Google begins to visualize a new project in which its digital advertising would transcend its search platform.
Technology and digital ads have a market value that generates 20 billion dollars in annual revenue.
How many users interact with digital advertising?
Does Google work as an ad and digital advertising player? Given the imminent positive response, the industry is anticipating the changes. Advertising experts see the digital sector as a next step in which the technology giant will dominate. But there are also concerns.
As advertising on physical channels advances towards digital and programmatic purchases, speculation about their participation in the same sector also increases. In fact, there are rumors of his arrival in these types of fields.
According to WirtschaftsWoche, Google has engaged in conversation with German officials to present an advertising product for road signs and other outdoor displays. The goal is to expand its advertising business to digital screens in public spaces, such as those found in train stations, shopping centers or retail stores, to agencies and media companies.
Although the technology has denied it, this measure would be the next step of the digital advertising giant. According to a report by Business Insider, Google tested a programmatic platform for the purchase of advertisements in London in 2015, through Google Ads.
If the company entered this market, “Google will outperform the competition only with the large number of advertisers they already have,” said Paul Hoban, assistant professor of marketing at the business school at the University of Wisconsin-Madison.
How could Google use the data to determine your ads?
Specifically in Germany, where the general data protection regulation is very likely to face fewer regulatory hurdles in other regions, such as the United States, because there really are not many data privacy laws and their regulation on the platforms.
While spending on the digital advertising industry has been growing since 2009, according to a report by the Outdoor Advertising Association of America Inc., Google may be willing to interrupt a supply chain that billboard operators have mastered.
Traditionally, to buy offline ads, the agencies that represent brands collaborate directly with the owners of the billboards. If Google decided to enter the market, it could offer its clients digital advertisers with the option to work through the existing ad exchanges on their platform. Thus, you could directly advertise a billboard in different locations, instead of having to go through a billboard owner for all your needs.
Traditional advertising vs. digital advertising
In the past, traditional offline advertising groups relied solely on public data. And similar agencies could sell ads based on who lived in a certain region and their average income for a location.
Now, the industry has begun the transition to rely more on third-party data providers, so you can be more specific and add value to help advertisers navigate through these types of spaces.
Thus, specialized firms in digital can provide geolocation and mobile data, such as those generated by Google Maps, to provide navigation and geolocation data. Also to help clients understand what demographic characteristics they will see the ad. This can be obtained from the mobile location data added to help brands have a clearer idea of who will go through a specific billboard location.
However, if they used their own data, Google or other technology companies would not have to rely on the same type of external providers, who anonymize their data before sharing, and that could generate privacy problems, even in the United States.
Main concerns
It must be emphasized that all data, at some point, start as individual data, whether they come through a third-party data provider or directly from Google.
As for the collection, the same concerns apply to any type of data we are talking about, whatever the process used to customize the content. It is a fact that people do not like that their data is manipulated with a purpose. The clearest example was verified by Facebook at the beginning of this year.
Another possible obstacle that the technology giants could face if they chose to extend their skills to the digital advertising space are the regulations in the billboards on the streets, which face restrictions at the federal, state and municipal levels as to how an advertisement of Digital billboard changes image and message.
However, despite the potential obstacles, the trend of technology companies extending to the digital outdoor advertising space will continue throughout the advertising industry.
Also published on Medium.