Why you should welcome new tools and competition in the digital ad space

February 2022
Kevin Hewitt
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Why you should welcome new tools and competition in the digital ad space

Why you should welcome new tools and competition in the digital ad space?

As competition heats up, get ready to seize the benefits of greater choice, better targeting and even more innovation.

Competition is good. It brings choice, it keeps prices low and innovation high.

Competition gave us the iPhone and Android phones in place of Nokia and Blackberries, WhatsApp over MSN Messenger and Facebook over MySpace and Friends Reunited.  

But competition and choice require decision-making and forsaking other options. New tools require retooled processes.

Digital marketers are facing a wave of such challenges as investment and deal-making in the media and adtech sectors grew by 82% in the last year.<sup>1</sup>

Increased competition in digital marketing

Facebook and Google together hold 80% of the UK digital ad market<sup>2</sup> and a current lawsuit, filed by the Attorneys General of 14 US states alleges that the two giants colluded in “anticompetitive conduct”.<sup>3</sup>

But change is in the air.

The big five tech companies – Alphabet (Google), Amazon, Meta (Facebook), Apple and Microsoft – continue to grow, but smaller competitors are growing faster. The 42 Tier Two firms have grown from 22% of the big five’s market cap in February 2020 to 31% in October 2021.<sup>4</sup>

The effects of increased competition can be seen all around.

New entrants to the digital ad world

TikTok.com surprised many when it became the world’s most visited domain in late 2021, deposing even Google.<sup>5</sup> The short-form video service generated around $4 billion in advertising revenue in 2021 and is aiming to triple that in 2022.<sup>6</sup> It also aims to reach 1.5 billion monthly active users in 2022. Even so, 49% of major brands have not (yet) posted on TikTok.<sup>7</sup> That’s a huge opportunity for TikTok and for advertisers.

Ecommerce giants like Alibaba (already China’s largest digital advertising platform<sup>8</sup>), JD.com and, of course, Amazon are expected to have taken 16% of the global digital ads market last year (2021).<sup>9</sup> 

Old world, pre-digital retailers are recognising the value of their customer data and context to build out their own advertising platforms. Walmart gets regular mention, but UK high street giants like Tesco and Boots have also recently launched media businesses.<sup>10</sup>

Other businesses with previously under-used customer data, such as Mastercard, are also developing advertising solutions.<sup>11</sup>

That all means greater competition, of course, but it also offers marketers a wider range of targeting solutions and advertising contexts through which to reach the audience they need.

Increasing rivalry between the big five

As well as new entrants, competition is growing between the big five as they edge into each other’s worlds.

Whether you count Amazon as a newcomer to the world of digital advertising or a rival in the set of big tech firms, it continues to eat into the Google/Facebook dominance. Consumers increasingly start their online shopping searches on its property and Amazon’s advertising revenue increased by nearly 50% in its latest quarterly results.<sup>12</sup>

In terms of US search ad revenue share, Amazon is now the clear number two with 19% share compared to Google’s 56.8%,<sup>13</sup> and, reportedly, “most of the money flowing out of Facebook advertising is now flowing into Amazon.”<sup>14</sup>

As we noted recently, since Apple introduced its privacy changes its own advertising business has more than tripled its market share.<sup>15</sup>

Apple’s actions and Google discontinuing support for third party cookies are widely viewed as competitive moves. Google also recently announced it would lower the fee charged to providers of subscriptions in its app store to 15%, putting pressure on Apple to do the same.<sup>16</sup>

Alternative models and channels

The imminent demise of third-party cookies has helped drive a sharper focus on the value of first-party data and of appropriate context – “marketing by mindset” as Integral Ad Science’s CMO Tony Marlow puts it.<sup>17</sup> It’s not unlike pre-digital advertising, but with better data, greater insight and more powerful tools.

That can be seen in the resurgence of publishers and media channels offering new ways to connect with their audiences.

