A call to invest in advertising in Quebec media rather than on the platforms of the Web giants seems to be yielding results. The Association of Creative Communications Agencies (A2C) reports that the share of digital advertising investment in local media grew from 14% to 34% between the years 2020 and 2021.
The A2C, which represents 95 Quebec agencies, including Cossette, Sid Lee and Cartier, launched a movement in May 2020 aimed at supporting local media, which are having their income cheated by GAFAM (Google, Amazon, Facebook, Apple and Microsoft). These digital giants monopolize more than 80% of advertising investments in the country. Traditional media are scrambling to get their share of the market.
“Media funding has been a problem for a long time. The migration of advertising investments to global digital platforms deprives them of significant revenue to accomplish their mission, which is to imagine, produce and distribute quality local content. It is an obstacle to the transmission of essential content that informs us, fuels our democracy and perpetuates our culture”, argues Dominique Villeneuve, President and CEO of the A2C, in a letter to the Duty.
“In light of recent announcements of layoffs in various media, which add to the existing problem, it is imperative that companies mobilize. We must act now to maintain a strong and sustainable Quebec media ecosystem,” she adds.
A commendable effort
Patrick White, professor at the School of Media at the University of Quebec in Montreal (UQAM), salutes the effort of Quebec communication agencies to support local media. “It’s certainly a good idea to encourage advertising in Quebec media, which has experienced a sharp drop in revenue since last October,” he says.
The recent layoffs at Postmedia (particularly on a daily basis Montreal Gazette), at Quebecor and at Global News suggest a difficult year 2023 for the Canadian media, according to the professor.
Businesses are hesitant to invest in advertising due to fear of a recession. Certain industries, such as the automobile industry, have also slowed down their advertising investments because of the shortage of vehicles. Demand already exceeds supply even with minimal advertising effort, analysts point out.
Patrick White recalls that government advertisements relating to the pandemic have inflated Quebec media revenues between 2020 and 2022. These advertising expenditures have undoubtedly amplified the share of local investments reported by the Association of Creative Communication Agencies for the year 2021. The media can no longer count on these revenues for the year 2023.
Some, like The dutyhowever, have diversified their revenue streams by erecting a paywall that forces readers to subscribe to view all of their content — articles, videos and digital data.
The value of local content
The professor points out that Bill C-18, still being debated in Ottawa, is also likely to help the Canadian media. This initiative would force the Web giants to negotiate a sharing of advertising revenues with the media.
The A2C has calculated that if we doubled the share of digital advertising budgets allocated to local media (from 14% to 28%), they would collect $200 million per year.
According to the Parliamentary Budget Officer, the sums thus paid to the Canadian media could reach $330 million a year.
For its part, the A2C organization has calculated that if we doubled the share of digital advertising budgets allocated to local media (from 14% to 28%), they would collect $200 million per year.
“As experts, we remind our clients that local media can be effective [du point de vue publicitaire]. The level of engagement is higher in local media than on some platforms that are part of GAFAM. Local content, people want to consult it”, says Luis Areas, administrator of the A2C, president of the permanent committee of media directors and partner at Cartier.