We Need To Stop Worrying And Learn To Love Google And Facebook

“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 Stephen Taylor, senior vice president of enterprise solutions at Sojern.

It’s hard to deny that in today’s digital ad landscape, tidal forces have coalesced around two major players: Google and Facebook.

Facebook counts more than 1.65 billion monthly active users, more than half of whom access the service only on a mobile device. Google’s browser, Chrome, counts more than 2 billion installs worldwide, and Gmail has more than 1 billion monthly active users as of February 2016.

It’s easy to imagine the internet as a Venn diagram with two overlapping circles – the Google and Facebook walled gardens – and the smaller companies outside of the two circles are in a constant fight for survival. But are they really?

Some, including Jason Kint at Digital Content Next, have concluded that Facebook and Google accounted for all of the growth in US digital advertising in the first half of this year, and that the rest of the industry is shrinking. Eighty-five cents of every new dollar spent in online advertising in the first quarter of 2016 went to Google or Facebook, according to Morgan Stanley.

But the picture is not necessarily bleak. Yes, not having a digital marketing strategy that involves and relies on Google and Facebook is plain dumb. But this Darwinist view of the digital landscape is inaccurate: Even in a bipolar digital world, there are certain perennial opportunities for small and specialized players. In ad tech, we often use words like market fragmentation, consolidation and sometimes even obliteration, when we should really be talking about verticalization, where a business decides to focus on one type of advertiser or publisher and develops an expertise and key relationships in that chosen field, instead of trying to serve anyone and everyone. Data is a key component in verticalization.

Where ad tech vendors cannot compete with Google and Facebook is in their scale, reach and efficiency; there is no such thing as a smaller and smarter Google. Where they can compete is in the speed at which they can iterate, the depth of their data, the expertise in their chosen field, service levels they can provide and the framework of rules and regulations that the industry functions within – the more complex, the better.

What this means, for example, is that vendors may have to make a decision at some point in their company’s lifetime to deliberately not build another DSP because Google is already there – and they must make their peace with that.

Take the health care or finance industries. Both are extremely complex with many different layers of security protecting consumer data. No one digital marketing player has a good grasp of the whole picture in either sector, and certainly not the big players, whose view of consumer behaviors in either space is a mile wide and an inch deep. But a credit card company or even a smaller player that manages consumer health information has specialized in those fields and has deep and granular data that has the potential to turn it into a valuable partner to both Facebook and Google.

Even behemoths need partners. Great whales do not exist in isolation in oceans – they live in a relationship of symbiosis with birds, such as seagulls and shearwaters. Birds benefit from the large marine mammals’ feeding, which may push large schools of fish close to the water’s surface. Barnacles, too, live off of gray whales, hitching rides from one meal to the next, while at the same time protecting the whales like a suit of armor. It takes all kinds and sizes to make an ecosystem.

One thing we all need to remember is that Google doesn’t want to be a service company; it wants to be a technology company. That means that there’s plenty of fish to go around for everyone, and if companies are smart, they can live and thrive off the Google and Facebook ecosystems. Google, for example, has its DoubleClick Certified Marketing Partner program with about 40 partners to date, and Facebook has its equivalent.

The key is that small, specialized players need to constantly add value to both ecosystems – layers of depth, knowledge, service and data – and keep building unique competencies or assets. At the end of the day, a symbiosis is a two-way street.

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This post was syndicated from Ad Exchanger.