The economic devastation of Covid-19 might be keeping marketers awake at night but it is also exacerbating long-term issues and, combined with regulatory fears over Brexit and concerns about the dominance of tech giants in online advertising, has triggered a “triple whammy” that is vexing the finest minds of the industry.
So says “The New Internet” report by LiveRamp, which quizzed senior UK advertising and marketing leaders on the challenges that the industry needs to navigate in the next 12 months.
The research, conducted by LiveRamp and YouGov, shows that while over a third (36%) of respondents see the pandemic as a long-term threat – and still the biggest concern – more than quarter (26%) fear the effects of Brexit and a similar proportion (25%) are concerned about the advertising walled gardens.
Further exploring online issues, the study reveals over a third (35%) of senior British marketers think greater transparency in the decisions made by tech giants around advertising on their platforms would improve the industry.
Roughly the same number (33%), believe that the walled gardens should agree to a list of principles to make the sector fairer.
The UK has one of the largest online ad industries in the world, and in 2019/2020 online activity made up 62% of total advertising spend of £23.6bn – a growth of 5% on the previous year.
The report pulls together leading brands, publishers and industry bodies to consider how to overcome the challenges, future proof the UK online advertising landscape and ensure that the Internet remains open and fair to all.
Guardian News & Media commercial director Nick Hewat reckons Covid-19 has not created new challenges but rather increased the strain from existing ones. He added: “For us, the problem is our inability to collect revenue, according to the size and quality of our audience. It isn’t just coronavirus that has done that – this has been an issue for years. And it’s just become more concentrated during the past few months.”
Meanwhile, Damon Reeve, chief executive of the Ozone Project, which handles digital advertising for The Guardian, Reach, the Telegraph and News UK brands, is perhaps understandably most concerned about the walled gardens.
He said: “We all live in a world that is dominated by a very few number of companies and that creates a lot of sensitivity around their business models. On the one hand, we’re reliant on them for providing services, and on the other, they use that to their own advantage.”
Commenting on the influence of the tech giants, Advertising Week chief executive Matt Scheckner describes the ongoing battle between regulators and tech giants as “an incredible confluence”, adding that “regulatory bodies traditionally have authority in their jurisdiction and technology companies don’t recognise those walls or jurisdictions”.
LiveRamp managing director for Europe Vihan Sharma commented: “The environment for online advertising is becoming increasingly complex. Covid has put added pressure on the industry, with brands being compelled to reduce advertising spend, and publishers having to be more creative to entice buyers.
“As we face big structural changes in the shape of tightened regulation and restrictions on third-party cookies and device-based IDs, we must use this as an opportunity to innovate the online advertising ecosystem, embracing the tools that will enable data collaboration and increase addressability and reach.”
“We [want] to encourage everyone to identify how to improve our industry, encourage more transparency and distinguish how to create a fairer and more democratic place for online advertising.”
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