TMW #029 | A tale of two tech giants and the news, Shopify’s newest integration and media as a unique asset class

Feb 21, 2021

Welcome to The Martech Weekly, where every week I review some of the most interesting ideas, research, and latest news. I try to look to where the industry is going and make sense of it all.

👋 Why you should sign up

There are two versions of TMW, the full version for subscribers and a 50% version that's for everyone. You are reading the 50% version. Sign up to get the full version delivered every Sunday for this and every TMW. Learn more here.

Good afternoon to new subscribers from Melbourne, Sydney, San Francisco, Bangkok, Berlin and Warsaw!  

Every once in a while in your career you have a really consequential week, one of those weeks that has the potential to impact the future outlook of your career. With the outcome of the news media bargaining code and FB&G’s diverging responses, it has been one of these weeks for many who work in media and news, along with the countless agencies, developers and consultants who power the underlying digital infrastructure that runs news media online.

I’ve taken a considerable amount of time this week to look at a few important perspectives on the news media bargaining code, some interesting trends, and a few key indicators for what it all means for the future of digital media on the internet. But not only that. There’s the usual 20+ links to the other important Martech stories, research, and ideas.

👇 Here’s everything you’ve missed in marketing and tech this week.

🎤 New MSoM Episode: Ben May and the news media bargaining code's impact on the digital industry.

Thanks to everyone who shared the first every Making Sense of Marteh podcast episode last week! While everyone has been debating the politics and ethics of Facebook and Google’s responses to the news media bargaining code, I wanted to understand the impact on how digital publishers big and small will approach their use of technology and data into the future.

In this episode of MSoM, I'm joined by Ben May the Founder and MD of The Code Company and Co-founder at Publisha. We talk about the downstream impact of the news media bargaining code and how it changes how publishers do business. Ben has over a decade of experience working with news publishers and media businesses in Australia, building the digital solutions that make news publishers run on the internet. We talk about how media companies should approach Google’s News Showcase from an audience, discoverability and data front, the idea of a walled garden approach to hosting news, the real value of Facebook audiences for publishers, and how media companies are already investing in deleveraging the influence and risk associated with big tech.

Podcast links, show notes, resources here: Link

✍ Commentary

❌ A tale of two tech giants: FB&G’s divergent approach to the news media bargaining code.

I was reminded of a quote this week by French poet and politician, Alphonse de Lemartine who commented on how newspapers will disrupt book publishing in 1831:

Thought will spread across the world with the rapidity of light, instantly conceived, instantly written, instantly understood. Thought will not have time to ripen, to accumulate into the form of a book - the book will arrive too late. The only book possible from today is the newspaper”

Lemartine’s perspective is a 200 year old way to explain what is happening today with big tech, news publishers, and the internet. You could almost replace Lemartine’s last sentence to say that the only newspaper possible today is on Google. (Warning, big essay below 👇, If you’re interested in things other than the news media bargaining code, skip ahead).

Much of this past week has been dominated by the news of Facebook and Google’s decisions in response to the news media bargaining code legislation in Australia. There’s plenty to unpack here, but before we do, let’s look at the current state of play. The bargaining code is not a form of regulation, but to settle the perceived anti-competitive behaviors of big tech which has significantly diminished the fourth estate over a decade. The code requires Google and Facebook to bargain with the news publishers, like Newscorp to come to a deal to pay these news publishers for links displayed on their platforms. That’s it - not snippets or hosting news, just the links. This is obviously a nonsensical law, particularly for Facebook (how could they ever control the number of links shared by users on the newsfeed?). But here we are. It’s kind of asking you, the awesome readers of TMW to pay me every time you forward this email to your colleagues. Does that make sense? Of course not! The idea is that Facebook and Google benefit from those links as they create audience engagement and overall value. Some call it a link tax, which it is, but really it’s more about the cost of doing business in Australia where news publishers have significant sway in the political life of regulators and the treasury.

