Mail publisher urges CMA to take ‘decisive action’ on Duopoly’s ad market dominance or news industry ‘won’t survive’

Sep 12, 2019 | Social Media Marketing | 0 comments


The publisher of the Mail titles has urgedprompt and decisive action” over Facebook and Google’s dominance of the digital advertising market.

DMG Media warned the news industry will “not be able to survive much longer” if action is not taken.

The warning came in the publisher’s response to the Competition and Markets Authority’s investigation into whether competition in the digital advertising market is “distorted” by the digital Duopoly.

The study will look at “the sources of any market power, the way they collect and use personal data, and whether competition in digital advertising is producing good outcomes for consumers”.

DMG Media was among a number of publishers and broadcasters – including Guardian Media Group and Channel 4 – to support a potential “ex ante regulatory regime to regulate the activities of online platforms” as suggested by the CMA in its statement of scope for the investigation.

“Such a regime would look to encourage greater competition in both consumer-facing and digital advertising markets and would likely take the form of proposals for legislative change,” the competition watchdog said.

In its submission, published yesterday, DMG Media said the CMA’s market study, due to be published on 3 July next year, should take “prompt and decisive action” if the digital ad market is “not found to be working well”.

DMG Media told the CMA there is a “high degree of urgency in ensuring that the revenues of digital advertising are not appropriated by digital platforms at the expense of news publishers”.

It noted that “very few” UK news publishers have been able to turn a profit “as digital advertising revenues are overwhelmingly appropriated by digital platforms”.

The company noted that although Mail Online is the largest English language newspaper website in the world with an average of 172m monthly unique visitors, this has “not been matched by similar exponential growth in advertising revenue”.

The company therefore remains reliant on print revenues and particularly cover prices, even though Mail Online has been profitable since the last quarter of 2017.

DMG Media added: “The news publishing industry will not be able to survive much longer in a situation where digital advertising revenues are almost entirely captured by the Google/Facebook duopoly.”

Transparent algorithms

DMG Media also asked the CMA to analyse how digital platforms’ algorithms operate and ensure they function in a “fair, transparent and non-arbitrary manner” through “adequate remedies”.

A Google algorithm update made on 3 June led to Mail Online seeing a “very significant” 50 per drop in search traffic across all its content categories, resulting in a “significant loss of revenues”.

Calling for the Duopoly’s ranking algorithms to be made fully transparent, the company said: “In newsprint terms, a Google or Facebook algorithm shift is the equivalent of WH Smith deciding that on Royal Wedding Day readers of the Daily Mail are given the Telegraph, and during the World Cup Sun readers get the Guardian.

“The situation is even worse because while the market for the distribution of newspapers is competitive – as newspapers are distributed through around 50,000 outlets in the UK, including newsagents, convenience stores, supermarkets, garages etc. – digital publishers must rely on one search engine, Google, and one social media platform, Facebook.”

Audio distribution

In its own submission, Guardian Media Group asked the CMA to consider the rise of audio speakers and assistants as part of its investigation, reasoning that many of the concerns raised by the watchdog “will transfer to the distribution of journalism in audio form”.

“However, they will do so in an environment that is even less transparent for market participants due to the personalised and less visible nature of audio content streams,” GMG added.

“For content providers, the personalised nature of audio assistants raises concerns around the prioritisation of content served to users, a lack of control over how that content is presented to end users, and an inability to influence the way in which that journalism is monetised by dominant smart speaker platforms.”

The owner of the Guardian and Observer newspapers said the proposed regulatory regime should be a “standing statutory regulator that can examine existing and emerging issues with the practices of platforms with strategic market status”.

“It is vital that any such efforts by the CMA deliver behavioural remedies against platforms with strategic market status, as opposed to monetary penalties that have recently been levied by regulators in the US and EU.”

Channel 4 told the CMA it believes “fundamental regulatory reform of the digital advertising market is needed to facilitate competition and adequately protect consumers”.

The ability of Google and Facebook to dominate the market has meant the broadcaster is struggling to compete on an even playing field, it said, despite its “best efforts” to grow its digital offering.

The broadcaster added that the big tech platforms act as “gatekeepers to bringing short-form content to online audiences”.

“This is particularly important to Channel 4 as our ability to engage with young people outside of traditional, linear broadcasting is vital to our future sustainability because of the shift in viewing behaviour.”

‘Take it or leave it’ terms

However Channel 4 said it is forced to accept the revenue shares it is offered, which “fail to take account of the expense we incur when producing premium, PSB [public service broadcaster] quality content”.

Professional Publishers Association managing director Owen Meredith said: “Publishers feel unable to negotiate, as would be the place in a functional market, and instead have terms dictated to them on a ‘take it or leave it’ model, meaning platforms use their content to build audiences, sell advertising around that content, yet will not enter commercial discussion over the share of value that should be attributed to the content creator.”

Channel 4 suggested the CMA should consider whether regulated trading terms could be implemented between broadcasters and digital platforms to provide fairer access for broadcasters to online audiences.

Google told the CMA it is ready to assist the market study, which it said “provides an opportunity for clearer rules of the road and to dispel myths regarding how we operate and the value we provide consumers and industry in the UK”.

The tech giant outlined ways it uses user data and its initiatives to both improve ad tech transparency and support UK publishers and advertisers in its submission.

In its own response, Facebook said the way the CMA has already outlined potential remedies “gives rise to a concern that the proposed ‘remedies’ have not been tailored to the evidence”.

“In addition, while undermining due process, such an approach could have the unintended effect of diminishing, rather than furthering, competition in this highly dynamic and growing sector of the UK economy.”

The tech giant added it was “wholly artificial” for the CMA to isolate Facebook and Google for its study as this approach “overlooks the fact that they compete vigorously with each other and with other market players”.

Press Gazette’s own Duopoly campaign, launched in April 2017, has been calling on Facebook and Google to stop destroying journalism and pay more back to news publishers on whose content they rely.


Source link

You May Also Like



Not started