IAB Europe welcomes the report on “The future of European competitiveness”, prepared by Mario Draghi, and its comprehensive analysis of the challenges and opportunities facing Europe’s competitiveness. The report outlines a much-needed path forward, emphasising the importance of innovation, digital transformation, and regulatory reforms to secure Europe’s position in the global economy. With European industries experiencing a radical digital transformation, we find ourselves at a pivotal moment in history. The Draghi report is clear: “The innovation gap is at the root of Europe’s slowing productivity growth”. To keep pace with global competitors like the US and China, the Draghi report is right to call for a shift in its approach to innovation and competitiveness.
In the context of weak economic growth, digital advertising has the potential to power Europe’s digital transformation and boost its innovation and competitiveness. Digital advertising has become an integral component of digital transformation initiatives in sectors such as retail. Retail Media advertising in Europe grew by 22% in 2023 alone, compared to the total ad market growth of 6%. To unleash this potential, we need stable and predictable regulation. We echo the report’s emphasis on streamlining existing legislation and ensuring regulatory convergence across Europe. Fragmented regulations, particularly in areas like data protection as highlighted by Draghi himself, create barriers to innovation and growth. Simplifying the regulatory environment will allow businesses, especially SMEs and mid-cap firms, to thrive by ensuring regulation is proportionate and fair from the outset while reducing compliance burdens and fostering innovation.
Furthermore, we believe that effective and harmonised interpretation of existing laws is crucial to ensure that businesses can operate with greater confidence across all Member States. To this end, actionable guidance should always come before enforcement action. It is also essential that national regulatory agencies be adequately resourced and that they recognise and support industry standards that enable compliance with existing rules, ensuring consistency while minimising complexity for companies.
Looking ahead, now it is the time for a policy reset. The Draghi report rightly calls for Europe to be bolder in its policy ambitions. The digital advertising industry supports the need for reforms to incentivise investments in innovative services and technologies that will drive the future growth of businesses in Europe. This includes embracing developments in artificial intelligence (AI), which present significant opportunities for the advertising industry to enhance efficiency and effectiveness. Leveraging AI could unlock new innovations and create competitive advantages for European businesses. To achieve this, we need pro-innovation, pragmatic legislation and institutional reform to minimize the complexities of existing regulations.
Recent initiatives from the European Commission continue to focus on introducing new layers of regulation for the digital advertising sector, even before the current legislation has been fully implemented. To support Europe's digital transformation, we believe a shift in approach is needed across all Commission services, with particular attention to the timing and sequencing of any new initiatives. This means improving collaboration and adherence to better regulation principles, which are essential to ensuring a stable and predictable regulatory environment.
In conclusion, IAB Europe fully supports the report’s vision for a more innovative, competitive, and digitally empowered Europe. This means promoting innovation, creating better products and services, and ultimately ensuring choice for European consumers and users online.
