Facebook and Google control 70% of the digital advertising market

The digital advertising market is a business that grows at a great pace but has a lack of transparency and concentration that are not parallel with any other ac

Facebook and Google control 70% of the digital advertising market

The digital advertising market is a business that grows at a great pace but has a lack of transparency and concentration that are not parallel with any other activity. In it, Facebook and Google take the best piece of the cake. This has been determined by "study on competition conditions in the online advertising sector in Spain" prepared by the National Commission of Markets and Competition (CNMC).

According to the report, the 3,460 million euros that generated online advertising in Spain in 2019, Facebook and Google absorbed more than 20% and 50% of the market respectively. Specifically, Google monopolized 90% of search engines advertising, which reached 1,500 million euros. For its part, Facebook encompassed 40% of the advertising on display - which is generally understood as a banner that ascended 1,950 million euros. This subsector is, in addition, the one that is in greater growth.

These great platforms also monopolize the intermediation of advertising for medium publishers - dialies, televisions or digital radios. This portion of the market is known as Open Display and in it publishers and national audience negotiated for their advertising space with advertisers and agencies. For this, they resort to third parties that manage the process of intermediation with advertisers. In 2019, Google was one of the most relevant intermediaries in this subsector, with odds that ranged between 50% and 70% of the market depending on the type of service.

All this generates a high concentration of the market in the hands of the American giants who, as alert the study itself, "does not have a comparison in other sectors." Above all, taking into account the sector of digital advertising, it was only 20 years ago and whose growth has been very accelerated compared to other sectors traditionally concentrated such as telecommunitions or energy. This trend, in addition to worrying, is upwards, as explained Joaquín López, Director of Promotion of CNMC competition, in information collected by Europe Press.

The study, initiated in 2019, was persecuting the purpose of understanding how new technologies have modified the traditional models of competition in the advertising sector, putting the focus on the collection of third-party data with which digital advertising personifies and measures The response of potential consumers.

For this, he carried out a public consultation at his initial phase, in which 65 agents involved in the sector, among which consumers, means of communication and creators of content and academic experts participated. These showed their concern about the effects that the possible concentration of the market in certain operators could have on advertising. A concern that did not move away a lot from the final results of the CNMC study.

It is not the first time that these corporations are at the center of the controversy by sweeping competition. Google has received three fines from the European Commission (EC) for anti-competitive practices amounting to a total of 4,343 million euros. The latter of them took place in 2019, when Brussels imposed the payment of 1,490 million euros for carrying out "illegal practices in the intermediation of searches based on searches to consolidate their dominant position in the market," Margrethe himself announced. Vestager, European Commission Commissioner, on his Twitter account.

For its part, Facebook is under the scrutiny of the EC since beginning early summer an antitrust investigation against the social network. Brussels suspects that the platform that runs Zuckerberg used data collected from advertisers to compete against them, according to EFE. When it ends

It is precisely the ability to accumulate data from these platforms, which has favored that they control most of the digital advertising market, as reflected in the study prepared by the CNMC. The main monitoring body of competition in Spain considers that the collection of user data can be positive as it allows to improve consumer experience and favors the realization of more personal advertising strategies.

With this, it also offers advertisers the possibility of achieving greater effectiveness, being able to analyze, for example, where their investment is more productive. However, the CNMC also alerts that competition problems could end up reducing these positive effects of online advertising, affecting consumer welfare

In its study, the organism led by Cani Fernandez also offers several recommendations to avoid the adverse effects of an excessive digital advertising market control in the hands of Google or Facebook. Mainly, it alludes that the authorities continue to apply competition policies and make use of European regulations of digital markets, as well as strengthening the capacities and means of such authorities.

In this sense, Joaquín López recalled the importance of projects such as the European Law on Digital Markets - which are actually in writing - which aims to establish joint criteria for determining the rights and obligations of the platforms that act as access guardians. That is, those platforms with a strong, rooted and lasting economic position in the market and as a throttle between users and companies. That is, like Google and Facebook.

Date Of Update: 26 July 2021, 14:11

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