**News Industry Faces Revenue Drain as “Funnel” Effect Redirects Ad Dollars**
(The “Funnel” Effect on the News Industry: Stealing Advertising Revenue)
Major technology platforms are reshaping how people find news. This change creates a significant problem for traditional news publishers. Experts call this problem the “funnel” effect. It is steadily draining vital advertising revenue from news organizations.
People increasingly discover news content through social media feeds and search engines. These platforms act like wide funnels. They capture massive online audiences first. The news articles themselves reside on the publishers’ own websites. But the discovery happens elsewhere.
This setup hurts publishers financially. The big tech platforms control the initial point of contact. They capture most user attention and data at the top of the funnel. Advertisers naturally want their ads seen by large audiences. So they place their ads directly on these dominant platforms. They pay Google, Meta, and others for ad space.
Publishers see their own website traffic suffer. Less direct traffic means fewer people see ads on the publishers’ sites. Advertisers spend less money there. The platforms get the big ad dollars. Publishers lose income. This imbalance is stark.
The effect is simple. Tech giants capture the audience. They also capture the advertising revenue linked to that audience. News publishers create the content. But they get squeezed out of the revenue stream. Their content fuels the platforms. Yet the financial return is minimal.
(The “Funnel” Effect on the News Industry: Stealing Advertising Revenue)
This situation creates intense pressure. Newsrooms face budget cuts. Some publications close. The ability to fund quality journalism weakens. Industry leaders are vocal about the problem. They argue the current system is unsustainable. They seek solutions for fairer compensation. The debate continues. The revenue gap remains wide.