Disentangling data and the decline of the duopoly

Dave Fieldhouse, managing director, UK, at adsquare, says that finally, the power of the duopoly in digital advertising is set to be challenged.

For those of us who have been a part of the tsunami of change ‘digital’ and then ‘mobile’ have brought to the media world over the last 20 years it may seem almost absurd to even write a line that predicts the ‘decline’ of Google and Facebook – however is it really all that fanciful an idea?

The growth and scale of the two dominant players within digital has been truly breath-taking. Much has been written about their meteoric rise but suffice to say they now have a stranglehold on roughly 80 per cent of the ad dollars flowing through the industry. This has caused huge problems for the rest of the market as they fight amongst themselves for the last 20 per cent still available.

When you speak to leaders of the major agency buying points and mention their names you get a very mixed response. Having two major suppliers sure makes their life easier but annual price negotiations get tougher and the ability to audit such behemoths also causes major headaches. On balance the view is the market is far too heavily skewed in their favour and a healthier eco-system would be welcomed.

The reason for the unstoppable rise of these two (and yes, I haven’t mentioned Amazon yet…) digital media owners really comes down to two things – scale and data. These two factors have locked in budgets for many years and makes them a “must have” on any plan. Sheer reach is a basic hygiene factor for global brands but combined with granular levels of consumer data makes for a potent combination. So, the question remains – what can we – as the 20 per cent do about it?

The decoupling of data
The duopoly may have extraordinary amounts of data, but the deal is you have to buy their media assets if you want to use it. You also cannot “port” this data outside of their walled gardens. This absolutely may have protected them until now, however, the clamour from clients who are increasingly fed up with this arrangement grows louder.

As an example, Google now will not let advertisers export user IDs from its industry leading ad server. Google claims this is in the name of privacy, however it further deepens the moat around their products.

Our experience shows that clients and agencies do not want their media partners also being the custodians of the data. There is an inherent conflict when a seller says you can only access the rich data if you buy their media too. Transparency disappears as ‘data costs’ are wrapped up in ‘media costs’. It’s also true to say that the claim that the duopoly is entirely brand safe is also a misnomer – ads regularly appear beside some truly dubious content, something which has been well documented in recent years. This is another reason why buyers are now looking outside the social space for more quality environments.

The answer to the conundrum of ‘media + data’ lies in using transparent data suppliers who are agnostic when it comes to the media buy. As the quality, transparency and ease of using data suppliers outside of the walled gardens grows, the reliance on these players surely decreases. Programmatic execution layers also mean clients can deploy campaigns at scale, in brand safe environments using quality and transparent data, without relying on the big two to provide it.

Scale and data
Programmatic essentially provides a single pipe to the open web (including mobile in-app traffic) and enables clients to deliver scale quickly and easily in similar ways to buying from the duopoly. Alternatives are also emerging as Telcos such as AT&T and Verizon enter the space – with more to follow. How will they approach the use of data? Will it be in a much more open way than Google and Facebook? If they do, this could potentially give them an unfair advantage – alongside providing integration opportunities to third-party data providers who add value for clients.

Programmatic is not just eating digital right now – next in its sights are out of home and TV. Providers who can offer transparent data and also the integrations to deploy that data will thrive. If a buyer can programmatically execute a digital out of home campaign (and indeed connected TV) then where will the extra money come from? Potentially a down-weight in spend for the big two, along with a slice of ‘traditional’ budget pots. Facebook has long had its sights on TV budgets but has not cracked it – programmatic TV might just be the answer.

Mobile data’s growing importance
If you believe that digital out of home and TV will increasingly be bought programmatically, then the next logical step is to consider the types of data needed to enrich these buys. The obvious answer is mobile data. The outdoor industry is making great strides in this area, as mobile location data overlaid with audiences provides fertile ground for further insight and measurement.

Connecting outdoor and TV exposure to in-store, online and mobile app visits is also an area set to grow over the coming years which only mobile data can provide. Will the duopoly provide this data and service to buyers? Data providers who are decoupled from media placement can thrive here in the same way they do online – this trend has already begun, with real-time outdoor placements launching this year.

Most people cannot see a time when digital spend becomes broader-based and the balance of power shifts back towards a more level playing field. Right now, it’s hard to imagine. The early signs are however positive – scale and data (the bedrock of the duopoly) are now on offer in other areas, along with innovation from “traditional” media. Great civilisations thought untouchable have fallen in the past. If that can happen then surely a few Californian tech companies are ripe for disruption too.

Dave Fieldhouse is managing director, UK, at adsquare.