Yesterday, I argued that online giants – Facebook, Apple and Google – will use our addiction to apps, and our need to access them across all devices, to lock us in to their platforms for years to come. Today I heard a compelling argument for the opposite.
Of course, the man making that counterargument — HasOffers CEO, Peter Hamilton — has reason to hope I’m wrong. His company is one of the third party user data companies that the giants are likely to put out of business.
Since 2009, HasOffers has made its crust selling top-level software for large networks to manage performance advertising and help mobile marketers track which app installs come from what marketing sources. The Seattle-headquartered company has a San Francisco office and now employs 150 people.
Hamilton argues that if you talk to any major advertiser, they’re not preoccupied with the Facebook v Google v Apple axis. “They just want to spend money to grow their product and be able to see results,” he says.
These Internet giants create a platform that requires advertisers to put money into it. The platform itself is powerful, but it requires that major inflow of revenue to sustain itself. It’s a delicate relationship. “If I make an app, I control what my users see,” Hamilton says. “For that app to live it needs to make money.”
“Pandora is serving ads from its own ad system. If Apple then says you have to use iAd to sell ads, what does that do for the user? You’ve destroyed a vital part of the ecosystem.”
The next part of the puzzle, Hamilton says, is how interdependent Apple, Google and Facebook are on each other on mobile. Google relies on Apple because the highest volume of app usage takes place on its platform and it generates fives time as much revenue in app sales. Both companies rely on Facebook because so much of what we do on our devices revolves around checking in absentmindedly with our Newsfeed. Each company’s platform is the other’s blind spot. Advertisers are promoting themselves on Google and Facebook, so while Facebook can theoretically see on what device we first see an ad and where we first engage, it is powerless to know if we’ve seen that same message show up through AdWords first.
There is some retrenchment coming in the mobile space, Hamilton concedes. Especially with so many apps being used only once. “There’s a long tail of garbage out there,” he says. “But then again, how many websites does the average person go to?”
Yes, Google, Apple and Facebook might be best placed to track us across our devices, but the commercial use of that hasn’t been entirely mined yet. Hamilton says advertisers are thrilled with what HasOffers is able to provide them, letting them see what ads lead to which actions in mobile. Advertisers have to be extremely involved in a campaign to make cross-device data useful and customer privacy policies limit many companies from tracking people across the different devices that they use.
For Hamilton, a focus on user acquisition followed up with engagement is maybe more useful and lasting than being able to watch your audience bounce between laptop, phone and tablet. Facebook might be 25 percent of the mobile ad market, but there’s still a giant piece of a $13.3 billion industry that exists well beyond it. HasOffers is partnered with 375 different networks. A company like InMobi engages with 759 million consumers across 165 countries.
Not that there’s not a tension between the big guys and the third parties. HasOffers was removed from Facebook’s Mobile Measurement Program last month over allegations it was holding onto customer data for longer than agreed upon in its contracts. Hamilton has disputed Facebook’s actions and says that HasOffers’ clients can get access to that analytic data without them, while asserting that Facebook is a part, but nowhere close to all, of its business.
Hamilton can’t dispute in practice that as ad networks, Facebook, Google and Apple (even with iAd currently a laggard in the space) and the vast amount of high-quality user data they hold gives them the power to one day trample a lot of third party providers with better, more sophisticated and user-friendly analytics models, but whether they take that option is not yet clear.
But he isn’t even sure it’s in their best interests and he thinks it would be a shame if it were to happen. “Independent third parties are important for giving advertisers a choice. If there’s no unbiased way to look at an ecosystem, there’s no way to make educated decisions.”
[illustration by Brad Jonas for Pando]