/biz/ - Business & Finance

>>10064281
My last response because replying to you is a waste of time. Look buddy, I'm just trying to correct some of your misconceptions about online advertising since I don't want you to invest from a position of ignorance. The AdTech landscape is very broad with a lot of niche industries. I don't deny that Facebook and Google are the titans here, but its not that simple.

First, Google owns a company in just about every industry on the lumascape (attached).

A very simplified model of how online advertising works is that a page has ad space they want to sell (called a "publisher") so they put it on auction at an ad exchange ("exchange"). This exchange holds an auction for said ad space. A bunch of demand side platforms ("DSPs") bid on the ad space on behalf of advertisers. The relationship between the DSP and publisher is adversarial because the DSP wants the cheapest price for the ad and the highest bid price he can get.

Because Google owns a company in practically every space, you get scenarios where an advertiser is bidding on ad space via a Google-owned DSP on Google DoubleClick (their exchange). This is a conflict of interest because Google will simultaneously want the highest and lowest bid, so a lot of advertisers do not want to use Google as a DSP.

For Facebook, they are somewhat of an odd case because they are a publisher (they run ads), and a DSP. Fun fact, around 3 years ago they actually were an exchange and let outside DSPs bid on their ad space. I worked at a different DSP at the time and we did some cookie-synching projects with Facebook that led us to work closely with them. They hired a bunch of engineers away from my company including our then CTO and basically stole our tech. After that they shut down their exchange and now they basically work as both publisher and DSP.

But back to your original point about Facebook being the only company that can target audience segments.. you really couldn't be more wrong.