Can Publishers And Agencies Survive In A World Led By The Duopoly?

SonobiThere were some key buzzwords that drove a lot of the chatter in the advertising community in 2017, and none was more buzz-worthy than “the duopoly” — a word used to describe mass media platforms Google and Facebook. There is a clear reason why the duopoly became a sensational subject in the trades:

The duopoly is expected to rake in a combined 63% of US digital ad investment in 2017 — up over 15% from the previous year.

This investment trend isn’t because buyers want to massively consolidate and concentrate spend but because for buyers, sometimes it’s just easier to buy on a mass media platform where you know you’ll address the audience you want through a simple platform that has efficient ad products.  Media buyer investment became concentrated across the few simply because the duopoly enables them to deliver advertising to qualified audiences with unparalleled precision and scale.

Also Read: Facebook & Google: A Media Duopoly Under Scrutiny

Well, what is the value that the agencies are creating in a world where digital investment is being placed into a few media companies?  How can they survive and continue to drive value without purchasing power?

The value has come down to the audience tactics, they put in place, in driving effective distribution.  We saw that through multiple agencies making moves into the audience creation space such as Publicis’, Densu Ageis and our partnership with Merkle.

And despite all of this added value being created, there were problems in paradise. Brands began to notice the unsafe environments they were being placed in. The headlines focused on brands pulling out of the duopolies over concerns of brand safety. We saw complaints about brand safety issues —  ads appearing alongside videos promoting hate, racism, and violence. Blue-chip advertisers including Johnson & Johnson, Verizon, and Walmart said they would pull their advertising from these channels as a result.

Also Read: Digital Content Next Report Finds Facebook, Google Experiences Together Account for Less Than 5% of Total Digital Revenue for Publishers

In using larger scale media companies such as Google and Facebook, media buyers have limited their control over contextual adjacency. This is problematic when context can impact brand performance. Advertiser messages that are seen in a non-premium environment can damage the brand’s images in certain cases — Hearts & Science just released a massive bit of research about this.

Brands want to align their messaging with someone who has a similar “POV” or puts there the message in a context that is relevant to the sale of their products. This is where premium publishers come in.

Ironically, the premium publishers are creating content that the duopoly syndicates through user sharing.

So why isn’t the investment going to the content creator/premium publishers? Well, there are a couple of reasons that are driving this.

  1. The audience targeting is less accurate and efficient in comparison to the duopoly companies.
  2. The inventory is difficult to access and activate. You need to work with multiple parties to build out a plan.

Enter programmatic — how advertisers are bringing the targeting and scale advertisers receive through the large-scale platforms to the world of premium content.

Or so we all thought…

Also Read: GDPR Will Drive A Coach And Horses Through The Online Advertising Ecosystem

While you can use programmatic technology to get some of the value you get from the larger scale media companies of targeting, and scale there comes with it a great amount of time, effort and cost to combat issues like fraud, viewability, non-human traffic, etc that arise. In today’s complex, programmatic digital world, getting a meaningful message to an interested audience involves multiple intermediaries, making it difficult for brands and their agencies to meet campaign objectives and to manage the spend efficiently.

On top of that, GDPR is forcing brands, agencies and publishers to re-imagine the digital media conversation that is had with consumers — and will force all parties to stop assuming consent. All parties involved will need to be mindful of how the regulations apply to an individual’s right to be forgotten.

The onus falls upon the user/relation connection, the publisher OR the device itself (in cases of a Device ID) to validate the user’s acceptance and understanding of what to do with their data and handle it accordingly – and only pass through the data when approved in GDPR-enforced locations by GDPR-compliant parties. The difference between GDPR and previous industry-led initiatives are the fines for noncompliance and the belief that the EU will make an early and noteworthy example of those that are in breach of GDPR. 

Also Read: 3 Reasons Why Marketers Should Welcome GDPR (Other Than Because It’s Required!)

WTF Happens Now? What Agencies and Publishers Need to Think About Going into 2018

It takes a village to go up against a giant — agencies and publishers can work together to take on the duopoly.

It Will Take Data

Focusing on unified data solutions and collaboration will be key to connecting CRM data to publishers’ data signals. Each advertiser syncs their data into their CRM(s) of choice. Often times a single holding company of multiple national brands will support multiple CRMs based on brand-by-brand decisions. Working with multiple CRMs is immaterial within the “walled garden” where advertisers are able to sync their CRM data of choice into the ID space, offering an addressable solution.

Also Read: How to Pick the Right CRM: 3 Key Ingredients

Therefore, by applying this paradigm and creating a universal ID across CRM companies can solve for current constraints with addressable across comScore to equip agencies and publishers to deliver better business results.

To get there, we need technology that unifies data by synthesizing 1st, 2nd, and 3rd party data sources — including cookie and device data to PII compliant CRM and publisher login/registration data — in a privacy compliant manner. It will enable brands to take their first-party customer data and combines it with a publisher’s subscription/login user data in a privacy compliant manner.

The result will be that media buyers can move beyond targeting devices or content as a proxy for audiences and reach their customers on a one-to-one basis, across display, mobile, and video content.

Also Read: Why Your CRM Is Lying to You

It Will Take a Direct Platform

The publishers and agencies need to work with technology companies that can help unify the inventory ecosystem to eliminate needless intermediaries and help media buyers procure media in a simple and easy way based on their audiences. If it isn’t easy, it will not scale as quickly.

It will take Participation

Publishers need to combine their content and their data through technology. Advertisers need to shift spend towards reaching their audiences in premium content environments. A boat doesn’t move forward if everyone is paddling in their own direction.

Also Read: Sharethrough For Publishers Supply Side Platform Passes Major Milestone

2018 – The Year Ahead

With the new year and new resolutions upon us, now is an opportune time for the market to evaluate how technology can help build a fair and equitable marketplace, where agencies and publishers continue to thrive.

Publishers: Develop a plan to participate in a data strategy that creates a viable alternative around the walled gardens. Carefully evaluate how to ensure your premium content environment is surfaced directly to advertisers without intermediaries.

Agencies: Support technology that can connect your data directly to premium publishers outside the walled gardens.

Let’s work collectively to help brands make sense of the media ecosystem and drive results through the content and audiences that make the web what it is.  Through chaos, there will be clarity.

Recommended Read: Need for Data Orchestration for Contextualizing Customer Experience

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