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The clamor for regulatory reforms targeting Big Tech companies stems from a fundamental issue deeply embedded in the advertising industry. Within this complex landscape, tech giants such as Google, Facebook and Amazon reign supreme, wielding control over data, platforms and buy-side ad tech.
However, the very nature of their dominance poses a challenge, as they find themselves facing conflicts of interest. The imbalances they helped create have sparked the neutrality debate surrounding buy-side infrastructure, driving calls for change.
Grading your own homework
Talk about a stacked deck. These companies’ walled gardens are designed to collect and activate audience data. But by owning the data, the platform and the buy-side ad tech, these Big Tech players are grading their own homework.
Buy-side and sell-side are fundamentally at odds: Buyers want to maximize return on ad spend, while sellers want to maximize yield. There is no fair way to play on both sides simultaneously, and the intensifying regulatory pressure on Big Tech makes neutrality an existential question for these companies.
Several years ago, Big Tech bought up all their own ad-serving technology and with it, the mechanisms for reporting on viewability and verification. In the vacuum created by that consolidation, a trifecta of companies created what became a multibillion-dollar market just to handle brand safety and verification, because these checks can only be provided by an impartial third party.
Brands have come to appreciate that the same is true of other core capabilities, everything from ad serving to identity solutions to dynamic creative and audience intelligence. With ongoing fragmentation in supply, omnichannel marketers need these essential tools to be centralized under their control.
As it turns out, Big Tech is feeling the same way and increasingly embracing the idea of media-neutral buy-side infrastructure.
The incentives to do so are strong. First, it’s just what marketers need. Dollars will flow where advertisers can target their audiences and track their investments, and walled gardens still need those dollars. Second, there is an increasing demand on Big Tech to connect third-party ad tech to owned supply.
The walled gardens know they need a healthy independent ecosystem in order to survive, and they are becoming better partners in building it.
The case for independent tech
Here are some key reasons an independent buy-side solution remains an essential part of the mix, regardless of whether marketers also rely on Google, Amazon and Facebook:
- Transparency. Marketers will not backtrack on decades of innovation in data-driven marketing practice. They want insights, data and transparency into fees and access to unbiased measurement. Nobody should grade their own homework.
- Consolidation. Marketers would prefer to work with fewer, more strategic partners. A multinational brand that has 13 agencies in 10 markets doesn’t want 13+ dashboards to rationalize. They want reporting and they want real-time results, not waiting a few months to see what’s happening in markets. An independent third party that works across walled gardens can offer that.
- Fragmentation. Consumer attention and inventory supply are fragmented across channels and devices. The shift toward omnichannel media consumption has forced marketers to seek new ways to plan, buy and measure media with a single view of their audience.
- Creative. Creative personalization and optimization represent one of the last great value plays in advertising. After more than a decade of focusing on targeting, planning and measurement (all worthwhile), a new set of AI-enabled capabilities are returning marketers’ attention to what can be done with creative personalization. These tools can only be leveraged effectively when they are communicating with contextual and behavioral signals.
Marketers want the best tech to move dollars fast and reduce friction, and that’s reason enough for Big Tech to open its doors and take a more collaborative approach with neutral buy-side tech. But, as mentioned, the big three are not the only ones.
Tightening the screw
The goals and incentives of the buy side (to maximize return on ad spend) are fundamentally at odds with those of the sell side (to maximize yields). To date, Big Tech has gotten around that conflict by virtue of sheer scale, good campaign performance and unrivaled data, but the conflict is still there.
Now that the DOJ is aiming specifically at these conflicts within Google’s ad-tech business, and with serious talk about divestiture and breakups, all the Big Tech players in advertising are looking at things differently.
For them, it appears increasingly that embracing an independent ecosystem is imperative for resolving the conflicts of interest now at the center of the regulatory debate. The question for Big Tech is less whether or not to embrace it, but how to control the process so that it isn’t done for them by the state.
It wasn’t long ago that Big Tech and independent tech were pitted on either side of an issue, but things change quickly in a fast-paced environment. Today and moving forward, neutral buy-side infrastructure is more of a common cause for the industry.
