18 Feb 2021

  • Digital Marketing
  • Data-driven Marketing
  • Data Compliance and Privacy
  • Privacy and Compliance

ACCC: have a say on 6 must-know plans to transform digital advertising

The market for digital display advertising in Australia - particularly the dominance of Google - is in the spotlight of Australia’s competition regulator, the ACCC, and ADMA encourages its members that if they want to have some input, they need to make their submission before February 26, 2021.

Digital advertising in Australia operates in somewhat of a black box, with ACCC chief Rod Sims saying the practices in the $3.4 billion industry risks increasing advertising costs for business and higher consumer prices.

Digitally targeted ads exploit a range of technology, data sources and networks to show highly segmented ads at lightning speed to consumers while they read entertainment, news and shopping or scroll through social media websites.

The ACCC’s new interim report argues that Australia’s advertising technology services are not transparent, with Alphabet Inc-owned Google dominating due to:

  • its strong data collection abilities from powering search and using location data;
  • advertising inventory across services like GoogleAds and YouTube;
  • its powerful under-the-hood technology for tasks like real time bidding or ad serving.

The regulator is seeking more feedback from local marketers and advertisers in the next week, before then collating their findings and delivering its recommendations to the federal government on August 21, 2021.

ACCC continues its mission to regulate big tech and protect consumer privacy

Digital advertising technology makes some consumers believe their phone listens to their conversations as they are spookily shown ads for new cars or credit cards after talking about the topic.

While it’s technically possible that this happens, the ACCC’s digital investigations branch is working to find the best paths to consumers being reassured their privacy will be protected and that technology platforms won’t use their market size to monopolise local markets or hinder competition.

The ACCC moves are part of a detailed digital platforms inquiry, but the ad services enquiry began last year, spurred on by British investigations that found that as much as 15% of revenue that went into advertising technology simply evaporated and could not be accounted for.

That same British report found just 51% of revenues that went into advertising technology platforms made its way to the publishers, content creators and platforms that displayed that advertising to consumers.

ADMA encourages industry to have a say

ADMA previously made a submission to the ACCC Advertising Technology Inquiry and encourages use their voice in helping the ACCC to better understand their concerns and how advertising technology regulation can affect their business.

Below is an outline of the ACCC’s key proposals in the comprehensive report. ADMA encourages its members to consider their view to these.

As per usual, the ACCC offers the option for confidential submissions, too, allowing businesses to submit information that is relevant but may be classified as commercially sensitive.

There’s also a simple explainer at the bottom of this story, to reduce the complexity of the topic.

Proposal 1: Data portability

With the Consumer Data Right expanding into other industry sectors, the ACCC believes that data portability could promote competition in the supply of advertising technology and agency services. Furthermore, individuals need effective ways to control or consent to the processing of their personal data.

Proposal 2: Data separation

The ACCC proposes that separating data could be a valuable addition to the market. Breaking up the powerful datasets of “large incumbents” is a firm stab at Google, who scoop up valuable data through its search, maps, Android and other products. Other big companies creating powerful datasets include governments, banks, data brokers like Experian or Lotame, large retailers like Coles and Woolworths and media companies. The ACCC seems keen to prevent data gathered in the context of supplying one service - for example, buying groceries - to be used in the supply of another service without the consumer understanding the exact use of their data.

Proposal 3: Preventing anti-competitive self-preferencing

The ACCC is suggesting comprehensive guidelines and rules need to be in place across the industry. Conflicts of interest can be unavoidable in the complexity of the advertising technology ecosystem.

The ACCC has proposed managing competition and other issues of vertical integration, by:

  • Having guidelines to manage conflicts of interest such as preventing the sharing of information between advertising technology services;
  • Obliging providers to act in the best interests of publishers or advertising customers;
  • Creating a level playing field that offers every business equal access to advertising technology services;
  • Improving transparency of the whole supply chain.

Proposal 4: Voluntary verification of demand side platforms

A voluntary standard could enable full and independent verification of demand side platform services, which control the amount of revenue going into the ecosystem and how it is handed out to key players like publishers.

Proposal 5: Common transaction ID

There is suggestion that the solution involves an industry-wide system to identify each transaction such as web clicks or advertising clicks with a single identifier to trace and verify activity. Any such system  also needs to protect consumer privacy.

Proposal 6: Common user IDs to track activity accurately

Tracking users transparently could be done by creating common user IDs and behaviour should be tracked in a way that protects consumers' privacy.

 

About Digital Advertising Technology

Ad tech automates the process of buying and selling advertising, removing the manual task of insertion orders and campaign reports, but it is complex. The entire ecosystem includes many small and large players like Google, Facebook, data brokers, ad networks, agencies and technology providers. Here’s an easy guide:

Demand side platform: allows advertisers and agencies to bid automatically to reach specific audience segments on display, video, mobile and search ad inventory from a wide range of publishers.

Supply side platform: allows publishers and content services to sell their inventory in real time, sometimes with data brokers and ad networks as intermediaries.

User profiles: Data management platforms build profiles of users to place them in audience segments based on the content they consume and which ads are clicked on. This profile is often used in remarketing campaigns and ad optimisation, without any specific privacy consent from the user whose data is monetised. The data segmented may also be unverifiable, for example how does an advertiser check that “Women who have visited a banking website” actually undertook that website visit and then saw the ad?

User attribution: Separate from a user profile is the way internet behaviour is attributed and tracked across the internet (for example, on a mobile phone or while watching videos on a desktop). There is some vagueness of measure and metrics in reporting this eg Is the user double-counted across devices. Are all web visits counted equally, no matter the length of dwell time?

The ‘missing delta’: this is the part of money that goesinto to buyingads via technology services  that is not reported as displayed advertising orrevenue for the publishers that serve the ads. A 2020 UK investidation reported findings that only 51% of an advertiser’s spend went to publishers and 15%of costs mysteriously could not be accounted for at all.

The role of Google: The ACCC says Google’s share of revenue or ads traded in Australia ranges from around 50-60% right up to 90-100%, depending on the particular service. Others claim that Google is unfairly penalised for developing the ground breakingly fast technology that has supported the growth of the entire digital advertising ecosystem. Google is not the only player in Australia’s advertising technology or agency services space, but it is under the spotlight of the ACCC thanks to the entire Digital Platforms Inquiryand the influence he global platform has undoubtedly has held in this space.

Data consent & privacy issues: With government investigations all over the world confirming that their citizens’ time and attention is being monetised through real time auction advertising bids, they are actively moving to ensure consumer privacy and consent is managed so markets can flourish and businesses who want to advertise won’t suffer unnecessary price gouging.

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