Can Verizon Compete With Google and Facebook?
In recent years, Google and Facebook have exponentially taken over the universe of online ads and currently hold 40.7 percent and 19.7 percent of the United States digital ad market respectively. The two companies will total over 100 billion in online ad revenue in 2017 (over 70 million for Google; 30 million for Facebook) amounting to just under half of the world’s total digital ad spend.
This duopoly will only continue its dominance as Google releases its new ad blocker. But if there is one company able to take a bite out of the ad spend of Google and Facebook, it’s Verizon.
Verizon is the most viable candidate after purchasing Yahoo/AOL for $4.48 billion. This gives Verizon substantially more data to use for targeted ads, and potentially more ad campaign power as it takes over One by AOL, AOL’s ad platform.
One by AOL is a digital advertising monetization platform that uses its analytics engine and digital media to give advertisers real-time audience data and cross-channel insights.
Verizon will consolidate the brands owned by Yahoo and AOL into one new company called Oath. Oath will anchor over 50 media and tech brands, including One by AOL and publications such as HuffPost, Yahoo Sports, TechCrunch, and the social media platform Tumblr, among others.
"Our goal is not to directly compete with Google and Facebook," Oath CEO Tim Armstrong said in a press conference. "Our goal is to basically open up new relationships with consumers in a differentiated way."
Google focuses on search to bring in the majority of its ad revenue and will pull in $28.5 billion of the $36.7 billion market in 2017 (78 percent of the overall market). Facebook’s focus is display advertising, earning $16.1 billion (39 percent of the 2017 market).
While Verizon likely won’t be able to touch Google and Facebook in terms of search and display, it can use its expansive collection of data to its advantage. Verizon has 145.7 million wireless carrier subscribers, which is 11 million more than the next highest carrier in revenue and subscribers, AT&T.
If Verizon can utilize One by AOL’s platform to create viable ad campaigns, it can then use its vast compilation of data to display targeted ads to publications and other digital properties under Oath to further its reach and create a much more powerful ad network.