14. June 19, 2019
Pricey Makan Delrahim
US Division of Justice
950 Pennsylvania Ave., NW
Washington, DC 20530
Re: Public Competition in Tv and Digital Advertising
Pricey Assistant Delrahim:
At the R Road Institute (R Road) we thank you and the Division of Regulation ("DOJ" or "Department") for organizing a workshop and getting a public contribution to the competition in the tv and digital advertising market  Monet The current most popular video and digital providers are financed wholly or partly by advertising revenue, so it is important to take care of and promote viable competition in these advertising markets. As well as, the separate markets for television and digital advertising are increasingly converging into a single advertising market. This convergence creates new opportunities for corporations competing on this market and new challenges for regulators making an attempt to regulate them. In this case, the department's current session was both timely and timely.
R Road's mission is to interact in coverage research and knowledge to promote free markets and restricted, effective government. As a part of this process, we now have studied and commented on various policy issues related to US media regulation, including some of the current rules of the Federal Communications Fee (FCC) regulating elements of the telecommunications market.  These comments tighten and broaden R Road's previous work on this area by making three key points.
To begin with, the department ought to recognize that the single market for tv and digital advertising is more and more converging into a single advertising market. This convergence is because of many elements, reminiscent of technological developments and modifications in the shopper perspective. Such a convergence and transformation of the advertising market opens new alternatives for business to try to attain shoppers and new challenges for the division and different regulators in an attempt to take care of and promote viable competition on this market
. the department ought to take note of the ongoing convergence in the advertising market by extending the definition of those markets to the evaluation of competition regulation. Discussions during the DOJ workshop clearly showed that tv and digital advertising corporations are increasingly competing for advertising revenue, which ought to restrict corporations' capability to boost prices above any aggressive degree in any part of the market.
So far as commentators are still concerned about the impression of advertising competition on small businesses, the division should contemplate out there market-based mechanisms to counterbalance competition. Certain members of Congress have lately proposed a restriction on competition that permits local advertisers to type a cartel, prohibit manufacturing, and raise costs to help local information and different providers, however such collusion is "the greatest evil of a restriction of competition" [19459012
The only market for television and digital advertising is increasingly converging right into a single advertising market. The evidence of this was introduced throughout the first working day of the division when the panels mentioned advertising 101 and the nuts of advertising bolts in numerous media, and the second day of the workshop, when the panels discussed this concern and tried to predict future tendencies in the advertising market
. Tv and digital advertisements have historically served totally different functions for advertisers
During the opening performances and panels, the members made several references to the “marketing channel” mannequin used to visualise the advertising market as steps of the shopper's journey.  Although this journey isn’t all the time linear, it often varies after model awareness and from the starting with curiosity, evaluation of certain gives and purchasing.  Particularly, shopper journey is far the similar for each subscription-based and freemium providers regardless of their totally different business fashions. 
Traditionally, several types of advertisements have been focused to totally different layers of the funnel. The type of tv commercials – often 30 seconds or longer for audiovisual clips, typically with high manufacturing value and compelling tales – has usually been more appropriate for advertising at the prime of the funnel, as shoppers usually tend to view and keep in mind these advertisements
On the other hand, digital advertising on web sites or cellular purposes is usually It was more appropriate for advertising at the backside of the funnel because these shoppers see the advertisements in an surroundings where they will easily make purchases with just some clicks or a tap, which leads to extra outcomes. Nevertheless, technological advances and modifications in shopper viewing habits are raising this traditional paradigm at both ends of the funnel
B. Chopping and combined viewing blur the traditional distinction between the television and digital advertising markets
typically successfully. With these modifications, the advertising market can also be changing in the video market. There are two ways to draw attention to this: chopping off management and viewing it
Slicing down administration refers to the current development of shoppers withdrawing or eradicating traditional cable and satellite tv for pc video providers and relying as an alternative on free-to-air broadcasting and on-line streaming video providers. On-line streaming video providers differ tremendously in their varieties, reminiscent of video-on-demand and reside television providers; their enterprise models, including free, ad-supported providers (eg YouTube, Twitch), à la carte-paid providers (e.g., iTunes, Google Play) and paid subscription providers (e.g., Netflix, Sling TV); and their content products that embrace fashionable programming that draws a wide audience (e.g., CBS All Access, HBO Now) and area of interest programming that appeals to only a small part of the public viewers (e.g. Fubo TV for sport, Crunchyroll for anime
