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30 July 2020

AA Warc: Tech Platforms Profit As Other Advertising Sectors Suffer Double Digit Declines  

Advertising spend data published this morning has shown that the tech platforms continued to profit as the coronavirus pandemic took hold in the UK while all other media sectors suffered dramatic declines in revenues.

New figures for Q1 2020 from AA/Warc show that internet pure play, mainly Google and Facebook, grew by 10.5 per cent year-on-year while every other category declined with most experiencing double digit falls.

Direct mail was the worst affected, declining by 18 per cent, followed by regional news brands which declined by 15.5 per cent, magazines which declined by 11.9 per cent and cinema which declined by 10.4 per cent.

Regional news brands are forecast to continue to decline until Q2 2021 are expected to experience a strong bounceback, along with other media sectors, according to the AA/Warc figures. National newsbrands reported a 6.3 per cent decline for Q1 2020 after posting their third consecutive quarter of growth in the previous quarter.

The News Media Association said: “These stark figures demonstrate that, despite the enormous pressures of the coronavirus pandemic, the tech platforms have continued to profit by ruthlessly exploiting demand for other sectors’ content.

“Meanwhile, media content creators- such as local news media titles which invest in the trusted journalism people are demanding in ever greater numbers - are left fighting for their very survival. 

“We are calling on Government to act now and address this imbalance which is crippling our creative industries.”

The NMA has urged Government to act following the Competition and Markets Authority report into the digital advertising marketplace which found that the “exploitation” of commercial relationships with news media publishers by Google and Facebook was likely to lead to "substantial" consumer harm as publishers were less likely to be able to monetise their content.

"Weak competition in digital advertising increases the prices of goods and services across the economy and undermines the ability of newspapers and others to produce valuable content, to the detriment of broader society," the CMA said. 

Among other things, the CMA recommended the establishment of a pro-competitive digital regulatory regime, and a Digital Markets Unit which would be empowered to enforce a code of conduct to govern the behaviour of platforms with market power, as called for by the NMA.