MEDIA PANORAMA: THE DIGITAL PLATFORMS

This chapter explores the largest digital platforms. Named as GAFA (Google,
Amazon, Facebook and Apple), they have come to dominate the new economy
and the advertising and media landscape. We will initially explore how they
have been able to compete and gain market size and power through new
strategic drivers. We will then dive into:
- Google and Search Engine Marketing
- Meta and the social networks
- Amazon and Retail Media
- TikTok
- Other digital players

Understanding these platforms, their evolution, their business model, their

challenges and opportunities is crucial for marketers and businesses navigating
the digital advertising landscape.

COMPETITION IN THE DIGITAL AGE

Digitalization has changed the rules of competition and their ability to compete.
Michael Porter explained that companies compete based on three generic
strategies to achieve a sustainable competitive advantage:
• Cost Leadership – Competing by being the lowest-cost producer in the
industry, allowing the company to offer lower prices or achieve higher
margins. (e.g., Walmart, IKEA, McDonalds)
• Differentiation – Competing by offering unique and superior products or
services that justify a premium price. This can be based on brand,
quality, innovation, or customer experience. (e.g., Apple, BMW, Nike,
Dyson)
• Focus (Niche Strategy) – Competing by targeting a specific market
segment rather than the whole industry. This can be done through cost
focus (being the lowest-cost provider in a niche, like Dacia, Lidl, Primark
or Ryanair) or differentiation focus (offering unique value to a niche).
(e.g., Rolex, Ferrari, Lululemon or GoPro)

Porter argued that companies that fail to adopt one of these strategies risk
being “stuck in the middle,” leading to weak competitive positioning.

As we entered the attention economy, attention has become the most

valuable commodity in the digital era, shifting from traditional media’s reliance
on advertising and subscriptions to data-driven monetization. In this new
economy, there are two more ways in which companies can compete:
• Network Effects: The value of digital platforms increases as more users
join. According to Metcalfe’s law, the utility of a network is proportional to
the square of its users. Digital platforms have embraced the power of

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 free: free services to their users in order to increase their numbers and
generate network effects.
• Complementary Products: Platforms often subsidize hardware or
services to expand their ecosystems. (Example: Amazon’s Kindle is sold
at a low cost to encourage book sales.)

Leveraging these two powerful competitive strategies, we have seen that today
the most valuable companies in the world are digital platforms.

Let’s explore the main ones that are supported by advertising.

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GOOGLE AND SEARCH ENGINE MARKETING (SEM)

“If your business is not on the internet, then your business will be out of
business”. Bill Gates

This chapter explores one of the main media channels used by millions of
advertisers every day: Search. We explain the history of Search Engine
Marketing (SEM), its origins, how they work and how to obtain better results
with this channel.

Every time we search in Google, we will obtain both sponsored (SEM) results
and organic results. Both results are independent. The organic results can be
optimized with Search Engine Optimization (SEO), which is covered in the
Annex of this document.

HISTORY OF SEM: GOOGLE’s FOUNDATION

Google was founded in 1996 by Larry Page and Sergey Brin, who were Ph.D.
students at Stanford University. Before Google, web searches were done
through early search engines and directories that functioned in simpler and less
efficient ways. Some examples where the web directories (like Yahoo!),
Altavista, Excite, Lyxos or Infoseek. These early search engines relied on more
basic algorithms and often struggled with providing relevant search results.

Page and Brin developed a search algorithm known as "PageRank," which

ranked websites based on their relevance by analyzing the links between them.
This approach improved search results compared to existing search engines at
the time. Initially named "BackRub," the project was later renamed Google,
derived from the mathematical term "googol" (a 1 followed by 100 zeros),
reflecting the vast amount of information the search engine was designed to

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handle. Google quickly grew to become the world's dominant search engine. By
1999 Google was handling 500,000 searches per day.

Initially Google was just a great search engine, lacking monetization. Their
founders approached several companies with the hope of selling Google.
Notably, they tried to sell it to Yahoo!, but Yahoo! wasn’t interested in buying.
They also approached Excite, one of the major search engines of the time, and
offered to sell Google for $1 million. Excite's CEO, George Bell, famously
rejected the offer, considering it too expensive and not aligned with their model.