One example is Connected or Advanced TV advertising which re-invents television advertising with the ability to precisely target ads based on VOD providers’ subscriber data. Sky’s AdSmart service can reach 40% of UK homes via Sky and Virgin Media boxes.<sup>18</sup> Spending on Connected TV ads in the US grew by 48% in 2021.<sup>19</sup>

Media giants like Disney and NBC are becoming digital challengers, with a wealth of first-party data that can be used to better target advertising budgets. The recent unveiling of NBCUnified is one example of a data-rich destination leveraging its information to provide an alternative to targeting through third-party cookies.<sup>20</sup>

Publishers like Hearst and the Washington Post are also reinventing the old-world advertiser-publisher relationship through their first-party data.<sup>21</sup> In a recent survey of publishers, 75% expect to see ad revenue growth in 2022.<sup>22</sup>

Smaller publishers are joining forces to better compete with Google and Facebook again offering brands more choice of contexts and audience data. Examples include Buzzfeed’s purchase of Complex and Vox’s acquisition of Group Nine.<sup>23</sup>

As marketers race to reshape their strategies, they should also keep in mind the benefits of increased choice for brands and their customers.  

Why competition is good for you and your customers

At the highest level, competition brings better pricing, more choice and greater innovation. It also helps reduce risk. Facebook’s recent six-hour outage was a wake-up call for businesses that had become over-reliant on a single marketing channel. 

All of those are powerful reasons for brands and their marketers to seek out and support new platforms and publishers. But there are deeper reasons, too. 

Niche solutions provide access to precisely defined audiences, not only in terms of interests but also, importantly, in terms of context. Find the right niche and you are in conversation with an audience that understands the problem your brand solves and is in a receptive frame of mind.

Supporting smaller channels also encourages diversity of thought and perspective, which is a powerful asset for a listening brand as well as for the world in general.

How should marketers manage this new world of choice and friction?

So, what should marketers do about all this emergent choice and its associated hassles and frictions?

Task One is to keep scanning the marketplace for new tools, new approaches and new models. 

Task Two is to test, test, test. Don’t put all your marketing eggs in one basket, and don’t switch tools too quickly. But run lots of parallel tests with small samples of data. 

Evaluating and then deploying a wider range of tools and projects is easier than ever with today’s management and marketing intelligence solutions – another benefit of choice and innovation – so also take time to consider the tools you use to manage your marketing. For example, among the value 10th Man’s platform brings to the global brands it supports, is understanding which niche sites (or campaigns or data sources) are delivering the engagement they seek.

Testing and supporting new solutions is in everyone’s interest, marketers and customers, but you need hard, objective data to understand where your budget is getting greatest ROI.

10th Man works with some of the world’s biggest brands to provide deep and unbiased insight into marketing performance and organisational decision-making. We help businesses assess different channels and solutions and to truly understand their marketing ROI across all tactics and strategies. If you’d like to discuss how we can help develop greater understanding of a more dynamic marketing landscape, please contact us at team@10thMan.media.


<sup id="copyref1">1</sup> Marketing Brew (2022), Ad tech bounced back in 2021, and 2022 could be even brighter, https://www.morningbrew.com/marketing/stories/2022/01/13/ad-tech-bounced-back-in-2021-and-2022-could-be-even-brighter

<sup id="copyref2">2</sup> Press Gazette quoting the UK Competition and Markets Authority (2020), UK competition watchdog calls for action…, https://pressgazette.co.uk/uk-competition-watchdog-calls-for-action-as-facebook-and-google-take-80-of-14bn-annual-digital-ad-spend/

<sup id="copyref3">3</sup> Market Watch (2021), Google and Facebook CEOs colluded in online-ad sales scheme, unredacted antitrust lawsuit alleges, https://www.marketwatch.com/story/alphabet-and-facebook-ceos-colluded-in-online-ad-sales-scheme-unredacted-antitrust-lawsuit-alleges-11642205787

<sup id="copyref4">4</sup> The Economist (2021), How the pandemic has changed the weather in the technology industry,https://www.economist.com/business/2021/10/30/how-the-pandemic-has-changed-the-weather-in-the-technology-industry

<sup id="copyref5">5</sup> Cloudflare (2021), In 2021, the Internet went for TikTok, space and beyond, https://blog.cloudflare.com/popular-domains-year-in-review-2021/

