Last week, I wrote that Google and Facebook will control 85% of new online advertising, a daunting prospect for any company considering competition. I also noted that I see a third company looming, a probable combination by Verizon of AOL and Yahoo! That combination would result in an instant No. 1 traffic leader. So where does that leave other social and ad tech companies?
I talked this week to Jon Schulz, CMO at Viant, the ad tech and content (MySpace) company recently acquired by Time Inc. Schulz doesn’t go so far to say, as did Rupert Murdoch in a complaint to the European Union, that Google is anti-competitive. But he does call the 85% figure “accurate” and opines, “when companies get that big, they get a bit threatening.” Given their domination of search, “they have a lot of advantages.”
What’s Viant’s argument against the total supremacy of Google and Facebook? Schulz, who spent 20 years at Ford in various capacities, says his competitors are “walled gardens,” and that advertisers want to learn more. “The information loop is critically important.” With Google and Facebook, “there isn’t a lot of information exchanged.”
Schulz promises “a series of announcements” at Time Inc. quarterly earnings session, on May 5. “There is a lot of news coming up,” he promises.
Time Inc. CEO Joe Ripp had promised that his company would go after Yahoo! But Time Inc.’s own periodical, Fortune, compared that last month to “tying two rocks together to try and make them float, a couple of drunks holding each other up, etc.” The same piece called MySpace “faded” and Yahoo a “dead man walking.” (With corporate friends like this, you don’t need enemies.) Most think the Yahoo! move is off the table now.
So what could Time Inc./Viant announce that would make the ad tech world take them seriously? At one time, say, nine years ago, MySpace had twice the traffic of Facebook — 114 million uniques compared to 52 million for Facebook in June 2007, according to comScore. It was valued as high as $12 billion. Sumner Redstone famously fired a great Viacom CEO, Tom Freston, because he failed to acquire MySpace. What happened after Murdoch paid $580 million for it in 2005? Murdoch admitted defeat when he cast it aside.
“Simple answer — we screwed up in every way possible, learned lots of valuable expensive lessons,” he said as he sold it. Viant didn’t buy MySpace until 2011, and they paid only $35 million for it.
Murdoch’s no dummy. But his company famously lacked digital know-how in 2005. There was that famous attempt at creating a joint venture with MCI to compete with AOL, and a lot of palaver with online companies that didn’t amount to much. It sold MySpace for peanuts because it didn't know how to run it. Basically, one could argue that the same equation could be at work now. Remember, Time Inc. had a net loss of $881 million last year and it has had a history of disastrous tech failures, like the futuristic Full Service Network and the bungled Pathfinder Web operation.
Viant’s Schulz argues that Viant added strong relationships with clients in the retail, packaged goods and auto categories, adding to Time’s strength in such arenas as pharmaceuticals and telecommunications. And it’s got plenty of traffic. comScore’s March rankings put the Time Inc. Network at No. 16 overall, with almost the same amount of traffic as Twitter, 113 million uniques, and ahead of eBay. But Yahoo! is the No. 3 Web property, and it’s on life support, according to Fortune. And in terms of smartphone apps, Google and Facebook own eight of the top 15. Can the No. 16 Web property do battle with this kind of power play?
Programmatic Insider is a great believer in the interactive/feedback loop of MediaPost. I would encourage readers to post what they think Time and Viant are going to announce May 5. If you know, let us know. I would not be surprised if it’s a content acquisition. If Time bought something like, say, BuzzFeed, its traffic would equal Yahoo! BuzzFeed executive chairman Ken Lerer is a former EVP of AOL Time Warner.
(By way of disclosure, I should mention that I worked for News Corp. in two different capacities — at the New York Post and on the MCI/News Corp. joint venture.)