Google and Facebook now get 42 cents of every advertising dollar spent in Canada, according to the latest research from the Canadian Media Concentration Research Project.

The Duopoly’s dominance is, of course, much more pronounced online, where they received 78.2% of the $7.8 billon spent by advertisers in 2018. That’s up from about 75% in 2017 and 66% in 2015.

The data is included in two new reports from the CMCRP, led by Dwayne Winseck, a professor at Carleton University’s School of Journalism and Communication. The reports provide deep analysis of the Canadian media economy: The first looks at growth and change in the media economy, while the second focuses specifically on whether or not media concentration is increasing—and the associated problems that come with less competitive markets.

• $86 billion: The size of Canada’s network media economy, up from $19.4 billion in 1984, the starting reference point for the CMCRP studies.
• $358.50: Per capita advertising spend in Canada in 2018, down from an all-time high of $365.60 in 2008.
•  $4 billion: Canadian spending on online video, music, gaming and app stores, up from just $1.4 billion in 2014.
• 10.8 million: Cable subscribers in 2018, down from 11.5 million in 2012. Accounting for population growth, 76% of all households subscribed to a cable television service last year—down from 85.6% in 2011. (Although those losses have largely been recaptured through price increases for cable TV and broadband internet access, which have far outpaced the consumer price index). 

The empirical studies are wide-ranging and extensive (79 and 105 pages respectively), supported by data, and produced by academics without funding from industry players—meaning they are presented without agenda or bias. They often use frank language to articulate the analysis of complex topics—though there is some academic Herfindahl-Hirschman Index stuff in there too.

While Winseck and his co-authors are concerned about Facebook and Google, for example, they warn about overreacting in the face of a rising tech backlash.

“It is obvious that the extent of Google and Facebook’s domination of internet advertising justifies a range of actions to curb their growing clout. However, there is also a sense that we may be being swept along by the force of events in ways, a moral panic of epic proportions—which are never good times to make ‘media regulation.'”

Addressing the rising backlash with The Message, Winseck said there are legitimate concerns about the power of the duopoly. “I also believe that those threats are being hijacked and torqued to push policy wish-lists by incumbent interests,” he said in reference to Canada’s big commercial media companies, which remain massively powerful.

Google and Facebook may control digital advertising, but that is a small part of the overall $86.2 billion network media economy (see the advertising revenue breakdown in table, right). The “Big Five” Canadian players of Bell, Rogers, Telus Shaw (Corus) and Quebecor  accounted for 73.4% of the $86.2 billion network media economy last year, up from 71.4% in 2017. Bell alone accounted for almost 28% of all revenue in 2018.

The big Canadian commercial media players may be raising concerns about the power of Facebook and Google, but at the same time are ” intensifying their own efforts to harvest personal data on a vastly greater scale than ever before and clamouring for weaker privacy rules at the same time,” write Winseck and his co-authors. While those Canadian businesses see this as a way to compete with Big Tech, the authors contend that it is “a sure-fire recipe for a race to the bottom between domestic media companies and the global internet companies with respect to data and privacy protection.”

However Winseck and his co-authors also believe it is time to push for some strong regulatory action. Breaking apart Facebook or Google in some fashion has been one popular suggestion. Winseck said he’d like to see Google forced to separate its search and other consumer facing elements of its business from its ad tech. Having so much control of the market, along with currency it uses—the data and knowledge of consumers—is indefensible, he said.

“It’s not good for advertisers. It’s not good for other media that are competing with them for advertisers. It’s not good from a privacy and data protection standpoint. It’s not good for individuals. It’s not good for the internet.”

It’s unlikely any action will be taken in 2020, he said, but the wheels could be set into motion. “I see regulators around the world pushing a lot harder than they have before,” he speculated.

While the CMCRP reports that the vast majority of the broader $86 billion network media economy is strong, there is no doubt that ad-supported broadcast TV, radio, newspapers and magazines are in crisis. “I used to be a little circumspect about the scale of the crisis there; I am no longer circumspect,” said Winseck. “They have lost, collectively, $4.4 billion over the last decade.” About half of that was lost by newspapers alone, he added.

“These are what I call the engines of journalism or news production in this country,” he said. “When you gut the core economic foundations of these news engines to set the agenda for the rest of the media across the country, you have a problem.”

While the problem stems in part from Google and Facebook taking ad money away from those traditional news engines, overall ad spend in Canada has been flat or declining, he said. “And now it’s being spread thinner across more media.”

Winseck is also highly skeptical about the fundamental motivation underlying so much of the growth of the digital media economy—an insatiable thirst for more data to drive behavioural advertising.

“We don’t know what the impact of these advertising strategies are on audiences” he said. But the promise of those strategies has led to a digital economy fundamentally wired to serve those interests. “We basically sold off the technical architecture and the economic viability of some media that depended on advertising for the false promises of a bunch of snake oil sales people.”