Google and Facebook duopoly in the consumer attention and ad space

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MUMBAI: Seems like yesterday when digital evangelists were pleading the case for
online advertising before marketers. These days, every morning you wake up to
the news of either a search-based platform announcing self-driving cars
(Google); or an alleged ‘sexting’ app becoming a “camera company” (Snap Inc.);
an ecommportal getting into OTT and then freight business (Amazon); or a
wireless major thinking of buying cable companies after an in-the-pipeline media
company buyout (Verizon) .
And you’re left wondering if suddenly every tech player wants to make world
domination their end game.
As ambitious as it sounds, world domination may be a little too far in the
future. However, there are two key players who have gradually established their
duopoly in the consumer attention and advertising space over the years: Google
and Facebook. According to GroupM’s latest digital marketing report: In 2016,
Google accounted for 13% of all advertising globally and 42% of digital
advertising. Facebook accounted for 5% and 15% respectively. You probably know that already.

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Google Vs Facebook
Both Facebook and Google meet different online advertising needs – one is great for micro targeting, other is the king of search – but the mind likes to see only one winner. There could be one winner for the rest of the world and it may still be just another platform
back home because well, TII (This Is India)!
Harshil Karia, co-founder of digital agency Schbang gives us a break-up of
digital ad spend for major brands in India: 35%? on Facebook, 30%?on Google,
10%? on Instagram, 15% on Snapchat, and remaining 10% on others (Pinterest,
remember?). Now these numbers do hold true for some verticals. For instance,
1. 70% of Saahil Kumar’s total ad spend for Sennheiser India go towards
digital. “Out of this, over 60%-70% are on Facebook,” says the India marketing
head of the German audio company.
2. Some marketers treat the two as one unit, still. “Over 70% of our digital ad
spend is with Google and Facebook. We expect a more diversified market to come
up in two years – especially with large etailers opening up their inventory for
targeted ads,” says Martijn de Jong, chief digital officer of Aegon Life
Insurance.
3.But Lakshmipathy Bhat, marketing VP at app-making company Robosoft, finds
Facebook a lot more effective with its app-install ads and micro-targeting than
the usual “spray & pray” approach for Google.
Why do marketers take the carpet bombing route with Google? “Savvy marketers
know that a 0.1% CTR (click-through-rate) is nothing to write home about. Maybe
they continue to invest in Google out of habit. The concept of takeover (online
roadblock, basically) is dominating,” Bhat reasons. To be fair, Google has had
an 80% plus share of search revenues for over a decade, so this is a decade old
habit.

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Or is it Google Vs Amazon?
It isn’t Facebook that
threatens to change that habit though. It’s ecomm leader Amazon (yes, what are
the odds!). “The conjoined development of Amazon, Pinterest, verticals such as
travel and health and retailer-operated e-commerce means that large numbers of
people are starting and finishing their transaction journey without touching
Google,” says the GroupM report.Not to forget Amazon also has OTT presence with Amazon Prime now, which will
further eat into Google’s YouTube’s revenue share like most other OTT players.
Does that make Facebook the undisputed leader on the board for now? Not
quite. There’s a six-year old kid on the block that’s touted to snap the trophy
away from Zuckerberg.
Facebook Vs Snapchat
One is making profits in billions, the other (Snapchat, parent company Snap Inc.) has incurred losses for two years in a row and anticipates the same for the next few years as per its very millennial-toned IPO filed earlier this month. Does it even stand a feeble
chance against FB? Well, WPP’s CEO Sir Martin Sorrell thinks it does.
In an interview with Lara O’Reilly of Business Insider in January’17, Sorrell
says that advertisers are getting tired of the duopoly and are beginning to see
Snapchat as an alternative, “a third force” to Google and Facebook. He further
adds that an investor in both Facebook and Snapchat told him he thinks Evan
Spiegel’s Snap Inc. could even “displace” Facebook in future.
That explains all those rumours, now public knowledge, of Facebook trying to buy
Spiegel’s product back when it was still a baby. But now, Facebook has a
near-perfect clone of this baby in Instagram stories. And Snapchat’s user growth
has admittedly slowed down (by 82%) since the launch of Instagram Stories
(August’16).
Spiegel is aware of these realities, which is why his S-1 filing to the US
Security Exchange Commission has pages after pages on “risk factors”
highlighting the phrase “XYZ may harm our business” more times than Meira Kumar
said “Baith Jaiye” in her entire term as a Lok Sabha Speaker.
Loss, lost in translation?
Despite Instagram stories
clocking in as many daily active users in six months as Snapchat’s total users
to date, advertisers seem gung ho on the latter’s prospects. Even when there
aren’t any India-specific case studies to talk about. Sennheiser’s Kumar says
the 70% share of Facebook in his digital spends can come down to 40% in a couple
of years in line with Instagram and Snapchat coming up with advertising
solutions. Simeran Bhasin of Fastrack and Wildcraft fame echoes Kumar on the platform’s
growing popularity with the teens and plans to use it for her new lifestyle
venture BRAG.
Snapchat claims to offer TV-like advertising solutions for digital, only better
in quality. “With its ephemeral nature, it has managed to move youth’s content
consumption behaviour from on-demand viewing back to appointment viewing (which
is what TV used to be once),” notes Karthik Srinivasan, national lead,
Social@Ogilvy. But that temporary nature of content forces advertisers to extend
their Snapchat campaigns on the likes of Twitter for longevity, he observes.Not to mention the content is not format agnostic either. Snapchat videos have
to be vertical which limits sharing it across platforms. Why you hassle the poor
brand team, Spiegel? Srinivasan likes to leave it at: “Maybe we’re missing
something he has envisioned about the future because we can’t even think like
the generation (centennials) he’s catering to.”
Yes, brands, just when you thought you were getting a grip on millennials, they
have been declared too obsolete for you to worry about!
Clearly there are no easy answers to ‘who’s the strongest of them all’ at this
point. Even in the absence of that information, as a marketer you need to fight
the temptation of giving into hypes or habits when it comes to spending on
digital. It may not be a significant amount for most of you now, but it’s only
going to grow. So, pick wisely, spend well; this war of techies is unlikely to
have a winner anytime soon.

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