VIA BEETCAM — The pandemic could be good for already-powerful tech platforms with ambitions on further solidifying their power in advertising sales.
That is the view of one of the world’s leading ad agency leaders, who has long wrestled against the influence exerted by tech giants.
In this interview with Beet.TV, Sir Martin Sorrell says Google, Facebook, Amazon, Tencent, Alibaba and Tik Tok “are going to emerge from the COVID-19 crisis … with huge advantages in terms of data“.
For example, Sorrell says, Amazon, during the pandemic, is accumulating consumer data to make targeting more effective.
“The targeting and the performance of these media are, I think, becoming more and more effective in the course of this recession,” he says. “That’s another permanent effect.”
Forced in to publishers’ arms
Sorrell adds that pressure on two classes of media-ecosystem companies will reduce available options for advertisers…
- “Google have said, despite the COVD crisis, they’re not contemplating delaying the nixing of third party cookies,” he says. “That means a number of publishers are going to go to the wall.
- “A number of companies in the ad-tech ecosystem are (also) going to go to the wall. Maybe that’s not a bad thing … If that cleans out the system, makes it more effective, that’s no bad thing.
“As a result, clients, instead of being able to rely on their data sources for third-party cookies, it’d be pushed back and forced back to those six platforms in a more sophisticated way.”
A recent episode of eMarketer’s Behind The Numbers podcast also discusses how COVID-19 will change the flow of ad dollars to Facebook and Google.
The search for alternatives
Sorrell, the former CEO of WPP, has long sought alternative sources of ad scaled inventory to provide an alternative – and, thus, price competition – to the likes of Google and Facebook.
It used to be that ad executives were averse to this “duopoly“. The pool of giants then grew to what Sorrell has called “the four horsemen” (Google, Facebook, Amazon and Apple). Now, at a global level, the list appears to be six-long.
Sorrell has previously held out hope that Snapchat and AOL may become the scaled players necessary to provide competition.
As a response to the consolidation of data by big tech companies, Sorrell expects to see more brands implementing their own “data lakes“, repositories of consumer data that flow from distinct parts of their business, in order to fuel direct-to-consumer relationships.
Sorrell was interviewed remotely in London.
