By Suzanne Vranica and Alexandra Bruell
CANNES, France -- Advertisers have griped about the power Google
and Facebook Inc. wield over the digital ad market. But they are
generally wary of breaking up the tech giants, judging by the views
of the attendees at the annual advertising festival held here on
the French Riviera.
The U.S. Justice Department is gearing up for a possible
investigation of Google, while the Federal Trade Commission has
taken jurisdiction for possible antitrust probes of Facebook and
Amazon.com, The Wall Street Journal has reported. It is unclear
what outcome the government would seek, if it did pursue such
investigations.
Some major advertisers say splitting up Alphabet Inc.'s Google
and Facebook into smaller companies could work against their
interests. The technology giants have allowed them to reach huge
audiences and target them efficiently.
"I cannot walk away from scale, as a brand that needs mass
marketing," said Raja Rajamannar, MasterCard Inc.'s chief marketing
officer.
"Look at what Facebook and Google do for me -- they have pretty
sophisticated tools and consumers' demographic information and
location, " and they can help advertisers reach a swath of the
population, said a top marketing executive at a quick-service
restaurant.
Those sentiments explain why the two tech titans accounted for
58% of the U.S. digital ad spending in 2018, according to
eMarketer.
The advertisers' views stand in contrast to those of many
publishers. Many media executives would rejoice if U.S. antitrust
enforcers moved to break up Google or Facebook or take other
drastic action. Their case: the "duopoly" has cornered markets like
search, video and digital advertising.
That doesn't mean advertisers don't have deep frustrations with
the companies -- from their grip on user data to their repeated
missteps in allowing ads to run next to offensive or hateful
content. Several ad executives said if government scrutiny resulted
in changes to those behaviors, that would mark an improvement.
Advertisers also would like to receive user data from the tech
companies to improve what they already know about their customers,
though they realize this is especially sensitive territory now as
the tech companies deal with increased scrutiny over their privacy
practices.
Although most marketers aren't looking for a breakup of the tech
companies, "they would welcome some regulation of the platforms,"
said Michael Kassan, chief executive officer of consulting firm
MediaLink. The biggest challenge for advertisers, he said, is they
are "captives in the walled gardens" of Google and Facebook, unable
to determine which ad on which platform was responsible for a user
taking an action, such as making a purchase after seeing an ad.
More than a decade ago, Mr. Kassan helped Microsoft Corp.
galvanize brands to oppose an advertising deal between Google and
Yahoo Inc., which marketers believed would raise prices of search
advertising. The two tech companies eventually abandoned the deal
after the Justice Department said it would sue to block the
agreement.
"Maybe regulation will force them to be more open," Roger Sole,
Sprint Corp.'s marketing chief, said of Facebook and Google. "This
is what I'm missing today."
A spokeswoman for Facebook referred to Facebook Chief Operating
Officer Sheryl Sandberg's comments in Cannes earlier in the week in
which she said antitrust action isn't needed to preserve consumer
alternatives. Facebook has said it has added more people to ensure
content is safe for users and brands.
Google declined to comment.
Megan Pagliuca, chief data officer of Hearts & Science, an
ad buying firm owned by Omnicom Group Inc., said government
intervention might pressure Google and Facebook into accepting a
universal identifier for measurement that the industry would come
up with, which would help advertisers get consistent measurement of
how their ads perform across different platforms.
At present, Google and Facebook have different anonymized IDs
for users, which makes it hard for a brand to compare how its ads
perform across different platforms, Ms. Pagliuca added.
A universal ID would create a level playing field for marketers,
helping them understand and compare the effect of their efforts
within and across channels, said Jason Kodish, global data lead at
Capgemini. "This will allow for better targeting, investing and
experience development," he said.
There are some advertisers who do believe Google's dominance of
advertising technology raises serious anticompetitive concerns
because it is both a seller and buyer of ads and operates leading
products at every stage between advertisers and publishers.
"Google is a virtual monopoly," said a top marketer for a global
beverage company. "It quashes innovation and growth in the
industry," the person added.
Some executives pointed out that Google several years ago began
steering advertisers to purchase ads on its YouTube video platform
through Google's own ad technology systems, locking out competing
services that would be able to supply independent information to
brands on how ads performed.
While Google and Facebook have improved their "brand-safety
controls," meant to keep ads away from objectionable content, and
have given brands more third-party measurement options, there is
more work to be done, advertisers said.
"The (tech) platforms are media companies, and they must make
sure they have legitimate users, who must have consequences for
their actions and have quality content on their platforms," said
Kieran Hannon, chief marketing officer at Openpath Inc., a Los
Angeles startup that provides workplace security.
Write to Suzanne Vranica at suzanne.vranica@wsj.com and
Alexandra Bruell at alexandra.bruell@wsj.com
(END) Dow Jones Newswires
June 20, 2019 15:27 ET (19:27 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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