Thursday, August 03, 2017

Future of Online Advertising - Google & Facebook Platform Dominance

Not everything is rosy in the world of digital advertising. P&G announced last week it has cut more than 100$ Million (equivalent to INR 635 crores). It cited 3 primary reasons for this
·         Ads were simply ineffective
·         Ads were being served to bots
·         Placement of the advertisements
My uninformed guess would be that the primary advertisement cuts would have happened in
  • ·         Branding campaigns that focused on reach as the primary performance metric
  • ·         Non-Google & Non-Facebook advertisements
This broad trend of advertising shifting to Google & Facebook was reflected in Mary Meeker’s 2017 Internet Trends – where she clearly illustrated that growth in online advertising in US is largely being driven by Google & Facebook.
And multiple machine learning algorithms that is optimizing the campaigns in Google & Facebook networks serves as a very effective moat against any new player entering the space. And Google & Facebook are expected to further deepen their moat – by artificial intelligence and machine learning.  My bet is that in a 3-4 year time frame, >80% of the online advertising spends would be done through Google & Facebook platforms only.
But as marketers, should we be worried about Google & Facebook Advertising Dominance? We all remember how Facebook killed the organic traffic for brands inside its closed network. The day Google also faces similar challenges with revenue creation – we can expect it to do the same. If the history shares any trends, a category that was dominated by one or two players – will result in poor services and higher costs for the customers. Interesting Times for a Digital Marketer.