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How Jeff Bezos is taking on the Facebook/Google ad duopoly and why it matters

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Back in 2017, The Wall Street Journal published an op-ed titled “How Antitrust Undermines Press Freedom.” Written by David Chavern, the head of a trade industry group that represents thousands of news publishers, the piece argues that Congress should pass special legislation that would allow publishers to band together when negotiating with major platforms like Google and Facebook.

His argument is straightforward: Google and Facebook are siphoning off an ever growing portion of internet advertising. Not only do the two companies account for 70 percent of all online ads, their share of new digital ad growth is even larger. That growth has come at the expense of journalism, distorting “the flow of economic value derived from good reporting.”

“The only way publishers can address this inexorable threat is by banding together,” wrote Chavern. “If they open a unified front to negotiate with Google and Facebook—pushing for stronger intellectual-property protections, better support for subscription models and a fair share of revenue and data—they could build a more sustainable future for the news business.”

Current antitrust regulations bar organizations from this kind of collusion, hence Charvern’s ask for a legislative exemption. But however you feel about the merits of his argument, the op-ed seemed to be a clear signal that publishers, for the most part, were acknowledging that no single media company, no matter how large or innovative, could meaningfully challenge the Google/Facebook ad duopoly.

Publishers weren’t always unified in this view. As I outlined in a recent piece, there was a brief, four-year period when the industry was generally optimistic about its prospects for growth and profitability. Hundreds of millions of dollars in VC money flowed to publications like BuzzFeed, Vox, and Vice. Publishers touted massive audience scale, particularly in video viewership. It was only a matter of time before this scale would start translating into meaningful revenue growth.

Only we know what happened next. The bubble popped. VC darlings like Mashable and Mic went up in fire sales. BuzzFeed, Vice, and Vox reported disappointing growth and laid off employees. Facebook and Google’s grip on digital advertising remained firm, and even BuzzFeed’s Jonah Peretti publicly floated an idea that sounded remarkably like Chavern’s: a merging of several of the largest millennial publishers, which would afford them better negotiating power against the platforms.

But there’s one person who hasn’t accepted Facebook and Google’s continued reign as a foregone conclusion: Jeff Bezos. Through both Amazon and his acquisition of The Washington Post, Bezos has set his sights on the digital advertising market — a market he’s mostly ignored for the past two decades — and he’s already made significant headway.

Let’s start with Amazon. Last year, it became the first company to eat into Facebook and Google’s advertising market share. It announced in September that it’s projected to bring in $4.61 billion in digital advertising this year, and while this pales in comparison to the combined $64 billion generated by Facebook and Google, EMarketer reported that their combined market share slipped from 59 percent to 58 percent on account of Amazon’s growth.

Why is Amazon gaining? A lot of it comes down to consumer product searches, which are increasingly occurring on Amazon’s website. While it used to be that product research would start with Google search, nearly half (46.7 percent) of these searches now start directly on Amazon, versus 34.6 percent on Google. Amazon has capitalized on this by aggressively selling advertising space in its search results, and its millions of sellers recognize the value of real estate that sits at the very end of the consumer purchasing funnel. In October, CNBC reported that several major brands are moving half of their search budgets from Google to Amazon.

And Amazon is in a strong position for continued growth. Think about why Facebook and Google have proved so effective for advertisers. Facebook has data on all your likes and interests. Google tracks everything from your intent (through searches) to your location (through Google Maps). Amazon has access to your purchase data stretching back for as long as you’ve been on the platform — data that, some would argue, is more valuable than what’s collected on just about any other site.

Amazon’s reach outside of its main website is also significant. Think Twitch, Amazon Prime Video, Alexa, and even the sites hosted on Amazon Web Services. When you consider the potential these properties have for delivering high-quality, targeted ads to users, then it shouldn’t be surprising that Amazon is building out a New York office set to host over 2,000 employees dedicated to its advertising business.

