WPP's Sir Martin Slams Google, Facebook As Faux Tech Companies
Sir Martin Sorrell, CEO of marketing giant WPP, slammed Google, Facebook, AOL, and Yahoo over their refusal to be take editorial responsibility for their content they publish.
In a video interview with Mark Sweney at The Guardian newspaper, (1.08 minutes) he says that by calling themselves "tech companies," rather than media companies, they are hiding.
"If you have responsibility for the pipe, you can't ignore the responsibility for the editorial content... you can't abrogate responsibility."
Will regulators also start to see these US media-tech giants as media companies? If they did and took away their legal protection, which is the same as that given to telecommunications companies, it would result in a massive jump in business costs. They would have to hire tens of thousands of workers to monitor content before it is published.
It's unlikely that this would happen in the US but it could happen in other countries. In 2010 Italian courts ruled that Google was responsible for child abuse videos hosted and promoted on the Italian version of Youtube. It indicted three senior Google executives and sentenced them to six months prison terms, suspended.
The New York Times reported that this verdict had "sweeping implications."
It suggests that Google is not simply a tool for its users, as it contends, but is effectively no different from any other media company, like newspapers or television, that provides content and could be regulated.
This is the danger US tech media companies face in Europe that they could become regulated as media companies. It would certainly level the playing field with older media companies.
Google isn't very popular around Europe these days because of its massive-but-legal tax evasion in the UK; numerous European data privacy law violations; lawsuits over its mass book copying; and more. Google's unpopularity could sink the entire group: Yahoo, AOL, Facebook, Twitter, Microsoft, and even Amazon -- if European regulators were to feel it would be in the public interest to classify Google as a media company. It would spill over to the other "tech companies."
If that happened it would also expose them to civil suits from individuals and companies claiming to be harmed by content that they published.
Sir Martin clearly sees them as media companies and that's not good for these US giants. WPP's $16.1 billion in revenues relies heavily on media buys with traditional media companies. It's a far more profitable line of business than running Google AdWord campaigns for clients.
Slowing down the disruption in the media sector would be a very good thing for WPP and its shareholders. It might even make to use of its own services, its very effective machinery of influence, to make sure these companies are treated as media companies under European laws.
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Silicon Valley is a Media Valley
It's long been a critical point of mine to call Google, Facebook, etc, media companies - these are technology-enabled media companies. Since 2004 I've been insistent that this is an extremely important point of distinction and key to understanding this second phase in the expansion of the Internet.
Google, Facebook, Twitter, are media businesses but hide behind the tech company label because they they need to partner with traditional media companies. If they were seen as media companies then their business partners would likely be less willing to work with what are essentially their competitors.
The New York Times Co., News Corp., and every major media company now understand that Google is a media company and a formidable competitor but it's too late to do much about it now.
But back in 2004 I remember looking the front page of NYTimes.com, which only showed Google ads and under each ad was a link back to Google: "If you'd like to advertise on this site click here."I was shocked that the New York Times had handed over its customer relationship to another media company - and on its prime page!
Google goes to great lengths to promote itself as a tech company, as a mobile phone company, even as a car company - anything to distract attention from its actual business: media - $50 billion in annual revenues from publishing pages of content and advertising.
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Sir Martin is always worth listening to because he's a media watcher extraordinaire, he has incredible insight into the global media industry. His hundreds of advertising, marketing, and PR agencies work with multinational clients that collectively spend 10s of billions of dollars in marketing campaigns across a huge range of new and traditional media.
As a former accountant, Sir Martin loves data and has always collected huge amounts of it to evaluate the effectiveness of marketing campaigns, media buys, and spot important trends in the media business well ahead of others.
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