Why Big Data Companies Are Pursuing Media Platforms

The internet has witnessed a significant transformation in recent years, driven by the decline of third-party cookies and the rise of ad-blocking technologies. This shift has created a new landscape for ad-tech companies, forcing them to seek alternative revenue streams, one of which is strategic partnerships with media platforms. In this article, we will explore why big data companies are increasingly pursuing media platforms and the implications for the ad-tech industry.

Decline of Third-Party Cookies

Third-party cookies have long been the backbone of targeted advertising on the internet. They enable ad-tech companies to track user behavior across multiple websites, allowing them to serve highly relevant and high-value ads. However, this practice is now facing substantial challenges:

The internet has become more concentrated, with users spending a disproportionate amount of their time on large media platforms such as Facebook, Instagram, YouTube, and Snapchat. This shift has reduced the browsing time dedicated to smaller, less visited websites. Ad-blocking technologies and platform-specific filters have become more prevalent, further diminishing the effectiveness of third-party cookies. Major platforms like Facebook are collecting extensive behavioral data, making third-party data providers increasingly redundant for high-value ad targeting. Privacy concerns and data security regulations, such as the California Privacy Rights Act (CPRA) and the General Data Protection Regulation (GDPR), have also led to the decline of third-party cookies.

Implications for Big Data Ad-Tech Companies

The decline of traditional third-party cookies has significantly impacted ad-tech companies. This has forced them to adapt, exploring new revenue streams and seeking partnerships with media platforms that offer a solution to these challenges:

Decreased Internet Usage: Users are spending more time on centralized platforms rather than browsing small, independent websites. This trend is particularly pronounced on mobile devices, where ad CPMs (cost per thousand impressions) are often lower. Challenged Ad Blocker-Friendly Platforms: With the rise of ad blockers, the effectiveness of traditional ad models has diminished. Media platforms with direct links to consumers, such as TV and radio, offer a more promising avenue for high-value advertising. Direct Consumer Data: Unlike traditional media consumption devices, media platforms like television and video apps do not rely on third-party cookies. Instead, these platforms can easily identify users using login credentials or billing information, enabling more precise and valuable ad targeting.

Opportunities for Big Data Companies

Despite the challenges, big data companies are not sitting idly. They are exploring various avenues to diversify their revenue streams, including:

New Technology Applications: Companies are investing in emerging technologies such as self-driving cars and IoT devices to generate new revenue. Partnerships with Media Giants: Big data companies are forming strategic partnerships with media platforms to leverage their extensive user data for targeted advertising and delivery. Innovative Ad Models: They are adapting existing ad-tech skills and technology to create more effective and targeted advertising solutions for media platforms.

Conclusion

The current landscape of the internet poses significant challenges for traditional ad-tech companies reliant on third-party cookies. However, the opportunities for growth in media platforms offer a promising alternative. By leveraging the direct consumer data available on these platforms, big data companies can continue to thrive and innovate in the evolving advertising ecosystem.