Initially reluctant to embrace advertising as a source of revenue, Page and Brin

realized they needed a way to sustain the company. In 2000 they launched
Google AdWords. In 2002 they introduced AdWords Select with two key
innovations: the pay-per-click (PPC) model and the auction-based system.
The history of advertising changed forever.

THE BUSINESS MODEL OF PAID SEARCH

Invented by Bill Gross at Goto.com and later adopted by Google, the auction-
based search advertising business model achieved tremendous success
due to five key components:
1. Relevance: Ads are displayed only when they match users' search
queries, targeting them at the moment when their intent is clear. This
ensures high engagement by addressing consumers precisely when they
are actively seeking information.
2. Pay-Per-Click (PPC): Advertisers pay only when someone clicks on their
ad, allowing for highly targeted campaigns that can be run with small
budgets, maximizing return on investment.
3. Auction System: Ad placement is determined by an automated auction
where the highest bidder secures the top spot, ensuring that ad space is
allocated efficiently.
4. Simplicity: The ad format is straightforward, consisting of a concise text
copy paired with relevant keywords. This makes it easy for advertisers to
create ads quickly without complex designs.
5. Automated Pricing: The system is fully automated, eliminating the need
for human negotiations. Advertisers bid for ad space in real-time, which
streamlines the process and increases efficiency.
SEM has become an indispensable channel for many advertisers, due to
several key benefits:
1. Affordability
2. Flexibility
3. Relevance (as Google calls it, the ZMOT, zero moment of truth)
4. Short term measurable results
5. Brand protection against competition
6. Information of the key levers of our business

The success of SEM as a business model is related to The Long Tail, a

concept introduced by Chris Anderson. It describes how the internet and
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digital markets have shifted demand away from a few mainstream hits (the
head) toward a vast number of niche products (the tail). Traditional markets
focused on hits, while digital markets enable niches, because distribution and
inventory costs are very small: online platforms like Amazon, Netflix or Spotify
can offer virtually unlimited inventory. Consumers explore more choices and
allow for personalization.

Individually, niche products may sell less, but collectively, they can rival or
surpass the mainstream market in total sales. Google understood that an
accessible model to small advertisers, in aggregate, could surpass the demand
of all large advertisers.

KEY CONCEPTS IN SEM

1. Impressions:
An impression refers to the number of times an ad is displayed to a user on a
web page or in a search result. It counts every time the ad is shown, regardless
of whether the user sees it or interacts with it (e.g., by clicking).

2. Click-Through Rate (CTR):

CTR is the percentage of users who click on an ad after seeing it. It is
calculated by dividing the number of clicks by the number of impressions and is
used as a metric to measure the effectiveness of an ad in attracting clicks.

𝐶𝑙𝑖𝑐𝑘𝑠
𝐶𝑇𝑅 = (𝐼𝑚𝑝𝑟𝑒𝑠𝑠𝑖𝑜𝑛𝑠 ) 𝑥 100
3. Cost per Click (CPC):
CPC is the amount an advertiser pays each time a user clicks on their ad. It is a
pricing model used in pay-per-click (PPC) advertising, where advertisers are
charged based on actual interactions with their ads, not just the number of times
they are displayed. This is the model of Google.

4. Conversion Costs: Cost per Lead (CPL):

CPL refers to the amount an advertiser spends to generate a lead through an
ad campaign. A lead is typically defined as a potential customer who has
expressed interest by filling out a form, signing up for a newsletter, or otherwise
showing intent. CPL helps measure the cost-efficiency of campaigns aimed at
generating leads.

𝐴𝑑 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡 𝑖𝑛 𝑡ℎ𝑒 𝑠𝑒𝑎𝑟𝑐ℎ 𝑒𝑛𝑔𝑖𝑛𝑒

𝐶𝑃𝐿 = ( )
𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑙𝑒𝑎𝑑𝑠 𝑔𝑒𝑛𝑒𝑟𝑎𝑡𝑒𝑑

5. Conversion Costs: Cost per Acquisition (CPA):

CPA is the cost associated with acquiring a customer through an ad campaign.
An acquisition refers to a completed action, like making a purchase, subscribing
to a service, or completing a desired goal. CPA focuses on the cost-
effectiveness of driving actual conversions, not just leads or clicks.

