Platform Confluence8 min well spent
Aggregation theory describes the shift of power from supply to demand, growth based on zero marginal cost, and direct relationships with users. Platforms like Google, Facebook, Amazon, and others were able to become aggregators because of the internet.
The next step in the evolution of aggregators is Platform Confluence: the combination of several apps and sites owned by the same company into an ecosystem in which user signals and ads reinforce each other.
In this post, I want to zoom in on platforms blurring the lines between apps and finish up with the implications for marketers.
Facebook started as social network and added Instagram in 2012, Whatsapp in 2014, Occulus in 2014 (one month after Whatsapp), and Giphy in 2020. Features like the Marketplace, Groups, Feed, and Messenger were slowly added over time.
Besides all the feeds of the Facebook ecosystem, you can run ads on all story formats, in-stream videos, Facebook search, instant articles, and apps.
Data doesn’t just come from the apps, feed engagement, likes, shares, and comments. It also comes from other websites that have a “login with Facebook” button.
Of course, that data can be used for partners and against competitors as well:
A cache of leaked Facebook documents shows how the company’s CEO, Mark Zuckerberg, oversaw plans to consolidate the social network’s power and control competitors by treating its users’ data as a bargaining chip. The documents were obtained and are being published by NBC News.
Taken together, they show how Zuckerberg, along with his board and management team, found ways to tap Facebook users’ data — including information about friends, relationships and photos — as leverage over the companies it partnered with. In some cases, Facebook would reward partners by giving them preferential access to certain types of user data while denying the same access to rival companies.
The data Facebook is able to get through its ecosystem is stunning. It creates a powerful ecosystem with many opportunities to show ads and learn from user behavior.
The growth loop is simple: better monitoring across several platforms = better ads = more ad clicks = more revenue = more products/acquisitions = better monitoring…
1 + 1 = 3
Google is no better than Facebook when it comes to the profile it creates from all the collected data across many platforms. As I mentioned in Friday’s update:
The best way to see for yourself is to look at your Google my activity record of stored information.
On top of that, there’s a section called “more activity”. It’s well-hidden (for a reason), but on https://myactivity.google.com/more-activity, you can see all the other sources of data Google takes into account., such as Youtube, Play Store, Maps, etc.
Just like Google was very early on to merge different verticals (maps, images, news, etc.) into universal search, it now crosses platforms with ads and organic content like web results in Youtube Search.
Google recently put the former head of ads Prabhakar Raghavan in charge of Search. I want to point out that it’s not clear at all whether this will mean Search and Ads will blur further into each other. It’s a pure assumption at this point. And, there are other, better arguments to pull for this case.
One is the launch of Google Discover ads. Search Engine Land confirmed the official release for advertisers to leverage the Discover feed as part of “Discovery Ads”. Using this new channel will also allow you to appear in Gmail and on Youtube. Google stated that the combined reach of channels hits 2.9 billion users, the same number Facebook reports across all of the platforms in its ecosystem.
The outstanding fact that we as Marketers need to pay attention to, as reported in Marketing Land, is that Discovery Ads are fed by audience data – not intent data. Google was built on intent data and still lives off of the billions of searches entered very day.
Google bases Discovery ads off of interest, in-market, and affinity. Those signals come from search activity, Youtube watch behavior, sites on the Google Display Network, and downloads from the Playstore.
The new ad format is, of course, a blow against Facebook. Google Discover is a push channel, as opposed to Search. Similar to how Facebook tries to create a search experience with intent data by adding components like a knowledge graph, Google tries to grab more Facebook ad market share by pushing ads to users.
Both platforms follow the same ecosystem strategy – one based on intent data, one on behavioral data. But there is one big ecosystem left.
Every ad-driven platform is a marketplace between users and advertisers. Amazon is primarily an e-commerce marketplace but also the third-largest advertising platform.
Amazon has organic and paid results. Even though sellers pay at minimum $39/month or $0.99/product, there are regular and paid listings. Amazon’s ad formats allow you to “sponsor” or “boost” your product to get more eyeballs, which I consider a paid result.
Ads can be placed across IMDB, Fire TV, the marketplace, and the web.
Alexa is not yet fully rolled out but in beta testing.
Google, Facebook, Amazon, and Co started out as single platform (search, social, online retail), then built or bought more products (WhatsApp, Gmail, Twitch), and now tie them together into ecosystems. The power of such an ecosystem consists of tracking user signals – whether intent or behavioral – to show better ads and use the returns to create more ways to track user signals.
Google actually made this pretty clear in its concept of Ambient Computing:
In the mobile era, smartphones changed the world. It’s super useful to have a powerful computer everywhere you are. But it’s even more useful when computing is anywhere you need it, always available to help. Now you heard me talk about this idea with Baratunde, that helpful computing can be all around you — ambient computing. Your devices work together with services and AI, so help is anywhere you want it, and it’s fluid. The technology just fades into the background when you don’t need it. So the devices aren’t the center of the system, you are. That’s our vision for ambient computing.
What does this mean for marketers and brands?
It’s good news because ads become more efficient. They can hit users at the right time because the platform has a better understanding of where in the user journey they are. It creates different cross-platform formats, depending on what the right one is for the right demographic, use-case, and product.
It’s bad news for organic marketing (organic search, organic social, email, etc.) because as ads become more efficient, organic results matter less. The better and cheaper an ad, the more conversion/awareness it drives, the less important become organic results. Inbound marketing works is that it’s relatively cheap and effective. If ads can achieve that level, brands will invest less in organic.
At the same time, less competition in organic channels could be good for those who have a strong foothold. Channels like SEO would gain greater relative efficiency because more brands invest in ads. In the end, it will depend on whether platforms push organic results further back for ads or not.
5 things to check out
1. Panoply The Best Rank Tracker
A tactical buyer’s guide on picking the right rank tracker.
2. Substack The Most Interesting Companies in the World are Both
The best companies in the world serve both sides, consumer and enterprises, in a trend called consumerization of enterprise.
3. Digital Freelancer SUCCESSES AND FAILURES OF STARTUP CONTENT MARKETING
Good case study on someone with no prior SEO experience discovering the beauty of driving organic traffic with content marketing.
4. GSQI The May 2020 Google Core Update – 4 Case Studies That Emphasize The Complexity Of Broad Core Algorithm Updates
Glenn Gabe presents four case studies of the May algo update. Bottom line: it’s never just a single factor but always several that help a site recover. And you have you wait for the next update to see a change.
5. CXL Content Research: 4 Ways to Find a Ton of Wins
Fantastic CXL post by Derek Gleason on the fallacy of time, social presence and size in the efficiency of attracting backlinks. When you normalize for these factors, you find truly outstanding content pieces.