Facebook recently announced a plan to bring the Facebook Audience Network to mobile web pages to challenge Google. The deal drew immediate praise from industry watchers, with some calling it a game-changer.
It is a big deal for Facebook, although not for the reasons some believe. This move is not about clobbering Google. It’s about expanding and legitimising the market — and lifting digital ad rates.
By offering rivals Amazon.com, AppNexus, Index Exchange, Media.net, Sonobi, and Sortable access to FAN, Facebook brings more advertiser demand to companies competing head-to-head with Google’s fearsome DoubleClick empire.
The immediate impact of stuffing the channel with so much mobile-specific demand could have a “seismic impact on the value of publisher inventory,” argues Michael Connolly, CEO at Sonobi.
It is no small wonder, big publishers, like Washington Post, Daily Mail and Forbes have been working behind the scenes to make this happen. AdAge reports this could reset the game for content providers.
And as competition drives the value of content higher, digital advertising rates must follow. That’s a win for digital advertising companies. It just so happens the best of the breed are Google and Facebook, which are very big and on track to get much bigger.
In other words, smaller ad tech players should be careful what they wish for. As ad rates push higher, ad buyers should demand better tracking, better analytics. Google and Facebook have far and away from the best ad tech. And they have a monumental scale.
It’s a fact venture capital firms have been quick to acknowledge. Fred Wilson, co-founder of New York-based Union Square Ventures proclaimed last year “investors and entrepreneurs concede that Google and Facebook have won and everyone else has lost”.
Winning is certain to pay off handsomely. The 2016 McKinsey Global Media report predicts digital ad spend will reach more $230 billion by 2019. The same analysts ultimately believe digital will overtake television advertising.
Growth and scale are the primary reasons Facebook has been a cornerstone of growth portfolios It built a terrific business in the fastest-growing part of media. It has the wherewithal to exploit and create new business opportunities. And its massive 1.8 billion user base holds content providers and advertiser’s captive.
Now Facebook is working to ramp up ad rates. The stock is buyable on sizeable pullbacks.Read More at Forbes