Commentary

Diversification Beyond The Duopoly: The ROI You're Overlooking

Our industry has started to see the first cracks in what was once thought to be the duopoly’s impermeable shell. However, on the day-to-day media-buying front, very little has changed. Two out of every three digital ad dollars still go into the pockets of either Google or Facebook, even as advertisers grumble about recent moves that have deepened the isolationism at both companies.

Frustrated advertisers don’t need to resign themselves to a future where the portions of their budgets going to Google and Facebook are viewed as a sunk cost.

The very moves that both Google and Facebook have taken to build their walls higher in recent months have greatly increased the value of first-party data to advertisers in today’s media landscape, and it is through that value that media buys on publishers outside of the duopoly umbrella, such as ad networks and ad exchanges, will become increasingly attractive alternative for brands and agencies.

No Time for Complacency
There is a good reason that two out of three digital dollars are spent with Google and Facebook these days. Such buys are easy, and they’re effective. They have been for years now.

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But brands cannot become complacent and assume that established channels will continue to deliver on their needs over the long term. It benefits them to continually test new media technologies, suppliers and platforms that may offer parity—or something more.

Since the rise of the duopoly, the digital marketing playing field has changed dramatically. In fact, the most drastic changes have arguably come in the past six months as a result of GDPR. In light of the new privacy regulations, a growing number of brands are shifting away from third-party data sources and instead focusing on building their first-party data assets to establish more transparent relationships with consumers.

Meanwhile, the duopoly is restricting access to audience data for advertisers. Advertisers dump money into Google and Facebook campaigns, but they’re increasingly prohibited from using that audience data gleaned from those buys to inform their media buying elsewhere.

Redefining ROI Around the Value of Data
In today’s media landscape, data holds true value for advertisers. It’s time that advertisers start reflecting that value in their ROI assessments of advertising partners. In doing so, advertisers will increasingly find that non-duopoly ad network buys—ones that enable advertisers to extract valuable audience insights and apply them to media buys on other platforms—represent a much higher-value proposition than campaign-level metrics alone would suggest.

Buys on networks with data-permeable walls lead to a virtuous cycle of improved performance for advertisers. Audience insights gleaned from campaign performance can be fed into a brand’s first-party data pool and then leveraged for informed buys on other networks, including—yes—Google and Facebook. On non-duopoly networks, the virtuous cycle continues, with each campaign yielding additional insights for future buys. Meanwhile, on Google and Facebook, the cycle is broken. Audience insights go in—but they don’t come out.

Over time, as non-duopoly network buys yield growing troves of first-party data, the effectiveness of such buys will continue to improve, warranting further investment from brands and agencies. Ultimately, weaning brands and agencies from their Google and Facebook dependencies needn’t be a painful or sudden process. As the tangible value of extractable audience data becomes increasingly apparent to advertisers, the ROI of non-duopoly buys will speak for itself—and budgets will follow.

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