The ACCC has asked for more input from the industry as its digital platforms inquiry turns its focus to the ad tech supply chain.

During a speech to the Australian Association of National Advertisers (ANNA) and ThinkTV audience in Sydney last night, Rod Sims, chair at the ACCC asked for the advertising industry to provide feedback on a number of preliminary recommendations before the final report is released in June.

The ACCC said its digital platforms inquiry is continuing to analyse issues about the digital advertising supply chain the affect on Australian advertisers, including how advertising is verified on the major digital platforms.

The inquiry is examining issues concerning the pricing of intermediary services, such as the cut of the amount paid by the advertiser for the ad impression.

The ACCC said this is seen by many to be opaque, particularly when there are many intermediaries involved.

Collectively, the amount charged or ‘cut’ taken by intermediaries is estimated to be between 30 and 75 per cent of the final price paid for ads. The ACCC is exploring whether there is sufficient transparency around these transactions.

Rod Sims, chairman, ACCC

Sims explained, “It is important that we better understand the issues with the ad tech supply chain because a lack of transparency means that advertisers do not know what they are paying for, where their advertisements are being displayed, and to whom.

“Higher advertising prices ultimately translate to higher prices for consumers for products and services.”

The lack of clarity around ad tech also arguably disadvantages online media businesses’ ability to monetise their premium content via advertising opportunities, Sims said.

He said, “We have not yet reached a view on these issues and we are continuing to examine the ad tech supply chain to understand better how it works and how this impacts advertisers.

“In this we would like the advertising industry’s help, as it is clear these are issues that require close examination.”

The ACCC is also yet to weigh in on the process of verifying ads and whether or not there are effective measure in place to confirm the as sold by the digital platforms are reaching their intended audience.

The AANA and Free TV have raised concerns with the ACCC over Google and Facebook’s monitoring the delivery of advertisements on their own platforms. Google and Facebook have rejected claims that advertisements on their platforms are not verifiable.

The inquiry released its preliminary report in the digital platforms in December, which highlighted the dominance of Google and Facebook in the Australian marketplace.

According to the report, in digital advertising in Australia it is estimated that more than sixty-eight cents in every dollar is going to Google and Facebook.

Sims said, “Being big is not a sin. Australian competition law does not prohibit a business from possessing substantial market power or using its efficiencies or skills to outperform its rivals.

“But the dominance held by Google and Facebook in certain markets, plus the incentives they face, does mean their conduct should be subject to particular scrutiny to identify whether it is creating competitive or consumer harm.”

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