We have never been exposed to so many advertising messages. In a decade, advertising spending in Canada has increased from $12 billion to nearly $20 billion. However, traditional media have not benefited at all from this meteoric growth. On the contrary, advertisers have deserted them: three-quarters of advertising investments in Canada are now monopolized by digital platforms, with Google and Facebook in the lead.
“If the advertising market has grown so much in 10 years, it is because companies are much less afraid of spending on advertising than before. Now, thanks to the Internet, they can know exactly what their advertising campaign earned them. They can see how many people went to their site after seeing the ad. Unfortunately, it is not yet possible to measure the impact of an advertisement on television or in newspapers with such precision. This is why advertisers prefer the Internet,” summarizes Benoit Skinazi, head of marketing at Sharethrough.
The company he co-founded advises different companies in the deployment of their advertising strategy.
Mr. Skinazi still believes in the power of traditional media, but he also agrees that large platforms make it possible to better target potential customers thanks to their search history. “TV will evolve towards this model too. With smart televisions, it will soon be possible to segment the audience. During the same broadcast in live, I will no longer necessarily see the same advertising as my neighbor who listens to the same program. We’re not there yet, but it’s coming,” he predicts.
The press in free fall, TV in decline
For the moment, the Internet is the only medium to benefit from the explosion of the advertising market in the country. According to cross-Canada figures compiled by ThinkTV, a marketing organization focused on commercial TV, Internet advertising spending has exploded by 359% in just 10 years. In 2012, less than a quarter of advertising investments in the country were directed to the Internet; this proportion was 72% in 2022.
Conversely, all traditional media have suffered an erosion of their advertising revenue in recent years. The fall was particularly dizzying for the written press: between 2012 and 2022, daily newspapers lost 75% of their revenue from advertisers, magazines, almost 86%.
Radio resisted for a time the competition represented by the Web giants, the famous GAFAM (Google, Apple, Facebook, Amazon and Microsoft). But the pandemic will have hit private stations head-on, and several advertisers who left ship during the crisis did not return in 2022. Consequence: radio saw its advertising revenue drop by 31% over a period of 10 years.
Television is the traditional medium that is doing better in the current context. The drop in advertising revenue was limited to 7%. The pandemic had also scared away TV advertisers, but the year 2022 turned out to be particularly auspicious. Advertising revenues have not only returned to their pre-pandemic levels, but they have reached a threshold not seen since 2015 in the industry.
“TV remains very important in advertising. Advertising on TV remains a better way than advertising on the Internet to create a long-term feeling of belonging for a brand, because an ad on TV arouses emotion. But unfortunately for TV, in the current economic context, advertisers are more concerned about their short-term sales than their long-term image,” notes Anne-Sophie Collins, media director of the advertising strategy agency Dialekta.
Difficult digital shift
In recent months, the major broadcasters Quebecor, Radio-Canada and Bell have all made major cutbacks, citing a radical drop in advertising revenue.
According to Mme Collins, the exodus of advertisers is very real on television, but this decline of 7% over 10 years cannot alone explain the current crisis. “Many people have their share of responsibility for the crisis facing local media. Yes, advertisers must be made aware of the importance of advertising in these media. But advertisers don’t have to carry this weight alone. It is up to local media to adapt to current reality. And it is up to governments to better support them in this transition,” she reasons.
However, in recent years, TV channels have all indeed undertaken a digital shift in the hope that advertisers will follow them. This was not the case: the digital activities of the country’s TV broadcasters generate less than 10% of all advertising spending on the small screen. Daily newspapers today derive the majority of their advertising revenue from their website or application, but digital technology is far from bringing in as much as the advertising placements of the good old days of paper.
“It’s one of the great paradoxes of the industry at the moment. Internet users spend more time [sur les sites qui créent du contenu]. But most of the ads go to platforms that share this content, like Facebook,” recognizes the media director of the Dialekta agency.
The adoption of Bill C-18 last year by the Trudeau government was intended to partly correct this injustice. The major platforms are now forced to negotiate agreements with the media to share advertising revenues. Google released an envelope of $100 million per year for the media, but Meta reacted to the adoption of the law by blocking access to all news content on its Facebook and Instagram platforms in Canada.
“It is not a law that is adapted to the reality of the media world. At the moment, this law is hurting the media, which relied heavily on Facebook. It causes the opposite effect of the reason for which it was adopted. We have to go back to the drawing board,” recommends Anne-Sophie Collins.