Instagram Center of Facebook’s Antitrust Web

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This Week
November 17, 2020
Instagram at the Center of Facebook’s Antitrust Web
Ad Filterers: Champions of Online Engagement
Billing, Data Management, Communication and Fraud Plauge Pubs
PubMatic Preps Risky $75Mil IPO
Instagram at the Center of Facebook’s Antitrust Web
Photo by Omkar Patyane from Pexels
Tis the season for giving antitrust suits. For months, the Federal Trade Commission has been hinting a big ol’ antitrust suit is just about ready to be sent to Facebook, and reporter Alex Kantrowitz, who wrote the highly praised “Always Day One” about big tech dominance, is convinced Instagram will be at its heart.

Wait, didn’t the FTC give the thumbs up to the Instagram acquisition back in 2012? Yeah, but times change—and while the Instagram app gave Facebook a leg up in mobile when it, where it was struggling, its actions since demonstrate terribly anticompetitive behavior. But Kantrowitz also points to internal documents where Zuckerberg acknowledges Instagram as a threat and Instagram Founder Kevin Systrom was worried Facebook would go into “destroy mode” if the startup didn’t agree to a merger.

Even though CEO Mark Zuckerberg has been interviewed by FTC investigators, Facebook doesn’t seem to be trying to dissuade opinions about its social media dominance. Through enabling cross-platform messaging, has been trying to make its products more interoperable and tightly wound
Why This Matters
If this antitrust suit isn’t another embarrassing politically driven hack job, it seems likely the only recourse will be a breakup. And that would be interesting with one walled garden split into two. Would one of the two be willing to open up the programmatic pipes into the inventory?

Would Facebook and Instagram compete against each other for advertiser dollars—particularly that vaunted small and medium-sized business spend? Or would that mean even more dollars headed to the split company? That could be a setback for publisher hopes of cashing in on SMB spend.

But the big question, as AdWeek pointed out a while back, who owns the ad tech and the data-gathering mechanisms? You can’t split the Facebook pixel in half (or can you?). But publishers will definitely bring on an Instagram pixel if they know the company’s ad targeting arm will increase bid density. An additional competitor with a data set comparable to Google, Facebook, and Amazon in the open programmatic space is good for publisher revenue.
Ad Filterers: Champions of Online Engagement
We know that ad filterers—the 200 million+ individuals defined as “users who have blocked ads in the past month but discover brands or products through ads seen online and have clicked on an online ad in the past month”—are hungry for knowledge and spend a ton of time online.
But we didn’t realize the extent of it.

Especially when compared to the segment of the population that doesn’t use an ad blocker at all, ad filterers are voracious readers of websites. According to findings gleaned from the GlobalWebIndex , in any given month ad filterers in the United States are 100% more likely to visit business news websites, 35% more likely to visit travel websites, and 29% more likely to visit a news website than non-ad blocking users.

This website-loving behavior has a lot of implications. The fact that ad filterers devour business and non-business news alike points to a dedication to keeping up-to-date and abreast of current events. And the fact that they visit travel websites hints at another characterizing trait of ad filterers: they tend to be affluent, with the means to travel off to that dream beach getaway or wilderness adventure.

However, when you start to look deeper into these insights, an even more compelling portrait of ad filterers starts to emerge.

Scientific studies suggest that people who have a desire to explore new destinations (and therefore check out travel websites) are also motivated by a strong sense of curiosity, thrill-seeking, and restlessness. And the personality traits associated with the news buffs and current events enthusiasts is success. When Business Insider looked at the habits of the wildly successful—from Warren Buffet to Bill Gates—they realized that reading the news built the foundation of their days.

So the fact that ad filterers love reading news and travel websites doesn’t just point to a love of political facts and pictures of palm trees. It also hints at curiosity and high levels of overall success.
Why This Matters
These findings overturn a pervasive, false stereotype: that people who use ad blockers are unengaged and uninterested in the health of online publishing.
But that couldn’t be further from the truth.

Ad filterers, who make up the vast majority—95%—of the entire ad blocking user base, are voracious, involved readers of a variety of publications. Not only does this insight reveal aspects of the ad filterer psychology, but it exhibits just how highly engaged they are.
Publisher Problems: Billing, Data Management, Communication and Fraud
As if the pandemic ad spend slowdown and upcoming changes to ITP and deprecation of the third-party cookie in Chrome wasn't enough to start publishers biting their nails.

In a recent study, DoubleVerify has uncovered a host of other challenges for pubs amid COVID-19.

For one, payment times are increasing due to challenges that pubs with reduced staff now face with their billing processes. Forty-seven percent of respondents said their organization “lacks the resources to support the billing and reconciliation process across our customers, causing payment times to increase.”

Publishers are also spending way too much time collecting, managing, and processing data. With many still stuck in the age of manually processing inventory performance and revenue data and pulling data from disparate systems, it's becoming a disastrous situation for optimizing performance and revenue.

Also high on publishers' list of woes, is the poor communication and synchronization across internal and external parties negatively impacting the campaign delivery process. As well, fragmentation of media quality measurement tools across advertisers is a big headache for pubs trying to make sense of how their inventory is viewed.
Why This Matters
Digital media and measurement consultant Rachel Adams has written for AdMonsters about the issues that the lack of transparency and access to data can cause to a publisher's bottom line. It ain't good.

If nothing else is clear from this study, pubs need wayyyy better tools. And transparency across the supply chain is still a major issue that needs to be addressed.
It's IPO Season: PubMatic Preps $75Mil IPO
Duck, it's raining Ad Tech IPOs. Or so it seems.

A couple of weeks back, we talked about DoubleVerify and AppLovin gearing up for IPOs. This week, the highlight is on PubMatic's $75Mil IPO and the biggest IPO in Israeli history, with app monetization provider IronSource setting sights on an $8Bil offering.

For the sake of space, we'll focus on PubMatic's IPO.

Despite the pandemic, PubMatic's rev rose about 20% in the first nine months of 2020, when net income tripled to $7.8 million. We hope that pubs got their payments too.

PubMatic was also able to open up another revenue stream earlier this year with the launch of header bidding solution, OpenWrap OTT. This header bidding solution brings scale to the OTT space while making the relationship between buyers and sellers more seamless.
Why This Matters

Investor interest in the ad tech space is continuing to grow as ad tech matures. Ad tech companies are finally making inroads to figuring out how to provide better services to buyers and sellers that reduce a lot of the friction in the relationship. 

Kudos to PubMatic for being noticed. But it might not be so easy once going public.

As AdExchanger pointed out in their analysis of the pending IPO, there are great risks challenging the company's success if the industry is unable to find a suitable replacement for 3P cookies and mobile device IDs. Then, as they also suggested, there's always the Pandemic looming over the economic future of every business right now.

Sweet Tweet
Section 230 is very bad

Worth a Listen
Beelercast: To Catch An Ad Blocker
In this episode of BeelerCast, AdMonsters Advisory Board Chairman, Rob Beeler, talks with Neal Thurman (Coalition for Better Ads / Brand Safety Institute) and Dan Rua (Admiral) about their call for participation in the CBA’s Better Ads Experience Pilot Program. They talk about ad blocking, better ad experiences and a new segment: “To Catch an Ad Blocker”.
Upcoming AdMonsters Events
Webinar: From Analytics to Revenue Optimization in Record Time | NOV 18, 2020
PubForum+ | DEC 8-10, 2020

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