A WARC Trend Snapshot, Google and Facebook’s digital ‘duopoly’, notes that many experts believe the pair will together account for almost all growth in digital advertising despite the efforts of would-be rivals like Oath or Amazon.
Last week Alphabet, Google's parent company, reported a 21% rise in Q3 annual advertising revenue to $24bn, and Facebook is today expected to announce similarly strong figures.
“[The duopoly] creates an imperative for agencies to have platform experts who truly understand how Google and Facebook work,” according to Rob Norman, chief digital officer at GroupM.
“If you fail, then that is problematic – just as problematic as if, in the 1950s, you had decided TV was unimportant, and that you were not going to engage with NBC,” he said.
Agencies also need such expertise if they are to avoid clients going direct to the duopoly and cutting out the agency as a middle-man – a strategy that can lead to problems when it comes to attribution and budget allocation.
“That causes a lot of issues in terms of media-neutral planning,” Matt Morgan, managing partner for digital at IPG Mediabrands network UM, pointed out.
“[As an agency] we have our own tools which help us to plan in a media-neutral way, based on outcomes, but Google and Facebook are in there pushing their own agenda.”
Reconciling competing versions of the ‘truth’ emanating from two different walled gardens is already difficult enough and will take on added urgency if and when the duopoly starts to take ad dollars from TV broadcasters rather than, as so far, print and digital media companies.
But Norman remains optimistic. “You have to distinguish between the fact that there are two extraordinarily large players versus the idea that advertisers have no choice,” he said.
“You need a sense of what is possible.”
Sourced from WARC