An abridged version of this article originally ran in AdExchanger under the title ‘Will Fast Follower Google Dominate People-Based Advertising’?
With the launch of Google’s Custom Match, we are seeing a fate come to fruition. We knew that Google would enter the people-based advertising fray with a serious contender, and now we see how.
If you’ll remember, it was at last year’s Advertising Week that Facebook introduced people-based marketing with Atlas. I consider the phrasing PR at best since marketers are forced to upload known data into Facebook’s platform in a way that keeps marketers from closing the loop on measurement and attribution. That inconvenience means that marketers’ known first party data is converted into anonymous aggregate data for reporting purposes.. It is a step forwards for advertising but an inability to close the loop on the data is a significant step backwards for marketers. Regardless (or perhaps because of this), over the course of this year, joining us in hearing the siren song of people-based marketing were: Salesforce, Verizon/AOL, Criteo, Oracle, and more.
It’s a Battle of Voltrons.
In the TV show Voltron, the super robot would form from five robotic lions to do battle. There’s a parallel in the fight for people-based marketing dominance companies amass the right parts to conquer the field.
I continue to enjoy that metaphor, no matter how nerdy.
Facebook’s Voltron was First, and It’s Got a Headstart.
Facebook’s people-based advertising platform is the combination of multiple technologies, all built on top of Facebook’s super power, the identity graph that Facebook generates every time a consumer logs-in. This identity graph formed the heart of Facebook’s Voltron, empowering it to target people, not pixels, while providing a vehicle to affix to its other ambitious technologies. Its main weapons are LiveRail for video, an optimized audience network appendage (which allowed advertisers to extend the use of their first party data from their Facebook ads to other apps) and of course, their big gun: Atlas. Until now, they’ve sat atop their throne unchallenged.
Facebook Atlas Was Engineered to Beat Google: But Now Everything Changes.
With Atlas, Facebook made technologies like Google’s PixelTech (Doubleclick) antiquated overnight. Facebook’s completed Voltron, with its ability to target people far beyond Facebook’s walls, created the playbook for its rivals to follow.
For a while, Facebook was the only one who had amassed anything like it. Google, even with its ad server, SSP, DSP, mobile ad network, marketing attribution arm, etc. was no match without the ability to target first party data cross-channel and cross-device. As Kelly Liyakasa aptly pointed out, what Google still truly had, at their heart, was a dependency on the cookie.
But with yesterday’s news, no longer will Google’s Voltron be hobbled by dependency on the cookie alone, forced to market to pixels, not people. Now it can focus on marketing to people using plain old vanilla CRM/1st party data that nearly every brand has in droves. And its data is superior: Google has intent data, not just things liked on Facebook or across the web.
But will this battle for supremacy really be limited to just two players?
Where Do Each of the Potential Rival Voltrons Stand?
So where do the other players sit when it comes to going after an advertising market predicted to be 37.6 billion in 2019?
1. Salesforce would be a natural contender, but it isn’t as aggressive as it could be, in terms of closing the loop with paid media. Salesforce recently announced it would integrate with partners so its customers could leverage any of the primary advertising networks and technology platforms they already use. Since Salesforce is choosing integration over doing the heavy lifting itself, this strategy may seem guarded, leaving money on the table, but I think it is reasonable, given its focus.
2. Adobe is well known for their acquisitions, but are conspicuously lacking ad-serving capabilities. Adobe did buy Demdex and Efficient Frontier in a promising start before getting cold feet. Just recently, Adobe upgraded its DSP but the competition is fierce and conquest is hard if you do not have a clear way to demonstrate superiority. They’ve been quiet and operating somewhat behind the scenes, but with all of their assets, they have a very broad set of capabilities.
3. Criteo has amassed a large identity graph. More than 80% of their clients participate by leveraging its cross-screen solutions. However, Criteo flies under the radar when it comes to people-based marketing because they wield the power of the graph silently. Their automated approach and behind-the-scenes use of their own identity graph makes them the leader in mining the “live intent” needed to retarget the right product or service to a person irrespective of device or browser. Up until this point, they were without rival. But now Google is entering the fight with the intent and data science to compete. However, Criteo is considered the standard to which we all aim: fully integrated from the collection of “live intent” to its use across device and browser. They should be watched very carefully.
4. AOL/Verizon’s merger earlier this year was a savvy move. AOL had previously acquired Convertro, which provided a top-of-the-line attribution solution and, I believe, is the solution for AOL/Verizon’s identity graph. If Verizon can match its data to AOL’s capabilities, the impact is impossible to overestimate. It’s not an insignificant “if”, however. They’ll need to execute while managing privacy. That sounds simple, but is incredibly complex. It is by no means a done deal and eyes are on them.
