Two recent events in the Digital Media industry have tested the ‘plat-ag’ vs. platform exclusive theory: 1. Google’s announcement of their tag management solution and 2. FBx. Platform agnostic brands, startups, and agencies main USP is being able to shift gears easily and adapt to the most current and innovative technologies available. Yet a major disadvantage to the strategy is missing out on relationship aspect – beta opportunities, co-dev, and monetary incentives (kickbacks). However, the media industry has learned not to align yourself too heavily with one platform in such instances whereby the next Facebook shakes up the market and ruins competitive advantages in one fell swoop that took years to cultivate (Invite/FBx).
Most Agency people cringe at the thought of migrating technology for one of their clients/accounts – especially if one of the major risks is data loss. Technologies with data management capabilities, i.e. ad servers and tag management solutions, are such technologies. Google bought DoubleClick in April 2007 (technically March 2008), which set the stage for both Publisher and Advertiser dependency. There’s plenty of other ad servers an Advertiser could choose from – Atlas, MediaMind, and MediaPlex. As the Display Industry matures, it continues to show less and less barrier to entry with each startup and technology that arises. Google recognized the trend and crafted the iTunes of Display. Switching costs and risks outweigh most competitive USP messaging an Advertiser is pitched in a given Quarter or year. With the announcement of Google Tag Management, it’s less about the data they’re collecting (they collect plenty of data on users in market for junk they shouldn’t buy with their 85% market share on the Search industry) and more about ensuring platform dependency.
Google’s main revenue threat outside of competitors is the Advertiser themselves. Ad Creation and tagging workflows are laborious compared to the analytics aspect of Display, which has been automated for years. It’s the iTunes model. Apple created a more seamless way to run the music industry and owned the process from music/content acquisition to consumption thus handcuffing people in the digital world to Apple via content and device. Google seems to be using the same strategy in Media. Make it easy and make it platform dependent. I have an iPhone so I’m completely on board and a subscriber to this strategy…until the platform becomes obsolete/irrelevant/no longer the common currency – enter Facebook.
For reasons above, one of the biggest platform exclusive deals in the media industry happened between Vivaki/AOD and Invite Media (acquired by Google). In June 2010, Vivaki publicly announced their more formal alliance with Invite coming days after Google’s acquisition of the DSP. It made sense at the time – digital media giants of the agency world aligning themselves with digital media giants of the publisher world. However, FBx completely shit on that marriage when Invite was kept out of the beta and more importantly – one of AOD’s major competitors (Xaxis) was brought in due to their alignment with AppNexus. Keep in mind – Vivaki has the ability to access FBx by using any other DSP at their disposal so it’s not like they’re out in the cold, but the impact was clear – alliance to any major player in the market has major advantages and sometimes-unforeseen disadvantages. Both AOD and Xaxis have extremely talented people in their own right and a platform shouldn’t decimate their abilities to deliver client objectives, but in a world where agencies are relying more heavily on technology and inventory exclusivities – hedging bets on the wrong relationship could mean a reactionary shift in long term strategy.
The idea of aligning with one platform is actually against innovation impacts we’ve observed in the market. Innovation causes fragmentation. We’ve seen it in the ad network space when 100 different ad networks would all pitch the same thing to an agency then consolidated eventually evolving into the Exchange space. The Exchange space spawned 100 iterations of DSPs, DMPS, and other three acronym companies all fighting for market share and Advertiser dollars. Now, we see it in Social. Facebook is the major player, but look at the others in the market arising around the world, on mobile, video, and platforms we still haven’t fully realized. The two sides really shouldn’t be platform agnostic and exclusive because the answer is contingent to the expansion/contraction argument that seems to play out in a cyclical manner every few years. Ask yourself – is this decision being made during an expansion or contraction trend in the market and what are the long-term pros and cons to each. Then, go and pet your iPhone 5 and tell yourself you’re not personally platform exclusive with anyone…