B2C Rules Today
There is very little doubt that in this new era of People-Based Marketing, Facebook is the leader, as I’ve argued in the pages of AdExchanger before. They were the first mainstream product on the market and they ushered in the era of bold moves and thought leadership. They earned this position by leveraging their technology, deterministic data and moxie.
Facebook may have the lead right now, but the chatter from brands, who are the ones throwing data over the walled garden, is that there are a select few platforms directly on the tail of Facebook who are developing their own solutions to create a version of people-based marketing that can stand on its own. Google is, the industry is assured, working on a solution. Yahoo, Twitter, Pinterest, Amazon, eBay and AOL are bringing up the rear guard and soon are expected to either introduce or expand their capabilities when it comes to marketing to people, not pixels.
To the uninitiated, this may make sense. After all, the technology is catering to people. Why would the inheritors of this space not be from the B2C arena? From the outside, it makes sense. It’s ideal that the data is owned and permissioned directly from the consumer, so of course it makes sense that companies like Facebook and Twitter are taking the lead. The backbone of people-based marketing is the data, and that data is based on B2C relationships.
Is B2C Dominance Assured?
But to the hardened platform veterans, this is a precarious position. Consumers are fickle and you never know when a mass exodus could happen. We tell ourselves we’ve learned from the mistakes of the past, but the ghost towns of MySpace and Friendster loom large. When the consumers leave these ecosystems, so too does the data and the bridge to bringing to fruition powerful people-based marketing solutions that endure.
B2C may have burst onto the scene as the pioneers of the practice, but that’s not the only way to earn a seat at the table. This will be a battle of the tortoise and the hare. B2C is fresh out of the gate, but there is a slower yet more methodical rival bringing up the rear. B2B is, no doubt, discovering its path as we speak.
The Case for B2B
Why is B2B such a natural inheritor to the throne? It’s because within B2B, the value of the translation layer is shared. This means that no one company can wall it off from the rest. As long as every company gets back more than it gives, everyone wins. This is true in the B2B world more so than in the B2C.
Additionally, if given a choice, brands would happily rather trust their data to partnerships that deliver more value than they extract. Why would brands support a one-way relationship that enables a walled garden if they don’t have to? Walled gardens disproportionately benefit the owner of the data, which is rarely if ever the brand. In people-based marketing, walled gardens are the provenance of B2C and nobody likes them. The proof is in the pudding. The AOL of today is thriving as proceeds from its platform come rolling in. This is because AOL has put a focus on content and its platform on the open web, not shut itself down as a portal. This is a stark contrast to how the behemoth saw themselves before their turnaround: a walled garden trying to get exclusive content to attract more subscribers. At the end of the day, technology and a desire for fair play always finds a way to even the playing fields, though, and that advantage lies chiefly on the side of B2B.
B2B also holds a clear advantage in its portability. The data on the B2B side is more stable because there is a lot of overlap between clients. If one leaves only a small portion of the data, the data unique to that client is lost. Long term, brands will gravitate to the B2B offerings for this reason, but it will take leadership to create that migration, which I hope to explain in a later piece.
Finally, the very culture of B2B companies is one that rewards its thoroughness. B2B companies are on surer legal footing. They read the small print. Having B2C data doesn’t automatically mean you can use it. You can bet that when a B2B company enters into the arena, each data point will be accounted for and used with the correct permissions. This makes services originating from the B2B world more appealing to brands.
What’s Holding B2B Back
Right now, a key advantage for the major B2C players is how they wield their translation layer (a brief note about a common question: The identity graph and the translation layer mean the same thing. Like everything else in the new world of marketing platforms and SaaS, there is little standard definition). The B2B inheritor to the throne would need a way to link de-identified PII from a cookie or mobile ID to an SSP, DSP, or both in order to have plumbing necessary to act on and target the cookie or mobile. In the B2B space, Acxiom/LiveRamp, Neustar and Oracle’s Datalogix all have translation layers but they don’t have the rest of the stack, so they’re essentially left as being facilitators in a transaction, not its fulcrum point. However, once one of those B2B candidates has acquired an SSP or DSP or both and made the translation layer a benefit of their platform, the B2B challenger is in a great position to make a run at the B2C players.
