Social media platforms are among the world’s most profitable businesses whose business models rely on digital advertising revenues. The current global digital advertising market comprises thousands of interconnected platforms and (platform) businesses and is projected to be worth $333 billion, in which programmatic advertising accounts for the vast majority (84.5% or more) of total revenue. Despite its significance, not enough is known about the structure of this global digital advertising market, how exactly it relates to social media, and the importance of partnerships and partner integrations in connecting them.
In an empirical study, we consider the significance of business and data partnerships in the social media ecosystem to understand how partners mediate and shape the governance and power of the world’s largest digital platforms. We present an empirical method for tracing their partnerships and partner integrations (the software integrations built through partnerships) – inspired by a prior empirical study of how partnerships figured in Facebook’s platform evolution. We then apply this method to map the thousands of business(-to-business) partnership relations that comprise the social media business ecosystem to learn more about the different types of partnerships and their role in mediating and shaping the governance and power of social media platforms in particular.
The empirical maps show which relationships are involved, which are exclusive or shared, and help us to identify key sources and locations, or ‘nodes’, of power in this ecosystem. Importantly, they spotlight the central role of partnerships and partner integrations in connecting social media platforms with what we call the audience economy – the complex global and interconnected marketplace of business(-to-business) intermediaries involved in the creation, commodification, analysis, and circulation of data audiences for purposes including but not limited to digital advertising and marketing. That is, we present the relationship networks that make up the ecosystem of social media, search engines, and other large digital platforms and which also interconnects the players of this global ecosystem, including leading data intermediaries, cloud service providers, and digital advertising and marketing technology providers.
|Social media and audience intermediary partner ecosystems, with highlighted social media platforms (light blue) and audience data intermediaries (orange).|
Within this global and interconnected audience economy, business(-to-business) partners play a pivotal role through the creation of software tools, products, and services for shaping the creation, buying, modelling, measurement, and targeting of data audiences. In fact, we suggest that partnerships have been endemic and essential to the burgeoning business of digital platforms, particularly to their ‘programmatic’ (automated, data-driven) advertising and marketing businesses. Through intermediary partnerships and infrastructures, these data and advertising-related practices often extend far beyond any single digital platform environment or geographic territory. Consequently, partners contribute significantly to the ongoing process of ‘platformisation’ through their collective development of integrated software infrastructures between diverse economic sectors and spheres of life.
Most of the partnerships we found when conducting the empirical research in 2018 involved large advertising agencies (e.g. Dentsu and WPP), advertising and marketing clouds (e.g. Adobe Marketing Cloud, Oracle Marketing Cloud, and Salesforce Marketing Cloud), audience data aggregators such as data management and customer data platforms (‘DMPs’ and ‘CDPs’, e.g. eXelate, LiveRamp (formerly Acxiom), Oracle DMP (formerly BlueKai), and Salesforce DMP (formerly Krux)), data analytics and measurement firms (e.g. 4C Insights, Nielsen, and SocialCode), ‘multichannel’ advertising and marketing solutions (e.g. Adobe, AdParlor, Brand Networks, Oracle, Percolate, Salesforce, Spredfast, and Sprinklr), and customer relation management (‘CRM’) solutions (e.g. Adobe, Salesforce, Spredfast, and Sprinklr).
These examples are just the tip of the iceberg. It is clear that there are many different types of partnerships and players that may inform our understanding of the nature and structure of the audience economy – including the global digital advertising market, which is exceptionally dynamic – and where the vast stores of digital data held by social media and other types of digital platforms derive their value and worth. That is, how disparate data sources are aggregated, linked, and made valuable through diverse practical applications, including but not limited to targeted advertising and data analytics. Data aggregation and identity resolution have become central processes in this audience economy as a result – and we find those processes as solutions offered by virtually all the leading platform businesses.
Based on the empirical findings, we suggest that power is not only held by the world’s largest platforms (e.g. those referred to as ‘GAFAM’, or Alphabet, Amazon, Facebook, Apple, and Microsoft) but also mediated by their partners and dispersed within the integrated platform ecosystem. Google and Facebook’s digital advertising ‘duopoly’, for instance, depends to a certain extent on their strategic position within the partner ecosystem, while strategic partners such as Acxiom, Oracle, and Experian benefit from partnerships with Google and Facebook through being among the few with privileged access to their closed platforms (referred to as ‘walled gardens’ or ‘data silos’). Within this ecosystem, governance and control are exercised through partnership agreements and software infrastructure for the sourcing of data from disparate sources and the distribution across many media channels – all automated and occurring in the blink of an eye.
While there are many important implications to consider, as some already have, the global and interconnected structure of this audience economy raises geo-political concerns around how these intermediary partnerships enable or cause data to move across (international and intercontinental) borders. The prevalence of partnerships between and among audience data intermediaries means that it is exceptionally difficult, sometimes impossible, to trace the origins and flow of audience data throughout the integrated platform ecosystem (or understand where data originates, is stored, and moves – a requirement under the EU GDPR). For instance, Wodinsky from Gizmodo raised concerns about the role of partners mediating, through an unknown number of intermediary partnerships, between Western and Chinese firms and advertisers. Additionally, The Intercept featured how a network of local Chinese partners offered Oracle’s technology and services to Chinese police and defense entities. Given these implications, we hope that our research methodology – and an (openly available) dataset of the partnerships we found – provide useful starting points to undertake additional research to help further improve critical understanding of this audience economy and the players within it.