It's no secret that Google and Facebook all but own the digital ad market but with the world's biggest advertiser calling BS on the media supply chain looking to increase its ROI, the Google and Facebook duopoly is now feeling the pressure.
Google and Facebook have largely had things their own way but of late the world's biggest advertiser proctor and gamble have been clear in their intention to get a better return on their large investment in advertising. Last month, P&G's Chief Brand Officer Marc Pritchard took the whole media supply chain from agencies to platforms to task to improve and "grow up"
it's been a long time coming as brands have been largely silent about issues that plague the digital ad market from the lack of clear and universal metrics, ad fraud and ad blocking. But Pritchard put an end to the silence as P&G are finally putting their foot down.
P&G forcing Google and Facebook to adhere to their demands would be a win for brands who have largely trusted ad agencies to negotiate with publishers online but with Google and Facebook effectively being the game in town worth entertaining as far as digital advertising is concerned, ad agencies can find themselves with no option but to accept the metrics Google and Facebook give them.
How Google and Facebook respond to P&G threats to send their ad dollars to companies that meet their demand will be interesting as both parties have largely pledged to fighting ad fraud, improving viewability. Both Facebook and Google have been keen to share data with marketers but one can only imagine a world where Facebook and Google open up their books to a third party to scrutinize without a fight to the death.
Kudos should go to L2 founder and chairman Scott Galloway who predicted a day when CPG brands like P&G would either put their feet down or vote with their dollars as soon as they realize the correlation between their ad spend and sales isn't as strong as they think it is. The only flaw in his prediction is that he failed to take into account just how this realization among CPG brands would affect both Google and Facebook who are just as dependent as publishers on ad dollars.
Google and Facebook rose to prominence because they've managed to outperform rival platforms and publishers in the marketplace who have neither the platform, reach, or more importantly, the insight into consumer behavior both companies have. However they've managed to do it in an environment of light regulation and very few viable competitors which has left Google and Facebook atop of the digital ad marketplace unchallenged.
The only real threat to Facebook and Google's dominance was CPG brands, who are the biggest spenders on ads, pulling their weight and holding them to task directly which never happened as brands were willing to accept the growing pains of what is still a very young industry. However, with digital ad spending outstripping the dollars spent on TV ads, brands are now willing to assert themselves and clean up an increasingly dodgy looking digital ad market where ad fraud and ad blocking is rampant.
Why P&G are pushing the digital ad industry to change now instead of a decade ago when it would have been able to make demands with an awful lot less resistance may seem like a difficult question to answer but in truth there's only one real answer, Amazon. While store only purchases represent 90% of the retail market, e-commerce is by far the largest source of growth in the sector, much of it driven by Amazon. CPG brands like P&G know full well that e-commerce is the future of retail and have made a point to partner with Amazon where they can.
WPP CEO Martin Sorrell was dead on when he pointed out that Amazon pose so many dangers to the Google/Facebook duopoly as while Google and Facebook maybe where customers get reviews or discover a brand, Amazon are knee deep in the only game that matters, conversion. This is such a threat to Google in particular as should Amazon start offering ad inventory akin Google, they'll take a chunk out of Google and Facebook overnight.
No one knows this more than Google which accounts for why the Mountain View based company have been to compete with Amazon's popular AI assistant device, Amazon Echo, as it represent a very real threat to its search business as it swaps desktop and mobile searches for voice commands.
Should CPG brands come to the realization that much of its growth is coming from Amazon rather than its ad spend with Google and Facebook, both companies will fall victim to one of the largest divestments in business history. In sum, P&G demands maybe a source of consternation and greatest challenge the Google/Facebook has faced so far but why P&G are now putting their foot down is what really should drive everybody Google and Facebook to avoid some of the biggest writedowns in corporate history.
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