The Duopoly Breaker Won’t Be Who You Expect

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The following is a guest contributed post by David De Jong, CEO and Founder, Screen6

It’s hard to go a day in our industry without stumbling across a news or opinion piece related to “The Duopoly.” You’ve no doubt heard everyone’s favorite stats about their combined potential. That is, together, Google and Facebook accounted for about two-thirds of U.S. digital ad revenues in 2017. And virtually all of the growth in digital ad spend is going directly into the pockets of the two titans.

Every time I see a Duopoly headline, an old Dutch proverb springs to mind: “Twee honden vechten om een been en de derde gaat er mee heen.” The proverb loosely translates to, “When two dogs fight over a bone, a third one carries it away.”

At present, all eyes in our industry are searching for that third dog – the one that will stealthily creep in to snatch the bone away from Google and Facebook as they bite and wrestle each other. And, in fact, a favored hound has already emerged from the lurking pack: Amazon.

All Eyes on Amazon

The Amazon obsession – which, quite frankly, might be taking up more headline space than the Duopoly obsession right now – is completely understandable and warranted. If ever there was a dog well-positioned to steal a bone, it’s Amazon.

Consider that Amazon is uniquely positioned as it relates to the consumer, and the consumer is the end game. While Google and Facebook squabble over media spend, Amazon is already in possession of the all important direct consumer relationship. Sure, Google knows about consumer intent, and Facebook knows about consumer interests. But nobody is more embedded in the consumer’s actual life than Amazon, because in reality, they are the only ones who actually sell to consumers.

Amazon not only knows what people shop for and purchase day to day (and that data is immensely powerful), but it also struts through the consumer’s front door on an increasingly regular basis. With its acquisition of Whole Foods, it’s going to be making itself even more at home in the consumer’s kitchen. Amazon’s relationship with the consumer is unmatched, and there’s tremendous power in that.

That said, while Amazon is a powerhouse that’s going to continue to redefine entire industries, it’s not necessarily poised to overtake Google and Facebook on media spend. Globally, eMarketer estimates that Amazon brought in $ 1.81 billion in ad revenue in 2017, with about $ 1.65 billion of that coming from the U.S. Compare that to Google’s estimated $ 35 billion and Facebook’s $ 17 billion in the U.S. last year, and we see how far Amazon has to go to be a real threat on ad spend.

Yes, Amazon’s ad revenues are growing at a faster clip than that of the Duopoly, but that doesn’t mean Amazon is intent on hyper-growth in this area. Its current growth is healthy, stable, and impressive. But it’s a long way from being an ad spend disruptor, and Amazon has other fish to fry.

The Third Dog Is Still in the Shadows

While our industry has plenty of reasons to keep its eyes on Amazon, there’s likely a different third challenger out there, poised to carry away the bone as the other two fight. And that third dog is most likely still unknown to us.

When a new contender does emerge, it will come in an unlikely shape. The Duopoly giants aren’t the only companies sitting on treasure troves of consumer data and sophisticated tech stacks. In that regard, major telecoms like AT&T, Verizon and Comcast make for interesting third-dog contenders.

In addition, shifting our perspective on what the actual bone represents opens up an entirely new array of possibilities as it relates to Google and Facebook threats. While many are focusing on competitors as it relates to their current share of media spend, I think the more interesting consideration is who has the biggest share of the media planner’s attention.

In that regard, there are plenty of players in the marketplace whose relationships with brand decision makers are much deeper and more trusted than those of Facebook and Google. And there is power in those relationships. Today management consultancies like EY, Accenture, IBM and Deloitte are making huge inroads as trusted marketing partners, while marketing and advertising technology companies like Salesforce, Oracle and SAP are upping their relationships with brands as well. Then, of course, you have the agencies, who have long served as trusted brand advisers — WPP, Omnicom, Publicis, Dentsu, Interpublic. These entities are industry powerhouses in their own right. Any one of them—or better yet, a combination of them—are in the position to make serious industry waves with a well-placed power move.

Let us not forget that 10 years ago, The Duopoly wasn’t even a blip on our industry radar. Disruption in digital marketing happens fast, and the next headline darling – that third dog, if you will – could come from the place you least expect.

The post The Duopoly Breaker Won’t Be Who You Expect appeared first on Mobile Marketing Watch.


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