For those readers too young to remember, it was almost two decades ago that the Canadian government passed Bill C-103. A bill which imposed an 80% tax on advertisers who tried to geo-target a Canadian ad inside an American magazine.
The purpose of Bill C-103 was to stop the popular American magazine Sports Illustrated from producing a "split-run" magazine which would carry the same content in Canada and the United States but would contain U.S. ads for magazines distributed in the U.S. and Canadian ads distributed in Canada.
Bill C-103, was introduced after vociferous lobbying by the Canadian Magazine industry who claimed split-run magazines would siphon off lucrative advertising revenue and destroy the Canadian magazine industry.
One of the most vocal lobbyists and, not surprisingly, the greatest beneficiaries of Bill C-103 was Rogers Communications. Rogers was and remains to this day, Canada’s largest magazine publisher therefore it had the most to gain by banning the practice of split-run magazines.
Split Run Magazines and Geo-targeting are the same thing
For Internet savvy readers, split run magazines are simply the dead tree version of geo-targeted advertising on the web. Internet advertisers use geo-targeting every day to determine what country a visitor is from and then serve up a relevant advertisement.
For example, Rogers pays to advertise U.S. magazine websites who geo-target its visitors. The benefit to Rogers is they can advertise much more cheaply by using geo-targeted ads on a U.S. magazine website than if they had to advertise on a Canadian website whose only real audience is Canadians.
Why what Rogers does is hypocritical
If you haven’t already figured out the hypocrisy here, let me explain.
Rogers is buying split-run web ads on a U.S. magazine website, a practice that siphons off lucrative advertising revenue and helps to destroy the nascent Canadian web industry while at the same time railing against in the same practice in magazine publishing industry.
In summary, when Rogers is a publisher it lobbies the government to ban split-run advertising thereby forcing Canadian advertisers to spend all their dollars with Canadian publishers, however, when Rogers is an advertiser, the notion of supporting the Canadian web publishing industry goes out the window.
In principal, this website does not take issue with the practice of geo-targeted advertising despite its very negative aspect on our profitability and the negative impact on the development of the Canadian Internet industry.
We do believe, however, that it is hypocritical and unjust for media conglomerates such as Rogers to benefit from laws that prevent geo-targeting while engaging in the practice themselves.
It’s time for the Federal Government to stop the hypocrisy and to either:
- eliminate the high tariff barriers placed on split run magazines; or
- have the CRTC implement a ban on the practice of purchasing split-run (geo-targeted) ads on foreign websites.
Canadian Magazine, Television and, yes, Internet content providers can’t have it both ways. As advertisers, they must live by the same rules that they lobby for as publishers.
Split Run Magazines and the WTO
For the record, in 1997, the Canadian government was forced to back track on Bill C-103 after the World Trade Organization (WTO) agreed with a complaint by the United States that the 80% excise tax imposed on split-run magazines was a violation of the General Agreement on Trade in Services (GATS).
Rather than remain true to the spirit of free trade and the goals of the World Trade Organization, the federal government ignored American complaints and proposed the Foreign Publishers Advertising Services Ac (Bill C-55) which would imposes criminal penalties on U.S. and other foreign publishing companies that use the magazines they produce to advertise directly to Canadian readers.
By the beginning of the 21st Century the Canadian Magazine industry had killed any chance of split run magazines in Canada.
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