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 𝐴𝑑 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡 𝑖𝑛 𝑡ℎ𝑒 𝑠𝑒𝑎𝑟𝑐ℎ 𝑒𝑛𝑔𝑖𝑛𝑒
𝐶𝑃𝐴 = ( )
𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑠𝑎𝑙𝑒𝑠 𝑔𝑒𝑛𝑒𝑟𝑎𝑡𝑒𝑑

HOW DOES SEM WORK: ADRANK

Search engine offer ad results related to the words that are searched by the
user. This system provides users and business owners with relevant ads, which
in return favors the search engine itself, as it becomes more useful to users.
The system ranks the ads (sponsored links) in different positions.

How are these positions calculated? Through an auction system:

- The advertiser bids for a maximum CPC to pay for each word or group
of words.

- The system calculates a Quality Score (QS), from 1 to 10, which is a

function of three elements:
o Relevance of the Ad Copy: the user search query should match
the content of the ad copy. If someone searches for “Small
Electric Car”, the ad copy should also say “Small Electric Car”.
o Landing page experience: following the example, the ad should
link to a page that has “small electric cars”.
o Expected CTR of the particular keyword considered.

- The algorithm combines the Quality Score and the Maximum CPC to
obtain a final Ad Rank. It is calculated multiplying the maximum bid and
the QS. The Ad Rank also incorporates other variables, like:
o Ad Extensions: ad format that refers to the visual improvements
in the ads that improve the quality of the ad: for example,
telephone numbers, clients’ scores, web links, etc. This ad
extensions provides better resources to people to click on them,
making them more valuable.
o Device used for the search, and other user attributes
o Time of the day
o Other ads
o Searched terms

Example of AdRank after a search on “Mortgages”:

Quality Score Bid
of bidder Max CPC Price AdRank Final Order
Bank 1 7 2€ 14 3
Bank 2 5 4€ 20 1
Bank 3 3 6€ 18 2
Bank 4 2 8€ 8 4

The final price paid by the winning bidder (in the above example is Bank 2), is
not the CPC proposed in the bid, but the one from the previous advertising in
the final order (in this case, Bank 3). This is called second-price auction.
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 𝐴𝑑 𝑅𝑎𝑛𝑘 𝑜𝑓 𝑡ℎ𝑒 𝑏𝑖𝑑𝑑𝑒𝑟 𝑏𝑒ℎ𝑖𝑛𝑑 𝑦𝑜𝑢
𝑃𝑟𝑖𝑐𝑒 𝑝𝑎𝑖𝑑 𝑝𝑒𝑟 𝑐𝑙𝑖𝑐 = + 0.01€
𝑌𝑜𝑢𝑟 𝑄𝑢𝑎𝑙𝑖𝑡𝑦 𝑆𝑐𝑜𝑟𝑒

So Bank 2 would pay = 18 / 5 + 0.01€ = 3.61€.

Exercise: How can Bank 3 improve its position in the search results?

As we saw in the previous example, Bank 3 was willing to pay 50% more than Bank 2, but
due to its low Quality Score, the result is that it will appear in second position behind Bank
2. Considering that the ad formats is the same, how can it achieve the first position?

a) One option would be to increase its maximum CPC price to improve the AdRank
AdRank = Quality Score x Bid Max CPC Price = 3 x Bid price = 20 → solving, bid price
should be 6.67€

b) It would be easier and much better to increase its QS:

AdRank = Quality Score x Bid Max CPC Price = QS x 6 = 20 → solving, QS should be 4.

Optimizing investments by improving keyword research and selection, ad formats, ad

copywriting, creative optimization, bid management & control, landing page optimization is
the role of good, experienced SEM professionals.

SETTING UP A SEM CAMPAIGN

Setting up a successful Search Engine Marketing (SEM) campaign involves

several structured steps that ensure the campaign is optimized for maximum
visibility, targeting the right audience, and driving conversions:

Step 1. Define Campaign Goals and KPIs

- Goal Definition: Before launching any campaign, the SEM professional

works with the client or business to define the primary goals. These goals
could include driving website traffic, generating leads, increasing sales, or
building brand awareness.

- Key Performance Indicators (KPIs): Based on the goal, establish clear

KPIs such as Impressions, Click-Through Rate (CTR), Conversion Rate,
Cost Per Acquisition (CPA), Cost per Click (CPC), Quality Score, Average
Position or Return on Ad Spend (ROAS).

