The News Media Alliance applauds the introduction of the “Competition and Transparency Digital Advertising Act,” by Senators Mike Lee (R-Utah), Amy Klobuchar (D-MN), Ted Cruz (R-TX), and Richard Blumenthal (D-CT).  While our priority is the Journalism Competition and Preservation Act, we support the goal of Senator Lee’s bill to break up the ad market, ensure more transparency, create fiduciary duties to publishers, and make more data available to publishers. We look forward to working with the lead sponsors to ensure competition and transparency in digital advertising.

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Overview

Provided by Newsgatherers serve a vital role in our communities. Every day, millions of Americans rely on their local newspapers to get the latest information on what is happening locally, nationally, and internationally. Local newspapers not only help to create a sense of community but also form a fundamental part of American life. By keeping government officials and other policy- and decision-makers in check, a healthy local news ecosystem corresponds with lower municipal lending costs, while local and regional newspapers are also often responsible for some of the biggest scoops that affect the national discourse.

Niche publications aimed at certain racial or ethnic groups similarly provide high value to those communities and have been hard-hit by the transition to a Duopoly-dominated advertising marketplace.

Minority-owned news outlets occupy an important place in American journalistic history, and their continued survival – as well as the addition of new outlets – is threatened by the digital platforms’ anticompetitive practices.

This report investigates how the digital Duopoly’s dominance in the digital advertising ecosystem has impacted news outlets owned by and targeting non-white Americans.

Click here to download the report.

Research Report: Minority-Owed Media and the Digital Duopoly

Background

Throughout their history, minority-owned news media have faced economic challenges due to the dearth of advertising and prohibitive printing and distribution costs. While some believed that the Internet would enable minority media to flourish by lowering barriers to entry, the rise of Facebook and Google has created a host of new challenges for all news media.

As eyeballs and advertising dollars have largely moved from legacy print to digital media, the big tech giants have been the biggest beneficiaries, while newspapers, television and billboards have all faced double-digit revenue declines and competition for a smaller share of the advertising pie. The outsize claim on online ad revenue by Facebook, Google and increasingly, Amazon – which rose from 80 percent in 2019 to nearly 90 percent in 20201 – has sparked a number of antitrust lawsuits that allege Facebook and Google constitute a duopoly that is illegally manipulating ad sales. A bipartisan House Judiciary Sub- Committee report found evidence that the tech giants had monopolized the digital economy. “Companies that once were scrappy, underdog startups that challenged the status quo have become the kinds of monopolies we last saw in the era of oil barons and railroad tycoons,” said the report. It further states that the tech giants both run and compete in the marketplace, “a position that enables them to write one set of rules for others, while they play by another, or to engage in a form of their own private quasi regulation that is unaccountable to anyone but themselves.”

The shift has undermined the economic underpinnings of the traditional news industry. Between 2000 and 2015, newspaper ad revenues alone fell from approximately $60 billion to $23 billion, and between 2008 and 2017, newspapers laid off 45 percent of their workforce. During roughly the same period, the 82 percent spike in employment and addition of 6,100 jobs in digital-native newsrooms did little to offset the loss of some 33,000 newspaper jobs.

While the Duopoly has fueled legitimate concerns about its adverse impact on the news media, little attention has been paid to the particular effect the tech giants’ media dominance is having on minority-owned and -operated media. People of color comprise roughly 40 percent of the U.S. population, yet remain acutely underrepresented in mainstream newsrooms that, consequently, often under-report or overlook issues of importance to their communities. After George Floyd’s death, some in major media issued apologies for their historical racial failings, including the editors of the Los Angeles Times, the Kansas City Star and Vogue magazine.

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Key points from the report:

– Data for the top 22 Black-focused websites shows that the median audience size of these websites is just under 2 million average monthly unique visitors. Collectively, the median decrease of these websites’ average monthly visitors was about four percent between 2015 and 2016.

– While Black Planet was profitable and poised for growth when [Co-Founder Omar] Wasow left in 2005, he said Facebook, which went public in 2016, was growing ten times faster.

– “Staying competitive would have required substantially more investments to keep up with emergent technology… the dominance of Facebook makes it difficult to replicate Black Planet’s previous success.” – Omar Wasow, Co-Founder, Black Planet

– “The watchdog function of the press is vital,” he said. It’s crazy that Black America – with more than 40 million people – doesn’t have major media.” – Omar Wasow, Co-Founder, Black Planet

– Today, roughly 95% of all web advertising dollars goes to the top 50 websites, and a 2001 Aspen Report on the 15 ad-supported African-American websites showed the rates generally fall below the industry average of $35 CPM.

About the report

American Economic Liberties Project, MediaJustice and News Media Alliance commissioned author, journalist, and professor Pamela Newkirk to conduct extensive research on the history of – and impact of the ascendance of big tech platforms such as Facebook and Google on – minority-owned media and media targeting underrepresented communities. Dr. Newkirk gathered evidence, including research studies and news articles, and conducted phone interviews with Dr. Benjamin Chavis, president and CEO of the National Newspaper Publishers Association (NNPA); Joel Dreyfuss, former managing editor of The Root; Akoto Ofori-Atta, co-founder and executive editor of Capital B; Mark Trahant, editor of Indian Country Today; and Omar Wasow, Co-Founder of Black Planet.

For more information

Please contact Alliance Executive Vice President & General Counsel Danielle Coffey if you have any questions.

