Bernard Ginns: History a good guide in global war for advertising spend

EVER BOUGHT anything from Twitter?

Me neither. But I bet you, like me, get annoyed by its increasingly irritating advertising placements.

Have you ever made a meaningful connection on LinkedIn?

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The best business relations begin in person. For all the benefits that digital networks bring, face-to-face meetings trump all others.

You can get the measure of someone more quickly in person than you do online, where a gift for language and presentation can obscure any number of warning signs.

The wider struggles facing social media sites like Twitter and LinkedIn were laid bare last week when the two companies shocked tech investors in Wall Street when they reported a surprising slowdown in advertising growth.

Shares of LinkedIn Corp, owner of the leading social network for professionals, fell 20 per cent on Friday after the company slashed its full-year forecast, wiping a staggering $6bn from its market value.

The poor results followed Twitter Inc’s weak showing, which led to stock falls by as much as 24 per cent, slicing about $6bn off its market value.

Both companies lost up to a quarter of their market capitalisation, suggesting that the hot air might finally be starting to escape from the tech bubble.

But according to the Pink ‘Un, the travails of LinkedIn and Twitter highlight the split between the strongest companies in the sector and the rest.

The Financial Times reported that Google and Facebook are capturing the lion’s share of digital advertising dollars - each reach more than 1bn users a month - and their dominance will only increase.

With power comes responsibility - or certainly the expectation from others that responsibilities will be exercised in a meaningful way. Sadly, the lesson of history tells us that those in power cannot help but abuse their position.

Once, Rupert Murdoch was the most powerful man in Britain. His papers used to call general elections. Today, as Labour leader Ed Miliband tells us, the Dirty Digger (Eyes passim) is not as powerful as he used to be. Still, his titles do bear influence on what people think, particularly among the class of people who still read newspapers, who tend to be those who run or own institutions.

The Sunday Times’ new business columnist, Luke Johnson, took aim this Sunday at the US tech giants in a lament for the fading world of Adland, where “advertising is based less on leaps of creative faith, and more on research and analytics”.

Mr Johnson, the chairman of Risk Capital Partners, said the almost entirely automated digital advertising players like Facebook are “eating the lunches of the admen of Madison Avenue and Soho”.

He argued that “giant parasites such as Google, which invest nothing in content and contribute negligible amounts towards Britain’s creative industries”, have disembowelled the traditional ad and media profession and he expressed astonishment that big media owners in Britain have stood by and watched as Silicon Valley’s content-scraping pirates “looted their franchises”.

Mr Johnson said: “The technologists are vicious about protecting their patents, but have to be brought kicking and screaming to respect artistic copyright.

“At least the EU has recently justified its existence by filing charges against Google for anti-competitive behaviour.

“Here’s hoping those claims are upheld, and Google is forced to disgorge some of its protection-racket style profits and reform its monopolistic practices.”

Google, no doubt, strongly disagrees and has told me it is “welcoming the opportunity to present the facts” to the EU.

This is a kind of war, make no mistake.