Tech giant Meta will pull the plug on Canada-based users’ access to news sharing through Facebook and Instagram in response to the country’s Liberal government passing controversial new online news legislation through the senate late last week.
The Online News Act (Bill C-18) is still awaiting royal assent before it formally becomes law but Meta announced in a corporate blog post that news availability “will be ended on Facebook and Instagram for all users in Canada” prior to the act taking effect.
Both Meta and Google have taken issue with the bill because it will see the tech giants have to negotiate compensation deals with news outlets over sharing of links to news content produced by publishers and broadcasters - in Meta’s case, effectively forcing it to pay news outlets whenever users share their stories on Facebook or Instagram.
Meta leaders said in a statement reviewed by The Washington Post: “We have repeatedly shared that in order to comply with Bill C-18, passed today in Parliament, content from news outlets, including news publishers and broadcasters, will no longer be available to people accessing our platforms in Canada.”
Will brands invest their ad dollars elsewhere?
Meta platforms enjoyed $113bn in global ad revenue last year and this is projected to increase to around $120bn in 2023, which would give it a just over 20% share of the global digital ad market, behind only Google’s 28.4% of the share.
However, with Canadians now needing to look elsewhere for their news, there is potential for less eyes to be on the Facebook and Instagram platforms, which could prompt brands to question if their ad dollars should be invested into alternative channels.
In particular, the emergence of retail media as an alternative digital ad channel - one that reaches consumers closer to the point of purchase - may gain even more popularity in the wake of this decision from Meta.
A similar bill was passed in Australia in 2021 forcing tech firms to create content supply deals with media outlets and saw Facebook news feeds temporarily shut down across the country.
With Canada following suit an additional question for brands must be raised - is this trend going to continue across the globe?
“An important step for publishers to be recognised for their position in the advertising ecosystem”
Aarti Suri, Global Strategy Manager, Publisher, at Permutive supports the Canadian Government’s decision, believing it to be an “important step for publishers to be recognised for their position in the advertising ecosystem - they deserve 100% of the revenue for the value they create”.
She continued: “We’re seeing advertisers slow down their spend on social display. In the latest IAB Ad Spend report, Social Display is already the channel with the slowest growth, just 4%. Display non-social is growing at 11%. Publishers also see revenues increase as advertisers shift spend directly to publishers to ensure they reach consumers.
“Meta’s failure to realise the power of news and premium publishers in an era of fake news and brand safety will see more budgets spent directly with publishers. Choosing to funnel ad spend directly with news publishers will ensure the accuracy and validity of the content being read and funnel spending to continue quality journalism.”
“Removing legitimate news from their platform feeds will likely increase the presence of misinformation”
Ramin Beheshti, Co-Founder and President of The News Movement, said the new legislation presents a great opportunity for competing providers to strengthen their news offerings, citing the propensity this move may have for spreading misinformation as something to be wary of.
He said: “This is a significant move that will undoubtedly have repercussions in terms of marketing spend but also when it comes to user behaviour. There will also be a wider challenge in determining what is considered news. For many younger people, social media is the primary news source; our recent study into Gen Z habits revealed that 60% of Gen Z go to social media for information.
“If they no longer get access to news through Meta’s platforms, this presents a strong opportunity for competing providers to strengthen their news offering to gain a bigger share of these users’ time. Ultimately, people reward compelling content with their attention, and removing legitimate news from their platform feeds will likely increase the presence of misinformation.
“While it’s too early to predict what the real impact will be, if enough users start to reduce the time spent on these platforms, advertisers and their budgets are sure to follow.”