Advertising and digital probed by senators at future of journalism hearing

Rosie Baker
By Rosie Baker | 11 July 2017

PwC’s Megan Brownlow, Jodie Sangster, CEO of ADMA and Darren Woolley, Founder of Trinityp3 are among the advertising and digital industry experts giving evidence at today’s Select Committee hearing on the Future of Public Interest Journalism.

Scroll down for the key highlights for advertisers.

Others giving evidence today include GroupM's director of technical operations Tim Whitfield; MediaScope's Denise Shrivell; SMI managing director Jane Schulze; Hitwise manager of innovation and insights Alice Almeida and Mumbrella's Tim Burrowes.

Three representatives from FreeTV are also due to appear; Ross Mitchell, director of broadcast policy; Sarah Waladan, head of legal and regulatory affairs and Justine McCarthy, legal counsel, regulatory and business affairs.

A number of industry bodies and academics will also appear including Dr Alex Wake; Dr Colleen Murrell; associate professor Angela Romano from Journalism Education & Research Association of Australia; associate professor Tim Dwyer; Dr Fiona Martin and Dr Penny O’Donnell.

There were 57 submissions ahead of today’s hearing from journalists, publishers and digital players including Google and Facebook.

Key themes and takeouts for advertisers from the Select Committee Hearing

The hearing is looking at the model that funds journalism, and players are offering perspectives on the impact of shifting advertising dollars.

Taxing Google and Facebook:

The Senator questioned if it is reasonable to apply a tax to Google and Facebook to help fund creation of content when “we all know who would pick up the tab”, suggesting that any tax imposed would be passed on to advertisers in the form of higher costs, and as a result, passed on to consumers.

When asked if a tax on digital giants was reasonable, Woolley said: “Would it be fair to put it onto Google and Facebook? Yes. But the consequences of that would have an impact on all advertisers in Australia.  Advertisers would not be happy with any additional taxation.”

Dominance of Google and Facebook

The Senator also questioned whether competition laws have not kept pace in allowing the dominance of Google and Facebook.

Woolley said: “Like most legislation competition laws are lagging behind the market, and there's been massive change from digital media. To look at the domination of those players would be an advantage for us all.”

Woolley also said that opening Facebook and Google's walled gardens would provide greater insights for advertisers to make decisions, adding "I'm not sure how it evens the distribution of revenues".

Media Reform

The current proposals for media reform are being discussed in depth, particularly whether the two out of three rule would protect journalism, or if it would create further concentration and consolidation and mean less diversity. There is consensus that no one can recall a time of greater unity from rival media owners.

PwC’s Megan Brownlow says it's “absurd” to have regulation that focuses on distribution platforms.

“I don’t think removing the rule would decrease diversity but I haven't studied it. It’s a risk to remove the two out of three rule if broader reform doesn't happen. Broader reform is pressing given the declines in revenue we’re seeing. It's just tinkering without addressing the bigger problem," Brownlow said.

Woolley later added: “This industry is very big on self regulation, and doesn't usually welcome government [interference]. It likes to look after its own backyard, so the alignment of the media owners is a recognition that they cannot address this issue themselves and are looking for some kind of government intervention.”

Blurring of lines

The line between journalists who create content and the advertising that has traditionally funded that has changed.

GroupM's Tim Whitfield suggests between just 10 and 20% of total media spend in Australia goes towards funding journalism.

Jodie Sangster CEO of ADMA said: “[Advertisers] will use the channels that reach the right audience. Less budget, driving higher return and finding channels that cut through the clutter - that’s what’s driving brands and how they are doing their advertising. They will use the channels that work for them and that is why there is such a shift over to Facebook and Google, because they can target better.

“10 years ago it was very clear what an ad was. TV ads are clear, advertorials were clear. Now the lines are blurred because we’ve moved into content publishing and brands are putting out their own content. It used to be advertising and journalism – but there is now a middle point where brands and individuals are. The lines have blurred, journalists come into the marketing sphere and advertisers move over to middle ground of content marketing.”

More to come.


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