John McLellan: could Amazon swallow up Facebook and Google?

The threat from Facebook and Google to media companies, one of the main themes of Channel 4 newsman Jon Snow's impassioned address to the Edinburgh TV Festival last week, is real enough but a threat to their might is looming.

'First Craigslist and Gumtree came for newspapers, then Facebook and Google came for TV and radio, then Amazon came for them,' writes John McLellan. Picture: Phil Wilkinson
'First Craigslist and Gumtree came for newspapers, then Facebook and Google came for TV and radio, then Amazon came for them,' writes John McLellan. Picture: Phil Wilkinson

Snow’s demand for the tech vampires to cough up taxes which reflect the millions they suck from the UK’s advertising markets is justified but will do little for publishers and broadcasters who are virtually powerless as media-buying agencies continue to herd clients towards them because of the precision targeting of tailored audiences they offer.

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The most likely challenge to the duopoly will come not from HM Revenue & Customs but other tech-based giants like Amazon and Rakuten who use similar digital communication tools to understand their customers. But unlike Google and Facebook, where communication is the product, for them communication is the means by which goods are sold. Control the communications and you control the markets, so, having bought Whole Foods, Amazon quietly launched a tool to encourage YouTube “influencers” – individuals who have a big enough network to impact on traffic and spending patterns – to join its own influencers programme.

So, as Amazon continues to devastate high streets by delivering vast ranges of cheap goods to doorsteps within hours, it now has a television channel and a social media programme targeted at the highest-value users. This gives it the potential to become the ultimate one-stop shop, offering a communications, marketing, transaction and delivery package to link manufacturers directly with customers in a way that Google or Facebook can’t match.

Why then, Amazon can legitimately ask, should we pay millions to Google and Facebook when we know more about our customers’ buying patterns than they do? This not only poses a threat to the tech vampires, but the media-buying agencies who have made fortunes advising firms where to spend their marketing budgets.

The media buyers will deny they could become less relevant but it’s by no means impossible when all Amazon needs to do is recruit its own media advisers and the chain will be complete.

Few disagree that the public needs media channels independent of the buying chains, those trusted environments where information is untainted and balanced judgments can be reached. But as agencies continue to culvert clients’ cash to Facebook and Google, by the time they wake up to the threats to their business, it could be too late because the agencies will have helped destroy the options.

First Craigslist and Gumtree came for newspapers, then Facebook and Google came for TV and radio, then Amazon came for them.

• John McLellan is director of the Scottish Newspaper Society and a City of Edinburgh Conservative councillor