March 18, 2015

Facebook is the new Cookie, and that is how Google will crumble

FBFacebook this week announced their new Ad Exchange, basically extending their Video Ad network which was powered by LiveRail to Display Ads too. In short this means that marketers spending money on Facebook can now use Facebook’s targeting capabilities on other display networks, essentially converting some of the other Ad Networks to Dumb pipes and out-performing other exchanges.

People hoped Mobile RTB was going to be as game changing as it was on the Web, the biggest hurdle was the lack of an equivalent to the Cookie on Mobile, due to which Exchanges started heavily depending on Data Management Platforms (DMPs) which tired to function like Cookies by aggregating data from various 3rd parties. But Mobile RTB never really took off, on the other hand Facebook started to outperform Google and others on Mobile because of better targeting.

How powerful Facebook is at targeting the right user was already shown in the capability to deliver the best performance for App Install Ads, information a bunch of developers have shared with me. Other signals of this are Facebook growing at a rapid pace, and according to some estimatesthey will overtake Google (and have done the same in the US already). This when they have just started leveraging Instagram and have not even though of Whatsapp.

As Facebook goes strength to strength it just show they are sitting on the proverbial “pot of gold” w.r.t the user data. As it surges ahead, more advertisers will start spending money on it, thus more publishers will start using the exchange, thus making Facebook cash rich. And where will they spend that money? Probably rolling new products and features to keep users hooked on to the Facebook family of Apps. If they do succeed here, they will probably have the most useful data for targeting the users.

While there would be various Ad networks and Exchanges effected by this, the biggest looser here could be Google, as users go to Facebook and sister apps to talk to friends, talk to businesses and read news, people will do few searches, which will hit Google and it’s revenues.

Photo credit: mkhmarketing / Foter / CC BY