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Call for digital authority to regulate Internet giants

8 August 2019

Call for New Zealand digital authority to regulate Internet giants

In the light of Australia’s moves to regulate Google and Facebook one digital agency boss – who depends on the two Internet giants for a large portion of revenue – is calling for New Zealand to follow suit, to address privacy concerns and ensure fairness for other media providers.

Kim Voon, head of digital marketing agency Insight Online, says there aren’t enough digital media options for New Zealand businesses and he’s worried that the monopolisation of the Internet will create a ‘haves and haves not’ environment for local business.

“Our agency uses these channels the most, they are great channels. But they’re really the only channels for most businesses in New Zealand There should be more choice. Australia reports that $71 out of every $100 would go to Google or Facebook. We have very similar numbers* -- that’s a lot of control over our media landscape.

“The monopolisation of the media by these digital giants allows them to put the squeeze on organic (unpaid) reach – anyone remember the days when posting something on your Facebook page would get shown to your followers without boosting? Or when you could see what organic keywords people were searching for to reach your website?”

“If there were even five options for online marketing, that would be amazing,” says Voon. “They could help keep each other in check. It’s might be overly optimistic. But lack of competition in the digital advertising space is long term bad for our businesses, it’s bad for digital marketing agencies and it is bad for our public freedoms, for example, privacy.”

“Mainstream news media advertising is very expensive. Search and social media is cheaper with more specific targeting, but these channels are maturing quickly, and their shareholders still demand high revenue growth. It is only a matter of time before costs increase, as they have in the last few years, while opportunities for organic reach are reduced or shut down.”

Voon said it is very difficult for local authorities to exert control over a global conglomerate, but it is also unprecedented for US companies to have so much control over the media in New Zealand.

Relying on Internet giants to police themselves is giving authority to a private business that is focussed on profit maximisation.

“We need a Government agency – that is answerable to elected politicians – in charge of policing the digital landscape. So long as a monopoly exists, businesses and customers will pay more. Organic reach will get harder and harder and we will soon be living in a future where the Internet is unaffordable to most businesses.”

Voon said in the interim businesses should get smart with their online strategy and cultivate various options to keep costs down.

1. Advertise to people who know your brand or business

He says the biggest cost of advertising is when a company advertises to a cold audience.

“Advertising to a cold audience will consume 70 -80 per cent of your budget. The cheaper option with a better return-on-investment (ROI) is to advertise to people who have at least heard of your brand before.

“This may include remarketing or re-targeting. The default time on Google’s remarketing list is 30 days, but it may be useful to extend your time to 40 or 60 days if you have a longer buying cycle.”

Advertising to an audience of people who have heard of your brand is much cheaper and may only cost $100 compared to $1000 to reach a similar size audience that has never heard of your brand.

2. Be flexible in your advertising options

“Email is always good, but it comes down to building your list. The best way to do that is to give away some of your intellectual property for free e.g. inbound or content marketing.”

Voon said the thing to remember for businesses is that people buy from people, and channels like Google and Facebook are a means to an end but not the end itself.

“Don’t think of your marketing being defined as channels but in terms of reaching and connecting with people. Figure out different ways to reach them.”

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