Competition for digital advertising dollars is heating up and two biggest players - Facebook and Google - are taking a lion share of it. According to eMarketer global digital advertising spend in 2015 will be worth $170,50 billion, so even 1% increase in market share will lead to $1,7 billion in additional revenue.
If you were following industry news lately, you might have noticed that the frequency of new product launches from both Google and Facebook increased significantly and the nature of these new offerings shows that companies now openly compete head-to-head. Some recently released products or ad platform features (targeting, optimization etc.) are almost identical, but there is no clear leader or follower in terms of innovation. The pace of digital market growth forces these companies not only to innovate fast but actually mirror other company offers so not to leave missed gaps. This way wich each new feature/offer we get 2X more benefits.
This situation is very exciting since it gives whole digital advertising industry more momentum and creates 2X more value (or efficiency/opportunities for advertisers). With each new launch from Facebook/Google, in a matter of max 6 months we get the same offer from the competitor.
This competition makes digital advertising more transparent, data usage more efficient and new formats more innovative.
Transparent advertising
When launching new ad formats Facebook sometimes is known to push its own advertising metrics that not always resemble how user actions on digital should actually be measured. However, lately the social network is becoming much more transparent and offers metrics in-line with how it is used globally. Video views. One of these metrics is video views. When Facebook launched video ads many advertisers raised concerns about the 3s rule for a video view. On YouTube advertisers paid for a full video view or a minimum of 30s if the video is longer. Still, Facebook charged for 3s views. Facebook did a research with Nielsen proving that even 3s views increase ad recall, brand awareness and purchase intent, but advertisers still wanted more valuable screen time for each advertising dollar, so Facebook introduced 10s views objective which is now a default view metric for video ads on both Facebook and Instagram. Viewable impressions. Viewable media is one of the major topics in digital marketing today. Most advertisers want a proof of every dollar spent on digital, so global players are willing to adapt. Last month Facebook announced the opportunity to buy 100% viewable impressions and 2 weeks later Google followed with the same announcement of 100% viewable impressions on GDN if advertisers buy media on a CPM basis.
Cross-device measurement. With the majority of time on screens moving to mobile, cross-device measurement is an essential part in attributing role of mobile in driving conversions on both platforms. Majority of digital conversions start with one device and end on another. It was very interesting to observe how Facebook and Google introduced cross-device measurements two months apart.
Active data usage
Audiences. Custom and Lookalike audiences is one of the killer features that Facebook used to enter the digital performance field. Taking into account tremendous amount of data Facebook has, custom audiences allow for many advertisers to actively work with the existing clients databases and lookalike audiences creates very precise similar audiences for new reach. Last month Google introduced a similar offering called Customer Match which allows to upload customers email base and also create Similar Audiences to reach more audiences similar to your existing customers. However, as always GDN is a child left behind because Customer Match audiences currently could be used for targeting only on YouTube, Search, Gmail and Similar Audiences on YouTube and Gmail only.
Insights. As you might have noticed, there were quite a few big updates from Google when speaking to customer data usage. One of those updates was Adwords Audiences Insights. Now both companies allow advertisers to analyze audiences remarketing lists using psychographic and demographic data. I strongly believe that Facebook aggressiveness in terms of customer data usage made Google realize it should more aggressively utilize more of its own data.
Innovative formats
Dynamic ads. Last year Google made a full rollout of dynamic remarketing ads. An offering which was first introduced in 2013 to a limited number of industries. In half a year Facebook followed with the similar offer called Dynamic product ads. Just like viewable impressions or cross-device reporting makes digital advertising much more transparent, dynamic ads offering unlocks huge revenue potential for both Facebook and Google from ecommerce in all verticals. It allows advertisers with huge inventory (and probably spendings) to cover all product groups (less time) and automatically optimizes ads based on the products viewed (higher ROI).
Performance video. Digital video advertising growth is incredible. According to eMarketer, in US alone digital video spend in 2015 will be worth $7,77 billion with an impressive YoY growth of 33,8%. Digital video revenue potential could be significantly increased if videos would be used not only by big FMCG, Telco, Finance etc. brands for awareness campaigns, but also by companies with ecommerce presence too. YouTube first started moving in this direction with the Cards feature and this May it introduced a new format called "TrueView for Shopping" which takes products from your connected Google Merchant Center account, automatically feeds to cards in TrueView videos and optimize products shown for best conversions. Facebook recently introduced videos for carousel format and I strongly believe this is a counter feature to TrueView for Shopping. Video for carousel ads currently is the best decision for Facebook. Making video ads interactive Facebook would risk jeopardising user experience while consuming video content (taking into account already constant changes to its video interface).
Constant competition between these two digital advertising giants pushes all market forward and makes it much more transparent and efficient. Facebook learns a lot by adopting commonly agreed advertising metrics (link clicks instead of any engagement, 10s video views, cross-device measurement etc) and Google is forced to develop GDN and YouTube advertising offerings.
