Archive for the ‘Uncategorized’ Category

The Winds of Change Howling around Big Tech

January 26th, 2021 by Heather Maloney

Big Tech – namely Google, Apple, Amazon and Facebook – are increasingly under pressure due to their vast impact on our lives. The way they exercise their impact and influence is coming under pressure in many ways, including the following:

  1. Privacy concerns surrounding the sale or misuse of personal data.
  2. Monopolistic concerns, including their control over digital advertising and the digital landscape, and their control over retail.
  3. Free speech and dissemination of information, particularly with regard to the influence of social media, censorship and algorithms that fuel division rather than understanding and unity.

The above points may sound negative or alarmist, however, it is important to see that all change provides opportunity, so let’s look at each of the above and the potential opportunities they present to Australian businesses.

Privacy Concerns

The GDPR (General Data Protection Regulation) is a prime example of strong pushback against the use of private data by the big tech companies. Prior to the GDPR coming in across Europe, Facebook and Google seemed unabashed in their use of data they had captured from people using their platforms to specifically tailor ads and recommend content.

The pressure they are being put under with regard to privacy, and their various breaches of privacy for which they are being sued, has made the general public more aware of concerns about privacy. This can only be a good thing, particularly for the younger generations who embraced social media and other apps in which they shared their personal information seemingly without concern for how their personal information could be used.

The outcome of the use of browsing behaviour by Facebook algorithms to continue to feed people with more and more sensational articles that agree with their perceived view, has caused greater polarisation of viewpoints between two sides of an argument, less empathy between opposing sides, and provided the opportunity for digital terrorism in the form of de-stablisation of western democratic countries by nations who stand to benefit. Interference in elections, using stolen electoral information, is of particular concern.

Opportunities:

  • Peer to peer solutions that allow individuals to benefit from the collaborative nature of cloud technology, at the same time as keeping their data away from big tech.
  • Providing alternate digital solutions that keep data firmly in Australia, away from the big tech companies. This is a strategy that we have employed for Enudge – our in-house built email and SMS marketing platform.
  • Alternate platforms for groups that wish to deliberately avoid using big tech platforms and any potential control they may have in future over their data.
  • Anti-cybercrime solutions.
  • Online voting solutions that can be relied upon!
  • Online community that brings people of different views together to develop empathy rather than division, and to take positive steps forward to improve the lives of all.

Monopolistic Concerns

As the world has become increasingly reliant on the internet to find products and answers to questions, Google in particular has gained a huge percentage of the market share of advertising budgets across the globe. Competition between advertisers has naturally driven up the cost of advertising on digital platforms. With such a monopoly, it is easy to see how Google could significantly increase it’s revenue by a small change in pricing. Advertisers may feel that they have no real alternative to be found online.

In 2019, research confirmed that out of every $100 spent on digital advertising by Australian businesses, $53 went to Google, $28 to Facebook and $19 to all other websites and ad tech. Last year, Google made $4.3bn in advertising revenue in Australia, and Facebook made $0.7bn.

With a monopoly situation, malicious actors can have a much faster and more detrimental impact on an organisation. There are many publicised cases of businesses being the recipient of fake, nasty Google Reviews – presumably by competitors – even for businesses that have not yet launched. Google isn’t always very fast in taking down even the really obvious fake reviews. The damage on businesses can be significant, and requires better responsibility to be taken by the platform to support the reputation of businesses.

Aside from professionally, and accurately, responding to all reviews, a way to reduce the impact of malicious negative reviews is to ensure that you have a large number of reviews from happy customers, so that one or two bad ones will be diluted by the good.

Even within the USA there are concerns with regard to the monopoly held by each of the 4 big tech companies. Most states of America want to see Facebook split off Whats App and Instagram to reduce their monopoly.

Multiple lawsuits have recently been commenced in the USA against Google in relation to anti-trust – basically anti-competitive behaviour, misusing it’s stronghold on search advertising and other online advertising to retain it’s stranglehold on the market share. An interesting article in Business Insider describes the impact of a similar court case against Microsoft 22 years ago, which Bill Gates has given for the reason that the Windows phone did not succeed, and he ultimately stepped down as CEO.

In 2020, Apple was forced to payout millions of dollars to iPhone customers due to slowing down older phones via software updates, without telling customers that is what their updates were going to do, which resulted in many customers purchasing newer phones.