There is a distinct advantage here for the B2B realm. After all, a translation layer built from hundreds of businesses has the potential to be larger than a layer from one company, like their B2C counterparts. Of course, I recognize that Facebook likes and a social login give Facebook potential power that B2B firms might find formidable. But the B2B side is steeped in something consumers and brands want: an open platform that’s portable and where the relationship is more quid pro quo. Facebook may have a relationship with roughly 1.4 billion people, but B2B companies have specific advantages. Oracle would be an especially strong competitor given that it has a full-blown marketing cloud already in place. That’s the other side of the coin from traditional advertising and with marketing clouds, you can close the loop of tracking success. That’s the holy grail that Lumascape alludes to when discussing the evolution of digital marketing. Couple that with the fact that Oracle has relationships with roughly 98% of the top Fortune 500 companies and those companies have their own relationships with consumers and we begin to see why B2B is in a position of strength in a people-based world. Oracle is more likely to be trusted with the people-based marketing relationship than Facebook since they aren’t trying to control the relationship and set up a walled garden.
Google is in an enviable position
If the future will be formed by a battle between B2B and B2C, then Google is in the sweet spot, with feet in both ponds just like Facebook. What’s going on with them, though?
Google has all the data it needs from its B2C properties and it also has the B2B relationships to build a translation layer. Google, of course, has a network like no other. Over 10 million sites use Google Analytics, including more than 55 percent of the top 10,000 websites and 63% of Fortune 500 companies. Google reaches, by some estimates, 80 percent of Internet users worldwide. This massive inventory pool is uniform across DoubleClick Ad Exchange and the Google Display Network
Google, unlike most of the other titans, builds open systems. If they were to choose to build the translation layer using data from their publisher network (with publisher consent) instead of from their own B2C data, they would give brands what they are looking for: an open translation layer (service). Additionally, they would engender trust with consumers that they covet by silo-ing that consumer data. Google would still have the ability to use the data but it would never be shared so we could all continue to search and use the Google products we love secure in the protection that Google offers us. Everyone wins with the exception of those pesky walled gardens – huzzah!!
With this theoretical translation layer built from publisher network data, Google could maintain a walled garden around that data, a precaution that protects their relationship with the consumer without sacrificing any value to their clients. If Google made their translation layer a truly open service, it would instantly make Facebook’s Atlas a far less attractive solution in comparison. This is because each brand would be able to extract more value than they contributed to Google’s ecosystem, the opposite of Facebook’s walled garden approach. This theoretical move by Google would serve as a sharp contrast to Atlas, because Google’s offering would not change its relationship with its consumers they hold above all else.
That being said, I’m making this theoretical move by Google sound very simple. My experience is that of someone constantly toiling with a key component of the translation layer, de-identified email addresses. The minutiae and vagaries of building and leveraging a translation layer are nuanced, and what may appear to be a small detail could be the difference between a safe implementation and a privacy nightmare. Google has a reputation for being vigilant about ensuring consumer privacy, a rarity in this field. But, the question the industry is asking is: Has Google begun to make these moves? Is it on their radar?
Where Do We Go From Here?
What will the future hold for the industry? Will it be rife with internecine fighting between B2B firms? There are a lot of dramatic mergers and acquisitions that could happen that could change the environment in one fell swoop. The Rubicon Project could acquire someone like Gigya and integrate sophisticated Identity Management into its automated ecosystem for a new twist on people-based marketing. Perhaps Oracle could do something extraordinarily bold and acquire Appnexus in order to put rubber to the road. Salesforce could acquire Pubmatic and MediaMath to truly use data and automation to optimize the customer journey through people-based marketing and advertising like never before.
As is often said, the best defense is a great offense. Maybe B2C pioneers will read the tea leaves and once again preemptively equip themselves for battle by acquiring Marketing technology. For instance, Facebook could go the “marketing suite” path and acquire a jewel like Marketo for their crown.
Nobody knows what’s next and that’s why this moment is so exciting. But those who don’t understand history are doomed to repeat it. We’ve learned that being a first mover matters so we sit on pins and needles and monitor who makes what bold move. People-based marketing is the biggest transformation in digital advertising since the advent of the internet because it solves so many of marketing’s most pressing issues: from cross device targeting to online-to-offline measurement and attribution. That’s why the future of the industry hinges on who leverages it best.
Marketing is no longer a guessing game when you are a people-based marketer. The coming era will show us who has the ability and foresight to assemble the right parts that make them unassailable to challenges from either the B2C or B2B world.