Digital ad market is ‘dysfunctional’

NEWS Corp chief executive Robert Thomson has labelled the advertising market “dysfunctional” following the scandals around digital measurement and fake news.

The Australian newspaper quoted Thomson as making the remarks at the UBS Global Media and Communications Conference in New York this week.

Fake news on social media news feeds and other websites has become a big talking point in recent weeks, following the American presidential election campaign, where a number of pieces about the Democrat and Republican candidates, Hillary Clinton and Donald Trump, turned out to be false.

Thomson said: “You would like to think now that the debate over fake, over fallacious, over faux, over fraudulent (news) will lead to advertisers in particular, ad agencies and others reassessing the value of different platforms because the ad market is dysfunctional at the moment, and not because we’re not getting our fair share.

“It is dysfunctional and it’s digitally dysfunctional,” he added.

Advertising industry experts are now starting to question the numbers and analysis which market leaders Google and Facebook have been using to measure their audience numbers and, therefore, to sell advertising.

Thomson said advertising agencies also needed to take responsibility for where they were placing ads.

“We’ve sort of gone from the era of mad men to mad metrics,” he said.

The Australian quoted Thomson as saying the caricature of old school “martini-sodden” advertising executives had made way for the “slightly techno-tipsy”.

Print remained a powerful platform and the key for the publisher has been adjusting the company’s cost base, reconfiguring titles to the digital age, understanding how readers were accessing products and orienting the various businesses to the environment, Thomson said.

“The growth at the Times in recent quarters, in print, has been up as much as 12 to 13 percent,” he said.

“The circulation revenues at the (Wall Street) Journal were up 6 percent last quarter, double the rate of the New York Times.

“So you’re seeing growth in circulation revenue but what you are also seeing is a significant decline in advertising revenue.”