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Digital killed the radio star but what about the future of digital advertising in a data world?3rd July 2020 Media Law
The Competition & Markets Authority (CMA) has published its ‘Online platforms and digital advertising market study’ report this week. Presumably as a result of the report, the CMA has also launched a campaign calling on the government to introduce new regulations to foster competition and tackle the market power of big tech giants such as Google and Facebook.
What do they mean by market power?
The easiest way that I can explain is by using my own experience. As a former commercial radio presenter, I can remember a time when local businesses would queue up in large numbers to advertise on the radio and in local newspapers. Companies would buy up as many advertising spots as they could afford, especially at peak times like Christmas and some would even do ‘promotions’. Have you ever heard of a radio station giving away a holiday or a new car? That’s a promotion.
Sadly in recent years ‘local’ radio stations have given way to national networks and local newspapers have struggled along.
Perhaps the 1979 Buggles classic was wrong? It was digital advertising not video that killed the radio star. We’re probably more likely to wake up and pick up the phone to check Facebook, Twitter or Instagram than we are to have our favourite local radio presenter blasting out of a speaker on a clock radio. Times do change.
The CMA, which is a non-ministerial government department to oversee competition, estimates that last year digital advertising was worth £14 billion which equates to £500 per household. The CMA says that 80% of that revenue was earned by Google and Facebook. To be fair to these platforms, they do provide an opportunity for companies to talk to new and existing customers online.
Where there are users, there are data protection considerations and that is the part which I find most interesting. The CMA has confirmed that it has been working with the UK regulator of data protection the Information Commissioner’s Office (ICO) to ascertain the impact of privacy regulation on the market.
The CMA has said that tech companies could be interpreting the Europe-wide data protection law - the General Data Protection Regulation (GDPR) - "in a way which favours their business models, instead of in a way which gives users control of their data. For example, big platforms might share user data freely across their own sizeable business ecosystem, while at the same time refusing to share data with reputable third parties – which could have a detrimental impact on smaller players.”
We know that tech companies collect and process personal data, such as name and contact details, but the point the CMA has made in the report is that tech giants also collect data that users may not be aware is being collected. Examples would be device and browser information, IP address, operating system and information on the consumer’s activity such as preferences, interaction data (eg, clicks and mouse hovers), search history and location data.
The CMA suggest that tech giants share data through intermediaries to personalise advertising more. That may go some way to explaining why when you search for takeaway food, adverts for your local pizza delivery takeaway appear on your social media channels almost immediately. We’ve all noticed that sort of cookie usage. The CMA say that search data and the success of an advertising campaign is also processed.
The CMA appears to be saying that there should be a more open market and that big platforms shouldn’t be exploiting data protection laws. Whether any change comes will remain to be seen. However, in a digital marketing world, data (rather than column inches) seems to be king.