Google announced this week that they have plans to share revenues with publishers. Their approach is to combine the robust personal data that they possess on users combined with an algorithm to help publishers increase their subscriber base. The idea is for Google to act as a catalyst for publishers to grow and for Google to share the additional revenue with the publisher.
The new initiative is designed to be very similar to Google’s AdSense, which provides publishers the ability to serve ads that are targeted to specific site content and a targeted audience. Google’s AdSense revenue was typically split 30-70, with Google taking 30 percent of the profits. However, Google’s head of news, Richard Gingras, told The Financial Times that they would not take thirty percent of the revenue and would allot much more revenue in favor of the publisher.
“It will obviously come down to what we think that business relationship should be but, bottom line, I think [revenue shares] will be exceedingly generous [to news publishers],” said Gingras. “In our ad environment, the rev shares are 70 per cent-plus. The rev shares [for publishers] will be significantly more generous than that.”
The data that Google has on millions of users enables the company to target personalized ads to individuals. This could potentially enhance a publishers’ ability to increase their audience base by reaching a new market.
However, some publishers are hesitant regarding this new announcement stating that the relationship that they have directly with the customer is important and they would not want any tech giant to be that gatekeeper. But despite this view, others are more optimistic.
“It’s very interesting, because this would be the first time [revenue share] has ever happened,” said Nic Newman of the Reuters Institute for the Study of Journalism to The Financial Times. “What publishers really want is to have access to Google’s wealth of data, so it’s a step in the right direction for both parties.”
The Google initiative is a major turn of events for publishers since newspapers have suffered significantly as readers go online for the news. Publishers have blamed Google and other platforms for the decrease in subscriptions and decline in ad dollars. This may be their chance for a turn around.
As Google sets in sights in creating a win-win partnership with publishers it will be increasingly more important for publishers to also be compliant with some of the standards that are valued by the tech giant. For publishers, being HTTPS compatible and have fast loading pages, both of which are criteria for being ranked higher in a Google search, are going to help optimize the publishers’ site for this new subscription model.