Facebook Inc (FB) and Google Inc (GOOGL) Advertising Business under Threat from Digital Publishers
Google Inc (NASDAQ:GOOGL) and Facebook Inc (NASDAQ:FB) dominance of the online advertising business could soon be shaken by a powerful alliance of digital publishers all pushing for more ad revenue. The Guardian, the Financial Times, CNN, Reuters, and Economist have all teamed up in an initiative calling itself Pangaea Alliance, to fight back against ad drain spend.
Pooling Together 110 Million Readers
Google Inc (NASDAQ:GOOGL) and Facebook Inc (NASDAQ:FB) have over the years sold space online, which advertisers in return use for airing their adverts. Pangaea plans to pull together the publishers audiences and provide advertisers with space across all the sites in one a transaction.
The initiative seeks to give brands access to more than 110 million online readers using a unique computerized advertising system. The outlets hope that by the use of the new system, they will be able to scale the benefits of advertising within trusted media environments. Partners in Pangaea affirm that the alliance brings together an influential and trusted global audience for advertisers.
Push For Higher Rates
Global online display advertising market continues to grow at a stupendous rate, currently valued at about $60 billion. The space is however becoming dominated by media owners that can offer giant scale to advertisers. E-Marketer reports that Google Inc (NASDAQ:GOOGL) and Facebook Inc (NASDAQ:FB) will this year accrue over $1 billion from the total digital display advertising market in the U.K alone.
Scaling in the advertising business has become the biggest hurdle for a number of media outlets especially when competing with Facebook, which has over 1.4 billion monthly active users. Advertisers most of the time end up on platforms offered by Google Inc (NASDAQ:GOOGL) and Facebook Inc (NASDAQ:FB) where they can access big audiences entering into billions of people. Pangaea should be able to close the gap in the advertising business while charging higher rates when content is shared across the group.
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