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On July 22, the News Media Alliance hosted a policy maker breakfast and book launch event for An Ugly Truth: Inside Facebook’s Battle for Domination by Sheera Frenkel and Cecilia Kang at The Dubliner in Washington, D.C. The launch featured special guests Kang and House Antitrust Chairman David Cicilline (D-RI).

Written by two award-winning New York Times journalists, The Ugly Truth debuted as a best seller in early July. Frenkel covers cybersecurity and Kang covers technology and regulatory policy at The Times. Their unique insights provide a troubling look into the tech giant’s rise and control.

The book largely focuses on the time period between 2015 and 2020, starting with the 2016 election and ending with the January 6th insurrection. From data leaks to internal scandals, Facebook’s role in Mynamar’s genocide to the FTC lawsuit against Facebook, The Ugly Truth goes deep on Facebook’s unprecedented power and the power to corrupt.

WaxWord's take on @ceciliakang and @sheeraf new book, #AnUglyTruth: The back jacket sums up the arrogance & dissembling coming from the top, a series of mealy-mouthed apologies, none convincing. https://t.co/XA8nyeUPHu

— Sharon Waxman (follow me on Threads @sharonwaxman (@sharonwaxman) July 26, 2021

The book’s back cover is speckled with quotes from Facebook’s CEO Mark Zuckerberg and COO Sheryl Sandberg from 2006 to 2020, each one acknowledging fault, apologizing and admitting Facebook needs to do better.

Chavern tweeted, “Such a great event and so happy to celebrate #TheUglyTruth and @ceciliakang — and very honored to hear from @davidcicilline, a real leader for our times.”

Cicilline is known for his staunch stance against Facebook, calling them a monopoly and issuing a statement in December of 2020 saying “[Facebook’s] abuse of its dominance harms competition, innovation, and other businesses. In the absence of competition and accountability, Facebook has harmed people’s privacy and allowed disinformation to flourish on its platform, threatening our democracy.”

Following the event, Cecilia Kang shared on Twitter that she was “Glad to share insights from our book and to wonk out with such an informed policy crowd.”

In early June, the French competition authority, Autorité de la concurrence, announced that Google had reached an agreement with the authority to settle an antitrust investigation regarding the tech giant’s anticompetitive behavior in the market for online advertising services. In addition to a €220 million fine, the settlement includes commitments by Google to change the way their platforms operate to allow for a more competitive industry. While the practical effects of the changes Google has committed to making remain to be seen, the settlement is yet another important step forward in addressing Google’s anticompetitive practices internationally and in rebalancing the online marketplace to create a more even playing field for news publishers.

Following complaints filed by multiple news publishers in 2019, the investigation centered around two of Google’s main advertising services: Doubleclick for Publishers (DFP) and Doubleclick Ad Exchange (AdX). The French competition authority found that Google abused its dominant market position by engaging in practices in the operation of these two services that harmed publishers and made it more difficult for other advertising platforms to compete with Google. In particular, the investigation showed that when private entities tried to buy and sell online advertising space, the DFP publisher ad server favored Google’s own AdX while, conversely, AdX favored the DFP ad server.

In both instances, the investigation found that Google had applied less favorable terms and technical conditions to third-party platforms than to its own services. As an example of this self-preferencing, Google used the prices on competing supply side platforms (SSPs) to inform AdX, allowing it to better optimize AdX, among other benefits, and providing Google’s platforms a competitive leverage at the expense of a competitive marketplace. Google also imposed contractual limitations on third-party platforms to further push buyers and sellers to stay within the Google DFP and AdX ecosystems by making interoperability between Google and third-party platforms more difficult and less efficient. By making it harder and more expensive to use third-party SSPs, Google has been able to steer more and more business to their platforms and away from competitors, making it harder for publishers to use other platforms.

In addition to the fine, Google agreed to change their practices to increase interoperability with third-party platforms and to not restrict the ability of publishers using Ad Manager to negotiate prices and terms directly with third-party platforms, hopefully increasing the ease and ability of publishers and marketers to utilize third-party ad platforms that compete with Google. These changes may lead to a more balanced and healthy competition in the online display ad marketplace and limit Google’s market dominance in the field. Google also committed to no longer using other platforms’ pricing information to optimize their services and to give Ad Manager users at least three months’ notice of any changes that publishers need to adopt. The fees associated with using third-party ad platforms will also be removed according to the agreement, and Google has promised to publish a guide on how to configure AdX Direct Configuration for customers using a third-party platform.

The French settlement comes at a time when Google is facing increased antitrust scrutiny focused on its ad tech services globally, including in the United States, Australia, the United Kingdom, and the European Union. These cases similarly focus on the ways that Google’s advertising technology platforms have restricted competition in the digital ad sector. The commitments made by Google in the French case give reason to hope for a more competitive digital marketplace in France, in addition to potentially serving as a blueprint for regulators in other parts of the world.

Recently, in the United Kingdom, the Competition and Markets Authority (CMA) released proposed commitments made by Google with regards to their Privacy Sandbox initiative following the CMA’s investigation into the issue. The Privacy Sandbox is aimed at developing alternative tools for interest-based digital advertising once third-party cookies are phased out. The CMA’s investigation into the Privacy Sandbox before the tools are finalized is an encouraging development, hopefully addressing problematic issues and features before they arise. For publishers, the increased focus by national competition authorities on Google’s digital advertising practices is long overdue and will hopefully help create an online marketplace that works better for everyone and not just the few dominant platforms.