Editor’s note: Google is knitting together an array of media and technology assets to provide a unified view of the consumer at an individual level. In doing so, Google is borrowing a page from Facebook’s people-based playbook.
HAMPTON, N.H. – As investments in digital advertising continue to surge, marketers will spend an estimated $210 billion on global digital advertising in 2017, up 14% year-to-year. TBR anticipates that Google’s total advertising revenues will surpass $85 billion in 2016, compared to Facebook’s $26 billion.
Google is pre-eminent in keyword search advertising, while Facebook commands significant share of display ad spend by leveraging people-based targeting (display includes video, native and other nonsearch formats). TBR estimates that search accounts for approximately 40% of spend compared to 60% for display.
Google is knitting together an array of media and technology assets to provide a unified view of the consumer at an individual level. In doing so, Google is borrowing a page from Facebook’s people-based playbook. This is noteworthy as Google is typically a trailblazer and market leader in the ad industry. In the past week, Google announced the following trifecta to enable the company with a stronger “people network” in which it can deliver advertising based on user login data (i.e., people-based ads), measuring both ad and app engagement.
• Broader support of Android on Chromebooks manufactured and sold in 2017
• Acquisition of Fabric, Twitter’s app developer platform
• Integration of search data with YouTube ad inventory
In an increasingly multidevice world, the ability to understand cross-device consumer behavior is critical to delivering relevant messaging for brands and agencies. While Google has long been recognized for its dominance in the search business, it also commands massive share in faster growth, adjacent advertising technology (ad tech) and marketing technology (marketing tech) segments via a robust set of platforms, including:
• Programmatic advertising: DoubleClick Bid Manager and DoubleClick Ad Exchange
• Mobile apps: Android and Admob
• Enterprise marketing analytics: Google 360 Analytics Suite
Contributions from ad tech and marketing tech tools are reported in aggregate in Google’s Network revenue, which TBR estimates will surpass $15 billion in 2016. Revenues for specific lines of business are highlighted in TBR’s upcoming 4Q16 Google Ad Tech Vendor Profile and 4Q16 Ad Tech Vendor Benchmark.
Balancing revenue opportunities, marketer needs and consumer privacy creates a high-wire act for Google
Google is still in the early stages of assembling an omnichannel platform that can deliver people-based ads at scale for marketers. TBR believes the company will need to balance these efforts while being mindful of commingling consumer data from various sources, even if those sources are Google-owned. Following Google’s search and YouTube integration, marketers will be able to leverage consumer search data to inform campaigns on YouTube.
However, given the rising use of ad blockers by consumers and concerns around publicly identifiable information by privacy advocates and government agencies, TBR believes Google will need to be extremely cautious when threading together person-based assets en route to delivering value for marketers and defending its heavyweight title versus Facebook.
This creates a catch-22 as data-driven marketers seek deeper and more granular insights into campaign performance. Google and Facebook have come under criticism for allowing data into their walled gardens, while limiting the outflow of data.
(C) TBR
