Google, Facebook and Apple are on a collision course as each company's content and technology are merging into super-heated cauldrons of profit.
So, how will these three compete in the data-driven, addressable future of tomorrow's display media? It's still not crystal clear but there are clues. And, it should be noted that this is the first battle that will lay the ground work for the much bigger opportunity - addressable TV. Of the three, Google's display strategy appears to be the most transparent and, easily, the one generating the most profit at the moment. (Chris Dixon did a great job just recently of telling the story about Google as well as giving his take on Facebook's display future.)
The Google story looks something like this: bottom-of-the-funnel search captures intent and drives users either organically or though paid links on the search engine result page to their - pixel fires here - conversion. The result has been high Google margins for paid search have taken away more of the ad spend dollar and - POW! - agencies and others take one on the chin, again and again, as spend pours the Google way.
Next, and to a lesser extent in terms of profits, the Google Content Network loops in sites big and small to provide contextual advertising. As AdExchanger.com has discussed in the past, the next steps of opportunity are being unlocked today: search and content together capture a treasure trove of anonymous behavioral profiles and intent; and, Google is enabling all publishers to leverage their own dataset by releasing self-service retargeting into the world which drives spending on display across the DoubleClick Ad Exchange and through GCN's display inventory.
Next step: search retargeting where a user's anonymous profile will be made available for ad targeting purposes as search's intent can be retargeted across publisher sites with display inventory - and across the DoubleClick Ad Exchange.
Looks hard to stop the Google machine. But, Apple and Facebook have their own ideas.
Apple Creates Its Own Web
Is Apple building a big old ad exchange? No. Where are the standard IAB ad units on the iPad? Nowhere.
They are choosing to change the game and pull the Web away from Google. As a friend noted recently, "When I use the iPad, I never use the browser." Indeed, that's the idea.
The proprietary app-driven (the new mini web browser!) world of Apple is the future where Apple has complete control across its many devices. And as it pushes out with proprietary devices and features, Apple extends its walled garden that is the envy of any Comscore Top 30 publisher whose garden is more commodotized. Each publisher will ultimately turn into an Apple app at the least. It's the online service provider model of AOL in the nineties all over again.
And, as we're starting to learn, if you're a buyer and want Apple's premium opportunity, you're going to have to go direct and buy through the app: the branded app, video, display and text ads through the direct sales team led by the growing ad network tentacles of Apple's Quattro Wireless.
In the future, with data captured through the proprietary Apple devices and tools of iPhone, iPad, iPod, iAd and assorted Mac computers, the Apple dataset grows with its enviable demographic at its core. It will be interesting to see the audience targeting capabilities evolve. If they can become an ad tech company. It's not at their core after all. Similar to Google and Facebook, there's no reason this proprietary dataset can't be swung across display media exchanges outside the Apple walls - or whatever RTB-infused addressable future exists - down the road.
Facebook Takes Over The Web, Too
Meanwhile, over at Facebook, the company is growing an enormous, unique data strategy. With their resulting dataset, ad buyers of the future will be able to target on Facebook and through exchanges (The Facebook DSP cometh!) - going head to head with Google's website and search retargeting.
I'd break out Facebook's data strategy in three parts:
- 1. Site-side data: Taken from your behavioral profile on Facebook which is informed by all you do on Facebook.com.
- 2. External Facebook data: your basic cookie tracking, where the cookie is set on Facebook.com and follows you around the web.
- 2a. External Facebook "Like" data - Whoa! It's external data, too - but intender data times 10! Chris Dixon calls this "taste" data - I like it - which tells every advertiser and publisher what the user really likes given a literal click of a button which says "Like." This is not just an inference on intent given a user's clickstream.
Another note: If you "like" something and it "comes" to your profile in Facebook today, does that wrap into your site-side data profile? Is this another way of Facebook targeting with external data by effectively making it site-side data? Sure seems like it. The web-wide, Facebook ad network would appear to already exist on Facebook.com.
Another data point to consider is Facebook's ability to get up-to-the-minute info. This is why a Foursquare acquisition or a new location-based check-in "game" makes sense. Show me your intent NOW! Data has a shelf-life and it varies across verticals and horizontals. Facebook wants to play along the entire timeline: now, yesterday and last year when you "liked" that hot, new BMW on the IcantAFFORDaBMW.com group discussion boards in July of 2009.
More to come, for sure. The addressable future has only just begun!
By John Ebbert