It would be easy to dismiss the MPs’ report as well-meaning rhetoric but regulatory intervention is possible.
Sharon White, the chief executive of Ofcom, said last month that the tech companies need to be “more accountable” and “the argument for independent regulatory oversight has never been stronger”.
White suggested that social media companies must make greater efforts to protect consumers from “harmful content” and a regulator should have powers to “enforce standards” and to “act if these are not met”.
Advertisers have an important role to play because tech companies get most of their revenues from digital advertising, which is worth upwards of £10 billion a year in the UK.
There is still limited evidence of a swingback towards trusted, premium content but, following last year’s YouTube brand safety scandal, marketers have recognised that it is a mistake to depend on algorithms to buy online audience reach, without caring about the context of where an ad appears.
Advertisers also don’t like the fact that Facebook, Google and others “mark their own homework” when it comes to setting standards for viewability — how long an ad is viewed — and sharing audience data.
“I’m fed up with it, it’s not right and we need to change it,” WPP’s Robin O’Neill, arguably the most influential buyer of online advertising in London, told a recent conference, hosted by Newsworks, the trade body for the newspaper industry.
O’Neill, who is UK managing director of digital trading for WPP’s media-buying arm, Group M, warned the status quo “suits tech platforms and discriminates against premium environments where users have a greater engagement with content”.
He went on to cite new research that showed that an advertisement that appears on a newspaper website is 42% more cost-effective in terms of user engagement and brand awareness, compared with an online ad bought on the open market.
Advertisers’ anger combined with consumers’ distrust may be having some effect.
Investment bank Liberum Capital says it has heard from a leading, unnamed media agency that Facebook’s UK ad revenues fell in June, which would be a big deal after years of uninterrupted, double-digit growth.
If there’s one thing that the tech giants fear more than the threat of regulation, it’s the prospect of making less money.
