Canadian news publishers applaud the decision by Prime Minister Justin Trudeau and Pablo Rodriguez, Minister of Canadian Heritage, to end the Government of Canada’s advertising with Meta’s Facebook and Instagram services in response to Meta’s threat to block news in Canada.
This decision provides an opportunity to draw attention to the way governments and corporations allocate their advertising spend. At about $20 billion, Canada is one of the largest advertising markets in the world. Yet, too many of those dollars flow south of the border.
Last year, the Government of Canada spent a total of $140 million on advertising. Most of that spend was managed by Cossette Media, the Government’s Agency of Record for media planning and placement. About $6.5 million or just five per cent of federal advertising dollars went toward print publications, like newspapers and magazines. That is a far cry from roughly one-third of the budget going toward print 20 years ago. For comparison, government spending on Facebook/Instagram ads alone accounted for almost double what is spent on all print advertising combined. And the spending on Twitter, Snapchat, and TikTok combined was greater than all print expenditures.
Today, digital advertising accounts for more than 50% of all federal ad spending, yet the federal government’s annual report on advertising activity is far too opaque to see where the digital ad dollars are going. Anecdotally, publishers tell is they see little to no digital advertising from the federal government.
Digital search and social giants have contributed greatly to connecting people, businesses and communities. However, they do not employ a single journalist in Canada. And there have been unintended consequences. While they provide the essential plumbing of our digital age, despite all their technological acumen, they have not figured out a way to separate the clean drinking water (e.g., fact-based, fact-checked news) from the sewage (e.g., fake news). With rapid advances in artificial intelligence, it is going to become even more difficult for them and their users to separate fact from fiction.
Real journalism, which is based on editorial judgment and rigorous fact-checking, costs real money, which comes from advertising and/or subscription revenue. Canadian news publishers employ real journalists, who adhere to strict editorial standards, and publishers can be held liable for their content. Big Tech companies, on the other hand, don’t employ journalists and are shielded from liability, yet they benefit from the content our journalists produce.
Journalism is in transition. Publishers need to invest more in their newsrooms to drive revenue. Advertisers play a key role in supporting journalism, even though the revenue mix is shifting from majority advertiser to majority subscriber. In addition to the feds, we very much welcome the leadership by other political leaders like Quebec’s Premier François Legault and Mayor Valerie Plante of Montreal and Mayor Bruno Marchand of Quebec City, who stood up for democratic values and a free and plural press. We encourage other provincial and municipal governments to follow suit.
The CEOs of the large corporate advertisers – our financial institutions, telcos, retailers, auto and consumer packaged goods companies – those make up most of Canada’s ad market and much of Meta’s $4 billion in Canadian revenue – should direct their ad agencies to support the home team and keep their ad dollars in Canada and support Canadian journalism.
The consequences of inaction are more misinformation and disinformation, a less informed and engaged citizenry, less robust public discourse, and a loss of community. It’s time for a “Team Canada” approach to advertising.
Paul Deegan is president and chief executive officer of News Media Canada.