Google and Facebook duopoly force change in online advertising industry

Facebook and Google provide high ROI and easy-to-manage online advertising options for thousands of businesses but have put the pressure on advertising agencies of all sizes to innovate. The duopoly is now predicted to attract 60 percent of all online advertising spending in 2017, according to eMarketer.

87 percent of the $26 billion in revenue this quarter from Alphabet, Google’s parent company, came from online advertising. Facebook reached similar numbers netting $9.3 billion this quarter with 98 percent of that coming from online advertising, according to Wired. Other large tech corporations haven’t achieved such success as Twitter reportedly lost two million high-value users for advertisers and Snap’s stock went on a downward slope since going public.

Digital Ad Revenue
Google and Facebook have positioned themselves at the front of this demand curve by being the ad publishers with some of the best-in-class targeting abilities in the digital ad market. With Facebook being able to provide targeting based upon consumer interests and Google capitalizing on where those consumers have been through searches, both companies ensure their lead among digital ad publishers.” –Monica Peart, eMarketer senior director of forecasting

Advertisers and ad agencies are looking for new ways to combat the duopoly, mostly by questioning current advertising practices and techniques. Many marketers are pushing for fee reduction on agency services, which would give some agencies a competitive edge. Facebook ads currently cost nearly 25 percent more than they did a year ago. But Facebook and Google both benefit from their large user base, allowing for highly-detailed analytics reports and competitive targeted ad targeting technology.

The growth of the online ad agency has brought fraudulent online advertising practices to light. Also known as “spoofing”, fraudulent online advertising practices use third-party ad exchange websites to sell advertising space directly to high-value sites. However, the ad would actually lead to a low-value, low-traffic site. In addition, Facebook recently banned certain online advertisers who used “cloaking methods” which send users to unauthorized websites that passed through Facebook’s screening process.

For e-commerce businesses, growing their websites through organic traffic is sustainable in the long-run, cuts costs that would be used to purchase advertising space and raises traffic at a higher rate than a PPC program would. Dirxion online catalogs offer SEO guide pages that involves a process of indexing every page of the printed catalog. This practice helps boost the overall SEO of the online catalogs site, as well as increase the likelihood of someone finding a catalog page when searching a company’s brand name. In addition, Dirxion online catalogs offer a variation of ad platform services for customers through widgets. The widgets, which come in a variation of sizes and implementations, can be either integrated into an existing advertising program or the customer can sell space directly to customers without having to use an external advertising service. 

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Google no longer scans emails to sell targeted ads, raising questions for online advertising

In a recent announcement through Google’s blog “The Keyword,” the company plans to abandon scanning user emails through Gmail, which helps serve targeted advertisements.This change is planned to occur before the end of the year.

As the largest entity in the market, Google’s decisions set industry standards and affect millions of businesses. Online advertising is a huge marketing focus, with more money invested online than in television, the previous giant of the advertising industry.

The initiative initially began when Google decided to no longer scan the emails of paying customers of their G Suite program. G Suite adjusts Google’s platforms to be more business-orientated by providing services such as unlimited cloud storage, shared calendars and other potential add-ons. Google has made a conscious effort to appeal to businesses in recent years and, according to Seth Schoen of the Electronic Frontier Foundation, many current or prospective business customers were uncomfortable paying for G Suite under the notion that their emails might be scanned.

Google Suite

 

“Consumer Gmail content will not be used or scanned for any ads personalization after this change. This decision brings Gmail ads in line with how we personalize ads for other Google products.” — Diane Greene, SVP, Google Cloud, 2017

With 1.2 billion users, Gmail continues to be a powerful marketing tool for online advertisers. The initiative won’t end ads within Gmail, but they ads will be targeted based on information collected from other Google services such as search of YouTube. While Google’s decision is an effort to achieve consistency across all products, it also addresses some long-standing questions on Internet privacy, especially within emails. According to an article published by the New York Times, users are generally less receptive and more bothered by targeted ads within emails as opposed to ads based on browsing history and other Internet activity. 

Complications and the ever-changing online advertising industry has led many businesses to focus on driving traffic to their sites organically. Through SEO and focusing their website content on a few high-traffic keywords, e-commerce businesses have been able to retain some control of their website traffic. Dirxion online catalogs offer SEO guide pages that involves a process of indexing every page of the printed catalog. This practice helps boost the overall SEO of the online catalogs site, as well as increase the likelihood of someone finding a catalog page when searching for specific products.

