Dodano: May 15th, 2017

Half of my professional career was related to the planning and purchase of so-called traditional media – writes Agnieszka Stelmaszczyk, CEO of Feno Agency. – My competences included negotiating commercial terms between agencies and media. More or less equal partners were involved in the negotiations: agencies, marketers and media advertising offices. To a large extent, media houses have been created just to balance the influence of the media, which was growing as a result of consolidation, through the scale of pooled client budgets. On the other hand, media research and control were provided by industry consortia, owned by the media houses. This gave them an advantage over suppliers. Such an image of the media world seems very organized and balanced compared to the current distribution of forces in the digital market.  In a short period the rules of the game have changed a lot by the appearance of two digital giants. What does this mean for the advertising business?

Expenditure on online activities remains dominated by Google and Facebook. It is assumed that, on a global scale, these two companies will be responsible for over 75% increase in total spending on digital. This means that from each additional dollar spent on online or mobile advertising, 75 cents will go to Google and Facebook. Some forecasts say that in 2016 the share of these entities in the proportion of business growth amounted even to 90%. Facebook’s growth rate is particularly fast (58% growth).  The predominance of global players over local players completely changes the nature of the purchase. We don’t negotiate terms of purchase on these platforms. Prices and conditions are the same for both big and small ones, for agencies and marketers directly. Only the efficiency in use of platforms and their technical capabilities can affect the purchase conditions. The basis of media houses operations – the accumulation of budgets – doesn’t really matter for the business with Google and Facebook.

The faster, better and focused on learning ones are the winners. This opens the advertising market to new players who specialize in planning and purchasing on these platforms. Especially since their budgetary and strategic significance is growing dynamically, while media houses may try to slow down this process due to their desire to maintain status quo and business connecting them to other suppliers. This is evident when evaluating the scale of budgets spent on online media campaigns on Facebook, Google vs. portals and other entities. Often, for a few hundred thousand zlotys spent on the whole campaign, only a small part is spent on FB. This completely doesn’t match the position, optimization capabilities and marketing potential of this platform. Limited access to platform data is a big problem from the market perspective. In the previous scheme, user data was collected by industry consortia (eg. Polskie Badania Czytelnictwa) and made available to all market participants equally. In the case of Google and Facebook, most of the key data is obtained directly from these platforms and only to the extent they are willing to share. It’s called a “fenced garden” strategy. The remaining data are their exclusive privilege and competitive advantage. It can be said that their up-to-date data about user behavior have more value than the usefulness of delivering content itself.

The risk associated with this situation has been highlighted by the recent controversy surrounding the falsification of Facebook video statistics data. We buy campaigns according to vendor-provided data without any possibility of auditing or validation of campaign performance outside the supplier ecosystem. There is currently a battle concerning placement of advertising content in an uncontrolled context which results from the broadcast of YouTube video content in extremist films. This situation shows advertisers and agencies that the real impact on the way advertising content is being broadcast is getting smaller. With two ultra-strong partners, even setting unified market standards is a problem. Everyone measures their “viewing”, their emissions, and introduces their advertising formats. Only now, organizations representing marketers and agencies have started talking about greater data transparency and market standardization. The technological, strategic and business advantage of the two major digital players over both competition and customers (agencies, marketers) is only growing. In all major digital development areas (video, AR / VR, AI / bots), they are the ones to define the tools and the pace of innovation on the market. This will continue until a new strong player appears on the market and takes control over the people’s eyes, thumbs and attention.


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