What happened next highlights that every single party involved in this deal has made a bad decision, it’s quite breathtaking, really. In response to the code, Google launched Google News Showcase, its own platform (like a Medium) for news. They have already done licencing deals with the most notable news publishers, like Nine News for a speculated annual spend of $30M. Google is now paying the bill for news, but in so doing they’ve also made a significant investment into owning the audience, data and experience of news publishers, but also breaks the dynamics of search where everyone loses in the long term except for Google. If you don’t have a deal with Google then you will be able to take part in Google News Showcase, which reduces your discoverability in search, but if you end up doing a deal with the devil, then you forfeit a sizable chunk of direct access to your audience, a portion of the end user experience and most importantly the data you collect on the people who consume your news. Also there’s a problem with the incentives the new platform will create for the fourth estate. If you’re receiving millions each year to host your content on Google’s platform, what will happen next when a news publisher has a significant scoop on one of many of Google’s ethical missteps? Google’s already winning the race to create news platforms that takes away control from the publishers. This is because news is a big part of their platform proposition, and is a treasure trove of audience data that you can’t get anywhere else, like people who regularly read political news or gossip rags. That’s important.

This is not the case with Facebook, as they’ve demonstrated by responding to the Australian government by taking the nuclear option and shutting down all access to Australian news globally, and also restricting news content availability in Australia. This is effectively the de-platforming of an entire industry. They’ve also managed to do this while banning their own news page, and shutting down many small businesses who depend on Facebook’s advertising features and organic reach to get customers. If you survey the past five years of investments, acquisitions, and product development an important trend emerges - Facebook sees the news industry as a high effort and low-leverage aspect to their business. What does it tell you when in 2018 when Facebook limited the reach of business pages to promote personal accounts or when Facebook announced Libra, a cryptocurrency that would run commerce across their platforms, when Instagram integrated shopping features directly into the app or even when Facebook launched marketplace globally? It tells me that the future of Facebook is in social commerce, not social media Facebook is transforming from a public square to a marketplace and it has been quietly disrupting these industries over time. For years in Australia the most prominent used goods marketplace was Gumtree. Facebook’s marketplace swiftly ended that company. This recent move by restricting access to news could be understood as a big experiment. Australia is so removed from the rest of the world, that it can act as kind of a fish bowl to experiment with plays like this by Facebook to help the company get to its goal of controlling commerce at a global scale. And while the company is building Facebook news platforms, like the one in the UK, and investing in that space, it won’t be able to compete with the likes of Google News Showcase or even Apple news - two companies with a far greater reputation for quality information. The news media bargaining code may have something good come of it that no-one could have anticipated - less misinformation and cult formation on the platform and more actual value exchange. At the crux of Facebook’s business is the advertising company, which will optimize for time spent and not value spent, or quality time and misinformation is a big problem for the company creating regulatory and antitrust issues that go nowhere. The outcome here is a look into the future Facebook really want’s for itself - dominating the commerce sphere, as Wechat has done in China. This will create many losers, but it might just be what society needs to balance how information flows around the web without Facebook’s contribution.

So in short, Google is working towards disarming news publishers by taking control of the experience, discoverability, data and quite possibly the customer all together. And Facebook are showing us where they are going next - becoming the social commerce business it really wants to be. Both responses position both companies into greater shares of economic power.

Now’s the time to really think about the competitive threat that FB&G really is to companies that sell anything online. The problems that exist with the news industry are now, but what’s next? AU Govt  Explanatory Memorandum. Facebook Statement. Google Statement. Analysis on Facebook, Google, Both.

🛒 Shopify extends Shop Pay to Facebook and Instagram. Here’s another proof point on how social media is becoming the center of digital commerce. For years Facebook has been the most popular channel for Shopify merchants to find and convert their audiences and in 2020 the reliance merchants have on both platforms has increased exponentially. Consumers spent a total of $120 Billion on the Shopify platform last year, which is almost double that of 2019. Shop Pay, the payments gateway native to Shopify, is now used by over 40 million buyers and is growing rapidly as it’s quickly becoming the fastest, most tightly integrated experience for Shopify sellers, with the brand indicating that the CVR of Shop Pay is 1.72 x higher than other payment gateways. The use case for the partnership with Facebook and Instagram is interesting; it allows Shopify merchants to display Shop Pay as a payment option right in the Instagram app, allowing customers to checkout without leaving the Facebook walled garden and also giving consumers the payments experience they are already having on online stores. One of the hallmarks of Shopify’s growth is the ability to empower retailers to build and own the end to end customer purchasing experience online with just the right amount of platform standardization (for example, it’s really hard to customize a Shopify checkout), with complete customizability and ownership of web and transactional data. This integration is an investment in the other direction -  less ownership of the experience, the data, and customer journey. You can literally stand up an eCommerce store with a Shopify and Instagram account, which helps accessibility, but at the end of the day, who owns the customer? Link

📈Chart Of The Week  

How the newspaper industry collapsed. Sign up here to get a link to the full version and the chart. You won't be disappointed.

