How French publishers are fighting back against Facebook and Google's display ad dominance
Patrick Smith @ TheMediaBriefing Experts' Blog - on 4/9/12
The battle to keep online advertising yields and returns high in a market of infinite volume and little scarcity rages on. But some publishers are deciding that it's not their fellow broadcasters, magazines and newspaper who are the problem but the titanic internet brands such as Google who swallow up so much of the available adspend.
The top five grossing display ad players in the US - Facebook, Google, Yahoo, Microsoft and AOL - are predicted to make $7.81 billion in 2012, half the national total (via emarketer). All that extra spend that's coming into the market thanks to the digital transition? If you're a publisher, you're not getting it, they are.
But over in France comes a possible solution.
La Place Media, which launched today after four weeks of running in beta, is an online exchange or co-operative comprising the biggest online publishers in France, representing 28 million unique users and four billion unique impressions a month (the consortium cites Médiamétrie-NetRatings stats from June this year - here's the release).
The publishers - including Lagadère, FigaroMedias, TF1, 20minutes and several others - are pooling their audience data using the Rubicon Project's REVV platform (you can read more about that here). That means that the 70,000 ad buyers that are plugged into Rubicon's platform can choose the audience and site that's relevant to their ad, in real-time.
It's a bit like lots of shops joining forces to set up a supermarket on the edge of town: the idea is to give customers a lot more choice and the shops better prices.
Fighting back for display control
Rubicon's Jay Stevens told me on the line from Paris that the point of the exercise was to fight back against the dominance of internet superbrands on display ad spend.
"The general concept is that the whole is greater than the sum of its parts, by bringing collective data together," he says. "The reasons why Facebook and Google's share of the media plan is so big are simple: they have scale and reach and relevant inventory; they bring efficiency and audience targeting through data."
"A co-operative like this offers to share its members' data, which on its own isn't worth that much but when put together is much more interesting.
"When you sit back and look at the market and see IAB figures showing display being worth a billion pounds - everyone says 'that's great!' But then people say 'why are we not seeing a 20 percent rise this year?'
"The reality is that the growth isn't going to publishers, except very big ones like Facebook - now publishers are asking why their ad growth isn't the same as other major sites."
Isn't this specifically the kind of thing competition is denied to prevent? Stevens says it's an issue not for individual governments but the European Commission in Brussels to decide. And in any case, there's nothing wrong with it - he says the real distortion comes from Google and Facebook dominating the display ad market to the detriment of premium publishers.
"This (La Place) isn't necessarily a competitive advantage in the market, but what it provides is a venue for them to be able to compete and ensure Facebook and Google don't dominate display in the way Google dominates search," he says.
Stevens adds that it's not an "exclusive group" and that other publishers not in the data-sharing club are welcome to join. About 90 percent of the publishers were already trading inventory through Rubicon.
Stevens won't hazard a guess at the amount of money he expects to be generated through this scheme but he's clear about the objective: "We're talking about four billion impressions a month, which is roughly the same size as major publisher here such as MSN France. And this isn't Hotmail content, we're talking about premium publishers in this market with premium content - and the audience they bring is very, very valuable."
Where next for RTB co-operatives?
So is it next stop London? Stevens is keen to see more initiatives like this in its key markets - the US, UK and Germany principally - but says that the "political" issues in the UK would be barrier. Not half: remember the delays and eventual death of Project Kangaroo at the hands of the Competition, amid frenzied lobbying from rivals.
TheMediaBriefing has heard of several medium-to-large sized publishers on the specialist side of the divide discuss joining forces in a private exchange to thwart what they see as unreasonable and stagnant ad network rates, so while a full industry-wide collaboration would be difficult here - Ofcom and the Competition Commission would have a lot to say - it seems like a matter of time before we see more digital ad collaboration between rival publishers.
In the battle to maintain and grow adspend in the face of Google and Facebook's dominance, it's a case of safety in numbers.
Elsewhere: ExchangeWire today has a chat with La Place MD Fabien Maglon which is worth a look.