Calling Online Advertisers: ACCC Seeks Feedback On Ad Tech Supply Chain

Calling Online Advertisers: ACCC Seeks Feedback On Ad Tech Supply Chain
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The ACCC is continuing its probe into online advertising, yesterday kicking off its inquiry into the advertising technology supply change.

The inquiry was first mooted last year as part of the government’s response to the Digital Platform Inquiry and will seek feedback on issues such as whether market participants have enough information to make informed choices about ad tech services, competition through the industry and whether competition is being affected by supplier behaviour.

It follows a seperate Inquiry announced last month into markets for the supply of digital platform services.

“During our Digital Platforms Inquiry, we heard many concerns about the complexity and opacity of ad tech and ad agency services. This has real potential to undermine advertisers’ abilities to choose services that provide the best value for money for them,” said ACCC chair Rod Sims.

“It may also prevent the companies that host those ads from maximising their advertising revenue.

“Higher prices for advertisers means higher prices for consumers. And lower revenues for ad hosts could in the longer term lead to a reduction in the quality and diversity of online content.”

Interested parties are invited to to submit their views in response to the ACCC’s Issues Paper, which will seek to gauge whether ad tech services and agencies are engaging in anti-competitive behaviour.

In particular, publisher ad servers, supply-side platforms/ad exchanges, demand-side platforms and advertiser ad servers are invited to participate in the in the Inquiry.

“During our Digital Platforms Inquiry, we heard many concerns about the complexity and opacity of ad tech and ad agency services. This has real potential to undermine advertisers’ abilities to choose services that provide the best value for money for them,” Sims said.

“It may also prevent the companies that host those ads from maximising their advertising revenue.

“Higher prices for advertisers means higher prices for consumers. And lower revenues for ad hosts could in the longer term lead to a reduction in the quality and diversity of online content.”

Google AND FACEBOOK

Similar to the 18-month Digital Platforms Inquiry that has just been completed, tech giants Google and Facebook are likely to feature heavily as part of the Ad Tech inquiry.

The Issues Paper specifically seeks stakeholder’s views on Facebook’s vertically integrated ad tech services and Google’s vertical integration.

Although the questions only reference Google and Facebook in terms of budget allocation for online advertisers, there are seemingly leading questions such as:

  • Are any market participants engaging in behaviour that serves their own interests rather than the interests of their customers?
  • Have any mergers or acquisitions provided suppliers with the ability to profitably raise prices or lower quality without losing customers, or made it more difficult for new companies to enter the market? If so, which ones?

Facebook director of policy for Australia and New Zealand Mia Garlick welcomed the latest inquiry.

We’ve proactively engaged with the Australian Competition and Consumer Commission over the past two years to support their review of digital platforms in Australia,” she said.

“We continue to support and work towards smart regulation and will work with the ACCC and the Government to inform clear measures that support innovation, strengthen competition and project Australians and their information. It is important we get this right as these decisions will impact more than 17 million Australians that use our services every month to connect, grow their business and share ideas”.

agencies

The Inquiry will not just be focused on ad tech, rather it will extend its reach to ad agencies and agency services also.

“This Inquiry focuses on the ad buying services supplied by ad agencies that assist advertisers with the optimisation and purchase of online display advertising,” said the ACCC in the Issues Paper.

It follows revelations in the DPI that ad agencies create another layer of “opacity” in the ad tech supply chain, as many ad agencies now have in-house trading desks.

The ACCC specified that the Inquiry is directed not to extend to the supply of creative input for advertising.

Submissions to the issues paper are due by 21 April.

The ACCC is required to provide a preliminary report to the Treasurer by 31 December 2020 and a final report by 31 August 2021.

 

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