Facebook and Google coming for out-of-home, says Mark Ritson

Lindsay Bennett
By Lindsay Bennett | 23 August 2017
Mark Ritson at Melbourne Media + Marketing Summit

As Facebook and Google have revolutionised the publishing industry, professor Mark Ritson is predicting a similar impact on the outdoor sector as it moves towards digitisation.

Speaking at the Future of Public Interest Senate Inquiry held in Sydney yesterday, Ritson warned of the diversification of the digital duopoly into other media platforms.

“It’s clearly a matter of time before outdoor advertising becomes completely digital in down town metro areas and that will open up an opportunity for the digital duopoly to enter into these areas,” Ritson said.

Once Facebook and Google begin to compete for outdoors budgets, it is likely they will cannibalise dollars once dominated by APN Outdoor, Ooh!Media, JCDeceaux and other outdoor venders - and our government is doing nothing to “liberate” these companies.

Ritson’s comments follow news in May that the APN Outdoor and Ooh!Media merger had failed after it was blocked by the ACCC.

“The merger was blocked on the basis they would end up with 50% of the share of the outdoor industry which was deemed by the ACCC to be too much of a controlling share," Ritson said.

"But when you put it against Google, which must have an 80-90% share of search advertising in this country, and search being 10 times more valuable than the outdoor industry, it does make a mockery of what’s going on.

“I don’t think we should be putting constraints on Facebook and Google but we should liberate our own media companies so they can fight back."

He argued we have passed the “threshold” in Australia with the proportion of dollars going to digital advertising versus traditional advertising.

“The best estimates put our media dollar at $16 billion for advertising spend in 2017 and we can be almost certain half of that is now being invested in digital options,” Ritson said, adding that Facebook and Google then dominate close to 75% of the digital pie.

When asked by senator Nick Xenophon on the exact figure Ritson believes Facebook and Google are taking from advertising spend in Australia, he estimated around $5-6 billion annually.

The figure is far from the $1.4 billion figure Google and Facebook shared with the senate prior to Ritson’s address.

However, a study from eMarketer forecast Australian digital ad spend to hit $6.18 billion in 2017 - a lesser figure than Ritson estimated.

While Ritson doesn’t back placing Facebook and Google under government constraint, he said the restrictions on domestic media has “played into the hands” of the duopoly.

“I believe it creates a double whammy, in which we are doing two things to the news media in this country; we are weakening the fourth estate and its ability to pull out the truth while crashing an environment in which fake news is increasingly the source of news stories for Australians,” he said.

“It’s effectively creating the bacterial infection but removing the bleach that can often remove it.”

Ritson also described the current media laws as "irrelevant" in the new digital era, showing his support for the proposed media reform bill – which is pushing for repeal of the two out of three and 75% audience reach media ownership rules.

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