The digital dominance of Google and Facebook should be assessed by the UK government, and the digital industry should work harder to self-regulate – that's what the House of Lords thinks following an six-month inquiry into the sector, but what does the industry make of the peers' suggestions?
The House of Lords published several recommendations this week (11 April) following an inquiry into the future of the ad industry, with the aim of helping the “UK’s advertising success story” retain its momentum.
What emerged was a focus on brining transparency to the digital supply chain, and assessing whether competition laws are fit for a 21st century economy. The report from the Select Committee on Communications outlined no less than 30 recommendations – provoking mixed reaction from all corners of the industry from trade bodies to agencies.
Extensive as they are, what does ad land actually make of the peers' suggestions around digital, and are the proposals symptomatic of a government that fully understands the industry?
Google's response to the Lords' call for action on digital
Highlighted in the report was the Lords' view that the digital duopoly needs to come under greater scrutiny from the Competition and Markets Authority (CMA).
“Consumers do not pay for free online services, but in exchange they must give up their data," it said. "The dominance of Google and Facebook leads us to question whether current competition law is adequate to regulate the 21st century digital economy that is increasingly driven by personal data rather than money.”
It's a timely point, coinciding with Mark Zuckerberg’s current grilling from US Congress on its data and business practices, and numbers which indicate that Facebook and Google alone pull in one-fifth of all global ad spend.
However, neither Google nor Facebook have specifically addressed the suggestion of a probe since the report was published.
The Drum approached both but only Google provided a reactive statement, with a spokesperson telling The Drum that the company believed the UK advertising industry to be “dynamic and competitive” and suggesting its own growth was also tied to that of the wider ecosystem.
“We're committed to helping advertisers show useful and relevant ads to reach new audiences and grow their businesses. We also support publishers who run Google ads by paying the majority revenue share back to them and in 2017 alone, we shared $12.6bn with our publisher," the rep added.
Advertising trade bodies react
Elsewhere, the Incorporated Society of British Advertisers (Isba), broadly welcomed the findings of the report, but noted that some "critical issues" remain unaddressed.
"Brand safety is a major concern for our members and we support any action which improves the environment where our members can advertise," it noted.
However, since appearing at the committee to present evidence it said it had seen improvements from the platforms brands spend with; including stricter controls from YouTube around monetisation, vetting practices, and DTSG accreditation.
"There is more to be done. We are still seeing examples of brands appearing next to inappropriate content and we will continue to push for improvements," the group added.
Another key tenet of the report stated the industry should give trade bodies greater powers, alongside the hand-in-hand prospect of improved self-regulation, with the report stating it was in the interest of the whole sector to take greater steps to do so by fully committing to certification from independent third parties like the Joint Industry Committee for Web Standards (Jicwebs).
The aim of this would be to increase transparency through industry-standard guidelines around measuring effectiveness and third-party verification. "If businesses fail to do so, the government should propose legislation to regulate digital advertising," the Lords suggested.
The Advertising Association’s (AA) chief executive Stephen Woodford told The Drum that across the industry many organisations and trade bodies are already working together to ensure it continues to be a sustainable, competitive and trusted sector.
He pointed towards the AA’s 'Trust in Advertising' working group, which is chaired by Isba chairman Phil Smith and Paul Bainsfair of the Institute for Practitioners in Advertising (IPA), as well as other senior figures.
“We will lead the way in ensuring our industry is on the front foot in meeting these challenges,” he added.
This recommendation of giving trade bodies "more teeth" was also “firmly supported” by Isba which said: “We would like to see the platforms come together as an industry to introduce an independent self-regulatory system. As the report acknowledges the principal of self-regulation is proven.”
What's the likelihood of the industry's big boys opening up to Jicwebs?
When it comes to the Jicwebs suggestion, a cursory glance at the evidence both Facecbook and Google supplied to the committee at the end of last year shows its likely this would take some time to get the duopoly fully onboard.
While Facebook's now departed head of agency partnerships Ed Couchman noted that its involvement in the IAB's Gold Standard initiative meant it was committed to a "Jicwebs process" he admitted that one of the challenges Facebook faced with Jicwebs was that it was born from an era of "traditional online advertising—display advertising, with shapes appearing alongside content."
He explained: "We will be the first platform that consists of mobile, feed-based environments. That has nuances, as every single person has a different Facebook experience," adding that Jicwebs was rising to that challenge, and that it was engaged , participating and absolutely committed to the gold standard.
Google, meanwhile, has only just opened YouTube up to Jicwebs' brand safety scheme, and during the evidence sessions Michael Todd, head of advertising industry relations for Google directed the committees attention towards his company's compliance with the Trustworthy Accountability Group (TAG's) global standards and its commitment to the IAB's ads.txt initiative.
The House of Lords have also suggested that the UK government use the ongoing Digital Charter – which will be used to agree new norms and rules for the online world and put them into practice – to gather evidence around Facebook and Google's dominance.
Lord Gilbert of Panteg, who chaired the review, said:"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."
He added: "The consumer's experience is also poor as they may be bombarded with clickbait, or their personal data may be exploited without their knowledge. To restore the public's trust in advertising as a whole, the industry must commit to adhering to proper standards," implying that while the six-month-long review is over, official debate is only just beginning.