The system is not working for advertisers and publishers too. We heard five main reasons why it is not working:
- The system is dominated by two major intermediaries.
- The intermediaries are opaque.
- Advertisers and publishers don’t control their experiences.
- And they don’t have enough control over data too.
- They are exposed to legal risks.
The system is dominated by two major intermediaries
In the UK a regulatory investigation found that Google has more than a 90% share of the £7.3 billion search advertising market. Facebook has over 50% of the £5.5 billion display advertising market.
As a result of this domination it can feel like there are few alternative choices for advertising and publishers.
The intermediaries are opaque
These major platforms, and the hundreds of other intermediaries in the ecosystem, are opaque.
It is difficult for advertisers and publishers to determine which adverts are effective, and who for. It is hard to understand the value being added at each stage, and whether it is worth the money. It is close to impossible to track where and how data is being shared.
Advertisers and publishers don’t control their experiences
The major intermediaries have most control over which adverts appear on which publishers sites. They have significant control over how those adverts are displayed.
This lack of control makes it harder for advertisers to exclude channels that do not suit their value. For example platforms that promote hate speech, or alongside content that is unlikely to make someone buy their products.
It makes it harder for publishers to create good experiences for the users reading their content and using their services.
And they don’t have enough control over data too
In the current system a large number of advertising intermediaries get access to data about:
- Advertising campaigns and audiences.
- Publisher’s content and audiences.
- And the behaviour of individuals as they browse the web or respond to adverts.
This is far richer picture than advertisers and publishers have of their own audiences and users. It exposes them to competitive risks.
Some advertising intermediaries provide competitive services to those that are being advertised, while publishers find that advertising intermediaries can reach their audiences with cheaper adverts on different websites.
They are exposed to legal risks
The architecture of the current system also exposes advertisers and publishers to legal risks. These are a mix of indirect and direct risks.
Indirect risks such as advertising intermediaries responding to their own legal risks by changing their products in a way that adversely effects advertisers and publishers. The recent European Data Protection Board (EDPB) ruling on ‘consent or pay’ business models that large platforms are struggling to offer valid consent and should offer a form of advertising involving the processing of less or no personal data increases this risk.
And direct risks such as advertisers and publishers being found liable for the inability of people to use the right to object, illegal consent moments, or for the content of illegal adverts that are placed on their websites by intermediaries.