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Canada 'outsources' digital spend

News, 27 June 2016

OTTAWA: Online, and particularly social, has taken great bites out of print advertising everywhere and Canadian news organisations have now voiced concerns over the way the government is "outsourcing" its digital advertising to US organisations.

The government spent 15% of its digital ad budget on news website ads in 2014-15, down from 24% the previous year; at the same time it doubled spending on Google, Facebook and Twitter to more than one third of its ad budget.

"If the government of Canada spends on ads on Facebook, they send money directly to Silicon Valley," said Steve Lowry, founder of Discovery Media House, an advertising consulting firm. "It's almost like outsourcing, in a way."

And while the inevitability of that was accepted by Bob Cox, publisher of the Winnipeg Free Press and chair of the Canadian Newspaper Association, he argued that the government could do more to help.

"I think that there needs to be steady advertising partners for the media to survive," he said. "Other countries have been much more aggressive... They could start by being more selective in how they spend ad money."

But Nick Taylor-Vaisey, resident of the Canadian Association of Journalists, warned that such a policy could lead to questions about the government having undue influence over the media.

"I think you would see a lot of journalists throw up red flags if that happened in a concerted, deliberate way," he said.

Meanwhile government spending in social media continues to increase, a trend accelerated by the new Trudeau administration elected in November last year.

"The main thing that's happened for consumers is that there's huge choice in media now," said Cox. "People over the age of 60 are great newspaper customers, people under the age of 20 barely use newspapers. Everybody has different ways of using media."

"But if this were the aerospace industry and they were buying products from a foreign supplier, they'd make sure there was at least some Canadian components," he added. "They should be thinking about how they support Canadian media in the same way."

Data sourced from National Observer; additional content by Warc staff