The publisher’s way to go from surviving to thriving.
Dec 8, 2020
The digital advertising market is booming. It’s already reached a significant level and now is more than all other types of advertiser expenses together including TV, printed media, billboards, and sponsorships. The market size has already exceeded the level of 300bn.USD. It looks like a great time for multiple digital services like websites, apps, games, etc.
It's not as rosy as it looks at first glance. The total domination of duopoly in the digital ads market is a matter of fact. Facebook and Google capture almost 60% of the entire digital ads market. Yes, we should respect the great job they did by creating the popular services which we use on an everyday basis. The popularity of Google Search, Youtube, Facebook, and Instagram is difficult to overestimate. Unfortunately, the real problem is much deeper. It is not about the competition for user visits and attention. The problem is the unfair market conditions relating to competition for advertising dollars.
The duopoly domination has already moved from providing services to total control of distributing the ad dollars for the entire market.
1. When advertisers need to build an ad campaign, they use the appropriate interface. On the other hand, if the publishers (eg. website or app) want to monetise the visits of users, they need to use the technologies to maximise income from every impression served to every visitor. The market for these tools is completely dominated by the duopoly. That means a news website needs to compete for attention with duopoly services and even when a user visit is achieved, a significant part of the current advertising dollar goes anyway to Google/Facebook.
2. Not only does the duopoly take a piece of the ad dollar on the way to the publisher, the digital advertising ecosystem is extremely ineffective. The programmatic supply chain study carried by PwC and ISBA in the UK showed that even if we speak about the 15 top advertisers (Pepsico, Nestle, HSBC, Vodafone, etc.) who serve the ads to the 12 top British publishers (The Guardian, Telegraph, etc.), there are an average of 300 ad-tech intermediaries between advertiser and publisher. That results in regular delays when the webpage is loading, in unsecured transfers of user data, and in privacy risks to publishers from uncontrolled vendors. In the end, even in the case of top publishers, a maximum of 50% of advertiser money is spent on their inventory. For small and mid-size publishers, this share is even much less (15-30%). It sounds strange, especially when compared with Google/Facebook where everything is internal. They are often described as a ‘walled garden’.
3. The fraudulent traffic works against publishers. The same research from ISBA showed that even when we explore money distribution between top British advertisers and publishers, 20% of it is unattributable costs. Fraud in digital ads is a big and well-known topic. At its peak, it reached up to 70% of the digital ad money. Now, the market has overcome such crazy numbers. However, digital ad fraud is still in the top-3 for illicit money, together with the weapon and drugs market. For certain, it’s much easier to eliminate fraud inside your ‘a walled garden’ within Google or Facebook user services. You can control each impression in every step. But it’s a critical issue for the market with thousands of participants where publishers work.
4. GDPR defines third-party cookies as an unsecured practice. Safari and Mozilla blocked third-party cookies a long time ago, and resulted in an inability for user identification by publishers. User identification is one of the biggest issues in the post-cookie era. The same collapse is coming for iOS14 with Apple taking control on IDFA usage for App developers. So the user ID is mostly blocked from both websites and apps. That means that without user identification, publishers are not efficient in spending ad dollars. Based on research from Deloitte and Google, a similar amount of revenue decline is shown for publishers without third-party cookies for around a 52% dropdown. Once again, duopoly platforms use internal identifiers and are not affected by the new regulation.
5. The information about the identified user is the key to ad performance. And even better, if you know the audience well, you can serve more precise ads and have more value with every impression for an advertiser. The GDPR has been oriented to return control to the user and avoid duopoly domination in the personal data area. Instead of this, we have an even bigger domination as a result of GDPR due to the legal limitations related to the sharing of third-party data. Meanwhile, the personal data for ads inside Youtube/Google search/Instagram/FB is not related to these limitations, simply because there is no sharing data externally. These processes are internal within the Google or Facebook systems. The positive change for personal data sharing secureness intended by the GDPR is tremendous. Along with that, companies without their own huge personal databases (eg. news websites or apps) will have less ability to compete effectively for advertisers than ever before.
6. The effectiveness of ads delivered is a crucial part. The growth of programmatic ads is even higher than the whole digital ads market growth. The better you relate an effective audience to your product, the better conversion rate for ads you can accomplish. As a result, the value for such an impression with the defined audience is much higher. With better trained AI/ML models and more unified input data about users you can offer a more relevant audience to advertisers. Everybody knows how active Google, Facebook, and Amazon are in the AI area. The growth of the ads' effectiveness is priceless. At the same time, the digital ads ecosystem outside the giants is completely unstructured, without unified user IDs and unified databases.
Just to summarise, the competition for advertising money is completely dominated by two companies. The duopoly captures 80% of ad market growth. They’re not running out of their inventory. They will simply move to the point where 2 or 3 companies will completely control what to sell to buyers. While media-buying giants also function as content platforms, those companies direct clients' campaign budgets, creating a conflict of interest. The GDPR with good intentions, created an ability for the duopoly to increase domination even more than before. At the end of the day, websites and apps will survive via paid subscriptions while decreasing their chance of competition with free services from Google & Facebook. Individuals in this scenario will pay twice. One time for products they buy containing the prices for ads served to them via duopoly platforms and the second time by paying for a subscription to use their favourite websites, apps, and games.
To put an Individual in the center is the solution
It feels like a total dead end without any positive perspective for publishers and users. The dictatorship of the tech giants looks unavoidable at first glance. myGaru has a graceful solution. Instead of creating multiple workarounds around the law as most of the digital ads industry is focused on, We simply put an individual in the centre of the market. We are creating a trusted and transparent ecosystem where we unite publishers with advertisers and put user control as the main component of it. That gives publishers more than they desire, even in their wildest dreams:
* Security of user experience without external vendor privacy risks. Our users are redirected by the myGaru Header-Bidding platform directly to our ecosystem without any data security risks.
* Faster user experience during page loads due to the absence of multiple intermediaries in the ad serving process without oRTB.
* Ability to identify users without the use of third-party cookies and limitations from browsers and mobile OS.
* Respectful and unprecedented transparent share of ad revenue.
* Total transparency with simple mathematical instruments to validate log-level data. Every data request and every impression can be validated which leads to outstanding transparency and eliminates fraud.
* myGaru open-source philosophy applies to performance as the way to effectiveness. External AI/ML product tools integrate with the myGaru platform and convey effective traffic monetisation.
* Securely anonymised GDPR-compliant data is provided explicitly by individuals without risks for identity reverse-engineering.
* Fantastic anonymised insights allow websites and apps to deliver the demanded personalised experience for the audience.
Finally, the way for fair competition with tech giants is opened. Publishers don’t need to accept unsecured practices for their own users as the only way to survive. Instead of just surviving, it can be a time to thrive for publishers. Undervalued traffic from small and mid-sized publishers can finally be rewarded while gaining respectful ad dollars.
That doesn’t mean that we put publishers in a limited position, they can keep using all the popular ad-tech tools as before. We just claim users who are under myGaru protection will keep far away from the wild west world of ‘modern ad tech’.
The main thing is that myGaru while delivering the treasure of benefits to publishers, will enhance our users' rights and deliver the desired user experience. Perfectly funded favourite websites and apps are free for use and give a secure personalised experience. This is how we see a better tomorrow for the user-centric digital world.