Why Big Tech’s travails are an opportunity for media agencies to show their mettle

Has the Big Tech bubble burst? Disappointing quarterly results from Facebook owner Meta (although better than some expected), Google owner Alphabet (YouTube made a loss), Amazon (cloud business getting softer) and even the mighty Apple (supply chain problems in covid-hit China) have made many wonder if their relentless march is coming to an end.

Actually it’s not so much the case of a bubble bursting, rather more like a slow puncture in a car tyre. Digital domination of the ad market (the primary source of revenue for Facebook and Google) may be reaching saturation and there are new, formidable competitors on the block, primarily big retail websites like Walmart’s, busily replicating Amazon’s online ad success.

Then there’s a future with the prospect of more and more legal challenges (over privacy and market dominance) and consequent fines. It’s not that they can’t pay the fines but eventually such an embattled life takes its toll – work isn’t so much fun any more with lawyers crawling over everything. And, of course, most Big Tech workforces are being “re-engineered,” that is, reduced.

Apple’s issues are rather different: its business model depends depends on selling ever-fancier gadgets at ever-higher prices and there comes a point at which consumers say we don’t actually need this new one. All such devices have built-on obsolescence (your software won’t work any more) but sales can still slow.

In a way Big Tech is now facing the same problems old tech business have faced for generations but it’s a new experience for them as they had seemed to defy gravity.

In terms of adland it could actually be good news for media agencies big and small. In recent years they’ve become Big Tech service industries, helping clients navigate the often bemusing and, sometimes, capricious nature of the California giants. But always trying hard not to annoy the aforementioned giants.

Now, as cookies come to an end (we hope) there may actually be some real alternatives for media agencies to get their teeth into, assuming they’re not too wedded to their existing comfort zone. Clients should challenge them to show what they’re made of.