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InContext / An inside look at the business of digital content

Media alliances take on the Google-Facebook duopoly

March 23, 2017 | By Mark Glaser, Founder and Publisher – MediaShift @mediatwit

The Google-Facebook digital advertising duopoly seems like a fait accompli at this point. So too is less-than-favorable revenue that publishers get from them, as a leaked DCN report earlier this year indicated. So it’s not surprising that publishers keep trying to team up to take on the online tech giants. The question is whether these efforts will amount to much more than throwing rocks at a Google bus.

Before we get into the latest efforts, let’s look at the numbers: eMarketer’s latest forecast finds that Google and Facebook continue to dominate in 2017. Online advertising in the U.S. is expected to grow 16% this year to reach $83 billion, and the two companies stand to earn the most from this growth. Google will account for 40.7% of U.S. digital ad revenues in 2017—more than double Facebook’s share. And Google will outperform on search and grow this year to seize 78% of all U.S. search ad revenues. Facebook, which rules U.S. online display ads, will grow to control 39.1% of the U.S. display market.

New Alliances

Condé Nast recently teamed up with Vox and NBCUniversal to join their year-old effort, Concert. The premium advertising marketplace was meant to help advertisers get better combined audience. It promises to reach over 200 million online consumers — including 99% of all millennials, according to the comScore data that the companies cite. As part of their new team effort with Condé Nast on board, Concert will develop new ad products catered around mobile video and branded content. Vox and NBCUniversal also now benefit from the addition of Condé Nast’s behavioral data-tracking platform Spire — evidence that these companies are thinking about a win-win situation for everyone, not just themselves.

Meanwhile, just as YouTube and Facebook have made moves into video and TV — or what some people are suggesting is “the new TV” — Fox Network Group, Turner and Viacom have created a new consortium called OpenAP. The grouping is meant to align offerings but also help navigate the tricky territory of audience measurement. The group says that a neutral third-party auditor will run OpenAP and attacks what it calls “proprietary walled garden, self-governed reporting” — a likely nudge at Facebook and its measurement flubs.

The team effort is also necessary for the TV industry to maintain a semblance of control in an environment where digital is taking hold. As OpenAP’s letter states:

“OpenAP will be a single platform that agencies and advertisers can integrate with their own planning systems to activate advanced audience targeting and independent measurement within premium content. That premium content reaches 93% of all television audiences today, and we hope it will expand if additional publishers join OpenAP in the future. This consortium is a necessity to move our industry forward.”

And there have also been newspaper alliances. The holding companies of The Daily Mail, The Guardian, The Telegraph, Mirror, The Sun, Express, Metro and The Daily Star in the U.K. are involved in a collaborative effort called “Project Juno” to take on the tech behemoths. Meanwhile, another U.K. body representing national and local publishers, the News Media Association (NMA), has called for an investigation into Google and Facebook’s online dominance because of their roles in helping to distribute fake news. This serves as a reminder of the perils of a news supply chain running on just a couple of distributors.

Coopetition Revisited

This isn’t the first effort at alliances to take on Facebook and Google. As I noted in a 2015 DCN column, coopetition — when companies put competition aside and cooperate for the greater good — has long been known in Silicon Valley. But for all the attention it attracted then, the Pangaea programmatic alliance of different newspaper publishers — including The Guardian, Financial Times, CNN International, Reuters and The Economist — has been fairly silent.

So too has the Truffle Pig advertising model that Snapchat, The Daily Mail and WPP became involved with in 2015. Like the real-life truffle hog it was named for, that advertising agency was meant to use its heightened sense of smell to sniff out and market content in a way only it could. As Digiday’s Jessica Davies pointed out last summer, “Such alliances have historically run into problems around infighting, lethargy and incompatible data and systems.”

And while some publishers are teaming up against Facebook and Google, others are imagining a different kind of coopetition altogether: working with them instead of against them. Some may refer to this as a “frog in boiling water” mentality (in which the publisher eventually dies). However former editor-in-chief of The Guardian Alan Rusbridger, is among those to suggest otherwise. His take is that it’s obvious the two companies will maintain an authority no matter how hard publishers resist. “I can’t think of an editor that can afford to not be on Facebook; that would be suicidal because a third to half of your audience is there,” Rusbridger has said. And some local news partnership groups are following suit.

In the end, the alliances are good for publishers who can share knowledge and audiences and get more attention from marketers. But the idea that they will somehow supplant or topple tech dominance is wrong-headed. In the end, it will take cooperation between publishers, as well as between publishers and tech companies, to succeed in a disruptive era.

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