Specifically, the ACCC is being asked to investigate the extent to which platform service providers are exercising market power in commercial dealings with the creators of media content as well as advertisers; their impact on the level of choice and quality of news and journalistic content available to Australians; and the impact of information asymmetry, including innovation and technological change, on competition in the media and advertising sector.
After closing the window for submissions on 26 April, the ACCC published all 57 submissions received on its website today. The list is a who’s who of Australian media brands, such as Fairfax, Commercial Radio Australia, the Australian Broadcasting Commission (ABC), Network Ten, Southern Cross Austereo, Special Broadcasting Service (SBS), Stan, Foxtel, Australian Associated press and the Australian Radio Network.
Also well represented are associations from across the advertising and media spectrum. In its submission to the ACCC, the Australian Association of National Advertisers (AANA) said it welcomed the opportunity to participate in the inquiry and highlighted its self-regulatory system for media and marketing communication in this country.
Technology change offers improvements for traditional media offerings, and the AANA listed a number of advantages of digital advertising options including large audience reach and targeting, cost efficiencies and engaging formats. But there’s no doubt the power of the digital goliaths is impacting the ability to capture advertising revenue, the AANA stated in its submission.
“There has been a shift of advertiser dollars from traditional to digital media. Within the digital media category, while there are alternatives to major digital platforms, the scale of the dominant platforms cannot be ignored by advertisers,” the statement read.
“The approach of digital platforms to obtaining user loyalty data has a flow-on effect for advertising. In order to effectively penetrate a consumer’s media consumption, if a consumer is linked to one platform, then an advertiser must work with that platform to be able to target that consumer.
The AANA highlighted the substantial power Google carries in search engine and digital marketing particularly, and pointed to figures from the US that suggest Facebook and Google together now capture about 75 per cent of all digital advertising.
“The experience of AANA members is that user concentration in the use of google inevitably leads to a level of advertiser concentration in the use of that platform,” the submission stated.
Other significant risks and disadvantages outlined by the AANA include walled gardens and issues of transparency on measurement and viewability, the use of non-standardised metrics to report on campaign performance, non-standardised ad formats, self-reporting by digital platform providers in lieu of independent reporting, and data privacy.
“As they increasingly become and act as media publishers and not just content aggregation platforms, the issue of appropriate regulation for digital platforms as content creators and distributors should be considered,” the AANA concluded, even as it pointed out major digital platforms have recently taken steps to better collaborate with industry bodies.
Medibank also submitted for the digital platforms review, completed by chief customer officer, David Koczkar, stating its use of Google platforms and its view on the state of competition in the market.
“Our view is that an appropriate metric [ to assess the market power of digital platforms] would include consideration of market share and concentrate,” the statement read. “This in turn contributes to dependence for various users in the ecosystem illustrated by the ACCC in the Issues Paper… including advertisers. It also contributes to Google’s increasing profits already noted by the ACCC.
“We consider there are now no realistic alternatives for various users in this ecosystem, including advertisers. Overwhelmingly, many users in this ecosystem only use or concentrate their use on Google for these services… and our data also reflects this. We also consider that Google’s current market share is a substantial contributor to driving up a market for the cost of those services without much by way of effective commercial or legal restraint.”
Medibank’s ongoing costs of investing in its own brand continue to substantially increase, particularly in the last five years, the statement continued.
“The market dominance of Google means that we must invest even more to obtain and retain customers – often at a substantial and unknown escalating cost – and despite investing even more, our return on investment has decreased.”
Medibank levelled the blame at Google’s Trademark Adwords policy, effective from 23 April 2013, which mean advertisers could purchase and use trademarks as keywords in Google Ads in Australia, among other jurisdictions.
“Google’s commercial pricing approach of using an auction means that we are unable to exercise meaningful or full control of our spend – that is, we are focused to bid on our own brand.”
And while Google’s vast data stores are beneficial, Medibank was critical of not having access to full visibility on best performing organic terms for brands and competitors to “optimise our spend towards, which would reduce reliance on paid activity”.
A preliminary report on digital platforms is due before the treasurer by 3 December, with a final report due 3 June 2019.