Consequences of The Online News Act

A few months ago, we took a look at the implications of media with the introduction of Bill C-18, The Online News Act. The Act would mean aggregators like Facebook and Google would have to fairly compensate Canadian news publishers for using their content across their platforms, striking deals to ensure publishers were partnering with Big Tech, rather than being used by it. 

And while it certainly sounds like a better solution to safeguard journalism efforts at first glance, the consequences have been faced in the last few weeks as both Meta and Google announced they will remove all Canadian news content for their users. Meta has already made the move to do so, even though the Act is not yet in effect. 

Of course, it is a little more complicated than it seems as many larger news publishers already have deals in place with the platforms that will allow their news content to be viewable to Canadians. However, for the most part, the Big Tech giants don’t seem to be backing down from their decisions and will create many complications for smaller or even medium-sized publishers. We estimate that more than 80% of all traffic to Canadian news publishing sites comes from Google and Facebook and removing these would create a wave of further consequence across, and beyond the news industry.  

The brunt of the pressure will remain on smaller publications and journalists in Canada as the build-up to The Online News Act comes to pass in 6-months time. Before then, some Canadian publishers are pulling their investments with Google and Meta in retaliation to their intent, or in Meta’s case, actions of no longer linking their content. 

What does this mean for advertisers?  

It may seem messy right now, and that’s because it is. Conversations will continue between the Canadian government, publishers, and Big Tech platforms and the best thing to do is to remain agile in your investments. Ensure your communications with any Canadian publishers you advertise with are clear on their reach in the market and if they are affected by any of the recent developments. 

Overall, advertisers will be affected dependent on where they place their ad dollars. As mentioned above, the impact on publishers will be massive, especially smaller publications, causing layoffs and widespread operational impacts in the industry. However, advertisers that frequently partner with news content will also need to be wary that, should the Act go through it its current state, CPM rates on those publications will inflate and impressions will crash. It will be unlikely that any advertising will meet performance expectations.

Therefore, if the Act continues on it’s current trajectory, advertisers will need to make significant changes to the composition of their media mix to ensure they safeguard their return on investment. 

What was intended by policy makers to protect Canadian journalism endeavours will inevitably cause more pain for the industry. The Canadian government is smothering the publishing industry with love, and if the Act doesn’t change, we’ll watch them suffocate. It isn’t just about understanding the power of Big Tech, but understanding how integral these platforms are to discovery online.

The government wants to target platforms that have a “significant bargaining imbalance”, but advertisers that know how important Search is will understand that these platforms also give a significant value imbalance, tipping in publishers favour.