In August 2020, litigation against Apple was commenced for antitrust violations and anti-competitive behaviour in relation to removing the game Fortnight from their app stores. Apple took this action when Epic Games launched a new version of their game app which processed payments for in-app purchases on their own platform, rather than using Apple in-app purchasing, in contravention of Apple’s terms and conditions. Epic Games has been pushing back against the 30% cut of sales that Google and Apple take from purchases made through the app stores. Apple has since announced a reduction of the commission to 20% for small businesses.

Amazon is under fire for the way it allows harmful products to be sold through it’s marketplace, and then claims that they are a mere facilitator of a sale, despite the fact that they promote the product, warehouse the product, take the order, and deliver it to the customer. Though perhaps Amazon isn’t too concerned given the significant increase in revenue they achieved on the back of the pandemic.

Opportunities:

  • Make sure that you capture information about your contacts, such as their phone number and email address, so that you can market to your audience outside of social media and Google remarketing – thus controlling your message and reducing your advertising spend.
  • Stand out by advertising in lesser known digital locations to reduce your dependence on Google, which will also reduce the monopoly of Google.
  • Keep a close watch on your Google and Facebook PPC configuration and level of spend, to ensure you are getting the best ROI.
  • Stand out by advertising your products and services is non-digital ways – consider local radio and billboards – these may also be cheaper forms of advertising right now with the reduced number of commuters on our roads.
  • Build a local, physical community around your products and services, focusing again on grass roots and communities, rather than the masses.
  • Build an application that provides an alternate to the USA hosted big tech solutions, for a niche market.
  • Ensure that the way you describe your products and services makes it clear where they are made, what they are made from, who its sales are supporting etc.

Free Speech and Accurate Reporting

Newspapers have all but been replaced by digital versions. Media organisations around the world are under continual pressure to retain their place in society, with everyone having a voice in social media, and “social influencers” having potentially more sway than the voice of soundly researched news.

The more recent censorship of Donald Trump by social media giants should send fear into the hearts of any advocate of free speech and democracy. This was perhaps a result of the July 2020 boycott of Facebook by many large advertisers as a protest against hate speech and misinformation published on the platform. The boycott by mostly very large advertisers only reduced Facebook’s revenue by around 12% for that month, and the linked article mentions that many of those who boycotted will be back at the same level of advertising after July because they are so reliant on the traffic it brings them.

Amazon is also involved in the furore, having terminated the web hosting services provided to Parler, an alternative social media platform also around the events leading up to the inauguration of Joe Biden.

The Australian government is seeking to force Google and Facebook to negotiate a fair payment with news organisations for using their content in Facebook’s newsfeed and Google’s search, rather than just benefiting from these news sources and using them as a free service. The Treasury Laws Amendment (News Media and Digital Platforms Mandatory Bargaining Code) Bill 2020 was tabled by the treasurer, Josh Frydenberg, in the last sitting week of 2020. It is hoped that the required payment from Google and Facebook for using the news, will help the media companies make up for their dramatic loss of income from the sale of ads, which has moved largely over to Google and Facebook, and sure up the ongoing provision of quality local news. France and the UK have similar changes underway. You can read more about the code that is seeking to give Australian News Media Companies a framework within which to negotiate with the tech giants via this article: Australia is making Google and Facebook pay for News – what difference will the code make?

Opportunities:

  • Niche community building tools that don’t require Facebook membership to operate.
  • Build relationships with local media and journalists to make it easier for your news to reach the world through traditional media channels.
  • A potential backlash against Google and Facebook advertising may see a return to Australians consuming more online news, and therefore more likely to see your ads within their publications.
  • Don’t be afraid to advertise in lesser known platforms – these may give you more cut through of your message, and give you access to new audiences.

A replacement internet?

As this article in the India Times states, Tim Berners-Lee (father of the internet) has expressed his distaste at how major corporations have taken what was supposed to be a free environment and placed restrictions on it. He doesn’t like how groups like Facebook, Google, and Amazon have effectively centralized the Internet, nor how they control people’s data. So he’s instead working on a new platform and startup that’s declaring war on Big Tech. The new platform is called Inrupt, and is based on people who use it controlling all their own data via a pod rather than having your data harvested and controlled by the big tech companies.

Berners-Lee is making the platform open source and isn’t looking to make money out of it. He plans to tour across the globe over the next few months, tutoring developers on how to build their own decentralized apps using Inrupt. So here’s another opportunity waiting for startups!

Where else do you see opportunity arising from the pressures being applied to big tech?

Facebooktwitterredditpinterestlinkedinmailby feather

Subscribe to our monthly

Contactpoint Email News

Our enews is sent out approximately monthly, and contains information on latest digital technologies, and how these can be used to help your organisation grow.

To subscribe, simply fill in your details below: