Facebook and Google Dominated Discussions at Cannes
Cannes, June 29th, 2016
The Cannes Lions Festival is much more than just honors and awards. There are workshops and presentations throughout the festival by creative leaders and technology visionaries. Attendees have the opportunity to sit in on many of these talks and gain insight into the minds of esteemed professionals.
This year, one theme seemed to monopolize most of the discussions, the ever-rising presence of Facebook and Google in the online advertising market. As the top search engine and most used social network in the world, both companies hold an enormous amount of power. That control seeps into the digital advertising industry. In 2015 both Google and Facebook took the lead in the amount of digital advertising sales. Controlling over a combined 64% of the industry revenue (Bloomberg Technology), it is apparent that these two powerhouses are the dominant players in the field. This presence is labeled a “duopoly”, the combined control of both Facebook and Google in online ad sales. There are other small companies that take parts of the rest of the revenue, but they can barely compete with the tech giants.
It should come as no surprise that this was a hot topic in many conversations held at Cannes. For now the percentage is just over sixty percent, but the trends only indicate that Facebook and Google will continue to grow in dominance. As advertising agencies increase digital presence for clients, they also become more chained to paying Facebook and Google for online ad space. With minimal competition, agencies have little option but to comply and work through Google and Facebook.
Many leaders in the field do not approve of this trend. Another buzzword of the festival was Facebook’s “walled garden”, referring to the role Facebook plays as gatekeeper between brands and consumers. Chief Executive of AOL Tim Armstrong spoke openly about the subject at Cannes. He referred to the negative effects of the growing role of Facebook and Google as intermediaries in the digital advertising process. Armstrong made the point that AOL intends to create a more open policy with online advertising looking ahead.
It appears not much will change in the immediate future. Facebook and Google are the ringleaders and the agencies must simply play by the rules. If they don’t, their clients will suffer from not being present on the most-used search engine and popular social network. The walled garden remains present, for the time being at least.