Sergii Denysenko, CEO at MGID.
The triopoly of Google, Amazon and Facebook ended 2021 how it began: with a near-total grip on digital advertising. According to eMarketer research, the trio sustained almost exactly the same level of spending dominance as in 2020, collectively accounting for 64% of U.S. ad spend last year.
New documents that were recently made public from a Google lawsuit show that Mark Zuckerberg and Google CEO Sundar Pichai allegedly knew about practices around ad sales manipulation within their respective companies. But despite rising awareness that the dominance of Google, Facebook and Amazon is limiting opportunities for all members of the ecosystem, they remain in control of the tech landscape and especially advertising spend. Moreover, we’ve seen further examples of how heavily publishers and advertisers alike depend on walled gardens for media exposure and audience reach, including the chaos caused by Facebook’s outage.
The power balance isn’t going to fix itself. To stand a chance of better distribution this year and beyond, buyers need to start driving change by harnessing platforms and channels across the open web and seizing the rich benefits they offer.
Broadening Contextual Possibilities
As Google’s new third-party cookie deprecation deadline looms closer, advertisers face another race to find different ways of ensuring sustained online targeting and measurement ability. Among the obvious solutions are offerings that allow them to deliver tailored ads using insights held within black box walled garden systems, with prime examples being Facebook’s advertising suite and Privacy Sandbox proposals from Google.
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The fact is, however, that most triopoly solutions don’t offer the level of granular targeting needed to ensure maximum meaningful relevance or reach beyond their own borders, and they certainly provide little in the way of data access. But by turning their attention toward the open web, advertisers can harness a wider range of options that allow them to still achieve accurate targeting while expanding media choice and preserving user privacy.
While Google is continuing to experiment with cookieless alternatives, which potentially include topic-based targeting, major digital publishers are increasingly adopting advanced contextual intelligence tools that allow them to match ads to surrounding content with precision. In addition, media giants like the New York Times are making better use of their own data rather than giving it away for others to harvest.
This shift presents significant scope for advertisers to start capitalizing on ad placements supported by contextual intelligence: with rising uptake among media owners of innovative tools, making it possible to match ads with the meaning and sentiment of digital content. Recent research shows that just over 40% of brands are already planning to spend more on contextual campaigns as cookies fade. While positive, this number needs to be bigger, and action needs to be faster.
Minimizing Disruption for Social Media Users
Social media platforms are unlikely to see their power diminish anytime soon. More than one-quarter of consumers use social media to research products to buy, and 44% claim it helped them discover a new brand or product. But even enduringly popular players such as Facebook have come under criticism about their advertising tactics on multiple fronts, including unauthorized use of data and the tendency to bombard users with ads in a bid to drive clicks, often at the cost of causing negative brand perception.
To harness consumer incentive to purchase on social media, advertisers must ensure ads harmonize with the user environment. And there is a growing capacity for them to do so across open web platforms through unobtrusive native ad formats. Our agency has seen firsthand that native in-feed ads boost campaign effectiveness as they don’t interrupt the scrolling experience. As well as generating stronger results than standard formats — delivering up to 8.8 times higher click-through rates (CTRs) than banners — native often shines brightest in open web environments.
Forging Closer Ties With Online Shoppers
As also noted last year, the main ace that retail platforms hold over long-running kingpins such as Google is their valuable store of purchase history data. Amazon is, of course, the best-known example of a player that has started leveraging this advantage: using granular customer understanding to support targeted ads, as well as moving into programmatic. And once again, not much changed through 2021.
As eMarketer data illustrates, the platform’s continually increasing share of ad spend is still going strong, now covering 11.6% of U.S. ad spend and due to account for 14.6% in the next two years. Although it’s unlikely this trajectory will be changing, there is still potential for advertisers to avoid becoming over-reliant on the latest tech giant by casting their spending net wider.
Scale isn’t always everything. By increasing investment in open web retail platforms, they can serve ads fueled by high-quality insight into customer buying behavior and habits, ensuring messages are ultimately more resonant and effective, and less likely to result in wastage.
Ad options provided by retail platforms are also growing. Alongside search and display formats, many retailers are branching out into instantly shoppable media, affiliate partnerships and sponsored placements within content or advertorial (aka native promotional opportunities).
Advertisers may feel stuck in Groundhog Day, but there are alternatives they can use that reduce dependency on walled gardens while maintaining choice. By broadening their spend, tapping into different channels and platforms, and taking new approaches to media planning, brands can begin to create a more varied strategy without relying on the media giants. If ad buyers seek different options going forward, it will lead to a healthier and more balanced ecosystem.
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Author: Sergii Denysenko, Forbes Councils Member