Toronto Star owner calls on Cdn companies to spend 20% of ad budget on local media

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TORONTO — The publisher of the Toronto Star is calling on Canadian companies to dedicate at least 20 per cent of their advertising budgets to local media.

Jordan Bitove made the request Thursday at a Canadian Club luncheon in Toronto, where he said convincing local companies to dedicate their ad spending within Canada is crucial because tech giants who link to articles published by his papers and others are “basically stealing the great work that our team does.”

“The advertising revenue that once funded newsrooms has been moved ironically to companies that use our content for their own benefit … and those companies don’t want to pay us for it,” he said.

“The result is we are seeing local news disappear at an alarming rate.”

Bitove’s remarks come after years of media organizations laying off staff and closing papers to cope with shrinking subscriber counts and advertising revenues diminished by large tech companies such as Google, Twitter and Meta.

A 2018 report from the Canadian Media Concentration Project revealed Google had half the market share of the country’s internet advertising that year, equal to $3.8 billion in advertising revenue and up from $2.8 billion just two years earlier.

Facebook was next with 27.3 per cent and Bell, Twitter, Postmedia and Star parent company Torstar sat at under two per cent each. (Torstar owns six regional daily newspapers in Ontario, including The Hamilton Spectator and Waterloo Region Record, and 70 community newspapers in the country.)

Facebook made $2.1 billion in advertising in 2018, while Bell made $146 million, Torstar earned $120 million, Twitter got $117.5 million and Postmedia made $116.4 million.

To counter these trends, the federal government has put forward Bill C-18, which would require digital giants to negotiate deals that would compensate Canadian media companies for linking to or otherwise repurposing their content online.

“We appreciate federal legislation, but it’s not enough to actually grow the media industry in Canada,” said Bitove.

He’d like to see the federal government increase its spending on COVID-19, reconciliation and affordability advertising in Canadian media, saying Torstar papers and their digital platforms received 0.27 per cent or less than $400,000 of a recent $140 million budget.

“If that percentage went up by two per cent or even five per cent, think what a difference that revenue could make when we put it towards journalism,” he said.

Bitove also wants to see corporate Canada increase its local advertising spend, after he heard that “one of Canada’s leading institutions whose values are 100 per cent aligned with our company” spent $50 million on ads last year. His company’s share of that spending was less than one per cent.

Industry association News Media Canada, in turn, said it wants to see increased ad spending from the government.

“The federal government needs to put its advertising dollars where its mouth is,” said CEO Paul Deegan. “It is unacceptable that they spent just $6 million on print ads out of an advertising budget of $140 million.”

Bitove didn’t waste words on his message to diners seated in the Fairmont Royal York Hotel ballroom.

“Go back to your office and find out what percentage of your media spend goes back to supporting Canadian-owned and -operated media,” he said.

“If it’s not 20 per cent, it’s not good enough.”

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