Ad Age’s Survival Guide maps the changes and challenges in the year ahead, from new ad-tech wars to shifting policies in Washington, D.C.
Amazon, Facebook and Google this year are set to square off in an unprecedented battle for programmatic ad dollars that’s sure to send shock waves throughout the industry — but will hopefully give marketers and publishers more options in the process.
Though the three tech titans have a combined market cap of $1.21 trillion, only Google is firmly entrenched among marketers’ and publishers’ automated ad deals, via its DoubleClick empire. But the meteoric rise of an ad-tech tactic called header bidding has Amazon and Facebook smelling opportunity. Each plans to appeal to advertisers and publishers differently with new offerings. And more competition among the web’s greatest powers should mean only good things.
“We are entering a world where three major titans are going to be competing for ad dollars,” said Tim Wolfe, VP of revenue operations at USA Today. “From a premium publisher’s perspective, this is a good thing. I think the three of them bring a lot of attributes and flavor at scale.”
The war won’t stop at desktop and mobile screens, either. “This is a warm-up for a much bigger battle that involves a much bigger screen,” said Andrew Casale, CEO of ad-tech firm Index Exchange. “Before long, this will be a fight for the screen that sits in front of the sofa — TV.”
New announcements are expected as early as the first quarter, with insiders anticipating even bigger moves by midyear.
In Amazon’s case, it will offer publishers a trove of data about their readers. Google will move to levels of transparency that will be the stuff of marketers’ dreams. And Facebook, meanwhile, will continue to build out its Facebook Audience Network, which reaches users when they’re off the network.
Header bidding technology upended the traditional waterfall structure, which saw online publishers take bids in succession from distinct groups of buyers, starting with the most promising and taking the first acceptable offer that came along. Header bidding lets publishers take multiple offers for their ads all at once and gives advertisers a more even shot at inventory in the process.
For some, however, that’s only one of the important results. Others argue that the rise of header bidding has confirmed the fears of publishers who long suspected Google of gaming its own system to its advantage.
“At the foundation of Google’s programmatic business is the fact they are the sole arbitrator of deciding who gets to share an ad,” said John Donahue, chief product officer at Sonobi. “Well, that went away in 2016.”
Google last April introduced its header bidding alternative, called exchange bidding dynamic allocation, or EBDA. Although still in testing, the product is expected to arrive in the second quarter of this year, several people familiar with its plans told Ad Age.
During the final months of 2016, Google held a first-of-its-kind meeting that high-level executives from five or six of the leading exchanges attended. The company spent several hours with the group trying to convince them that its EBDA solution isn’t a trap. Publishers saw their ad rates climb when header bidding allowed them to collect more bids than DoubleClick alone, so some are wary of going all-in with Google again.Read More at AdvertisingAge