Google recently experimented with the impact of news content on ad revenue in eight countries in Europe. The test was to deny European news content from the search results to 1% of users in Belgium, Croatia, Denmark, Greece, Italy, the Netherlands, Poland, and Spain for two and a half months. The test aimed to provide information regarding the economic value of news content in Google products, particularly under the European Copyright Directive, where Google was asked to pay news organizations for use of segments of their content.
The result of the experiment was that removing news content from Google had no measurable impact on the ad revenue of Google. Specifically, there was no reduction in search ad revenue, and total ad revenue across Google properties, including the ad network, didn’t shift. But Google Discover experienced a statistically significant 2% reduction in revenue, though this feature is only moderately important to Google’s overall revenue.
Google clarified that the marginal decrease in usage of around 0.8% was from searches that generated very little or zero revenue, so the lost usage was not very significant in revenue generation. The company assumed that European news content in search has no measurable impact on its ad revenue, which implies that news is not a critical component of its ad business.
The test was among Google’s efforts to comply with the European Copyright Directive and to provide information to publishers and regulators. The firm has negotiated payments to news publishers in the EU and introduced an Extended News Previews licensing program to thousands of publications across a number of countries. However, Google has faced setbacks, including antitrust lawsuits in France, for which it was fined for breaching intellectual property regulations for publishers of news media.
Google’s findings may guide its talks with European publishers regarding the value of news content. The company argues that the value of news to its ad business has been grossly overstated. But such an argument may invite even more regulatory scrutiny, as Google has already had to pay huge penalties and face criticism for how it handles news content.
The trial initially had France on board but was put on hold due to disagreements with the competition agency in France. Germany also was not part of the test. Google’s handling of news content is what has sparked complaint, and policymakers and news publishers in the close attention want to know how much weight the company places on paying for news content incorporated in its offerings.
Google’s commitment to keeping the news ecosystem alive has not flagged, however. The company emphasizes its mission of bringing publishers and readers together with new technologies. But the controversy over the economic value of news content and whether it needs to be paid continues, and Google’s experiment provides fresh grist for those mills.
