US: Delrahim spells out Ad Market Review

Department of Justice antitrust chief Makan Delrahim provided a number of breadcrumbs that broadcasters and advertisers can follow on the trail to what changes DOJ may or may not make to its view of the competitive advertising market when it comes to merger reviews.

Justice and the Federal Trade Commission divvy up such antitrust reviews, with Justice almost always getting the broadcasting and cable and telco merger review.

Delrahim was speaking Thursday (May 1) at the outset of a two-day forum on the impact of digital platforms on traditional broadcast and cable ad markets.

Delrahim said that while DOJ was confident in how the department had defined the competitive broadcast ad market in the past, which includes last year’s Sinclair-Tribune merger deal, when DOJ concluded the ad market was confined to broadcast spot. “We recognize that industries change. In order to ensure that we continue to update our analysis of media markets, we need to take into account the latest industry trends, the latest technological evidence and the latest economic,” he said.

“Ad-supported business models bring goods and services to customers who would otherwise be priced out. Thanks to revenue from advertising, consumers often pay lower prices, and sometimes even enjoy goods or services free of charge. Studies demonstrate that many consumers prefer ads to paying for certain services. For example, nearly 80 percent of respondents in one study reported in Recode represented that they would choose an ad-supported Facebook over paying $1/month. Some consumers may even prefer receiving targeted advertisements that are more likely to be relevant to their needs than ads that reach broad audiences, but whose products and services may be inapplicable to many viewers.”

“Ad-supported business models are a form of a multi-sided platform. They serve consumers who wish to digest content and advertisers who hope to influence those consumers with the ads that accompany the content.” he added.