Though traditional pay-TV providers are highly regarded, and actually they’re still the dominant type of viewing, online streaming video providers and cable chopping proceed to be well-liked particularly amongst younger viewers.  And while on-line advertising in the late 1990s and early 2000s was often limited to static photographs and hyperlinks, on-line Streaming video providers advertisements are these days typically inseparable from broadcast and cable TV advertisements. The truth is, many online video advertisements are as excessive as conventional TV advertisements, and may typically be more focused to a selected viewers relying on conduct contextual and geographical concentrating on. Thus, as wire chopping continues to grow and as on-line advertising continues to improve high quality, these advertisements are more and more turning into a direct alternative for conventional TV commercials and can be utilized successfully to focus on shoppers to the prime of the funnel and create brand consciousness
At the similar time, technical enhancements in traditional TV viewing also permit concentrating on of TV advertisements efficiently for shoppers at the bottom of the hopper and produce outcomes. Generally, these improvements and the opportunities they offer might be referred to as "combined views".  This time period "refers essentially to the many ways in which viewers participate with the media in multi-screen, socially networked, digital entertainment experience."  For example, watching a TV or cable TV on a settee can embrace a smartphone, tablet or laptop computer. These screens could be improved via the viewing experience – for example, by offering video clips and highlights during a stay sports activities occasion, as ESPN does with its cellular app or by providing viewers with the opportunity to comment and talk about reside video in real-time social media. Equally, these screens may also be used to enhance your advertising experience – for instance by displaying extra advertisements to shoppers or, most importantly, giving shoppers the alternative to make actual purchases, perhaps with one in every of the promotional low cost codes shown on the display and redeeming another.  Though these developments have thus far been more pronounced in online advertising, associated viewing continues to be an enormous promise for advertising on broadcast and cable TV. The introduction of the new ATSC 3.zero Broadcasting Commonplace  and the continued efforts of programmers  and different  are creating new standards for conventional television providers, whereas tv advertisements are increasingly appearing as online ads. This variation and convergence between the tv and online advertising market will give business new alternatives to attempt to attain shoppers – as well as new challenges for the division and different regulatory authorities in making an attempt to take care of and promote viable competition on this market.
Over the years, many feedback have warned that main know-how corporations comparable to Google and Facebook have successfully monopolized the online advertising market to the detriment of smaller rivals and shoppers . Also, in the case of on-line advertising, these claims do not stand for consideration. Google, the current leader, has a market share of less than 40 %, and the Google-Facebook advert duopoly has now been curbed by Amazon, whose market share rose from 6.eight % to 8.eight % final yr.  During this era, Google's share fell by 1 % and Facebook's rise by simply 0.Three % to 22.1 % 
As explained above, on-line advertising is increasingly competing with television advertising in any respect ranges in the advertising channel, so "online advertising" is just not relevant market. Discussions during the DOJ workshop clearly confirmed this, as corporations increasingly see the advertising market as a single entity where tv, community, printing and other forms of advertising are interchangeable. Businesses do not finances separately for each ad sort, but price range once to advertise the advert, and then distribute ad funds to totally different platforms, relying on elements corresponding to worth, availability, and demographics.
This rising substitute and competition between totally different forms of advertising ought to limit the means of corporations in any part of the advertising market to restrict manufacturing and lift prices above a competitive degree. The establishment should subsequently consider this ongoing convergence and growing competition in advertising by extending the definition of the advertising market to the analysis of competition regulation. It is definitely potential that an particular person company can achieve market energy in all advertising environments and use that power to limit returns and raise prices, but no firm is such a power at present. As well as, the new opportunities introduced by the convergence of tv and on-line advertising are more likely to make it inconceivable for the firm to realize such power in the near future. On this case, the department must be much less involved about one-way conduct and extra concerned about potential secret agreements and cartel actions in the advertising market.
The advertising market appears to be usually competitive and wholesome in the present day, but some comments remain concerned about the influence that advert competition can have on small businesses that rely on advertising income to help their companies. Sure members of Congress are so concerned about the effects of the advertising competition they’ve just lately proposed to release competition regulation so that publishers can create an advertising cartel.  This proposal would harm shoppers and ought to be resisted.
If publishers are granted an exception to competition regulation and permit co-operation to type an advertising cartel, they’ll certainly use that power to limit manufacturing and raise costs. In this case, the members of the cartel would obtain more advertising income that might be used to help their enterprise – and should have some social worth if used to promote local information reporting. Nevertheless, these advantages would come on to the shoppers (ie the advertising producers) as a result of they need to pay competitive costs to advertise their services. Little question there isn’t any assure that the surplus revenue of the members of the cartel can be reinvested in Members' publishing activities, as they can be used to increase income or to finance some other activity. This would definitely be a internet injury to shopper welfare.
