As the world is still grappling with the threats of disinformation, public interest media’s sustainability keeps eroding. In its latest report, the Forum on Information and Democracy calls for a structural reform of the online advertising market to reroute part of its revenues towards trustworthy news sources. It provides a clear roadmap for governments willing to take action.
By 2034, the size of the online advertising market should reach an astonishing 1.5 trillion dollars. And if the market does not evolve, a vast majority of this revenue will be captured by a small number of companies, with the Google monopoly taking the biggest share.
Meanwhile, across regions, the news media industry continues to suffer from an unfair and opaque programmatic advertising system. Advertisers, on their side, face reputational risks and lose money in a system that finances fraud.
Based on in depth research and the contribution of 40 experts, a new policy brief from the Forum on Information and Democracy proposes a concrete plan to reform the online advertising industry, in support of journalism and democracy.
A deeply flawed market harming news media and advertisers alike
The report highlights that, while laudable initiatives at redirecting advertising revenue to news media have been tried, the current structure of the online advertising market remains deeply unfair and does not support information integrity. This is largely due to a broken market dominated by a few technological giants perpetuating monopolistic practices by operating on all sides of the market, with Google today holding between 40–90% of market share across the various layers of the adtech stack.
The shift from direct ad placements to automated networks represents a broader trend driven by an impression of efficiency and lack of transparency. Advertisers lack control over where their ads appear and what exactly it funds. This leads to significant resource wastage on platforms that promote low-quality or misleading AI-generated “made for advertising” (MFA) websites that would otherwise reach news publishers.
Fraud within the system was estimated at more than USD $84 billion in 2023. Large platforms, meanwhile, benefit further from the spread of harmful content, which their algorithms tend to favor in pursuit of ever-greater engagement. News publishers on their side continue to face severe financial challenges, suffering from the loss of advertising revenue to big tech companies and generative AI using journalistic content often without fair compensation, while also reducing traffic to news sites.
Governments should act to recreate the conditions of a fair market
The policy brief entitled Ads for News, News for ads provides recommendations to governments which have a direct responsibility in ensuring the condition for a fair online advertising market. Recommendations encompass immediate, actionable steps such as incentives for advertisers or mandating a media exception in programmatic advertising.
While these actions can be taken within the existing advertising landscape more profound structural reforms aimed at restoring fairness to the digital advertising ecosystem must also be considered, such as:
- Establishing transparency requirements across the advertising market supply chain to help advertisers and publishers make informed decisions, including clear visibility into where ads are placed, revenue flows, and what kind of information is being funded.
- Reducing the diversion from publishers to illicit websites, mandatory due diligence and Know-Your-Customer (“KYC”) requirements for all advertising intermediaries to verify the identity, beneficial ownership, and legitimacy of the publishers, advertisers, networks, and verification firms with which they transact, and to maintain auditable records for regulatory oversight.
- Implementing legally binding technical standards governing audience measurement, as currently many of the indicators used to assess campaign success are defined and operationalized within platforms’ own ecosystems, creating incentives that favor scale over the quality of engagement, often to the benefit of low-quality websites and to the detriment of publishers.
Towards a strategic collaboration between advertisers and media
The report further calls for a collaborative approach including advertisers and media organisations. Experts have highlighted different initiatives and strategies to help foster an ecosystem that delivers better results for both.
“While the report primarily addresses governments, there are moral and financial imperatives for all stakeholders to engage in reshaping the advertising market in a way that uplifts quality journalism and defunds harmful information,” explains Camille Grenier, Executive Director of the FID.
As legal scrutiny of dominant platforms intensifies with the Google ad tech trials both in the US and the EU, this policy brief provides a roadmap for governments to create a fair and transparent ad market that works in support of democracy, journalism and advertisers.
