Government launches market study into digital advertising

Date posted: 13 Nov 2019

Posted by: Smithfield

Post category: Blog

There is still a high concern and a lack of understanding amongst consumers about their personal data and how it is being shared. In recent research by ESOMAR 75% of UK consumers have difficulty finding information about how to protect their privacy and 89% of consumers believe legislation is needed to protect against the misuse of personal data. In recent research by Salesforce they identified that 36% of consumers believe companies don’t care about the security of their data and a telling 59% of consumers believe that most companies aren’t transparent with how they use their (the consumers) data (Salesforce; The State of the connected customer, 2019).

These concerns have also been identified by the Government through the Furman review (an investigation into the digital advertising industry). The report was published in March 2019. In the report it found that the digital advertising market isn’t “fit for the current digital economy, is dominated by two players and suffers from a lack of transparency”

The report highlighted that the services provided by online platforms have created significant benefits to consumers’ lives. In the UK, adult internet users spend over 3 hours per day accessing the internet, with more than a third of this time spend on sites owned by Google or Facebook (Ofcom, Online Nation, May 2019). Yet, there is a growing concern that these online platforms are harming the digital advertising industry by reducing competition and harming consumers.

This prompted the Government, on the 3 July, to officially announce that they will be carrying out market study into online platforms and the digital advertising marketing in the UK. They are assessing three broad potential sources:

  • To what extent online platforms are using people’s personal data, including whether making this data available to advertisers in return for payment is producing good outcomes for the consumer.
  • Whether consumers are able and willing (have the knowledge and skills) to control how data about them is used and collected by online platforms.
  • Whether competition in the digital market is distorted by the market power held by these online platforms.

So, what does this mean for advertisers?

In the UK, advertisers have been the fastest EU country adopting digital advertising. Between 2008 and 2017 UK digital advertising expenditure increased at a rate of 14% per year and is predicted to be 62% of total advertising spend in the UK. Currently this spend is £23.6bn (Advertising Association April 2019). With a third of ad spend been spent on Search (Advertising Pays Report 2019) and 97% of internet users accessing search engines and around 70% of UK adults on social media platforms you can see why there is concern. Literally, both Google and Facebook have it sewn up.

This review is to stop poor online advertising behaviour, where consumers are been misled for brand growth at their expense (think fake reviews, influencers not upfront about paid promotions etc). If brands can communicate how they are protecting consumers personal data, consumers will be more likely to share more data if they know the holder of that data is trusted and reliable; an issue both Facebook and Google are struggling with. In fact, in research conducted by ESOMAR they found that 72% of UK consumers would be more willing to share data from trusted brands.

And, given our current political economic climate it couldn’t be more relevant that we support advertisers in ensuring that the way we advertise through UK publishers and ad tech companies has consumer concerns at its heart to ensure we can continue to successfully look at how digital advertising can continue to grow clients’ businesses. It would bring a better experience to consumers and a greater benefit to advertisers.

We will keep you informed on the progress of the study, and let you know our thoughts once published.

If you want to meet with our Head of Digital, Sarah Coften, about any of these issues surrounding Data and Digital Media, then please get in touch. Give Patrick Woods a call on 020 7257 2600 or Tony Hall, in our Manchester Office on 0161 200 8330 and they will be able to set up the meeting to see how we can help you.

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