Breaking free from the advertising duopoly
Why Meta and Google’s dominance over the advertising market is so harmful
Breaking free from the advertising duopoly
Today’s digital advertising market harms European businesses, weakens the free press, and abuses citizens’ privacy. It no longer sustains the businesses that rely on it for revenue. It undermines journalism, exposes Europe to national security hazards, and prevents the emergence of European companies that can compete with the incumbent monopolies. Meanwhile, Europe’s publishers have stagnated and billions of Euros every year have been diverted to the pockets of giant U.S. platforms.
Research estimates that 10% of advertising expenses end up in clickbait sites and that “both advertisers and publishers feel locked-in to large platforms”, which “are inherently opaque”. Perhaps the worst offender is Google, which controls 95% of mobile search and is present in all three sides of the advertising market: buying, selling, and exchanges. Thanks to a recent US case against Google’s monopoly in ad tech, we now know Google’s own executive described Google’s massive conflict of interest as “if Goldman or Citibank owned the New York Stock Exchange.” This chokehold is destroying the free press, which is the foundational basis for European democracy.
What is surveillance advertising?
Surveillance advertising is the practice of collecting data on consumer’s online behaviour to show them advertising tailored to the profile the company has created of people with similar characteristics. Contrary to contextual advertising, which shows ads based on aspects such as the content of an article you are reading or the type of magazine in which they are shown, surveillance advertising analyses the consumer's profile (based on factors such as time of the connection to the website, context, demographics, personal characteristics, etc) and based on that intimate information adapts the advertising to the alleged personality of that consumer.
As the result of this advertising system, fewer than half of consumers (43%) feel in control of the content they are shown and the decisions they take and they also disapprove of being monitored and tracked online, with more than 80% of them considering unfair that their aspects of their private lives are used to target them with advertising.
Why is surveillance advertising so harmful?
The surveillance advertising industry has a deep impact in the foundations of what the European Union stands for:
- Anti-competitive: Both publishers and advertisers feel trapped in the duopoly created by Meta and Google. This anti-competitive market obliges publishers and advertisers to accept Big Tech's abusive terms and conditions at the risk of not reaching their target audience. Despite the existence of better European alternatives to surveillance advertising (such as contextual advertising), Big Tech’s dominance forces publishers to accept the status quo and they end up tied to them.
- Fuels disinformation and facilitates foreign interference: The business model leads to the spread of misinformation about vaccines or disinformation on Facebook. It can and has been exploited by bad actors to influence political processes.
- Destroys the business model of trustworthy journalism: It is indicative that publishers and advertisers alike describe their relationship with Big Tech surveillance advertisers as “abusive”, “aggressive”, “love/hate relationship, without the love” or just “painful”. Advertisers feel obliged to work with Google and Meta (“take it or leave it”) and some publishers claim that if they didn’t work with Google they would lose revenues.
- Creates risks for consumers's personal data and their privacy: There is so much data compiled by surveillance advertisers that some consumer groups consider it impossible to even determine it. However, they can determine that consumers' personal data is used not only to target ads or content, but also for purposes of discrimination, exclusion and manipulation.
What’s the solution?
Despite the advances against surveillance advertising with the ban of targeted advertising for children in the Digital Services Act (DSA), this is unfortunately not enough. The 2024-2029 legislative mandate in the European Union must lead to decisive actions to prevent the anti-competitive practices that prevent publishers and advertisers from getting their fair revenues. Furthermore, consumers must see actions that improve their digital lives by being free from discrimination, disinformation and Big Tech surveillance.
In July, Commission President von der Leyen listed competition as one of her priorities for the 2024-2029 mandate. It is crucial to take advantage of this opportunity to ensure that the duopoly in online advertising is adequately addressed.
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