Ad network battle heats up as Facebook buys LiveRail

For years, Face­book has been focused on expand­ing its reach beyond Facebook.com and its acqui­si­tion of Liv­eRail is the lat­est step in diver­si­fy­ing its dig­i­tal empire. Face­book already owns 1.3 BILLION eye­balls, one of the most impor­tant bid­d­a­ble media chan­nels, a host of fast-grow­ing mobile apps and Ocu­lus Rift. Now Liv­eRail will expand its off-site ad net­work reach into some of the biggest pre­mi­um video pub­lish­ers on the web.

Face­book acquir­ing LiveRail

Face­book agreed to acquire Liv­eRail, which pro­vides media com­pa­nies the tech­nol­o­gy to sell video ads programmatically, for some­where in the neigh­bor­hood of $400–500M. The acqui­si­tion makes a lot of sense in light of Facebook’s video ad push on its own net­work, its recent mobile ad net­work launch, and its inclu­sion of more non-Face­book brows­ing activ­i­ty in ad tar­get­ing. This acqui­si­tion sets Face­book up to com­pete more effec­tive­ly with Google as it looks to grow its ad busi­ness beyond its core web­site and mobile apps. Giv­en Facebook’s huge mar­ket cap­i­tal­iza­tion and rich trove of user data, Face­book is look­ing like the most like­ly com­pa­ny to give Google a run for its mon­ey in online and mobile video ad dominance.

Face­book and Google are attack­ing a mar­ket worth bil­lions. eMarketer’s lat­est report says mobile video adver­tis­ing is on pace to more than dou­ble this year as the fastest grow­ing area of adver­tis­ing; mobile video ads are pro­ject­ed to grow 119% to $1.44B in rev­enue, and online video ads 26.4% in 2014 to $4.45 bil­lion in rev­enue. Mobile advertising’s over­all rise is mete­oric too: eMar­keter projects that adver­tis­ers will spend 83% more on mobile adver­tis­ing in 2014 than they did in 2013; by the end of this year it will rep­re­sent almost 10% of all media ad spend­ing and sur­pass news­pa­pers, mag­a­zines, and radio to take the #3 spot behind TV and desktop.

Twitter’s always in the mix

The oth­er most ad-savvy social net­work doesn’t want to be left out of the fun: Twit­ter has acquired Tap­Com­merce, a mobile ad tech com­pa­ny focused on mobile retar­get­ing, for just under $100M. On the same day it announced this acqui­si­tion on its blog, Twit­ter also announced the glob­al expan­sion of its mobile app pro­mo­tion ads beta pro­gram. Mobile app-install and app re-engage­ment ads are a big focus for Twit­ter, and TapCommerce’s pow­er­ful mobile retar­get­ing capa­bil­i­ties will help strength­en its adver­tis­er offer­ings here.

Face­book and Twit­ter are also mak­ing moves toward more search-ori­ent­ed ad prod­ucts. Twit­ter offers Key­word Tar­get­ing in Time­line and Pro­mot­ed accounts in Search and Face­book has invest­ed heav­i­ly in their Graph Search prod­uct, which should be com­ing to mobile devices soon. It looks like every­one in the social space wants a piece of Google’s mas­sive ad business.

So what does this mean for marketers?

For any­one in the dig­i­tal mar­ket­ing space, this is anoth­er sal­vo in the ongo­ing bat­tle between Face­book, Twit­ter, and Google for dig­i­tal adver­tis­ing dol­lars. The chang­ing nature of these plat­forms rep­re­sents a huge oppor­tu­ni­ty for any­one who buys paid media online. Adobe Media Opti­miz­er has built in port­fo­lio bid­ding opti­miza­tion with auto­mat­ed spend rec­om­men­da­tions to help move your pounds, dol­lars and euros between plat­forms and get the most effi­cient clicks. If you can struc­ture your ad team to flex­i­bly move bud­get between dif­fer­ent chan­nels, you can take advan­tage of the increas­ing­ly sim­i­lar ad types on these plat­forms to get the best deal each day, week or month on every­thing from key­words to video ads. Of course, this strat­e­gy only works with high qual­i­ty ana­lyt­ics, so don’t for­get the fun­da­men­tals: under­stand your goals, have a sin­gle source of truth for your data, and mea­sure everything!