As we start to think about our predictions for the year ahead, I’m anticipating that 2019 will be the year of collaboration. With the Google, Amazon, Facebook and Apple (GAFA) quadropoly continuing to dominate the ad market, more publishers are realising there will be strength in numbers when it comes to fighting back.
In 2018 dozens of new media alliances were created among publishers and broadcasters. Of particular note in the UK was the launch of the Ozone Project in June, with The Guardian, News UK and Telegraph pooling their resources to create their own digital ad network, serving up a monthly audience of over 42 million unique users. Facebook has 40 million monthly active users in the UK. So, when it comes to scale, these media alliances are positioning themselves as credible alternatives to the walled gardens.
However, when it comes to offering the same richness of data as the quadropoly they are falling short. For instance, the Ozone Project only uses navigational data. Compare that to the GAFA brands which offer gender data, interests, friends’ interests and transactions etc as well as navigational data and you can see why advertisers may still not feel brave enough to wean themselves of what many in the industry call the GAFA ‘crack’. Without this depth of data, for some advertisers the argument to shift budget is just not compelling enough.
This is why 2019 is not just going to see greater collaboration in the form of more media alliances, but the creation of a new breed of ‘super alliances’.
A good example of what I mean can be seen with the Gravity Alliance in France. It doesn’t only have large publishers like Le Parisien and Lagardere Active as members, but also two telecom companies (SFR and Orange) and also search businesses, content providers and sizeable retailers (eg Fnac-Darty).
Et voilà! By adding non-media brands to the publishers in the alliance, the Gravity Alliance has been able to build not only scale, but a unique picture of consumers. It provides a real depth and richness that goes beyond the GAFA offering, including contextual, search, geographic, transactional and purchase intention data. The alliance is in control of its own eco system and the members are able to monetise all of their first party data across all of their sites. With over 150 campaigns already executed via the platform and revenues of €5m in its first year, the Gravity Alliance is starting to knock down those garden walls.
This is likely to inspire UK publishers to think beyond straightforward media alliances and explore the super alliance route – either with existing media alliances expanding their membership or with totally new super alliances being launched. We are already in conversation with a number of potential new collaborations around the world.
Super alliances are likely to still be driven by publishers and broadcasters as they have such a wealth of knowledge and expertise in online advertising – and with declining print revenues and traditional TV audiences, the benefits of collaborating to fight the GAFA threat will be high on their agenda. However, bringing in partners from outside the media world is likely to be relatively easy as the impact of GAFA is being seen across so many markets, from telecoms and retail to travel. If a super alliance is a way to compete and also potentially open up an untapped revenue stream, then what’s not to love?
I suspect we won’t just see broad alliances setting up, but also more niche companies coming together to pool their inventory and data to allow heightened targeting. A great example would be the travel sector with travel publications and broadcasters collaborating with travel comparison sites, airlines, online travel agents etc. For the right brands, the kind of data that a ‘vertical’ alliance would create would be extremely powerful.
The biggest sticking points in creating a super alliance has always been the complexity of setting one up and also the issue of traditionally competitive firms having to get in the same room as their rivals.
It’s true that setting up a super alliance will always be an involved process, so bringing in non-media ‘newbies’ will create its own challenges, but the advancements in technology will make it somewhat easier. For a start, the new generation of universal data marketing platforms are built to sophisticated standards to ensure that any worries about data safety and security are met. Plus, just as importantly, they have safeguards in place to make sure that each brand’s data is kept separate at all times so it’s totally safe and GDPR compliant – an absolute prerequisite when competitive brands collaborate.
When it comes to long-held rivalries, potential alliance members are becoming increasingly confident that issues are manageable and far outweighed by the benefits. The vital thing is for them to get terms agreed up front and also for an independent company to be set up to run and market the alliance. This ensures that all members’ interests are equal and no one’s data gets priority. Also, given that what differentiates a super alliance from a traditional alliance is the greater variety of members involved, this will mean fewer direct rivalries.
What will be particularly important in driving this trend in 2019, will be the statistics that prove the worth of the super alliance. When it comes to demonstrating the value to potential alliance members, our own analysis shows that this kind of collaboration grows revenue overall, so any worries about cannibalisation are unfounded. Plus, advertisers should note that agencies like Dentsu Aegis who are using the Gravity Alliance are now going public in saying that the results are particularly good with regard to the visibility rate and also scale, suggesting that campaigns targeted via a super alliance are a viable GAFA alternative.
With this kind of evidence available to create a compelling argument to steal budget, super alliances will provide a real alternative to the big four for advertisers. ‘Super alliances’ in more ways than one.
Graeme Finneberg is country manager, UK at mediarithmics