Even at the risk of hyperbole, it must be said that free flow of information has never been more threatened by market forces than it is today. Such a crisis impacting publishers stems from a duopoly in digital advertising carved out by Google and Facebook. The tech giants’ dominance – with market shares estimated from 48% to a lot more in select geographies – threatens a wide variety of media and a lot of smaller advertising firms.
To address this growing challenge, advertising technology companies of varied stripes have joined forces in a new initiative to fight off the duopoly. The consortium, led by programmatic advertising company AppNexus, includes seven firms. But that may not be enough in the battle billed as Facebook and Google versus the rest of the world. New York-based AppNexus’ chief strategy officer Tom Shields conceded as much.
“The consortium will not stop at seven companies…It will be a much larger group; we are at the very early stages but open beats closed and if we work together we will be able to build something much bigger and better than one company,” Shields told Mobile Marketing magazine.
LiveRamp and MediaMath are the other key players in the emerging consortium, announced May 4. The group also includes Index Exchange, LiveIntent and Rocket Fuel.
It is not the first initiative of its kind. Previously, DigiTrust – a nonprofit established in 1998 for varied reasons – has attempted to bring together varied players and combine technology smarts to put up a credible alternative to the networks run by Google and Facebook. However, it has yielded only mixed results. It is why several players have been forced to explore other choices. In fact, four from the new initiative – AppNexus, Rocket Fuel, OpenX and Index Exchange – remain part of DigiTrust.
Digital advertising today depends critically on user targeting, termed “deterministic.” To be effective, firms need mountains of personal data to mine. Google and Facebook have that in plenty because of the hundreds of millions of users in their ‘walled gardens’, so to say. They also enjoy and enjoy more than a head start on the others. Individually, the others don’t have a ghost of a chance. Combined, they might just have a shot. Or, at least, that is the belief.
So we have, broadly, two sets of companies in this coalition. One perfects the targeting or identification of users, and includes the likes of LiveRamp and LiveIntent, which focuses on email marketing. The second set consists of companies that build the algorithms, sometimes with the help of machine learning and artificial intelligence, that deliver the ads optimally. This set includes AppNexus, a specialist in programmatic advertising; MathMedia, which combines data and machine learning on an omnichannel (web, mobile, out-of-home, addressable TV and other emerging channels); and RocketFuel, which combines predictive science and artificial intelligence.
The new consortium plans to first standardise a framework for delivering digital ads. Then come identifiers such as cookies and other personal user data. Together, it is believed, the consortium can create a robust programmatic platform that can deliver “precision advertising” comparable to those on Google and Facebook.
“Today, 48% of all digital advertising dollars accrue to just two companies – Facebook and Google. That dynamic has placed considerable strain on the open internet companies that generate great journalism, film, music, social networking, and information,” said AppNexus chief executive Brian O’Kelley.
The consortium is great news for publishers and content creators struggling to remain financially viable in the new digital environment. For users reeling under blatant invasions of privacy, it might still not be the panacea they are looking for.
“The opportunity to establish the strong and consistent data protection policies that consumers deserve. Upgrading this foundational piece of the infrastructure puts us on solid footing, as programmatic grows to encompass all of digital,” said MediaMath president Michael Lamb.
That is big talk and cliched. Given the fiercely competitive landscape in which the new consortium will operate, it is not hard to guess what it might do to user data when push comes to shove. But the present scenario is such that users might be glad to cut some slack on privacy, so long as the new consortium can dent the Google-Facebook duopoly.
Written By Bala Murali Krishna