Lords call for investigation into ‘dysfunctional and opaque’ digital ad market

Senior peers have called on the Competition and Markets Authority to investigate Facebook and Google’s dominance of the digital ad market after hearing concerns from the industry that a lack of choice is making it hard for advertisers to gauge value for money.

The House of Lords is calling for the competition watchdog to launch an investigation into the “dysfunctional and opaque” digital advertising market.

The call comes after senior peers heard complaints from the ad industry that “Google alone has control at all levels of the market” and urged the industry to “take greater steps to self-regulate”.

The Lord’s investigation also called on the Competition and Markets Authority to undertake a market study of the digital advertising market to ensure that it is “working fairly for businesses and consumers”.

Lord Gilbert of Panteg, the Conservative chairman of the committee, says: “Digital advertising has quickly become the most significant form of advertising by spending.

“But the market for delivering digital advertising to consumers is notoriously ‘murky’: businesses which buy advertising services don’t know how their money is being spent, whether their advertising is being displayed next to content which is obscene or which supports terrorism, or whether their ads are being viewed by a human being at all.”

The UK is not the only government investigating the digital ad market, yesterday Congress quizzed Mark Zuckerberg on whether he would support a GDPR style law in the US.

After finding the significant influence that Facebook and Google command in the market,  members also called on the Government to examine competition law to decide “whether it is appropriate for the 21st century digital economy”.

The Advertising Association (AA) and ISBA, both support the findings. ISBA director general Phil Smith says: “Brand safety is a major concern for our members.”

He adds: “We would like to see the platforms come together as an industry to introduce an independent self-regulatory system.”

Stephen Woodford, chief executive, Advertising Association echoes this, saying: “The AA’s Trust in Advertising working group, chaired by Phil Smith, ISBA and Paul Bainsfair, IPA, and involving senior figures from across our industry, will lead the way in ensuring our industry is on the front foot in meeting these challenges.”

The report also criticised the current “slow, expensive and restrictive” tiered visa system arguing that it extending it post-Brexit will “create an unmanageable barrier to finding and hiring the talent that the advertising industry needs”, especially for EU nationals.

To solve this the committee urged the Government to negotiate reciprocal agreements with other countries so that international workers for in the ad industry had the right to work in the UK.

Woodford says: “We appreciate the recognition of the huge value overseas talent brings to British advertising and the report’s recommendation that the country retain access to the world’s brightest and best talent after we leave the EU.”

Peers also recommended that the Government introduce a creative industries’ freelancer visa and called on the advertising industry to tackle a lack of diversity by banning unpaid internships.

Peers said the industry should seek to further encourage diversity across gender, class, race and disability so that the industry can “access a larger talent pool which better reflects the advertisers’ audiences”.

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