How Digital Publishers are Challenging The Duopoly Dominance
Google and Facebook aren’t publishers. But they, almost singlehandedly, control the future of the digital publishing industry.
The two companies control 85 percent of media spending and 80 percent of referral traffic to publishers.1 With so much influence over the market, the duopoly sets the rules and publishers comply.
What’s more, both publishers and marketers reinforce the duopoly’s closed ecosystem by utilizing features like Google AMP and Facebook Instant Articles. This furthers the growth of these two companies and lessens publishers’ revenue and their ability to compete.2
But a market change seems to be brewing.
Publishers are working together to aggregate their data and audiences, while private marketplaces are allowing buyers and sellers to negotiate directly.3
Here are some of the ways publishers are combating the duopoly.
Strength In Numbers
Smaller companies are realizing that competing for ad dollars in a fragmented industry is a lot easier to do together.
For example, Conde Nast, Vox Media, and NBCUniversal have partnered together to make their ad inventory available in a private marketplace.4
“What we bring to the table [with Vox Media and NBCUniversal] is not only a heritage of quality content and brand safe environments — that’s never been questioned here — but with these partners, now we have scale that can rival the likes of Google and YouTube, Facebook and Instagram,” says Jim Norton, chief business officer and president of revenue for Conde Nast.”5
Partnering together offers media companies “competitive-level scale” in the current digital duopoly structure.6
Together, Conde Nast, Vox Media and NBCUniversal claim they can now offer advertisers the ability to reach 200 million consumers, citing comScore.7
Additionally, these partnerships offer data targeting and measurement, with high-quality editorial content and brand safe environments – something the duopoly has recently struggled with.8 Both Google and Facebook have received backlash from advertisers whose ads appeared next to offensive content.9
These offerings are catching the attention of ad buyers. The Conde Nast-Vox-NBCUniversal partnership has already locked down four advertisers.10
In addition to partnerships, media companies are seeking advertising alternatives in the form of independent ad tech companies to lessen their reliance on the duopoly.
European publishers are especially fond of this method.
For instance, Germany’s biggest digital publisher and owner of Business Insider, Axel Springer, recently revealed plans to stop using Google’s ad server, DoubleClick for Publishers. Instead, it will turn to independent ad tech provider AppNexus.11
Shifting to an independent provider allowed Axel Springer to consolidate their inventory, and offered the media company more transparency into bidding.12
Furthermore, Sanoma, a Nordic media group, made the switch to AppNexus and cited the duopoly dominance a reason for the decision.13
“We took into account the fact that Google and Facebook are also competitors. So whatever revenue we can steer away from them, we will,” said Stefan Havlik, director of marketing and advertising for Sanoma.”14
The group also sought to simplify its ad tech by going from five ad servers – including Google’s – to one.15
Using a single ad tech provider to combine inventory gives media companies like Sanoma more control in a fragmented market.
Havik says, “The market is too fragmented from a buying perspective. You have to consolidate against Facebook and Google or you will continue losing market share.”16
Indeed, it seems digital publishers will continue to seek alternatives and band together to combat the dominance of Google and Facebook.
Havik bluntly summed up a strategy that’s rising in popularity. “You are either the predator or the prey, and we prefer to be the predator,” he said.17
1. Merwin., Alex. “How Independent Publishers Can Fight the Google-Facebook Duopoly.” Ad Age. N.p., 02 Feb. 2017. Web. 28 June 2017.
4. Patel, April 26 2017by Sahil. “In the shadow of the duopoly, media rivals are becoming allies.” Digiday. N.p., 21 May 2017. Web. 28 June 2017.
9. Hall., Emma. “Brand Safety Issues Go Way Beyond YouTube, Says Advertising Week Europe Panel.” Ad Age. N.p., 23 Mar. 2017. Web. 28 June 2017.
10. Patel, April 26 2017by Sahil. “In the shadow of the duopoly, media rivals are becoming allies.” Digiday. N.p., 21 May 2017. Web. 28 June 2017.
11. Davies, May 4 2017by Jessica. “‘The future of their businesses is at stake’: European publishers are exploring alternatives to the duopoly.” Digiday. N.p., 04 May 2017. Web. 28 June 2017.