Another chapter in the international Google antitrust lawsuit has begun – this time EU regulators progress it, as they suggest breaking up its ad business due to anti-competitive practices. Only last February, the US DOJ filed a lawsuit against Alphabet, claiming the company abused its dominance in the digital advertising industry. It’s apparent a growing focus on Google’s monopolistic business practices are under close review.
As more regulatory entities across the globe investigate how much influence, dominance, and power Alphabet (and companies like Meta, Amazon, Apple, etc) have, there’s a growing chance they’ll be forced to split up. The reality is, all of these companies work in advertising and heavily influence the state of the digital advertising industry based on the data they collect and provide. All eyes should be on where regulators land in terms of how they perceive Alphabet and others’ position in the market.
That said, if the antitrust lawsuit is successful, the digital advertising ecosystem will change forever, and marketers need to be prepared.
Current State of Play
Brands and advertisers have experienced this big-tech power dynamic in the digital advertising ecosystem for years. The advertising industry inadvertently moved towards the biggest players out of sheer necessity and perceived ease in acquiring new audiences.
Google, Meta, Amazon, Microsoft and TikTok will account for 65.5% of all US digital advertising revenue.
Over time, brands’ dependency on these platforms evolved, making it exponentially harder to diversify inventory options. In today’s market, where every ad dollar needs to stretch as far as possible, a lack of nimbleness is harmful. With the majority of ad dollars flowing into these platforms, we can easily see the detriments stemming from any changes to their businesses – the question is, how large of an issue does it take for the industry to explore ad spend diversification seriously?
If Google is forced to separate into disconnected business units, data silos will emerge that heavily reduce the deterministic targeting value for marketers – or, it will make those capabilities much more expensive. This, in turn, will force advertisers to identify new areas to invest their ad spend to continue reaching KPIs and business objectives.
Preparing for A New Era
The best path forward is to start exploring new strategies, identify what engagement tactics yield the best results for your needs, and consider what approaches are gaining market traction. By embracing a culture of experimentation, brands, and advertisers can uncover unique insights and refined approaches that drive results.
It all starts with identifying and engaging the right target audience. In the event this antitrust case pushes ahead and our industry’s ability to hyper-target consumers goes away, it will be critical to find the right contextual-based strategies that work for you.
Marketers are forecasted to spend 376.2 billion dollars on contextual ads by 2027, up from 228.66 billion dollars this year.
With data-driven A/B testing, businesses can compare different versions of an ad and measure which performs better via click-through rates (CTR), conversion rates, and overall return on investment (ROI). These insights enable marketers to better personalize their messages to specific segments, enhancing their campaigns’ impact.
A critical theme here is change. Not only will brands and advertisers need to change how they engage consumers, they also need to track the ways consumer preference evolves. By experimenting with new ad platforms, emerging technologies, and innovative approaches, businesses can capitalize on emerging trends and remain competitive. Additionally, they’ll boost the overall benefit to consumers. As brands and advertisers work to deliver relevant content, they’ll enhance the overall customer experience (CX) and foster new levels of brand loyalty.
It boils down to this: if the walled gardens no longer have cross-channel targeting capabilities, or the ability to find audiences outside of their platforms, investing so much with them becomes unnecessary. As marketers accumulate valuable first-party (1P) data and insights, and incorporate more contextual approaches, they can build a solid foundation for future campaigns. This iterative approach ensures every campaign becomes a stepping stone towards continuous improvement (CI) and sustainable growth.
