Before we go any further, I hope you’re not allergic to Anglo-Saxon terms as a large part of the vocabulary used further is in English. But don’t panic, that doesn’t mean I used one in each phrase either!
For the past several months, there has been quite a bit of news in digital advertising, and there’s likely to be greater changes to come! And for good reason, as within 3 years, purchase of digital advertising will have exceeded “traditional” advertising purchases. In 2018, e-Marketer estimated that the world marketplace for digital advertising was 235.03 billion dollars, or 43.5% of the total advertising market. But the most interesting statistic is the estimated share of digital advertising in the advertising market: e-Marketer estimates that it 2020, this share will be 49.9%. What was first seen simply as a growing trend is now confirmed and digital investments are slowly but surely exceeding all advertising said to be traditional.
So let’s take a look at the digital advertising marketplace, the current solutions, and the direction these formats are taking. Let’s consider this a debriefing at the end of a months-long meeting;
Truly! Let’s take a quick but necessary look at the legislative news! There’s no way you missed that end May, the GDPR took effect in Europe. Panic and jubilation before making way for the observation that the cataclysm announced by some has not yet been felt by marketing professionals. There are still important modifications for digital advertising and that is particularly noticeable on social media levers. The offers such as tailored/matched/custom which cross data from one social platform with that of an advertiser felt the impact of GDPR as soon as it took effect. The advertising formats which offer retargeting and generate leads were just as impacted!
Nothing alarming as these large platforms have the means to adapt to the GDPR without too great a difficulty and will quickly obtain their users’ consent.
Publishers and SSP can’t say the same. On the morning of GDPR’s implementation, Google DoubleClick Bid Manager (the company’s programmatic buying platform) announced to the latter a drastic drop in investments which they had been allocated until now. The primary reason for this turnaround? You already know it, it’s composed of 4 letters! In doing so, Google wanted to “forbid the integration of third-party pixels within advertising design when they buy inventory from third-party exchanges” – JDN
To summarize the situation, at the last moment Google announced the rejection of third-party pixels which are used extensively by publishers and are necessary for targeting audiences. All that after having promised that nothing would change with the arrival of GDPR.
“It’s catastrophic for some publishers for whom DBM represents close to a third of their revenues.” – Geoffrey La Rocca, Teads CEO, interviewed by JDN. The solution? There’s no miracle cure; to continue to sell their inventory to the web giant, they will have to develop their own SSP (automatic and optimized platforms for the sale of advertising space). As whether GDPR compatible or not, even publishers who prepared for the blow and equipped themselves with a CMP (Consent Management Platform) are affected by the Google measure.
Same issue for Facebook! The social network refuses to use 3rd Party Data moving forward. The measure, applied first in Europe, will slowly be deployed throughout the rest of the world by October 1, 2018. Previously, the social network used data generated by its users and originating from “Third-party data brokers”. These partners, the big losers in this situation, can be counted on one hand: Axciom, Oracle Data Cloud, Epsilon or yet again Experian! To give you an idea of the damage done, third-party data supplies almost half of the 1200 or so criteria for Facebook retargeting. Mark Zuckerberg’s company gives itself a little less than 6 months to apply the measure completely!
The other news concerning digital advertising comes from across the Atlantic! Last month, Bloomberg announced that Amazon launched the test-phase of a new advertising format which allows marketplace vendors to retarget users, who have seen a product in their Amazon ads, to third-party sites.
And so, going into direct competition with Google and Criteo, Amazon consolidates its recent advertising offer with this retargeting format. As a result, Jeff Bezos’s company has invited certain US marketplace vendors to try out this new solution before the end of May.
Currently, the vendors can already buy other advertising formats on the platform but with time, Amazon seems to be affording more importance to sponsored offers in its search results. For this retargeting offer, payment will be controlled by the number of clicks.
Certainly, Amazon is trying to insert itself into a duopoly dominated by Google and Facebook, but Jeff Bezos’s company has the necessary means to position itself as an important market player. With “only” 1.7 billion in revenues for its Ad Business branch, Amazon is far from the 95 billion in revenues generated by Google and Facebook’s 40 billion dollars. Time will tell how Amazon will evolve in this market.
At the same time, we couldn’t prevent noting a rising trend in advertising offers from social networks. Aware of the importance of content to seduce consumers, and frequent use of these platforms, some such as Instagram or Pinterest, are trying to attract advertisers. In France, on March 20, 2018, Instagram made it possible for professionals to redirect their consumers to their web sites’ product pages. More recently, beginning June, the social network incorporated shopping tags on the brands’ short videos. It’s no longer necessary for users to scroll to buy a product: the offers arrive directly at the top of the screen.
As for Pinterest, on March 19, 2018, it launched its “Shop the Look” feature which allows platform users to buy product that interests them directly from the platform’s pins. And as the platform won’t stop there, Pinterest also improved its advertising video offer by giving advertisers the possibility of using full screen videos.
“People on Pinterest really are more interested in videos from brands than on other platforms.” 67% of Pinterest video viewers say that videos on Pinterest inspire them to take action. In contrast, only 32% of people say that about other platforms.” announced the platform in the release on their blog.
For the time being one must be patient: Pinterest will commercialize its advertising offer in France during the summer and will take advantage of the rollout to deploy its advertising management platform, Ad Manager.
Apple also wants to enter the market! After a record 2018 quarter, (with sales of 88.293 billion dollars for 77.3 million iPhones moved) Apple has new ambitions for the rest of the year.
After having long objected to launching into the digital advertising market, the renown American company is in the process of signing a partnership with Snapchat and Pinterest to extend its digital advertising network. This partnership will make it possible, for example, to display distributed advertising in the internal search engine results in partner applications. Key in the word “furniture” in the Pinterest application and advertising distributed by Apple will appear. For the time being, the project is not official but there’s already been a great deal written on the subject! This initiative could grow the digital advertising market and put Apple in direct competition with Google and Facebook in the digital advertising market!
Given the latest statements by Tim Cook concerning the advertising model used by Facebook and Google’s advertising agencies, it’s not surprising to see Apple’s CEO want to enter the market and compete with the other 2 giants by proposing a different, more collaborative model. The former had qualified Facebook and Google’s Internet advertising business models as “creepy” and had added that were Apple to launch into digital advertising, the company would not opt for a model based on monetizing its users data. This story is still just a rumor, but merits monitoring.
The final information comes to us from Facebook! After having deployed its marketplace in 2016, Facebook decided to launch a new advertising offer. The latter allows advertisers to display their ads on the Facebook platforms (News Feed, its marketplace, Instagram, Messenger) thus allowing companies greater opportunity to convert users potentially interested by their offer.
The web giant explained in a press release on June 5, how its system would work:
“Businesses are already seeing results using ads in Marketplace. Thread Wallets, an accessories company, generated more than 300 purchases while increasing its year-over-year return on ad spend by 41% after adding Marketplace as a placement for its conversions campaigns.”
The Final Word
The current state of digital advertising has been surprisingly turbulent over the past months in particular with the arrival of the GDPR which changed many things for advertising house offers. This growing market is taking over traditional advertising and clearly shows evolution over time. One thing is certain, the Facebook-Google duopoly will face stiff competition with the arrival of Amazon, and this competition, coupled with restrictions on use of data, will push the players to accelerate development of new solutions.