Today’s Walled Gardens: Will We Soon Be Watching A Three (Trojan) Horse Race?

mattprohaska"Data-Driven Thinking" is written by members of the media community and contains fresh ideas on the digital revolution in media.

Today’s column is written by Matt Prohaska, principal and CEO at Prohaska Consulting.

There have been many successful Trojan horse plans executed in digital media over the years. I’m talking about the Greeks-in-Troy kind, not the breach-your-security kind.

When Google bought DoubleClick and Admeld, for example, it not only gave Google a head start on global publisher access but the move also made it easier for publishers to use its ad exchange if they already used DFP, Google’s pub-side ad server.

Meanwhile, AddThis, now owned by Oracle, smartly put sharing buttons on thousands of publishers’ sites, which allowed it to collect tons of valuable reader behavior data. And now header bidding has given ad networks, brands and supply-side platforms a brilliant view into a publisher’s entire audience with hardly any guarantee of spend for that access.

Facebook already has two horses through the gates. Its convenient login-through-FB one-click requires no pesky password while allowing Facebook to track its audience. And for the Facebook Audience Network (FAN), the company initially promised to give publishers all the revenue, at least to start, in exchange for a full view of publishers’ audience behavior to enrich its already-thriving walled garden. This is just one way it has taken advantage of deterministic cross-device tracking at scale.

Google and Facebook now earn more than 50% of US digital revenue, and global growth, outside of China, is very buoyant too. Verizon, which owns AOL and bought Yahoo last week, is now projected to move into third in the US, with more than 3% of US digital revenue.

There will be great temptation, and a heck of a business case to be made, to close off Verizon’s combined first-party gold mine of data and only allow advertisers to leverage it within its vast inventory. There are hundreds of millions of deduplicated monthly unique visitors to be had, with wonderful editorial environments for brands to associate. But a smart marketer that wants to serve sequential creative, use true reach and frequency measures or leverage behaviors from Verizon elsewhere will be handicapped in executing any of those strategies.

Tim Armstrong, AOL’s chairman and CEO, publicly said post-acquisition that AOL plans to remain the anti-walled garden. AOL proudly promoted that in Cannes with a huge banner in front of the Palais that read, “Explore an OPEN Relationship.” I don’t think that was AOL touting the new banner buy it closed with American Express last week or experimenting with some type of nonbusiness relationship.

This is very smart positioning against Google and Facebook. Verizon is now by far the largest “open garden” in the US, but we will see how open Verizon remains. An argument could certainly be made for maximizing profits by closing off that garden and keeping Verizon’s massive first-party knowledge in-house.

I hope it doesn’t. As Simulmedia’s Dave Morgan and other smart people say all the time, the only relationship that matters is between the marketer and consumer. Everyone else is an agent, even the publisher. If marketers truly want to understand and respect the consumer to deliver the right message to the right person at the right time on the right screen, they should also have the right to know everything appropriate about what that consumer does and wants.

Think about how hard it is for any other publisher not named Google, Facebook or Verizon to earn proper attribution when they don’t own attribution modeling companies or can’t prove to brands that their platforms work. Think about the new Trojan horse of the combined Verizon, AOL and Yahoo, which now has “on-deck” mobile visibility, the sell-side and buy-side platforms under management with thousands of frenemy customers and a publishing footprint across all media.

As a Verizon mobile subscriber, for example, I would hope the company makes Facebook’s login help obsolete by just auto-logging me into apps and mobile websites when it recognizes that it’s me using my phone.

So now we have the three Trojan horses of Google, Facebook and Verizon at the gates ahead of all those traditional digital publishers. Those publishers’ CEOs, CROs and heads of operations and data need to determine if they are happy being ruled by Trojans, if they will buy, build or partner their way into creating their own Trojan horse or if consumers, marketers and legislators will demand Trojan horses get disassembled altogether.

When faced with these three giant Trojan horses, publishers may not understand what they’re getting into – it will be all Greek to them.

Follow Matt Prohaska (@mattprohaska), Prohaska Consulting (@TeamProhaska) and AdExchanger (@adexchanger) on Twitter.

1 Comment

  1. Tom Bowman

    It is a compelling vision of the future. The question in my mind though is: 'what if the web is not that controllable?' EG what about consumer behaviour? Ultimately consumers have to be satisfied or they go elsewhere. The web is a messy morass of specialist interests. The first generation portals could never satisfy this need. Will that change?

    Reply

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