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More local papers will close unless digital advertising imbalance is addressed, committee told

LOCAL newspapers will close unless the dramatic imbalance in the digital advertising landscape that fails to adequately reward the content creators for their investment in news is addressed, an influential parliamentary committee has been told.

Giving evidence on behalf of the News Media Association to the House of Lords Communications Committee’s enquiry into advertising, Newsquest chief executive Henry Faure Walker (right) said the dominance of Google and Facebook was creating a problem in the digital advertising marketplace.  

 “We think there is a case for the CMA to review the digital advertising market and make some recommendations as to how it can foster a more competitive marketplace,” Mr Faure Walker said. “I think unless something changes significantly to the revenue outlook, and what we’re seeing is still steep revenue decline, then more local newspapers will close and hit the wall.”

Mr Faure Walker appeared as a witness on Tuesday last week alongside head of public policy Guardian Media Group Matt Rogerson who called upon the committee to take action to help make the digital advertising marketplace more transparent.

The session also heard from ISBA director general Phil Smith who said that advertisers lacked choice in the digital space and called for “urgent action” to be taken to address brand safety concerns following the latest revelations from The Times around brands appearing next to inappropriate content on YouTube.

In his evidence, Mr Faure Walker cited the NMA’s study of Newswhip study, which shows that 47 per cent of all engagements on UK content on social media are powered by commercial news brands but, Mr Faure Walker said, news brands are “only getting a very few crumbs on the revenue table.”

We are in dialogue with them but they are very slow to move and I think one needs to put more pressure on Google and Facebook possibly, in my view, through regulation so that we can create a more balanced marketplace,” Mr Faure Walker added.

In his evidence, Mr Rogerson cited Enders Analysis stats stating that for every £31 in lost print advertising news media brands were only recouping £1 in digital advertising revenue. The print sector’s share of the advertising market had dropped from 30 per cent in 2008 to just 10 per cent in 2018, he added. 

'The internet is not free'

Mr Rogerson added: “There’s this great myth that I’ve seen in some of the submissions to this committee that the internet is somehow free. The internet is not free. Both of our organisations invest a lot of money in the journalism which is distributed online and we find that we don’t necessarily get an amount of reward for that which is necessarily commensurate with the effort.”

Advertising had become “disconnected” from content instead following audiences around the web, he  added.  He continued: “The two platforms that have the most personal data on the most people are Google and Facebook.

Therefore, advertisers book to follow an audience round the web regardless of where they go in terms of the quality environment and that’s a fundamental change in the way the advertising industry has worked – it delinks from quality content and absolutely attaches to the audience.”

Read the full story on the News Media Association website: http://www.newsmediauk.org/Latest/more-local-papers-will-close-unless-digital-advertising-imbalance-addressed-committee-told

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