And then there’s The Washington Post. Many were perplexed as to why Jeff Bezos bought the newspaper in 2013, and industry watchers were pleasantly surprised when he devoted significant resources to growing its staff, both on the editorial and tech side. But as it turns out, The Washington Post is just an incubator for a much larger vision, one that centers on the paper’s custom-built publishing platform: Arc.

Arc, built out over a period of years, is a full-service platform that handles everything from publishing to email marketing to advertising tech to subscription paywalls, and since 2014 The Washington Post has been licensing it out to other publishers. Its pitch: why spend millions of dollars building and maintaining your own publishing platform when you can simply license out the industry best for a fraction of the cost? Publishers that include The LA Times and Globe and Mail have bought into this logic, and by Q1 2019, its chief product officer claims, Arc “will power over 400 websites and serve over 10 billion page views per month as ongoing implementations go live.”

But Arc isn’t the first CMS to come along. Publishers have been customizing platforms like WordPress for well over a decade. So why do I think Arc represents such a game changer?

Part of it has to do with timing. In a great piece for Nieman Lab, former Vice CTO Jesse Knight published a strong argument for why it’s time for the publishing industry to adopt a common publishing platform. Basically, as we head into 2019, most publishing needs are the same, regardless of the outlet. You need a dynamic site that’s mobile responsive. You require a robust analytics program, industry standard ad tech, video publishing capabilities, and a flexible paywall that allows you to test out various subscription strategies.

These common needs not only make building out your own publishing platform wasteful and redundant, Knight argues, but it also prevents you from capitalizing on the very network effects that have made Google and Facebook such formidable ad giants:

If media could consolidate around a common publishing platform, it would allow players of all sizes to cut costs as well as better compete against Facebook as a media union, taking action collectively, and once and for all addressing their biggest revenue challenges.

For example, while technology exists to stop ad blockers by preventing those using them from viewing a site, most media companies are afraid that by employing an ad-blocker blocker, their visitors will simply go to their competition. But what if every site blocked ad blockers at the same time? Or concurrently deployed a paywall? Users couldn’t simply go to the competition because everyone would be rolling out the change at the same time.

On the SEO front, when Google rolls out dramatic changes to how they index the Internet, in a united media world, any adverse impact that was not content related would be felt by all companies equally, preventing the unpredictable and brutal way some companies have suffered through recent Google updates.

But Arc doesn’t just represent a best-in-class publishing platform that will allow publishers, both big and small, to improve their distribution; the company also plans to roll out an advertising network that can scale across the billions of pageviews generated by the publishers it serves. “Arc is reaching a critical mass of most of the advertising markets in the United States, the major markets,” Shailesh Prakash, chief product and information officer for the Post, told Ken Doctor. With Arc’s ad tech platform reportedly improving CPM rates by 30 percent, one could imagine a seismic impact if enough publishers adopt Arc. Remember Chavern’s original op-ed about the power of collective bargaining? This could be a solution without the need of an antitrust waiver.

Now take a moment to remember that the owner of The Washington Post’s Arc also leads the one behemoth that’s already eating into Facebook and Google’s advertising market share. We’ve already seen some synergies between WashPo and Amazon; for instance, an Amazon Prime subscription nets me a significant discount for my digital subscription to WashPo, and I log in using my Prime account. Imagine a world in which Arc’s ad tech is able to leverage the consumer purchasing data of logged-in Amazon users. That would give your average publisher an ad targeting edge that isn’t currently available to either Facebook or Google.

So Bezos isn’t only poised to take on the Facebook/Google duopoly; the potential is there for him to spread the wealth to the entire publishing industry. While many are rightly worried about the power of Amazon as it faces its own bevy of antitrust issues, I think most publishers would agree that three major advertising players are better than two, especially when the new entrant aims to give them increased leverage against the current incumbents. Bezos may or may not represent the future of journalism, but his companies will play a key role in the news industry’s evolution in the years to come.

Simon Owens is a tech and media journalist living in Washington, DC. Follow him on Twitter, Facebook, or LinkedIn. Email him at For a full bio, go here.