📰 Latest Developments

Hubspot reaches 100k customers. What started out as a smart CRM solution for SMEs and startups has ballooned into a business driving more than $1B in recurring revenue. Hubspot had a unique approach to content marketing and integration that is only perhaps paralleled by Salesforce. A good company to watch. Link

UI Path raises $750 million to strengthen automation play. I literally never heard of this company until I read that the latest round puts them into a valuation of just over $10B. The company is building tech like RPA (Robotic Process Automation) which is a no-code way for people in enterprise companies to build bots that utilize user interfaces to complete repetitive tasks. Link

Census, a US-based data ops business gets backing from Sequoia. This company is trying to reinvent the way in which apps, services, and analytics are connected to data warehouses. Their MO is “why can’t companies just run all of their operations from a Data Warehouse?  It’s a new way to look at the problem of data infrastructure. Link

📚 Reading

Shifting towards seeing mobile apps as a customer utility. Complete transparency - my boss at The Lumery wrote this piece, but it’s an important conversation to have on the place of a mobile app for brands that have just started investing. Apps are usually seen as a channel to marketers, but for the companies pacing ahead in digital, it is the central hub in which a customer can experience the brand. Link

Is personalization helpful? A perspective from Gartner on how customers understand the value of having a personalized experience - it must help them in tangible ways. The view here is that personalization has more opportunities as a service function than a marketing function. Link

No one cares about your framework. The Martech landscape is filled with frameworks of all shapes and sizes, with consultants pitching to use a new framework of methodology for ideation or goal settings and for all of the other ways people are organized. This perspective from Ben Moiser looks at how frameworks are adopted in organizations. The first step is to stop trying to make people care. Link

🔢 Data & Insights

Consumer trust in digital impacted by pandemic. Some great research from Okta on how Australians understand what companies do with their data. 57% of people surveyed said that they have become more cautious about providing personal information to brands. Link

Data maturity benchmarks. Deloitte, in collaboration with Google, have created a tool to measure your digital data maturity against your company’s peers. This is focused primarily on retailers, but there are some interesting aspects to how this was constructed, the report looks at things like strategic direction, UX, and emerging monetization opportunities. Link

💡 Ideas

A mentor list for those working in ad agencies. This was in response to some platforms asking mentees to pay for a connection with a mentor. A few people got together and created their own list in a Google doc with some of the world’s most prominent people in advertising. Link

Free code camp. The company provides a 3,000 hour learning curriculum completely for free and is currently fundraising to bring in data science too. Sometimes the internet is a wonderful place. Link

Microquiz. A newsletter designed to ask you a question on a digital topic and then give you the insights the following week. It’s one of those things that benefit from scale economies - the more people subscribed the better the insights. Link

✨ Weird and Wonderful

The website design style that’s had its day. Most websites use a certain type of illustration style, and it used to be cool, but now it’s just old and lazy. Link

Losses to romance scams. A report on the use of social media to exponentially increase the number of romance scams happening on various platforms, reaching $304M in reportable money lost by its victims. Link

How web browser popularity changed over time. Do you remember when Internet Explorer completely disrupted Netscape? I had no idea that IE was so popular for so long. Link

Stay Curious,

Make sense of marketing technology.

Sign up now to get the full version of TMW delivered to your inbox every Sunday afternoon plus an invite to the slack community.

Want to share something interesting or be featured in The Martech Weekly? Drop me a line at

Juan Mendoza

Juan Mendoza is an expert in researching global media, marketing, data, and technology trends. He is the CEO of The Martech Weekly, a media and research brand with subscribers in over 65 countries.

Great! You've successfully subscribed.
Great! Next, complete checkout for full access.
Welcome back! You've successfully signed in.
Success! Your account is fully activated, you now have access to all content.