5. Yahoo was so ahead of the game until they weren’t! They bought Right Media in 2007, a crown jewel brimming with talent like Brian O’Kelley, founder and CEO of Appnexus, and somehow never got their act together. They went from first-mover to also-ran, although there are signals that they are hopping in to the People-Based Marketing And yet Yahoo Japan is leading the way with the most comprehensive people based platform built on an open architecture. Perhaps Yahoo has incubated the model for domestic success in a different market than the US.
Can Oracle’s Voltron Break Through the Garden’s Walls?
Oracle asserts it doesn’t want a walled garden and there’s a thirst for that in the market. Brands resent walled gardens, who require that they hand their data over for one-way use in their walled garden.
Oracle is attempting to let advertisers bring the same cross-platform and cross-device utility that people-based advertising offers without restricting that utility to those walled gardens (thus making it people-based marketing, not advertising). Of course, this isn’t out of altruism. Since they don’t have their own trove of data, Oracle and the clouds must count on giving more than they take and being open as compensation. And, Oracle is aggressively arming their Voltron (as reported by Ryan Joe) to do battle and be a central hub for pushing data into walled gardens and open platforms. Given their acquisitive track record, how long before Oracle acquires assets to put their identity graph and associated intent data directly to use like Criteo has?
Groundhog Day All Over Again.
Now that Google has finally armed their mighty Googletron, the question the industry is now asking is how did we get here?
Think of all the effort and money that has been poured into RTB over the years: DSPs acquired, SSPs built, DMPs optimized, all designed to give brands the ability to target, manage, measure and do attribution across their buys on any platform or network and to have the ability to do 360 degree attribution on first party data. The limitations of the cookie required these complex workarounds and necessitated the very complicated, inefficient, and therefore expensive process of cookie syncing that sits at the heart of RTB.
People-based marketing taps directly into CRM and 1st party customer data, making cookie synchronization unnecessary for people-based marketing. No synchronization is necessary at the intersection of advertising and marketing because the cookie is replaced and both parties target the anonymized email address.
Many of the innovations of RTB could be for naught because the rise of walled gardens is moving us back to the days of the portal, when data was in siloes. Somehow, we ended up back in the days of closed proprietary systems, where data only flows one way, from the brand to Facebook, Verizon/AOL, Twitter, and now Google.
There’s Got to be Change Around the Corner.
In a world where brands control ad budgets and have learned from the past, they are investing aggressively in becoming publishers. It is my opinion that the ball is in the courts of the brands. If they prioritize their budgets to platforms that are open, there is no doubt they will force many of the walls to crumble. With a little pressure, companies will be forced to support integrations that allow for true people-based marketing, not just people-based advertising.
For Now, It’s Time to See What Google Does.
Now that Google has responded to the Atlas threat, will it turn its attention to Oracle’s Voltron, which is defined flouting the walled garden trend? It would likely do so by being a fast follower, something they’re known for.
Google could easily double down and provide an alternative to the walled garden they have erected around their data in order to confront Oracle while holding Atlas at bay. All they would need to do is offer DFP customers the opportunity to participate in a co-op and they would have the largest graph of them all (assuming participation from most publishers). Will Google follow in the path blazed by Oracle and amass the power of their customers’ data in a public graph available to all their customers as a second act? Why not? Oracle published the recipe of their plans just like Facebook did, and if past is any indication of the future, Google now has what they need to replicate the success and be a fast follower (Google Drive (Dropbox), Google Docs (Microsoft), Google Cloud (AWS) and Google Search (everyone). They already have the tags on the pages, mobile and desktop. That means they have the technology and the relationship.
If Google can deliver the promise of people-based advertising combined with Google intent data without going through the onerous step of asking customers to change platforms, Facebook Atlas needs to be on high alert. Google’s done it from a standing start before and won (RIP Right Media.)
Can Facebook Pull Out Another Innovation?
Will Google once again win by being a fast follower? Are more Facebook innovations on the way to differentiate further? They could extend Atlas to other media channels that act like logged-in media. Doing this would provide Facebook the ability to add these channels to attribution models without sharing data beyond Facebook’s walls. How is this possible? It’s because every impression in logged-in media and in email (which acts like logged in media) has a deterministic match to the user.
I predict the last Voltron standing will have the most reach across online and offline. The race is on to see who is most clever about wielding their identity graph axe.
Whoever wins, one thing is for sure. With the leader in pixel-based business models entering the people-based adverting/marketing race, Pixel Tech is officially an endangered species.
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