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Facebook has announced it will offer $100 million to support the news industry as the coronavirus pandemic continues to strangle businesses in all corners of the United States. That money, $25 million in grants for local news organizations along with a $75 million marketing buy, will act as financial aid for newsrooms hit with declining ad revenue due to the virus.
“Local news is really important here. People need to know what's happening in their local area, both from a health perspective and economic perspective, knowing what things are open,” Facebook (FB) COO Sheryl Sandberg told Yahoo Finance.
“Journalism is hugely important all the time, but it's probably never been more important than it is right now, when people really need critical information about what's going on,” said Sandberg. “That means that those businesses have to be supported. So we're doing it by spending money and we're doing it by granting money.”
Declining ad revenue has plagued local news for years, with many publishers laying the blame squarely at the feet of Silicon Valley’s tech giants. According to consulting firm PwC, Facebook and Google alone made up nearly 60% of U.S. online ad revenue in 2018. Now, despite a surge in online readership and a bigger television audience, local news organizations stand to lose even more as the coronavirus forces companies to reevaluate their marketing strategies.
“This is a major economic challenge,” Sandberg said. “I think you're right that marketers are afraid to put their ads up, but it's also that a lot of businesses are closed... airlines are empty, hotels are empty or closed. So there's a lot of marketing spend that's not happening now and that’s certainly going to hit our business.”
The latest projections show U.S. ad spending to fall nearly 3% this year, with traditional media (TV, print, radio, outdoor) declining by 12% according to Magna. Facebook’s investment aims to drive home the message that “local journalism is a vital public service,” and the company is doing what it can to give the industry a much-needed boost. It also builds upon funding the social network had already committed to news programs and partnerships back in January 2019 – $300 million over three years.
“We want to support small business and support news organizations around the world,” Sandberg said. “I think we also have to realize how quickly the situation is evolving. We don't know what will happen next and that means we need to be really nimble. We need to be focused on keeping our services up and making sure people get the right information.”
Nick Rose is a producer for Yahoo Finance.
Read more from our Sheryl Sandberg interview: