28% Of Display Advertising Spend Goes To Ad Tech Services: ACCC Inquiry

28% Of Display Advertising Spend Goes To Ad Tech Services: ACCC Inquiry
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The ACCC has released the findings from its inquiry into the digital advertising supply chain, revealing there is a lack of competition and transparency that needs to be addressed.

Regarding transparency, the inquiry suggests that pricing is a key concern for the industry. A lack of transparency means advertisers and publishers are unable to make informed choices when it comes to selecting ad tech services.

According to the ACCC’s research, fees for ad tech services make up 28 per cent of advertiser expenditure on display advertising impressions in Australia in 2019.

“Advertising technology, or ad tech, has significantly transformed the way that advertising is delivered to consumers online. As consumers live more of their lives online, ad tech plays an increasingly critical role in the advertising market and the wider digital economy,” ACCC Chair Rod Sims [pictured] said.

“But there is a real lack of competition, choice and transparency in this industry. These issues add to the cost of advertising for businesses, which will ultimately impact the prices paid by consumers.”

The report again points to Google for its “market leading position” in ad tech and estimates its share of revenue or ads traded in different services (Advertiser ad server, demand side, supply side, publisher ad server) range from 50-60 per cent to between 90-100 per cent.

Previous acquisitions made by Google – such as its purchase of YouTube and DoubleClick – has strengthened the company’s position in the ad tech market, according to the ACCC.

“Google’s significant presence across the whole ad tech supply chain, combined with its significant data advantage, means Google is likely to have the ability and the incentive to preference its own ad tech businesses in ways that affect competition,” Sims said.

“During this inquiry we have heard concerns from parties about potential conflicts of interest from Google’s various roles in this industry. This includes Google very often acting on behalf of both publishers and advertisers for the same ad sale across the ad tech supply chain, while also selling its own ad inventory.”

The ACCC’s ad tech inquiry comes as the government instructed the ACCC to continue its inquiry into digital platforms until 2025, following the 2019 Digital Platforms Inquiry.

 

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