Such co-operation might theoretically be justified if it have been the solely potential strategy to protect local information or different providers that provide vital social (but apparently not financial) worth to shoppers. Nevertheless, it isn’t. At the finish of 2017, the FCC repealed lots of the restrictions on possession that have been beforehand regulated for the local media market.  Possession of broadcasters continues to be restricted at nationwide degree, however local broadcasters at the moment are free to merge with native newspapers and other native broadcasters beneath sure circumstances. 
continues to be more restrictive than common competition regulation, seemingly sustaining and promoting the variety of possession and content in the native media. Nevertheless, these rules are a lot less restrictive than earlier than. If newspapers, broadcasters, or other media need to improve their advertising income, they will concurrently improve their stock and negotiate the leverage of advertising income by simply combining one another. Horizontal mergers and acquisitions can definitely harm shoppers and competition by eradicating a number of rivals from the market. Nevertheless, they will also benefit shoppers and competition when the merging corporations create a stronger competitor to the market chief. Collaboration, on the different hand, is "the highest evil of the restriction of competition" ; it damages both shoppers and competition. Given the existence of market-based mechanisms to counteract the competitive imbalances between native newspapers and broadcasters on the one hand and nationwide or multinational advertising nations on the other, the establishment should oppose any try and merge and type advertising cartels.
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The R Road Institute commends the Ministry of Justice for the alternative to comment in response to a public seminar on competition in tv and digital advertising. R Road recommends that the Division continues the above-mentioned areas in the ongoing work to guard competition and promote innovation in television and on-line advertising.
__________ / s / ____________
Director of Know-how and Innovation Policy
R Road Institute
1212 New York Ave. N.W.,
Washington, D.C. 20005
 . Department of Regulation, Public Workshop on Tv and Digital Advertising Competition (Might 2-Three, 2019), http://bit.ly/2wAyoZ1.
 See, for instance, Tom Struble & Joe Kane, R Road Institute Feedback, Media Management Modernization, MB Docket No. 17-105 (Fed. Commc & # 39; s Comm & # 39; s July 5, 2017), http : / /bit.ly/2wA0jbK.(19659012OA  See Verizon Commc, Inc. v. Curtis V. Trinka Regulation Companies, 540 US 398, 408 (2004).
 See, for example, Dep & Justice, Public Competition on Tv and Digital Advertising, Lecture: Advertising 101 – An Overview of Advertising and Key Points to be Examined at the Workshop from 1.30 pm to four.30 pm (Might 2) 2019), http://bit.ly/2XAvIXo.
 See ID. 22: 50-23: 50
 See, e.g., Edward Carlson, Nat & # 39; Telecomm. & Information. Admin., Chopping Edge: NTIA Knowledge Show Change as a Streaming Video Shopper for Drop Pay-TV (Might 21, 2019), http://bit.ly/2XsfH5D.
 See ID. (exhibits that 86% of Internet customers between the ages of 15 and 24 have been watching on-line video in 2017, rising from 67% in 2013 in comparison with only 40% of Internet users over 65 years of age in 16% in 2013).
 See, e.g., Jennifer Holt et al., Introduction: Increasing Landscape of Combined View, 22 Convergence: Res. New Media Tech. 341 (2016), http://bit.ly/2XF38El.
 Id. 342.
 See, for instance, Phil Kurz, FCC launches ATSC Three.zero purposes, TV Tech. (Might 23, 2019), http://bit.ly/2wGvXUL.
 See, e.g., Todd Spangler, Disney, NBCU, Turner, CBS, and more Be a part of the Vizio-Led-Addressable TV Advertising Consortium, March 12, 2019, http://bit.ly/2wHczqC.
 See, for instance, Google, present TV advertising: creating a better, private TV and video expertise, assume with Google (June 2016), http://bit.ly/2wEapbq ("Demonstrable TV advertising is the capacity show totally different advertisements to totally different households once they take a look at the similar program. ”).
 See eg Nyshka Chandran, Huge Tech Monopolies are "Always be more and more a problem", Media Professional warns, CNBC (September 11, 2018), https://cnb.cx/2wJhwzw./19199002] ] See, for example, Felix Richter, Amazon Challenges Ad Duopoly, Statist (February 21, 2019), http://bit.ly/2wROlud.
 See, for example, Margaret Sullivan, Google and Fb Sucked wins from newspapers. Publishers are finally resistant., Wash. Submit, June 5, 2019, https://wapo.st/2XBgr8A (to debate the current payments in the Parliament and Senate to launch antitrust restrictions for news publishers)
 See eg Brian Fung, The FCC Simply Repealed 42 Combining Guidelines for Blocking Broadcasting Units, Wash Publish, November 16, 2017, https://wapo.st/2XBjmy4. At the similar time, the joint possession of both the newspaper and the television or radio station on the similar market was simultaneously banned
 See Verizon Commc, Inc. v. Curtis V. Trinka Regulation Companies, 540 US 398, 408 (2004).