Around the same time that it became crystal clear that Microsoft had opened a hidden and aggressive front in the battle to control the buying and selling aspects of advertising technology, Amazon first announced early last month that it earned $31.2 billion in advertising business in 2021. It was wrapped inside That new knowledge is a serious indication not just of where a business is, but where it’s headed: In the holiday period in the fourth quarter of 2021 alone (of course generally the ad spend advantage), Amazon’s ad business revenue was $9.7 billion, or 11.6% of Total for the year, up 10.3% from 2020. Talk about Bezos missiles! Watch out, 2022!
Now, Amazon operates in the top tier of the highly competitive digital advertising market, along with Meta (Facebook and Instagram), Google as well as Apple, Bytedance (makers of TikTok), Microsoft, Comcast, The Trade Desk, Verizon and ViacomCBS (now Paramount) and more.
However, all of these companies (and any others aspiring to be a serious player in the digital advertising ecosystem) are in sight of yet another new bill being cooked up in the capital this time from Senator Mike Lee (R-Utah), who announced late Last year he said he would introduce a bill now almost that would prevent big tech companies from doing what they do best: offering seamless options for reaching a media audience in one place with ease, which is especially important for small businesses that can’t hire teams of people. To run media purchases, placement and scaling.
While the specific target of the bill at the moment may appear to be the big three in digital advertising (Amazon, Google, and Meta), it could very well impact any company that acts as an intermediary for a buyer or seller of ad space and also owns the exchange where ad space is traded. The whole thing is mistakenly meeting the populist agenda to personalize a fiercely competitive and ever-evolving group of leaders in digital advertising.
The bill, dressed as it pretends is intended to prevent potential conflicts of interest, could effectively force ad tech companies to sell or sever large parts of their ad tech operations. The bill is based on old ideas of how “publishers” sell ad inventory and how ad buyers choose to use publishers to reach audiences. As top marketers and even diners know, any of the biggest players offer DIY ad auctions and direct buying that anyone can do. (If you want a quick course on how simple and effective all this is, just check out Amazon’s great handy tool. It’s not “mysterious” or suspicious at all.) This means, of course, that the publisher that provides the buying options is also the seller and the exchange. This is the very new and efficient way in which digital advertising works and this relatively young economic sector has thrived as a result – not just for publishers and platforms, but for the countless thousands of small businesses that were previously limited to ineffective and inefficient phone books or the “back of the day”. From the book “Classified ads.
Moore, CEO of BIGToken and a thought leader and original practitioner of advertising technology, among other accomplishments, is the co-founder of 24/7 Real Media, one of the early steppers of what can grow into a major digital advertising network business. “Advertising technology has come a long way since then, simplifying the business of buying, selling and displaying ads. As a result, digital has become the larger medium, replacing traditional television spending. Most legislative attempts are turning back the clock on time and progress, And in the process it will potentially replace the thousands of well-paying jobs created by digital advertising.”
O Congress, wake up! Don’t just believe what some interested party might tell you. The truth is that there has been a revolution and sellers and buyers are in a better position. Things have changed because the market has seen the immeasurable benefits brought about by a new system of business – and the competition has become fierce with the dominance of Yahoo and AOL, then replaced by Google, Facebook, Instagram and now Microsoft, which is back in combative form, and Amazon, which brings in tens of billions of sales ads. This is a highly competitive business and generates huge numbers of economic benefits, not least employment in Utah and 49 other states.
The bill, probably intended to protect a few small and relevant interests imaginable, frames its attack on the best and most efficient companies in apple pie terms such as a “fiduciary duty.” The truth is that the bill is trying to reverse decades of changes in advertising that the digital age has rendered obsolete. Not mistaken or doubtful, it is simply no longer preferred and thus has been sent to the trash for media history by buyers and sellers at their good discretion.
As if the idea of another new bill that doesn’t understand how digital works wasn’t enough, there’s been talk of David Cicilline (D-RI) and Ken Buck (R-CO) considering a potential companion bill in the House.
In case you missed it, and it should be noted, the ad-supported internet economy contributed $2.45 trillion to the country’s $21.18 trillion GDP in 2020 alone. Why do lawmakers in the capital always try so hard to stifle one of the country’s biggest growth engines?
Perhaps these senators and congressmen are rushing to show their anti-digital goodwill to those backer companies that were once publishing giants but now have to compete in ways that never existed before (back when a newspaper, for example, and its editorials which favor local candidates, can dominate an entire media market and have no effective national or global competitor around their cozy nest covered in feathers and money printing). Perhaps, too, Amy Klobuchar (D-MN) and Chuck Grassley (R-IA), who have proposed a bill that would prevent Amazon, Apple, Google and Meta from competing with other companies that use their platforms to sell products or services. (By the way, the mind-boggling bill that would hamper competition passed a major hurdle in the Senate.)
These bills, and others like them, are complementary and conflicting at the same time. Each requires companies in this market to make long-term or even medium-term decisions in a context that threatens to undo their business models. How long will there always be a senator or congressman to propose another bill holding them back? And while the claim about this latest Senate bill is that it only targets the biggest easy targets, it’s all bills to worry about every major healthy ad tech player. and growing The advertising ecosystem that could attract the attention of legislators in the future.
It’s a frightening precedent that should give everyone who cares about a free and open internet, a competitive marketplace for buying media, nightmares.