The House of Lords Communications Committee today publishes its report UK advertising in a digital age.

The Committee finds that the UK’s advertising industry is a success story: the UK is a global hub for advertising which added £120 billion to the UK’s economy and supported over 1 million jobs in 2016. Advertising is a creative endeavour that contributes to the UK’s culture and society. However, the industry is in a state of flux.

There has been an explosion of businesses using technologies which make money from delivering advertising online, which often rely on processing personal data of consumers. The Committee heard evidence that even individuals within the industry do not have a comprehensive understanding of how business models such as these work, making the digital advertising industry dysfunctional and opaque.

The Committee recommend that the industry should take greater steps to self-regulate through independent bodies such as the Joint Industry Committee for Web Standards. The Competition and Markets Authority should undertake a market study of the digital advertising market to ensure that it is working fairly for businesses and consumers. The Government should review whether competition law is appropriate for the 21st century digital economy.

The Committee heard that as result of the lack of transparency advertising on the internet may be displayed next to inappropriate or illegal content and, according to one estimate, over $16 billion spent on digital advertising was stolen through fraud in 2017. Digital advertising does not adhere to the usual high standards of print and TV, and consumers are bombarded by ‘clickbait’. This threatens to undermine the trust which the advertising industry relies on.

The UK is a global centre for advertising that relies on an international workforce and its ability to attract and retain international workers is key to its global success. These workers provide the cultural, creative, digital and languages skills which enable the UK to win advertising accounts from multi-national companies for global campaigns. Extending the tiered visa system, which is slow, expensive and restrictive, to EU nationals will create an unmanageable barrier to finding and hiring the talent that the advertising industry needs.

The Committee therefore recommends that the Government should seek to negotiate reciprocal agreements with other countries under which international workers with a job offer in the advertising industry will have the right to work in the UK. The Government should also introduce a creative industries’ freelancer visa.

Individuals from all communities and backgrounds, regardless of ethnicity, gender, class and ability, should have access to employment in the advertising industry. The industry should discontinue informal working and recruitment practices, such as unpaid internships, which present a barrier to groups from lower socioeconomic groups. The Government should clarify the law on unpaid internships. This will allow the advertising industry to access a larger talent pool which better reflects the advertisers’ audiences.

Chairman of the Committee, Lord Gilbert of Panteg, said:

“Advertising contributes to culture, society and fuels the economy by helping businesses to grow and compete against one another. It is therefore essential that UK advertising continues to thrive and maintain its international reputation. But the industry is facing immense changes which threaten to undermine its success.

“Digital advertising has quickly become the most significant form of advertising by spending. But the market for delivering digital advertising to consumers is notoriously ‘murky’: businesses which buy advertising services don’t know how their money is being spent, whether their advertising is being displayed next to content which is obscene or which supports terrorism, or whether their ads are being viewed by a human being at all.

“The consumer’s experience is also poor as they may be bombarded with clickbait, or their personal data may be exploited without their knowledge. To restore the public’s trust in advertising as a whole, the industry must commit to adhering to proper standards.

“The UK’s global success relies on an international workforce. These workers provide the cultural, creative, digital and languages skills which enable the UK to win advertising accounts from multi-national companies for global campaigns. As the UK leaves the EU, the Government must develop an immigration policy that works for advertising businesses.”