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What Do News Aggregators Do? Evidence from Google News in Spain and Germany

Author

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  • Joan Calzada

    () (Department of Economics and BEAT, Universitat de Barcelona, 08034 Barcelona, Spain)

  • Ricard Gil

    () (Smith School of Business, Queen’s University, Kingston, Ontario K7L 2P3, Canada)

Abstract

The impact of aggregators on news outlets is ambiguous. In particular, the existing theoretical literature highlights that, although aggregators create a market expansion effect when they bring visitors to news outlets, they also generate a substitution effect if some visitors switch from the news outlets to the aggregators. Using the shutdown of the Spanish edition of Google News in December of 2014 and difference-in-differences methodology, this paper empirically examines the relevance of these two effects. We show that the shutdown of Google News in Spain decreased the number of daily visits to Spanish news outlets between 8% and 14% and that this effect was larger in outlets with fewer overall daily visits and a lower share of international visitors. We also find evidence suggesting that the shutdown decreased online advertisement revenues and advertising intensity at news outlets. We then analyze the effect of the opt-in policy adopted by the German edition of Google News in October of 2014. Although such policy did not significantly affect the daily visits of all outlets that opted out, it reduced by 8% the number of visits of the outlets controlled by the publisher Axel Springer. Our results show the existence of a net market expansion effect through which news aggregators increase consumers' awareness of news outlets' contents, thereby increasing their number of visits.

Suggested Citation

  • Joan Calzada & Ricard Gil, 2020. "What Do News Aggregators Do? Evidence from Google News in Spain and Germany," Marketing Science, INFORMS, vol. 39(1), pages 134-167, January.
  • Handle: RePEc:inm:ormksc:v:39:y:2020:i:1:p:134-167
    DOI: 10.1287/mksc.2019.1150
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    References listed on IDEAS

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    Cited by:

    1. Magnusson, Evan, 2021. "Local news in Google News: a response to Fischer et al. (2020)," MPRA Paper 106431, University Library of Munich, Germany.
    2. Julia Schmitt & Klaus M. Miller & Bernd Skiera, 2021. "The Impact of Privacy Laws on Online User Behavior," Papers 2101.11366, arXiv.org.
    3. Mantovani, Andrea & Piga, Claudio A. & Reggiani, Carlo, 2021. "Online platform price parity clauses: Evidence from the EU Booking.com case," European Economic Review, Elsevier, vol. 131(C).

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