Lyrette is a power player in the advertising world, as she distributes clients’ marketing budgets in radio, television, newspapers and magazines, and increasingly on platforms like Google and Facebook. But the future, perhaps not surprisingly, has been digital.
“We find the audiences that our clients want. Whether the platform is owned by Canadians or Americans, it doesn’t matter,” says Lyrette whose company, Zenith Canada, counts such clients as entertainment giant 20th Century Fox, multinational cosmetic company Coty, and Canada Post. “The end result is what matters.”
For the Toronto-based Zenith, digital marketing now makes up about 40 per cent of all requests, with the rest split among radio, TV and print. That’s up significantly from what it was only a few years ago, and the trend is increasing, says Lyrette.
Within the digital space, Google and Facebook command the overwhelming share of advertising dollars at about 72 per cent. The rest is divided up amongst other media, including legacy publishers like magazines and newspapers, who fight for a shrinking piece of the pie. In 2018, the amount Canadian marketers spent on digital advertising was estimated to be $7.7 billion.
There are myriad reasons for the dominance of big tech companies in the advertising world, including better capitalization, analytics, technology, superior targeting and return on investment, even as legacy publishers struggle to catch up.
Some critics argue tech companies have been given a free ride on outdated tax regulations that have caused a crisis in Canada’s media industry.
Canada’s tax code was not written for the digital age. And one small but significant change could help to level the playing field between tech giants and domestic publishers.
Ads purchased on foreign-owned websites are tax deductible under the federal Income Tax Act. That loophole should be closed, critics say, because it encourages local businesses to buy into foreign platforms.
“I think the common thread we’ve had so far is that when given a choice between standing up for Canada’s interests or doing basically nothing, the government has gone with the latter,” says Daniel Bernhard, executive director of the media watchdog group Friends of Canadian Broadcasting. “Silicon Valley has basically done whatever they wanted. We haven’t applied our rules when they are involved and that’s become really expensive to all Canadians.”