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Google faces fines following EU investigation of online shopping service

Earlier this week, Google found themselves face-to-face with a $2.7 billion fine from the EU antitrust division following a seven-year investigation. The investigation was centered on Google’s search engine algorithm techniques and concluded the company “abused its market dominance” by giving an “illegal advantage” to its own shopping service.

While the fine is aimed at Google’s online shopping comparison feature, the EU’s fine adds to an ongoing list of international antitrust issues. In Brazil, Microsoft claims Google stifled competition in online advertising and the Korea Fair Trade Commission currently investigates whether Google forces Android smartphone makers in South Korea to pre-load their search engines into the devices.

“What Google has done is illegal under EU antitrust rules. It denied other companies the chance to compete on the merits and to innovate. And most importantly, it denied European consumers a genuine choice of services and the full benefits of innovation.”
Margrethe Vestager, EU competition commissioner

Current search engine practices involve a mix of paid advertising, through Google AdSense or Google Ads, and organic search engine optimization practices (SEO). With SEO, website and e-commerce platform builders can attempt to drive traffic to their website by including content and keywords that users are currently interested in. Google AdSense and Google Ads allows companies to engage in a more “pay-to-play” market, where Google places targeted ads within their search engine results and other websites to drive traffic to a particular website.

Google refuted the claims by the EU, stating in a post on “The Keyword,” Google’s blog, that the company’s current practices of displaying shopping links in search results benefits advertisers and users alike. The company claimed revolution and innovation from product comparison sites such as Amazon has lead to a decrease in competition within that market.

Puma Shoes

In response to the claims by the EU, industry analysts predict Google might have to change their search engine algorithms altogether or intentionally display links from the competition. A coalition of Google’s competitors formed “Focus On The User”in order to pursue lobbying efforts within the EU to put harsher conditions and restrictions on Google’s search engine and algorithm practices.

Dirxion online catalogs offer SEO guide pages that involves a process of indexing every page of the printed catalog. This practice helps boost the overall SEO of the online catalogs site, as well as increase the likelihood of someone finding a catalog page when searching for specific products.The Dirxion team keeps up with the changing landscape of Google’s search engine algorithm.

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Google changing online advertising landscape through ad blocking

Following a released study conducted by the Coalition for Better Ads, Google announced a new feature coming to their popular browser Chrome that will block certain types of online advertisements. The study concluded that pop-up ads, flashing animated ads and auto-play ads with sound “fall beneath a threshold of consumer acceptability.”

“Tens of thousands of consumers have made their opinions clear through this robust research,” said Bob Liodice, CEO of the Association of National Advertisers. “Consumers in North America and Europe have similar views on online ad experiences they find annoying and disruptive.”

The research conducted by the Coalition for Better Ads was intended to identify which methods of online advertising push consumers to adopt third-party ad blockers to their browser. Business Insider estimates 236 million desktop devices and 380 million mobile devices have some form of an ad blocking software downloaded.

Ad Block

 

Websites have tried to combat ad blocks before by locking out content from people who have ad blocking software installed and active. According to the official AdBlock “Solutions” web page, a website usually tries to download a resource commonly used to serve an ad, and if that resource is blocked or hidden, the site detects an ad blocker is present. However, most ad block users prefer to simply move onto another site rather than “white list” a site or completely disable their software.

Alternative solutions have been varied across different sites. The Guardian displays a pop-up at the bottom of their webpages asking ad block users to donate to the site directly, whereas Forbes waits until users click on articles to lock out their content. In response, software called “Ad-blocker blockers” has surfaced, tricking websites into thinking a user doesn’t have any ad blocking software active when they actually do.

 

Google’s filtering tool, which is scheduled to be implemented in early 2018, will automatically block the top 12 ad formats that are deemed below the standards of the Coalition for Better Ads. Google is attempting to push third-party ad blocking software companies out of the picture who run varying degrees of white listing programs. For instance, AdBlock Plus has an “Acceptable Ad” program that allows advertisers to pay extra fees to pass through the AdBlock Plus filter. Because of Chrome’s dominance in the browser market share (59 percent on desktop computers, according to NetMarketShare), advertising companies that use any of the 12 threatened advertising forms will have to reconfigure or lose access to almost half of the potential online market.

Dirxion’s advertising widgets have typically passed online advertising standards in order to ensure they’re displayed properly. The alterations to Chrome’s rules will require attention and potential changes to the way Dirxion delivers advertisements to its interface. Consequently, this is being monitored closely by Dirxion’s development team.

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