likely to be a buyer than someone reading the same content two years later.
Meanwhile bloggers and PR agencies are also likely to be affected by the changes. Google News is a useful aggregation tool for PR agencies when it comes to keeping themselves and clients speedily informed of major news.
However, Girdwood believes independent bloggers may actually see opportunities arise as a result of Google News closing in Spain.
“Google’s already (effectively) closed Google Blog Search and with Google News also closed it’s not as if bloggers can take the newspapers place directly. However, bloggers often operate on lower costs and the removal of Google News helps bloggers compete head to head with the traditional newspapers,” he said.
Google has stated that it will try and continue to work with Spanish publishers to help their online revenues despite having to axe News in Spain.
The news marks the latest in a string of obstacles the search giant has encountered regarding data privacy - the latest iteration of which has seen the European Parliament vote on whether it should break up its commercial activities from its search engine.