Studying journalism as a mature-aged student in the mid-2010s, much time was spent discussing the concept of gatekeeping.
Traditional news media – or legacy media in neocon parlance – was in a protracted crisis, where social media upstarts like Facebook (NASDAQ:META) and Twitter were replacing stuffy old broadsheets as the main conduits of information.
These new mediums were usurping the institutions long considered as the trusted sources of what was happening in the world.
The way these lecturers were talking, it felt like the end of days for journalism as it was long known, all the while watching as their students took out five-figure student loans.
Technology, it seems, has a way of surprising even the most cynical of journalism academics.
For even though the gatekeeping baton is continually changing hands, it hasn’t quite panned out the way these lecturers had assumed.
Nor has it been a doomsday scenario for legacy media.
In fact, over the past week, we’ve seen a number of stand-out financial results in the traditional news space.
Both Telegraph Media Group and Guardian Media Group, two legacy newspaper proprietors on opposite ends of the political spectrum, posted strong revenues in their respective trading updates.
The latter is even expanding its global workforce, while TMG’s ownership issues haven’t stopped the Tory party mouthpiece from sticking to its target of one million subscribers by the end of this year.
It wasn’t all good news in the newspaper earnings season though.
Reach plc, proprietor of the Daily Mirror, Express and Star, saw its operating profits crumble nearly 70% in the first half of 2023.
Why the disparity between GMG and TMG, and Reach’s suite of red tops?
Is it because readers are turning away from tabloids? Not a chance; following the BBC at number one, the most-read online news sites in the UK are the Mail Online, The Sun and The Mirror.
Neither The Guardian nor The Telegraph make the top five, coming in sixth and eighth place respectively, according to the Press Gazette.
Perhaps it is not a coincidence that Reach’s revenue model is the yin to GMG and TMG’s yang, with the former favouring subscriptions over the latter’s ad-based approach.
Diving deeper into the weeds of clickthrough rates and search engine optimisation (SEO), it is apparent that algorithmic changes at search hegemon Google (NASDAQ:GOOGL) are having a profound impact on the nature of news consumption. Not every player, and not every revenue model, should expect to survive.
Winners and losers
Google accounts for between 85% and 90% of the entire search market, depending on who you ask, so its influence on the nature of digital media consumption cannot not be understated.
Google also moves its SEO goalposts thousands of times a year. Not all of these changes are to the benefit of digital media.
One fundamental change that has caused a stir in the industry is the prominence of snippets.
Though they aren’t new, snippets have become increasingly central in recent years to how Google presents information to the user.
This presents a problem for clickthrough rates: Why would you waste precious time loading a webpage when the answer to your query has already been given in Google search?
Featured snippets and ‘people also asked’ sections “are designed to give users the information they need quickly, and potentially even keep them on the SERP (search engine results page) and not clicking through to websites”, commented Nick Swan, founder of seotesting.com.
Snippets are just one example of many among the SEO changes proving a challenge for news media.
According to Swan: “There are lots of websites that are exposed to SEO changes, but the websites that are most exposed are websites that rely on organic traffic to sustain their business. News websites, e-commerce sites and blogs which monetise with display ads are always the most at risk.“
Going back to Reach, The Guardian and The Telegraph, this makes complete sense.
GMG and TMG have been steadily shifting their businesses to subscription-first models over the years.
Between 2018, when TMG debuted its subscription-first approach, to December 2022, the Telegraph’s subscriber count increased 83% from 400,000 to 734,000.
The Guardian’s own discretionary monthly or annual subscription to “fund independent journalism” has been a success in its own right.
Though at opposite ends of the political spectrum, both publications have maintained a loyal readership willing to pay for access, thus moving their revenue models away from ad-based pay-per-clicks (PPCs).
The readership experience when heading over to The Mirror is starkly different. At best, the abundance of popups, chumboxes and banners are an annoyance, at worst, they make visiting the site an act of sadomasochism.
But that’s how much of digital media still gets it money; through advertising. For a long time it was the only way things worked, but there is a sense that the tide really is turning against ad-based revenue models.
At the very least, ad0based revenue models are on the backfoot right now.
Google and the spectre of competition
One would like to think that Google’s constant churn of SEO changes is because it wants to put the best content forward, but is this pure naivety?
For the first time in many years, Google is actually facing competition in the search space.
Funding and incorporating ChatGPT was a marvellous coup for Microsoft (NASDAQ:MSFT), so much so that its Bing search engine is starting to look less like the joke it has long been thought of.
The digital media sector should expect Google to respond to this in force, just don’t expect the trillion-dollar tech giant to be overly altruistic about it.
“Google is a business at the end of the day. They want us to be using their search engine, not another search engine, ” said Dave Colgate, head of enterprise SEO at marketing company Vertical Leap.
“You could argue that Google is scraping content and presenting it on their own search engine” rather than encouraging users to go to the website themselves, commented Colgate, going back to the snippets problem.
“That is having an impact on traffic, ultimately if you’re getting the answers on the search engine’s pages, (users) are not going to your page, seeing the advertising, and obviously you’re not getting the revenue for it”.
Evidently, despite having such a cute name, snippets really are having a profound impact on readership numbers.
“From January 2022 to January 2023 news sites overall saw a 20% drop in traffic from Google,” noted Chris Foster, head of SEO at UK marketing group Mabo. “The sites most affected were those that focused just on news stories, while sites that produced a mixture of news stories and informational articles managed to escape this trend.”
In some aspects, snippets can be considered progenitors to ChatGPT and other chatbots that will inevitably become information gatekeepers in their own right, with a single point of reference supplanting the onerous task of crawling through Google for the answer you seek.
So yes, Facebook is not longer the existential threat to legacy media it used to be, but perhaps the challenges on the horizon are even more profound.