Thursday, 28 February 2019 09:53

ACCC seeks more ad industry data for digital platforms inquiry Featured

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Rod Sims: "We have not yet reached a view as to whether the existing arrangements on the major digital platforms are sufficient to address the issue." Rod Sims: "We have not yet reached a view as to whether the existing arrangements on the major digital platforms are sufficient to address the issue." Courtesy: YouTube

ACCC chair Rod Sims is seeking more data from the advertising industry about the preliminary conclusions reached by the competition watchdog's inquiry into digital platforms.

He told the Australian Association of National Advertisers and a ThinkTV audience of marketing and television advertising executives in Sydney on Wednesday night that a company was allowed to be be big and exert substantial market power.

It has been estimated that more than two-thirds of every digital advertising dollar spent in Australia goes to either Google or Facebook.

Pricing of intermediary services, such as the cut of the amount paid by the advertiser for the ad impression, is being examined by the Australian Competition and Consumer Commission as it can often be quite opaque.

The total "cut" taken by intermediaries is between 30% and 75% of an ad's price and the ACCC is examining whether the process is transparent.

“It is important that we better understand the issues with the ad tech supply chain because a lack of transparency means that advertisers do not know what they are paying for, where their advertisements are being displayed, and to whom,” Sims said.

“Higher advertising prices ultimately translate to higher prices for consumers for products and services.”

He said Australian competition law did not prohibit a business from having substantial market power or using efficiencies or skills to go one better than its rivals.

"But the dominance held by Google and Facebook in certain markets, plus the incentives they face, does mean their conduct should be subject to particular scrutiny to identify whether it is creating competitive or consumer harm," he added.

Also under examination is whether advertisers can verify if ads they buy are actually shown to their target audience.

Both the AANA and Free TV have pointed out that Facebook and Google monitor advertisement delivery on their own platforms and keep score, despite being players themselves. TV broadcasters, on the other hand, are subject to third-party verification of their audiences.

The ACCC said both Google and Facebook had rejected claims that advertisements on their platforms were not verifiable. Both claim they have internal processes for this function and also allow third parties to check metrics on behalf of advertisers.

“We have not yet reached a view as to whether the existing arrangements on the major digital platforms are sufficient to address the issue. This is an issue we hope to achieve clarity on before our final report in June,” Sims said.

Each month, about 19 million Australians use Google, 17 million access Facebook, 17 million watch YouTube and 11 million use Instagram.

Said Sims: “With an audience of this size, digital platforms are a primary channel for businesses looking to reach Australian eyeballs and, more importantly, their wallets. This is why this inquiry is important for Australian advertisers, and we welcome feedback from everyone with an interest.”

A preliminary report on digital platforms was issued in December.

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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