Tech giants deny choice
BUSINESS owners are being forced to advertise with the world’s two biggest digital platforms just to stay afloat, Australia’s competition watchdog heard yesterday, even though some feel they’re not getting what they pay for.
The multibillion-dollar tech giants, Facebook and Google, have now completely taken over from the humble Yellow Pages, the advertisers argued, and were “locking” Australians into their digital tools and buying up new players so they could not switch to competitors.
The Australian Competition and Consumer Commission heard the complaints of advertisers in Melbourne last night in the second public forum staged as part of its investigation into digital platforms.
Inquiry general manager Morag Bond said “the growth of digital advertising” and the increasing use of consumers’ personal information had made advertising “far more complex” and the inquiry would investigate how the changes were affecting Australian businesses.
While Ms Bond said the watchdog had an “open mind” about what digital platforms were having the greatest impact in Australia, the Melbourne audience named two companies as dominating forces: Facebook and Google.
One advertising executive said Australian businesses had little choice but to advertise on Facebook, Google or both, just as small businesses relied on the Telstra Yellow Pages in the past.
“Could a small business have operated without the Yellow Pages? Typically, they wouldn’t try,” he said. “It’s the same now, instead now it’s globalised.”
Another advertiser said the two advertising giants were not only dominating the market in Australia, but making it hard to try competitors as they emerged.
“The platforms are getting very good at locking advertisers into a certain set of tools and that makes it very hard to switch,” he said.
“The other thing that the two big players do very well is have a range of educational offerings that bring in new players to start them on a digital advertising journey.”
One businessman said the tech giants’ dominance of the advertising market meant “bargaining power (was) limited” and prices continued to rise, and others argued new threats to the market were either failing or being taken over by the big two.
“What we’ve seen is emerging platforms tend to get bought by one of the two giants,” he said.
Australian advertisers also raised concerns about how many times their advertisements were really being seen by potential shoppers.
While audited readership figures or TV ratings provided guides in the past, some advertisers said figures provided by big digital platforms were “fuzzy”.
The ACCC’s second forum was one of three to be held as part of its Digital Platforms Inquiry this year, with another scheduled for August.
The Commission is due to submit a preliminary report on December 3, followed by a final report in early June next year.