Facebook and Google’s battle for Market Share changes digital advertising completely

Most of us are aware of the two key drivers of this seemingly exponentially growing innovation in digital marketing: Facebook and Google. But how do they do it? And most importantly: What’s in it for advertisers?

Working in digital marketing feels like living in a world where a new iPhone is released every week. Progress is everywhere. Let’s look at the scope of this. Experts predict that 80% of digital marketing spending will be controlled by Facebook and Google by the year 2020. This sounds like an ominous, shocking future, where advertisers bow down to two Silicon Valley heavyweights and beg for low CPMs.

Just as we were getting used to creating PowerPoint slides of big ecosystems with a wide range of different players and tons of fancy logos, something fundamental started in digital advertising – Facebook and Google ramped up their portfolio to consolidate the market with innovative tech capabilities and a love for data – the basis for gaining market power faster than ever.

Many advertisers fear this oligopolistic future, where just a few players dominate the digital market and eventually inflate prices. While this concern seems reasonable, it’s also safe to say that both players will drive their products to such perfection that scaling your business digitally is basically a “done deal”.

Insights to Go
Advertising on Google or Facebook is simply a pleasure. Scope and quality of possible audiences give great value to the term “targeting”. Advertisers are not only able to accurately target specific users free of additional costs, more and more data points are added constantly, in order to narrow your audience down to efficient cohorts, without losing scaling potential. These features are impressive, but not the main reason for success. At its core, both players – especially Facebook – enable advertisers to leverage their very own data with (almost) just a click. Where other Programmatic Channels seek for large DMPs and expensive Data Sources, Facebook and Google simply match your data, thereby generating perfect statistical twins: the “Lookalike” or “Similar” Audience. Besides this, both players have their own way of identifying relevant users for your product, based on data. For example, with Google display campaigns advertisers are enabled to use insights on search terms and browsed websites, whereas Facebook provides information about “liked” or frequently visited pages.

While many advertisers are already using these additional features, surprisingly few of them develop the passion to squeeze out the last bit of data from Power Editor & Co., in order to optimize their digital activities on deeper levels. Being able to target to such an extent offers more than just enormous potential. It’s also an obligation to challenge the status quo by identifying crucial insights surrounding your core target group and optimizing campaigns towards them.

Cross-device is Here
Don’t know what to talk about at a marketing congress after-party? Simply drop this term to initiate wild discussions. Everybody is trying to get a hold of accurate cross-device tracking – except for Facebook. They are the only ones who are on the verge of mastering this topic. Facebook’s reliable fingerprinting (a tracking method that uses an individual Users / Device ID) enables campaigns to serve perfectly paced touch-point frequencies across all devices. Most importantly, interactions are tracked more reliable, compared to the classic cookie pool based tracking. This is where Google struggles. Google’s fingerprinting abilities can’t keep track.

With tracking the customer from the initial interaction to the point of conversion being still a question mark to many, Facebook and Google have built intuitive tools that portray cross-device user flows and document the impact of ads. In the context of performance marketing campaigns, these abilities open up further layers of optimization potential for advertisers.

With great data, comes great confusion. Often forgotten, but just as important as generating data, is interpreting data with the campaign objective in sight. Scaling digital campaigns towards target customer acquisition cost requires a mixture of experience, gut feeling and data-driven optimization approaches.

A Globalized Marketplace
Facebook and Google’s secret to success in gaining market share is the fast roll out of profound advertising activities on a global level. Like brothers in arms, digital businesses expand across borders at a fast pace, nurtured by the globalized marketing instruments of Facebook and Google. They enable us to multiply the market potential at relatively low costs, compared to textbook scenarios with big expansion plans and due- diligence nightmares. Both of them not only facilitate international advertising, they provide powerful market- specific insights, such as Device Usage, Consumption Behaviour or Search Requests.

As a Global Agency, we value relationships with relevant media houses across the globe and are amazed by the variety of existing placements. Nevertheless, mirroring efficient digital approaches in Facebook or Google, slightly adapted into go-to-markets, brings great value to the initial stages in a market launch and is essential for scaling digitally.

