Google and Facebook dominate the online advertising market outrageously. A domination that all market players denounce because they fail to fight against. However, the competition is organized, especially the major players in computing (Amazon, Microsoft, IBM) that provide a very credible alternative offer while Apple comes to play spoilsports. In any case, do not fool yourself, GAFAMI is and remains the only masters of the game.
Google and Facebook reign supreme over intentionalists and social partners
Last week in Cologne the high mass of online advertising: dmexco. As every year, there are nearly 40,000 professionals in the sector who come together to agree that it was better before, but that the future opens up a lot of opportunities, so we should not Too much interest in half-empty glass, though not quite (the GDRP), but still a little (interesting report published here: Top five takeaways from Dmexco 2017 ).
Invariably for 5 years, it is mainly about two heavyweights in the category: Google and Facebook. It is clear that their hand on the market of online advertising has grown steadily over the years, both in terms of volume ( Google and Facebook bring in one-fifth of global ad revenue ), growth ( Google and Facebook Account for Nearly All Growth in Digital Ads ), and it is not about to stop as evidenced by the latest quarterly reports ( Quarterly earnings for Google ).
This dominant position is also not without posing problems of abuse of a dominant position, as is the case with the lack of transparency in the campaign reports and dubious figures that are used for advertisers: Facebook audience inflation is a global issue. This year, the market has found a bone to gnaw with the blockchain, miracle technology supposed to rebuff the cards ( Can Blockchain Solve Technology Digital Marketing ‘s Ad – Fraud Problems or Can blockchain restore trust in online advertising?
The competition is grumbling, it does not change the reasons for this dominance: If half advertising budgets are captured by Google and Facebook, it’s simply because their ads work better. On the one hand, Google has 15 years of a search history of billions of Internet users looking for answers to their questions (intentionalists). On the other hand, Facebook has 10 years of sharing history, like, comments, messages & see among the billions of users of its social platforms (socionautes).
All this data is agglomerated, processed and made available to advertisers through numerous advertising solutions. That’s what made the fortune of Google and Facebook, and that fuels the greed of many contenders.
Amazon is already starting to recover some of the advertising pie
The strength of Google and Facebook lies in the accuracy of their advertising targeting with the data of their users. Translation: the more data we have on Internet users, the more legitimate we are to sell advertising solutions. In any case, this is the starting point of the reflection led by Amazon which has distinguished itself this year as the new entrant in the advertising market: Amazon makes its presence known at Dmexc. You will notice that the arrival of Amazon on the market is not new since they have perfected their offer for many months: Amazon grows its programmatic ad business.
This new line of services is not really a surprise since Amazon already offers advertisers sponsored search results. A rather lucrative business in that more than half of the research prior to the purchase of a product is now done directly on Amazon: Amazon is eating into Google’s territory, and it’s only going to get worse.
In some markets, the reaction of advertisers to this offer is very encouraging and very worrying for Google: Amazon.com Galvanized by this first decisive victory, by its tremendous computing power (AWS) and by the consumption data of its customers, Amazon logically entered the programmatic buying market last year: With its new cloud-based header bidding, Amazon is taking another step towards building an adtech powerhouse .
Believe it or not, but if you have a website, you can give Amazon ad inventory management. Some see it as a great opportunity to shake up the current duopoly and give advertisers more bargaining power, for good reason.
Microsoft returns to the race with LinkedIn
- Google dominates the market with data of intent (search engine) and data of interest (video views on YouTube);
- Facebook is on the heels of social interaction data on its various platforms (Facebook, Groups, Messenger, Instagram, WhatsApp …);
- Amazon is catching up with consumption data from its customers.
If we can assume that the BtoC market for online advertising is starting to be locked, things are different for the BtoB market. The corporate world is indeed a territory on which Microsoft is ultra-dominant (roughly 25 years). All they needed was a very large audience on which to place the ads. They had MSN, but this portal has lost its beautiful (euphemism), they failed to impose Bing, no matter, they got paid LinkedIn, and with its hundreds of millions of members, it is largely the case: LinkedIn passes 500 million member milestone.
The audience of the largest BtoB social network combined with Microsoft know-how (recall that it is a historical actor of online advertising thanks to their Atlas advertising server technology resold to Facebook in 2013) form a real machine of war advertisement that unfolds little by little : LinkedIn raises its ad tech game, launches Audience Network across ‘tens of thousands’ of sites and apps
It is now officially possible to buy advertising slots in many mobile applications through LinkedIn’s management.
I’m not guessing, but I think this new offer will very quickly expand to many sites and BtoB services (eg free online applications). Here again, the data of LinkedIn members make it a formidable machine to target professionals.
IBM attempts a breakthrough in the conversational banner niche
More discreet, not really legitimate in the advertising market, but nevertheless very respected by the Directorates-General, IBM also embarked on the race two years ago with the acquisition of Weather.com and its meteorological data: IBM bought The Weather Company because of weather affects everything. These data combined with their know-how in artificial intelligence have allowed them to launch a worthwhile offer: IBM’s Weather Company employs Watson to boost its updated ad targeting platform. In addition to personalizing the messages, they are positioned on the niche of the conversational banners: Watson mans the first cognitive ad for cars.
For the moment the volume of sales of the Watson Ads division is very much lower than that of Google or Facebook, but their approach is singular and perfectly fit with their strengths.
Hayes, there is also Apple who is resisting with the announcement of an anti-tracking feature enabled by default on its mobile browser: Advertisers are furious with Apple for new tracking restrictions in Safari 11. Is it because Apple has established itself in the advertising market that it makes its former competitors pay? I leave you, alone judges …
A sold-out competition between GAFAMI
Admittedly, you could tell me that the advertising market is not limited to the 6 major players of the internet, but I would answer you that with more than half of the purchases made in programmatic ( Half of All Display Traded Programmatically In Europe ), everything is just a question of data: those who have the most manage to better value their inventory, so to attract more publishers, so more visitors, so more data, etc … QED.
So there are GAFAMI and the rest. In this rest, one nevertheless distinguishes actors who remain very powerful:
- Oath, the holding company that brings together Yahoo, AOL and many advertising solutions (eg BrightRoll …);
- Twitter, its 300 million users and its social graph of which we do not know exactly what it corresponds;
- Pinterest, its 200 M users and their wish lists ( Pinterest opens up more than 5,000 interests for advertiser targeting through its Taste Graph );
- The major press publishers who unite to resist better ( The major French media are embarking on the battle of the data );
- Specialized service providers with strong technological/algorithmic know-how (eg Criteo, Weborama …);
- Directories and city guides that have a strong graphical place (eg Yelp, Foursquare, SoLoCal …);
- Local actors (ex: Alibaba, Tencent, Yandex …).
Again, I’m not trying to downplay the power or the know-how of any particular provider or provider of advertising solutions, I just find that as the market intensifies its programmatic practices, the dominance of the biggest players (those who master the algorithms, data or both) is strengthened.
Conclusion: data is the nerve of war. If you do not want to be dicked by GAFAMI, you should collect as much data as possible about your customers /prospects and equip you accordingly (CRM, PRM, CDP, DMP …).