The duopoly of Facebook and Google are now making moves that contradict their long-established stance that they are not media companies, stated WPP chief executive Sir Martin Sorrell while speaking at the World Economic Forum Annual Meeting in Davos.
Discussing the changing role of both companies that control “75% of digital advertising, and 30% of the world market," Sorrell said: “They have not philosophically acknowledged that they are media companies to date, but in practice, they are starting to because now Facebook and Google are hiring people to monitor their editorial content because the big issue is can't we trust all the content that is on these platforms."
Historically, each company has been keen to reap the benefits of running ads on their networks, while maintaining a diminished responsibility for how the form and function of the data they share could shape society for the worse. Some examples are how fake news, extremist and damaging content, can be spread by them.
Sorrell provided an example of the changes he referred to. “A few days ago, Mark Zuckerberg modified the Facebook policy in relation to the newsfeed and we are going to have different gradations of the newsfeed, more privileged positions given to newsfeeds we trust according to some form of rating from consumers, and less to those we don’t.”
He stated that Facebook and Google are without a doubt media owners: “We distribute £5bn out of our £75bn of our media portfolio to Google and about £2bn to Facebook and Disney and Fox is about £3bn. Those are the relative orders of magnitude, but they are all media owners.”
He stated that it is a “key issue” for the big platforms in digital advertising, to “acknowledge the fact they are media owners”.
Furthermore, Sorrell hinted that 2018 will be the year the duopoly is truly challenged by the third major player in the market. “2018 may be the year Amazon starts to attack the two principals that control digital advertising.”
On how tech was disrupting the fundamental pillars of advertising, Sorrell highlights how 'word of mouth advertising' would change, claiming it was once the “most effective medium in terms of recommending products and services to people”. He noted that tech would continue to improve how we receive word of mouth and recommendations will improve over time.
Finally, he touched upon companies disrupting the status quo, like Amazon launching a humanless store earlier this week, Sorrell said there were two issues around the revolutions in technology: “Are these revolutions in technology going to improve my position as a consumer from a privacy point of view and an employment point of view.”