<sup id="copyref6">6</sup> eMarketer (2022), Can TikTok triple its ad revenue this year?, https://www.emarketer.com/content/tiktok-triple-its-ad-revenue-this-year

<sup id="copyref7">7</sup> eMarketer (2022), Can TikTok triple its ad revenue this year?, https://www.emarketer.com/content/tiktok-triple-its-ad-revenue-this-year

<sup id="copyref8">8</sup> The Motley Fool (2021), 3 Things About Alibaba That Smart Investors Know, https://www.fool.com/investing/2021/12/13/3-things-about-alibaba-that-smart-investors-know/

<sup id="copyref9">9</sup> eMarketer (2021), Duopoly still rules the global digital ad market, but Alibaba and Amazon are on the prowl, https://www.emarketer.com/content/duopoly-still-rules-global-digital-ad-market-alibaba-amazon-on-prowl

<sup id="copyref10">10</sup> Econsultancy (2021), Digital advertising in 2022: What do the experts predict?,https://econsultancy.com/digital-advertising-in-2022-what-do-the-experts-predict/

<sup id="copyref11">11</sup> AdAge (2022), 12 ad leaders planning for the cookieless future,https://adage.com/article/digital-marketing-ad-tech-news/12-ad-leaders-planning-cookieless-future/2393006

<sup id="copyref12">12</sup> Yahoo (2021), Amazon Q3 results miss expectations…,https://uk.news.yahoo.com/amazon-reports-q3-2021-earnings-results-163202192.html

<sup id="copyref13">13</sup> eMarketer (2021), Amazon’s share of the US digital ad market surpassed 10% in 2020, https://www.emarketer.com/content/amazon-s-share-of-us-digital-ad-market-surpassed-10-2020 

<sup id="copyref14">14</sup> Ideoclick (2021), The Shift to Amazon: Apple’s iOS 14 Impact on Advertising, https://ideoclick.com/2021/11/16/the-shift-to-amazon-apples-ios-14-impact-on-advertising/

<sup id="copyref15">15</sup> Financial Times (2021), Apple’s privacy changes create windfall for its own advertising business,https://www.ft.com/content/074b881f-a931-4986-888e-2ac53e286b9d

<sup id="copyref16">16</sup> The Economist (2021), How the pandemic has changed the weather in the technology industry,https://www.economist.com/business/2021/10/30/how-the-pandemic-has-changed-the-weather-in-the-technology-industry

<sup id="copyref17">17</sup> Exchange Wire (2022), Predictions 2022: Contextual, https://www.exchangewire.com/blog/2022/01/06/predictions-2022-contextual/

<sup id="copyref18">18</sup> The Drum (2021), What’s stopping you using advanced TV advertising?, https://www.thedrum.com/news/2021/05/06/what-s-stopping-you-using-advanced-tv-advertising 

<sup id="copyref19">19</sup> SmartyAds (2021), 2021 in Stats: 3 Growing Trends That Will Define Advertising Strategies in 2022, https://smartyads.com/blog/3-growing-trends-that-will-define-advertising-strategies/

<sup id="copyref20">20</sup> DigiDay (2022), The Rundown: NBCUniversal’s first-party data platform keeps pace, https://digiday.com/media/the-rundown-nbcuniversals-first-party-data-platform-keeps-pace/ 

<sup id="copyref21">21</sup> AdAge (2022), 12 ad leaders planning for the cookieless future, https://adage.com/article/digital-marketing-ad-tech-news/12-ad-leaders-planning-cookieless-future/2393006 

<sup id="copyref22">22</sup> DigiDay (2022), Digiday+ Research: Where publishers see revenue growth in 2022, https://digiday.com/media/digiday-research-where-publishers-see-revenue-growth-in-2022/ 

<sup id="copyref23">23</sup> Digital Context Next (2022), Publishers focus on scalability and audience growth for 2022, https://digitalcontentnext.org/blog/2022/01/18/publishers-focus-on-scalability-and-audience-growth-for-2022/