Gareth Davies, AdBrain, CEO, gives ExchangeWire his take on this week’s multimillion dollar purchase of Flurry, and how it’s the latest move in a Silicon Valley arms race, but also explains to his thoughts this can prove risky for brands’ own data.

Yahoo’s purchase of Flurry has dominated discussions in ad tech circles in the last day or so. There is still speculation over the cost of the transaction with estimates ranging from $300m to up to $1bn.

Most discussions among more seasoned ad tech pro’s have centred around whether the cost of this deal effectively made it a fire sale (on Flurry’s behalf), but let’s focus on things from Yahoo’s perspective. 

In my view it’s the latest move in the ongoing war of the Silicon Valley giants to gain a ‘single customer view’ across screens as consumer media consumption segues from desktop, to mobile-first, and on into the ‘mobility era’.

Firstly, let’s take a look at what Yahoo has bought here.  

At a global level Yahoo has bought a huge mobile data set, and publisher network through the sheer numbers of mobile app publishers that have downloaded the Flurry SDK. Plus on top of that the Flurry acquisition brings to Yahoo’s table a raft of organic app engagement data, such as historical ad impression, click and conversion data.

So what Yahoo has basically bought is a phenomenally large user base of mobile users (something it had been lacking). 

This is the new paradigm for a ‘mobile-first’ world where the key aim for marketers is to strive for a ‘single customer view’. The importance of which cannot be overstated, especially as things like connected cars and wearable tech become more commonplace in the market.  

Google and Facebook – the clear market leaders in mobile advertising with a combined marketshare of 75% according to some sources – have been massively investing in creating a single sign-on, which creates a single view of customers across screens, for years now. 

And we need only look at the recent average revenue returns posted by market leader Google – its average cost per click dropped by 6% year-on-year in the latest reporting period due to the emergence of mobile clicks – to see the importance of this arms race. 

Conversely, we could look at Facebook’s improving share prices; as they seem to rise with clockwork-like regularity when it makes announcements noting its improving mobile ad revenues (see its most recent earnings call).  

I’d argue that Facebook’s mammoth $19bn acquisition of WhatsApp – which was effectively the acquisition of a mobile OS in my opinion – had similar motivations to Yahoo’s Flurry purchase, given the depth of engagement it has with its users.

The importance of this single customer view for advertisers is immeasurable. For instance, it can help with deterministic attribution modelling, which as mentioned above is important as we move from the multi-screen era to the mobility age. 

And if brands can’t keep abreast of this fundamental shift in consumers’ media consumption can lose sight of just whom their customers are. 

I’d argue that the effect of not developing such insights would be like and aged spouse waking up one morning looking at their partner, and then not knowing who it is beside them. If you lose eight of just who is most important to you (i.e. those that interact with you day-in, and day-out), then you are in real trouble.  

Many marketers think they might be able to address this by going to Facebook and Google for their media buys in order to create a single customer view, which is fine in the short term, but then you are entrusting your data to two parties that have a combined 75% market share.  

My hypothesis is that if these companies’ dominance of the mobile advertising world continues to be then we are set witness the return of the network model, as let’s face it, both of their technologies can legitimately be labelled as providing black box solutions. 

And this could be problematic for brands, as while they pour just about all their data into these pipes, they get comparatively little back in return, and the aforementioned ecosystems can then use this data exchange to enhance their wider product offering. This can prove risky to a brand's individual set of objectives.

With the ad network model increasingly consolidating into the hands of the big Silicon Valley players, which are using their balance sheets to buy this single customer view through moves like the Flurry purchase, then brands are faced with a choice between the black box, or transparency.  

By looking beyond the big Silicon Valley players brands can get more of a gauge on the alternative models, and technology ecosystems out there, to gain a better deal for themselves.