Mark Ritson is a bigger threat than the digital duopoly in 2018
Excluding China, Google and Facebook own 84% of the global digital market. It’s a powerful, disconcerting statistic, and one which Mark Ritson recently cited in an opinion piece about the duopoly.
Is Google and Facebook's dominance online really a problem?
In my view, the market dominance of Google and Facebook is only bad for the media incumbents. And academics who can’t keep pace with the changing marketing world we live in. For the rest of us, it’s great.
Facebook & Google are more democratic for advertisers
Before the digital era, it was much harder to buy media. If you had the budget, you could go to a media buyer and ask them for a few million pounds’ worth of TV, print and outdoor, and justify the spend to your board through a pretty unscientific before-and-after analysis.
If you were smaller, your options were much more limited: regional news; direct; telemarketing; flyering; maybe a 4am spot on TV. It was rubbish.
The digital era, of which Google and Facebook have been pioneers, has opened up a new world of media inventory. Search, display, social, video, programmatic TV - all of a sudden advertisers of all sizes are able to buy media instantly, target the audience they want, measure the impact, and optimise performance.
The growth of Google and Facebook corresponds with the growth of PPC, which in turn corresponds with the growth of advertising as an industry. In the last ten years, UK ad revenue has increased by 46% from £12.9bn in 2008 to £18.8bn this year. Clearly advertisers don’t mind the reign of the duopoly.
Facebook & Google are better for small to medium-sized agencies (SMBs)
When a media agency’s primary function was to buy media, smaller agencies didn’t stand much of a chance. Being big meant being better: better inventory, and better deals.
The rise of digital has changed the business model of the media agency. Now, instead of buying power, it’s about brain power. Even if you’re a tiny independent, so long as you’re able to add value by improving the performance of a digital ad campaign, there’s no reason why you can’t compete with the most established agencies.
The slow down in growth of the big five reflects an improvement to the competitiveness of the media agency market, and therefore a far better climate for smaller agencies to flourish.
Facebook & Google are better for news consumers
While contributing to a decline in TV and print engagement, the internet has caused a significant increase in overall media consumption. People read more news now than ever, and from a far wider range of sources.
Despite its criticisms, social media has provided everyone with a voice. It’s a hallmark of democracy, and a great step forward for media pluralism. Google and Facebook’s aggregation of news has enabled people to be more objective in their news reading, and the rise of online news has enabled news companies to be more objective too, by shaping their content based on audience feedback.
The other 16% is worse
The rest of digital, ie most of what Facebook and Google don’t own, is simply not as good. There are some exceptions, obviously: Microsoft Bing, LinkedIn, Snapchat, Instagram, to some extent Twitter, but in general the digital ad market is a bit of a mess.
Take programmatic display. As has been repeatedly pointed out this year, the complexity of its ecosystem is baffling to advertisers, highly inefficient, and prone to the same opportunities for non-transparency as the old model of media buying. One of the positive repercussions of market dominance is consistency: with Facebook and Google, at least advertisers have a chance of understanding where their money goes, and how to measure the impact of their advertising.
There are also network effects. Google and Facebook are prime examples of businesses that know how to utilise data to optimise their services. The larger they grow, the more data they acquire, and the better they become at serving the needs of advertisers and consumers.
And, as much as I disagree with the disproportionate media scrutiny of the duopoly, being in the spotlight increases accountability. The thousands of less familiar platforms out there are under the radar, and therefore more able to get away with shoddiness.
There are people who will lose out because of the duopoly - this happens whenever there is market disruption. What also happens is progress.
Let’s be glad of it.
Dan Gilbert is founder and chief executive officer of Brainlabs
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Brainlabs
Brainlabs was founded in 2012 by former Googler Daniel Gilbert. After training some of the UK's top agencies, he realised they weren't very good. They lacked the kind of technical and mathematical expertise required to run successful PPC campaigns. So he left, and started recruiting the smartest people he could find to work for the most fun company he could create. And so Brainlabs was born.
Four and a bit years later, we are an award-winning specialist paid media agency, with over 80 employees. We are a team of marketers, scientists and mathematicians – all experts in our fields and totally dedicated to paid advertising.