Thanks to the global approach of both Facebook and Google, pursuing deliberate marketing abroad has never before been more serious from day one.

PMD, Reveal Yourself!
When pitching for digital budgets, advertisers are often not fully convinced by the added value of independent providers like Preferred Marketing Developers (PMDs) for Facebook or Bid Manager Tools like Intelliad for SEA Campaigns. As those are associated with fees, both agencies and advertisers would be foolish in spending extra, if not expecting a result with a surplus in performance. When looking at the bigger picture, we see a far more important role for independent providers. With Facebook and Google dashing to achieve world domination in media spending, independent providers continue to focus more on finding sweet-spot solutions for individual industry problems. Whether its ad template layers for dynamic Re-Targeting or tailored bidding tools for clients with short key seasons – independent providers help advertisers and agencies to further scale their digital activities, which eventually results in accelerating rapid growth of Facebook, Google and the advertiser.

Synchronization in Process
In recent months, TV or Digital Out- of- Home Sync has become more than a buzzword for sophisticated cross channel marketers. As TV reaches out towards programmatic capabilities, developing new advertising formats and making offline media spending trackable, the capabilities of synchronizing on and offline media keep growing as well.

Channel synchronization itself should still be handled with caution. There are big differences in how to synchronize activities and no golden rule exists for automated synchronization to generate the most value. Manually amended synchronization strategies can bring great success on their own, if they are done within an individual sophisticated cross media campaign alignment.

All Responsive
Did you know that more than 60% of users are mobile first? Me too! Apparently the whole world has heard. Due to the hype around graphs that indicate massive growth of mobile usage, it’s almost astonishing to see many advertisers put all their efforts into website responsiveness, although creating a great app would be the better choice. Despite the general aversion of App Store fees, it’s more than a fun fact that mobile customer acquisition comes best with apps – especially due to special ad formats built for app installs and app engagement.

Although many already succeed in illustrating an efficient journey with responsive shop experiences, we see the largest spike in media efficiency and scalability when building comprehensive approaches around app install and in-app engagement campaigns that leverage the latest tools.

Dominance in the Media Space
We should be aware of the growing dominance in the media space, but we don´t have to be afraid. The fuelled digital advertising market will continue to see rapid change. When? Constantly. It would be naive to believe that innovation will stop just because Google and Facebook are very dominant in certain areas. New solutions have already been picking up serious affection. We are witnessing brands taking influencer marketing and content distribution seriously, and new advertising networks are disrupting the market with native formats and systems that the bigger players are just starting to consider.

Voice-Recognition, Artificial and Virtual Reality. The new playgrounds and war zones are already emerging. Innovation in digital marketing is faster than ever and leaves us convinced in approaching a market not only full of opportunity but also variety in placements with scaling potential for you and your business.

In addition to the ever evolving digital marketing industry, offline channels such as TV and Out-Of-Home are stepping up as well. New offers with increasingly centralized systems drive competition and accelerate development of programmatic capabilities in offline advertising. Thereby, media owners are stepping up their game with the development of new advertising formats, digitalization of out-of-home placements and even possibilities in targeting customers more accurately offline. This energetic approach not only facilitates cross-channel marketing but also fuels our ability to continue what we do best – scaling businesses in a data-driven manner while combining TV, out-of-home and digital into comprehensive customer journeys.

Do we Still Need Agencies?
The greatest digital marketing tools and instruments will not support you in scaling your business if not used accordingly within your operation as a whole. It is essential to have expert knowledge with regard to what is feasible in digital marketing in order to be in a position to apply the right (ad) pressure and adjust the screws that actually impact the success of your digital marketing campaigns.

We see a great future for service providers and data-driven agencies like ourselves. Despite all the innovation and technological leaps forward, current digital marketing communication is still decades away from a truly optimized, personalized and engaging experience. It is up to us to squeeze out every bit of performance, both for you, our clients, and the customer itself.

As an advertiser, take this chance to reflect if your approach to digital and offline marketing comes with similar disruptiveness or needs a major upgrade before you are able to leverage digital acquisition for your company in a Silicon Valley style manner.

This blog post is an adapted version of an article that featured in Leverate Media’s company magazine ‘Leverate ONE‘.