Chancellor Philip Hammond has taken up a recommendation from an independent report and asked the Competition and Markets Authority (CMA) to conduct a review of the digital advertising market in the UK.
This was worth £13.1 billion in 2018, according to the AA/WARC Expenditure Report, a figure that is set to rise to around £14.4 billion this year. The need for the review becomes clear when one considers that the duopoly of Google and Facebook will account for 61.4% of global online adspend in 2019, a recent WARC Global Ad Trends report found.
“The Chancellor’s call for the CMA to look into the digital ad market is the first step in a much bigger journey for the industry,” said Paul Wright, General Manager EMEA at Sizmek, a buy-side advertising platform.
“A lot needs to be done to build a fairer, more level playing field so that brands can feel confident their ad spend is reaching the right people, in the right way and is not wrapped in a business model that only benefits the silicon valley giants.
“It also needs to be in a vibrant competitive digital economy and not one where there are only a few winners,” he added.
The recommendation was included in a six-month review of the UK’s tech sector, commissioned by Hammond and led by Harvard professor and former chief economic advisor to President Obama, Jason Furman.
This said that market-leading tech giants should be forced to share their data under a package of proposals aimed at tackling their “bullying tactics”.
Its proposed data-sharing plan would work in much the same way as the Open Banking rules, which require banks to hand over all account-related information when a customer wants to switch to another bank, and so save the need for a customer to start over in building up a personal profile with a new network.
It also recommended that start-ups in the sector should also be able to access anonymous information held by big data aggregators, such as Facebook and Google, allowing them to design new products.
Furman told the BBC that consumers are currently not easily able to switch social networks or change search engine because there is very limited choice. The current situation stands in stark contrast to the early days of the internet, he explained, when, in search, for example, there was a whole series of companies one after the other before Google arrived.
“With each passing year it’s becoming increasingly clear that, absent a change in policies, we can’t count on that continued cycle of competition,” Furman said.
Other proposals included the creation of a new competition regulator for the tech sector – the “digital markets unit” – which would be responsible for enforcing an industry code requiring tech giants to hand over their data.
Overall, the review concluded that there needs to be far swifter and simpler enforcement when one of the tech giants is found to be using “bullying tactics”, such as predatory pricing to drive out competition, or giving preference to companies it already owns.
This was worth £13.1 billion in 2018, according to the AA/WARC Expenditure Report, a figure that is set to rise to around £14.4 billion this year. The need for the review becomes clear when one considers that the duopoly of Google and Facebook will account for 61.4% of global online adspend in 2019, a recent WARC Global Ad Trends report found.
“The Chancellor’s call for the CMA to look into the digital ad market is the first step in a much bigger journey for the industry,” said Paul Wright, General Manager EMEA at Sizmek, a buy-side advertising platform.
“A lot needs to be done to build a fairer, more level playing field so that brands can feel confident their ad spend is reaching the right people, in the right way and is not wrapped in a business model that only benefits the silicon valley giants.
“It also needs to be in a vibrant competitive digital economy and not one where there are only a few winners,” he added.
The recommendation was included in a six-month review of the UK’s tech sector, commissioned by Hammond and led by Harvard professor and former chief economic advisor to President Obama, Jason Furman.
This said that market-leading tech giants should be forced to share their data under a package of proposals aimed at tackling their “bullying tactics”.
Its proposed data-sharing plan would work in much the same way as the Open Banking rules, which require banks to hand over all account-related information when a customer wants to switch to another bank, and so save the need for a customer to start over in building up a personal profile with a new network.
It also recommended that start-ups in the sector should also be able to access anonymous information held by big data aggregators, such as Facebook and Google, allowing them to design new products.
Furman told the BBC that consumers are currently not easily able to switch social networks or change search engine because there is very limited choice. The current situation stands in stark contrast to the early days of the internet, he explained, when, in search, for example, there was a whole series of companies one after the other before Google arrived.
“With each passing year it’s becoming increasingly clear that, absent a change in policies, we can’t count on that continued cycle of competition,” Furman said.
Other proposals included the creation of a new competition regulator for the tech sector – the “digital markets unit” – which would be responsible for enforcing an industry code requiring tech giants to hand over their data.
Overall, the review concluded that there needs to be far swifter and simpler enforcement when one of the tech giants is found to be using “bullying tactics”, such as predatory pricing to drive out competition, or giving preference to companies it already owns.
Sourced from BBC; additional content by WARC staff
