The Fourth Industrial Revolution represents a fundamental change in the way we live, work and relate to one another by merging the physical, digital and biological worlds. To stay ahead of the curve, leaders need to keep an eye on the intersection of media, advertising, technology and regulation. Kinga Incze, Founder & CEO of Mediaspace.global, shares her views on challenges and opportunities in 2024.
I don’t know about you but the last time I saw this scale of change was in the 90’s.
As the winner of the European Media Academy at Universal McCann in 1998, I spent some time working at the New York office where it was most futuristic to see my colleagues booking seats in after-work pubs via internet sites. Not phone calls, not emails, but websites!
This was the year when Google search was born and 6 years later was Facebook – just to highlight the speed of change which now presents a very different market than 25 years ago.
The past 25 years of disruptions and opportunities related to the platform economy, media and advertising space is all history now. And while the past quarter of century was not enough for media industry and related regulations to totally catch up with the first wave of digital disruptions, here we are, at the next phase of an even more complex disruption by artificial intelligence (AI).
So, let’s take a look at some facts and figures first.
Follow the money
While the aggregated media company growth index is 114 (meaning +14% revenue) between Q3 2023 vs Q1 2019, gatekeeper platforms (the ones designated gatekeepers under the EU Digital Markets Act) could reached an index of 235 and smaller platforms achieved an index of 210.
Segment-level revenue changes, Q1 2019 – Q3 2023
Market power differences between walled gardens vs open web players
“Digital personal data is increasingly framed as the basis of contemporary economies, representing an important new asset class. Control over these data assets seems to explain the emergence and dominance of so-called “Big Tech” firms, consisting of Apple, Microsoft, Amazon, Google/Alphabet, and Facebook.” — Academic researchers Birch, Cochran and Ward (2021) analysed the transformation of personal data into an asset in order to explore how personal data is accounted for, governed, and valued by Big Tech firms and other political-economic actors (e.g. investors).
Their findings show that Big Tech firms turn “users” and “user engagement” into assets through the performative measurement, governance, and valuation of user metrics (e.g. user numbers and user engagement), rather than extending ownership and control rights over personal data per se.
This visualisation of Similarweb traffic data by by The Visual Capitalists illustrated the size and concentration of traffic by the top websites, with which the billions of websites in the ‘long tail’ try to compete for eyeballs and revenues.
This new layer of digital players highlights the change in market structure. These global platforms have significantly more revenue and audience than their predecessors – do you remember the old days when all concerns around media concentration and market power were related to TV and print news corporations?
2024: storm in the rough sea
In 2024 we’re in the process of new regulatory frameworks becoming reality to ensure that every company plays by equal rules when it comes to competition, copyrights, tax, data and privacy after a digital ‘Wild West’.
Implementation of new regulations for the digital era so far don’t seem to be particularly fast and effective. The 5-year-old GDPR did start a new wave of privacy regulation beyond the EU, but it results in an ever more fragmented and complicated world. Google’s intention to increase the level of privacy by deprecating 3rd party cookies (Google Privacy Sandbox) might further increase their own competitive advantage vs publishers according to Movement for an Open Web, hence the UK Competition and Market’s Authorities monitoring of Google Privacy Sandbox with a global scope.
Also the 5-year-old EU’s Copyright Directive would need revision and it appears hard to implement. For example, French publishers need competition authority interventions, the German use arbitration boards, etc. With a fragmented market of publishers, the platforms ‘divide and rule’ approach works well for them to either avoid or postpone copyright fee payment for as long as possible.
It’ll be interesting to see the latest wave of EU digital regulations (Digital Services Act and Digital Markets Act) in action (also the Data Act and AI Act) and new ones in the UK, too.
So, on one side, fundamental changes are happening in terms of advertising targeting, monetisation, privacy, competition and other areas like sustainability regulations and commitments, not to speak about AI – and these all look very complicated. On the other side, the SME-friendly advertising solutions of the ad duopoly are still unbeatable because the open web’s programmatic advertising systems follow the old sophisticated way which does not let most SMEs manage their own targeted campaigns.
New winds
If you’re a lawyer you’ll most probably not agree with me, but I miss speed and market monitoring from regulations and policymaking. I also think simplicity on global and interdisciplinary regulatory frameworks should come next.
A few years ago it was unimaginable to get platforms to pay tax equally, but now the OECD’s initiative of the global minimum corporate tax is on its way to stop tax optimisation & avoidance by global companies (more here). So why not applying basic global rules in other areas, on top or instead of regional/national ones?
Half a year ago, when Canada’s Online News Act was born, Google and Facebook threatened to pull the news link – but in late November 2023 Google cut a deal with the Canadian government to pay Canadian 100M CAD annually. It’s a breakthrough that suggests simplicity, clear legislation and government-level acts work.
So, 2024 is another ‘transitional’ year where new challenges like AI, sustainability and unstable economies, dovetail with old challenges that have not really been fully sorted out.
Disruption of disruptors: a new dawn
AI has become widely well-known in 2023 via generative AI, but platforms and specialised companies have been developing, using and selling AI technologies for decades now. It means new, powerful technologies and business models.
OpenAI opened the bottle in 2023 and so a complex disruption has been started – for publishers and media players one of the most crucial elements is the disruption of search engines as it directly impacts on traffic sources and monetisation.
From market power perspectives, it’ll be very interesting to see if incumbent players will be able to transform and continue to thrive in the new era, or whether new players – like Google and Facebook used to be – will take the lead.
For publishers, new genAI platforms mean new opportunities, as well as copyright and monetisation challenges. It’ll be one of the key technologies when it comes to the convergence.
According to the definition by World Economic Forum, “The Fourth Industrial Revolution represents a fundamental change in the way we live, work and relate to one another. It is a new chapter in human development, enabled by extraordinary technology advances commensurate with those of the first, second and third industrial revolutions. These advances are merging the physical, digital and biological worlds in ways that create both huge promise and potential peril.” If they are right, media will be hugely impacted so we’re better off starting to think about what it means for our audience, our operation and business.
Takeaways for C-level decision makers
- Regulation. It’s worth keeping an eye on regulatory changes as there are fundamental changes in targeting, data and the platform-open web dynamics that might bring not only threats but opportunities, too.
- Innovation. It’s worth noting that the 4th industrial revolution is here and it’s worth having a strategic view on what the convergence of physical, digital but also of biological worlds mean for your business?
- Collaboration. Instead of the classic ‘direct’ competition approach it’s better to evaluate risks and opportunities based on market power vs potential allyship, as well as broader terms of substitutional products. YouTube and TikTok are video sharing platforms but indeed they are search engines, too. Publishers compete more with platforms for data and dollars than with each other. So, collaboration, allyship will be key in 2024.
- Community. In a complex world like ours in the 2020s, it’s even more important to join conversations with other leaders beyond our current circles in an interdisciplinary manner for insights, collaboration and business opportunities. In times of such quick changes it’s good to be informed and engaging in smaller, more personal professional conversations and communities are priceless. We’re humans, after all, whose intelligence to explore the world and get inspired via connections is hard to replace.
Kinga Incze
Founder & CEO of Mediaspace.global
About: Mediaspace.global is an award-winning platform (‘Most Engaging Tech and Media Sector Networking Platform’) with global monthly networking sessions, an invite-only Leadership Club premium membership, a MarketWatch section with market insights at the intersection of media, marketing, tech and regulation, and the annual invite-only Changemakers’ Summit. The organisation aims to burst professional bubbles by creating a global ecosystem connecting professionals in the form of a vertical social network in media, marketing, tech and regulation.
