Sep 29, 2020 - Economy & Business

Media's failed attempt to take on the Facebook-Google "duopoly"

Lazaro Gamio / Axios

The only competitor challenging the growth of Google and Facebook's digital advertising dominance of late is Amazon.

Why it matters: A years-long effort by major media companies to take on "the duopoly" has mostly fizzled out.

Catch up quick: In 2017, media companies, eager to reclaim their share of the digital advertising pie, began to invest in pricey ad tech deals and mergers that they hoped could help them attract dollars from marketers looking for an alternative to Google and Facebook.

Driving the news: Today, most of those companies have backed off from those investments.

  • Disney on Monday sold ad tech provider TrueX, per the Wall Street Journal, an asset it's been looking to divest since it acquired the property through its acquisition of most of 21st Century Fox. Disney was never trying to develop a major ad tech business the same way some of its streaming rivals once were, although it does have ad tech businesses that help power its ESPN and Hulu streaming platforms, as well as its digital assets.
  • AT&T is exploring the potential sale of its ad-buying unit Xandr, per the Journal. Xandr was created through the acquisitions of the ad tech firm AppNexus and the merger with Time Warner. During the trial to buy Time Warner, executives argued that the deal made sense because it would help AT&T compete with Google and Facebook for ad dollars.
  • Verizon has written down half of its investment in its mostly ad-supported media arm, and reports suggest it is looking to offload HuffPost, which was once considered a traffic goldmine for an ad-supported business. Verizon is still investing in its advertising technology, but its business has taken a hit due to the coronavirus.

By the numbers: Google and Facebook still control an overwhelming percentage of the U.S. digital ad market, even though they are losing some ground to Amazon. 

  • Jason Kint, CEO of Digital Content Next, the trade group representing premium publishers, tweeted in July that he still expects Facebook and Google to bring in 88% of all new digital ad dollar growth this year.
  • eMarketer predicts that Google and Facebook combined will own 52.8% of the U.S. advertising market this year. With Amazon, who's growing ad business will take up an estimated 9.5% of the U.S. digital ad market, that combined market share rises to 62.3% of all U.S. digital ad dollars this year.

Yes, but: Media companies and activists have been successful in putting regulatory pressure on Google and Facebook, and that seems to be playing out in their favor, if ever so slightly.

  • Lawmakers in Australia, France and other countries are considering laws that force Google and Facebook to pay news companies for their content.
  • A social media boycott campaign, focused mostly on Facebook, has pressured many advertisers to suspend their spending on social media platforms for brief periods.

What's next: Smaller media companies are trying to collectively offer advertisers an alternative to Google and Facebook, instead of competing with those firms head-on.

  • Vox on Tuesday launched Concert Ad Manager, a self-serve tool that will make it easier for advertisers of all sizes to buy ads across Vox's network of premium publisher websites. This type of self-service tool works similarly to the advanced ad platforms that Google and Facebook offer to marketers.
  • The Washington Post earlier this year also launched a platform that allows companies to buy automated ads in real time.
  • Hearst started building a self-serve ad platform last year.

The bottom line: "We're not going after those platforms," says AJ Frucci, VP of programmatic advertising and head of Concert. "Our perspective is more options is never a bad thing." (Full disclosure: Frucci was previously employed at Axios.)

  • "We know that scale is paramount in digital advertising. Scale is easy to find within the walled gardens [tech platforms] and on the open web. But to date, that scale has meant advertisers often had to compromise brand safety, creative excellence and contextual relevance."
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