A Little Demographic Twist Changed It All

Way before the Internet exploded, before microtargeting consumers with real-time adjustments became the norm, local newspapers reached local communities with relative effectiveness. To generate value to that community, these newspapers shaped news and human-interest stories with local reporters covering local news, sports and events. For some businesses, these newspapers supplemented their ad efforts on regional television and radio, while for others, newspaper ads were affordable and “enough.” National and international news were covered through services like the Associated Press, Reuters, etc. In short, ads targeted the community.

As the online marketing world developed, as the ability to track and analyze individual consumers became the norm, the focus of marketing made a big shift: to each individual consumer. Not the entire community in which that consumer lived. The new notion of an “online community” is the very essential of the rise and dominance of social media and mega-online retailers like Amazon and Wal-Mart able to embrace being huge while microtargeting based on artificial intelligence driven individual tracking. A privacy nightmare that still has not been solved. 

Consumers could buy many items they were being targeted to buy, and even for the biggest ticket items – from houses to cars – the Web provided informational site that eventually drove an attracted consumer to the ultimate purchase. While most of us are aware of this process, something very big has been lost: reliable local news. The numbers are both staggering and sad:

“It is well known that the digital transformation of the local news business robbed newspapers of much of their print advertising and subscription revenue. They have tried to transform themselves into digital properties with online advertising and paid subscriptions for products people read online. For the most part, it has failed. One outcome is that an extraordinary quarter of all American newspapers have closed in the past 15 years. Many others are on their last legs.

“A major new research report from the Hussman School of Journalism and Media at the University of North Carolina at Chapel Hill covers the carnage in great detail via a 124-page document called ‘News Deserts and Ghost Newspapers: Will Local News Survive?’ The analysis points out that vast parts of America have been left without any newspaper.

“Due to the shuttering of local papers, half of the journalists in the industry lost their jobs over the same period. The other major by-product is that 1,800 American communities have been left without a newspaper at all. At the start of the period examined, which was 2004, there were 9,000 local papers in the United States. Print circulation across the country has dropped by 5 million since then… Seventy of the papers that have closed are dailies. About 2,000 weeklies and other ‘non-dailies’ are gone.

“What happened? As late as the 1990s, many newspapers were highly profitable, some with profit margins over 30% of revenue. Their only competition was local TV and radio. The wide use of the internet was almost a decade away. Access to broadband did not explode until after 2000.” 247WallSt.com, June 25, 2020. Oh, “communities” still exist, but they are no longer limited to physical, geographical space. They are now linked more by shared ideology and sociopolitical values, possible only with social networks where physical proximity is irrelevant. What has obviously fallen between the cracks is local news and local community, the loss of which has been the huge driver of polarization that has ripped this nation into pieces. 

There has never been a greater threat to democracy or more vulnerability to malignant political forces, here and abroad, to manipulate and distort perception based on these inherent ideological and sociopolitical biases. Between the misuse of the First Amendment here (free speech laws elsewhere) and the willingness of advertisers to support political malignancies if enough eyeballs can be delivered to buy their wares and services, greed and amoral power brokers are having a field day with this new and massive online power. Can anything be done to stem this tide?

Australia is proposing an answer that will definitely result in a battle royal: “[A] growing number of democracies are looking for ways to shore up local news outlets, which have long played a key role in holding local governments accountable to the public. In particular, they’ve looked to tap the online advertising fortunes amassed by Google and Facebook, two powerhouses that have become major outlets of news online — much of it produced by newspapers. Those companies are in lawmakers’ sights also because of the control they exert over advertising technology and their ability to collect data about internet users, including the ones on newspapers’ own sites.

“The latest government to take on this issue is Australia’s, which is poised to require Google and Facebook to negotiate with news companies for the right to publish links to or snippets of their stories. The proposal echoes similar measures that have been enacted in Europe and are being floated in the United States and Canada.

“The legislation drew two noteworthy responses as it moved toward final approval last week. Google struck a deal with News Corp. — the global empire of Rupert Murdoch, whose portfolio includes eight of Australia’s 10 most widely read newspapers — that will pay what News Corp. called a ‘significant’ amount for the use of its stories in Google News Showcase, a feature on one of Google’s smartphone apps. And Facebook yanked all the news articles by Australian media from its network — even the ones posted by the news companies themselves.

“The blackout recalled Google’s threat to remove Google News — a service that aggregates news headlines, descriptions and headlines — from Spain and Germany after those countries enacted laws requiring publishers to be paid for such uses. Google ultimately restored the service in Germany for publishers that waived the fees, which many did after seeing their traffic plummet, but terminated Google News in Spain, pushing down online readership at Spanish news sites, especially smaller outlets.

“The lesson there is twofold: News publishers do get some benefit when Google and Facebook post links to their stories, although a portion of the readership stops with the headlines and never clicks through to the articles. And the smaller the publisher, the more dependent it is on Google and Facebook for online traffic.

“Therein lies one problem with Australia’s approach. The authors’ goal is to correct a ‘fundamental bargaining power imbalance between Australian news media businesses and major digital platforms.’ But simply requiring a negotiation and binding arbitration doesn’t help a small local news outlet extract the kind of terms that News Corp. can for the use of its content. In fact, the Australian bill excludes publishers that are new, that have minimal revenue (so much for solo journalistic crusaders) and that do not publish what the Australian government regards as “core” news.” Los Angeles Times, February 22nd. 

Time is running out for so many of the few remaining local news sources. Proposals to subsidize such entities, before they are closed forever, from user fees, advertising and social media revenue taxes abound… but unless these measures are enacted soon, big will get bigger, polarization will continue to polarize at an even bigger level and democracies grasp on survivability will continue to slip away.

I’m Peter Dekom, and how often do you read your tiny local community paper, even if it is free… or if it still even exists?