Tuesday’s Topics . . .

WILL AMAZON MAKE IT A TRIOPOLY IN 2018?:  One of the biggest problems facing the digital media industry is that so much audience scale, ad revenue, and market power is consolidated between the so called Duopoly of Google and Facebook.  A year ago industry experts were betting Snapchat could become the third horse in the race, but they’ve started to fade thanks to an unorganized business strategy and stalled user growth.  Now it’s looking more likely than ever that the true third member of a new Triopoly will be Amazon.  Digiday lays out the case for Amazon’s ascension into the upper echelon of digital publishers in the attached link.  The sheer velocity of Amazon’s projected ad revenue growth over the next few years (image below) is astounding.  What’s even more telling is the percent of advertisers who plan to increase their spending on Amazon in 2018 (63%), and the percent of users identifying Amazon as the site they’ll most likely visit for information before making a purchase (72%).  Becoming the go to site for users who have an intent to purchase is the retail equivalent of knowing where lightening is going to strike ten seconds before it does.  Now Amazon is harnessing that power for ad monetization.  Will it be enough to challenge the Duopoly in 2018?

DIY OMNICHANNEL?:  Client side DMPs in the Retail sector are nothing new.  Major retailers like Walmart, Kroger, and Target have invested millions of dollars to create their own proprietary databases of customer info which they use for off platform marketing.  But what if the data set was so good, so detailed, and so complete that the retailer could flip the script and sell manufacturers access to its own DMP?  That’s exactly what The Home Depot (THD) is trying to accomplish with its new One Home Depot omnichannel platform, as described in the attached RIS News link.  THD’s goal is to harness the 1.7 trillion (yes, that’s a “T”) weekly data points collected on its 50M+ consumer DMP to create custom audience segments it can sell to brands.  These analytics could even be tied to advanced real-time data like store-level inventory of particular items or weather triggers in that neighborhood.  THD is betting these precision analytics will improve their own digital marketing effectiveness, and also become a valuable data play for brands looking to sell goods in their stores.

DIGITAL VIDEO DOOMSDAY:  It seems like every brand has OLV baked in to their media plans these days, so how could the digital video sector be in trouble?  As it turns out there are some underlying factors lining up to squeeze many digital video publishers out of the market over the next year, as chronicled in the attached AdWeek link.  Two problems with digital video have to do with deal economics.  Programmatically transacting OLV has commoditized the market to the lowest bid price for standard viewable ad units, which has squeezed out super-premium products like native content integrations and takeovers.  As buyers have gotten used to buying OLV on the cheap it’s become economically unfeasible to monetize digital video – because it simply costs more to produce the content than publishers can recoup through ad sales.  Even if you can overcome these monetization hurdles there are two new content must haves to deal with.  First, to be successful moving forward video publishers’ content must be squeaky clean.  That means no user-uploaded objectionable content and/or inaccurate reporting.  In 2017 even dominant video platforms like YouTube and Facebook have been hurt by not policing their platforms, so you can imagine how much harder the smaller guys have to work to stay clean.  And now this standard even applies to who’s starring in and/or producing the videos in the first place.  The long overdue housecleaning now occurring in Hollywood around the #metoo movement will have a ripple effect from the big screen to the small screen to the third screen, which will give digital video publishers one more thing to be watchful of moving forward.  So with all that headwind are you still feeling bullish about digital video as a business model in 2018?

Have a great Tuesday guys!

182 thoughts on “Tuesday’s Topics . . .

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