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How The Duopoly Ruined The Ad Agencies Cannes

Ad agencies have long relied on a unique blend of research and intuition to understand what consumers want to hear and where they’re most likely to hear it. Which is why the rise of Google and Facebook, who use data to know the very things ad agencies are only guessing at has proved so vexing to them.

Talk along the Croisette at the Cannes Lions festival this year tended to focus on the overwhelming power of “The Duopoly” as the two companies have come to be known, and an overwhelming feeling that there was little anyone could do to compete with them.

Each member of The Duopoly has it’s own particular secret sauce. Facebook knows everything there is to know about it’s users: who their friends are, who their friends on Instagram and WhatsApp are, what other brands they like, where they went on their last vacation, where they work, etc. and so forth.  That’s a lot of data to triangulate from and when you throw in that Facebook, via its Atlas network, can track its users onto third party sites, it’s a very powerful proposition for advertisers.

Google, on the other hand, has its own compelling proposition: Google is all about search and so when someone is actively searching for a product or service Google can serve up a relevant ad on it’s all-pervasive search engine and on YouTube. That’s a lot more efficient than scatter shotting and hoping something sticks.Google also has years worth of data on user behavior—both specific users and users in general—that helps make their advertising even more targeted.

Ad agencies have argued that data is only part of the equation, that creative and context matter too, but those arguments have mostly fallen on deaf ears as advertisers have flocked to Google and Facebook in sufficient enough numbers to make them the main topic of this year’s rosé-tinged gripe-fests. (Fetes du Gripes?) Some of the main complaints about the two behemoths are their tight control over their data (both), their insistence on maintaining a “walled garden” (Facebook), their lack of any real competitors (both, but Google in particular) and the fact that while they say they are happy to share their data at reasonable rates, they can change their minds at any point and there’s nothing anyone can do about it.

While none of those points are untrue, they’re not really reasons for brands to give up on Facebook and Google. If anything, they’re reasons to seek out more data-driven ad platforms.

That may explain the current popularity of Snapchat. While Snapchat may not have the census-level user bases Facebook and Google command, they do have a sizable chunk of the 30-and-under crowd, a notoriously hard to reach demographic. They also have a well-designed new ad platform that targets individual users and makes extensive use of video. And while Snapchat has a long way to go before they steal Facebook’s thunder, they do provide an excellent complement to Facebook, especially for companies who are looking to reach a younger demographic.

The only possible pushback against the duopoly could come from TV, and only then if the MVPDs and networks can align forces long enough to get make full-scale addressable happen. This would provide the sort of data-driven platform that could compete against Facebook and Google, with the same sort of census-level user data, measurement and targeting that the digital platforms can provide, along with an environment that’s far more conducive to building brands (versus just making sales.)

While there were rumors of rumors that the big ad holding companies were trying to put together some sort of TV-based consortium (the rumors did not get more specific) we’re thinking that’s more wishful thinking than reality. Which means unless and until an addressable TV challenger actually comes to pass, The Dynamic Duopoly—and targeted digital advertising—will remain the flavor of the day.

Until the next new thing comes along.

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  1. […] Tuesday, we wrote about how “the Duopoly”— Facebook and Google—were the talk of Cannes and how one of the […]