Are The Walls Getting Higher Or Just Better Lit?

martinkihnupdatedData-Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.

Today’s column is written by Martin Kihn, research vice president at Gartner.

More than a century ago, two titans emerged from the wreckage of the railroad wars. The prickly Jay Gould ran the Union Pacific, and the pugnacious Cornelius Vanderbilt – called the Commodore since his days as a steamboat pilot – guided the New York Central and Harlem lines. In current dollars, both men were richer than Mark Zuckerberg.

And they hated one another. “I consider Mr. Jay Gould a damned villain,” said Vanderbilt.

Big business does not require big manners, of course, but growing markets can be characterized by a cooperative spirit until the finalists emerge. Then it gets interesting.

Over the past few months, we’ve seen a gradual rise in competitive rhetoric from leading media platforms and marketing clouds. It signals a new phase in the game when buyers should be particularly vigilant.

The first salvo in this year’s recent round came from Facebook. The world’s favorite social network announced plans last fall to test a demand-side platform (DSP) that was to be a kind of new Avenger in its squad of superproducts, which include the Atlas ad server, LiveRail publisher platform and Audience Network.

Well, Facebook ran the test. And it was not impressed.

Dave Jakubowski, the company’s head of ad tech, issued a statement of anger not unmixed with sadness. He had peered into “the usual exchanges” and was stunned to find himself in a universe of cabals and bucket shops.

“We’ve been able to identify and measure where most waste comes from: exchanges and banners,” he said, adding that the team was “amazed by the volume of valueless inventory.”

There goes the new Avenger, although it may return in a more native, video and mobile incarnation – in other words, in a Facebook-friendly form.

Jakubowski did not mention any culprits by name, but they knew who they were. Mike Caprio, VP at rival ad server Sizmek, echoed the thoughts of many when he noted that Facebook’s surprise was itself a surprise. In a column, Caprio said the experiment actually “raises more questions,” such as how, exactly, the team was defining “valueless inventory.”

But the implied object of Facebook’s outrage seemed clear. Google owns the biggest of the “the usual exchanges” (AdX) and serves the most banners (via DoubleClick). Without too much squinting, it is possible to see the familiar multihued sans serif logo glowering behind Jakubowki’s blanket condemnation of “desktop-first tools that are not built for a cross-device world.”

These pixelated players have been shadow boxing for months now. Facebook announces cross-device measurement; Google does too. Facebook launches first-party data-based ad targeting; Google does too. These technologies took years to develop and test, of course. The timing may be totally coincidental. Or not.

As far as I know, Google did not respond publicly to Jakubowski’s squib. It was busy. At about the same time, the search giant-cum-robot shop had some big news of its own: the launch of the Google Analytics 360 suite, which includes existing and new components for analytics, attribution, site optimization and visualization, as well as a data management platform (DMP). Not really unexpected, the offering is bundled in a way that makes Google a more direct competitor of enterprise marketing clouds, such as Adobe’s.

And Google’s timing was interesting: right before the Adobe Summit 2016 in Las Vegas. To industry watchers, it was as though during hair-and-makeup before Adobe Analytics’ big day, the bridesmaid threw on a red dress and announced her engagement.

Adobe was unmoved. Suresh Vittal, its head of product strategy, told this publication he appreciated that Google “validates the ways we’ve approached this market.” As for the suite itself, Vittal said, it looked to him like “a yet-to-be-proven DMP-like capability … and some nascent optimization technologies ….” Not to mention that the “DMP-like capability” is named Audience Center, redolent of Adobe’s own DMP, Audience Manager.

A little-known fact about actual walled gardens is that, in addition to repelling pests, they create a warmer microclimate within their walls. That doesn’t mean it can’t also get hot outside.

In an unusually vigorous move, the buy-side video platform TubeMogul published a screed on its website called “Manifesto for Independence,” as well as an ad campaign that asked, “What’s Google Not Telling You About Walled Gardens?” (Hashtag: #independencematters) TubeMogul accused its much larger rival of being huge, conflicted, opaque and other dubious things. (Video platforms like TubeMogul were adversely affected when Google pulled YouTube inventory from its exchange late last year.)

So what does all this mean for our lives? As I said, I think it signals a clear transition into a new era of more overt and open-throated competition. Vendors in all areas of ad tech and marketing tech are feeling the squeeze. Winners are emerging and also-rans turning into fire sales, “preferred partners” or history. Particularly worth watching are the categories touched by Google and Facebook: mobile and video platforms, tag management, measurement, now visualization and DMPs.

This is the end of the innocence. Much of our silicon evangelism has had a kind of saintly taste. Google’s mission to “organize the world’s information” and Facebook’s to “make the world more open” could not be more big-hearted. They were founded by college students, after all. College is over. It’s time to pay the (jumbo) mortgage.

We’re also enjoying a more careful assessment of motives. Witness recent cold, hard depictions of life inside Amazon and HubSpot. Whether unfair or not, their very popularity indicates a new willingness to consider the possibility that our modern moguls may not be all that different from the older versions. They just have skinnier jeans.

Whatever happens, one thing is certain. Commodore Vanderbilt advised aspiring titans, “Never tell nobody what you’re going to do till you do it.” In other words, it ain’t over yet.

Follow Martin Kihn (@martykihn), Gartner (@Gartner_inc) and AdExchanger (@adexchanger) on Twitter.

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