Step 2. Keyword Research

Successful SEM campaigns include a wide range of keywords to reach

consumers in all steps of the funnel. Most clicks will come from generic words,
but their conversion rates will be lower and the cost higher. SEM planners need
to find an equilibrium between generic and specific keywords.

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- Identify Relevant Keywords: The next step is to conduct thorough
keyword research to find search terms that potential customers are using.
Tools like Google Keyword Planner, SEMrush, Ubersuggest, or Moz are
commonly used.
- SEM campaigns are typically differentiated in two groups:
o Brand related campaigns: as other competitors may use our brand
name to attract customers to their site, it is imperative to analyze our
brand name in SEM and be present with all keywords related to our
brand.
o Generic campaigns: referring to the goods and services we offer
and the needs we provide to users.
- Group Keywords by Theme: Organize the keywords into relevant groups
(ad groups) based on search intent or themes to allow for more targeted
ads.
- Analyze Competition and Cost: Consider the competition for each
keyword and the average cost-per-click (CPC) to ensure the keyword fits the
budget.

Step 3. Create a Campaign Structure

SEM campaigns are structured into Campaigns, Ad Groups, and Ads:

- Campaign: This is the overarching campaign which sets the objective,
budget, and targeting.
- Ad Groups: Within a campaign, ad groups are created to organize
related keywords and ads. Each ad group targets a specific subset of
keywords with relevant ads.
- Ads: Each ad group contains one or more ads that will be shown to
users searching for the keywords in that group.
A good campaign structure will look like our website. Campaigns will be
organized following product or service lines, or geographic segmentation. Many
variations of the ads are used to discover which one work better.

Step 4. Set Up Campaign Targeting

To ensure ads reach the right audience, SEM professionals define targeting
criteria:
- Geographic Targeting: Specify the locations where the ads will be
shown (cities, countries, or custom geographic areas).
- Demographic Targeting: Set targeting parameters based on age,
gender, income, or other demographic data.
- Device Targeting: Decide whether to target desktop, mobile, or both,
depending on the audience behavior.
- Day and Time Targeting: Schedule the ads to show at specific times or
days when the target audience is most active.

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Step 5. Determine the Budget and Bidding Strategy

- Set a Daily or Campaign Budget: Based on the overall campaign goals,

an SEM professional allocates a daily or total budget. They set limits to
control costs and ensure the campaign doesn’t overspend.
- Choose a Bidding Strategy: There are different types of bidding
strategies in SEM:
o Manual CPC: The SEM professional sets the maximum bid for
each keyword manually.
o Semi-Automated: Enhanced CPC: Combines manual and
automated bidding to increase bids for conversions.
o Automatic Bidding: Google Ads or the platform automatically
adjusts bids to get the best possible results (e.g., Maximize
conversions, Max Clicks, Max Conversion Value, Target
CPA…).
- Bid Adjustments: Modify bids based on device, location, or time to
optimize performance.
- In large campaigns, users use automated management tools to manage
their SEM campaigns, like Adinton, Marin or Kenshoo.

Step 6. Create Ad Copy and Design

SEM professionals follow best practices for ad copywriting:

- Compelling Headlines: The headline should be clear, relevant, and
attract attention.
- Description: A short, persuasive description of the product/service that
matches the searcher’s intent.
- Call to Action (CTA): A strong CTA like “Buy Now,” “Get a Quote,” or
“Learn More” encourages users to click on the ad.
- Ad Extensions: Add extra elements to enhance ads such as:
• Sitelink extensions (links to other pages of the website)
• Call extensions (adding a phone number)
• Location extensions (showing a business’s physical location)

Step 7. Check Landing Pages

The landing page is where users arrive after clicking an ad. SEM professionals
ensure that landing pages:
- Match the Ad Copy: The message in the ad should align with the
content on the landing page.
- Optimize for Conversions: The page should be easy to navigate,
visually appealing, and have a clear CTA.
- Load Quickly and Be Mobile-Friendly: Speed and mobile
responsiveness are crucial factors for a successful landing page,
impacting both user experience and Google’s Quality Score.

Step 8. Set Up Tracking and Analytics

Tracking is essential to measure the success of the SEM campaign:

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- Google Analytics: Set up Google Analytics on the website to track traffic,
conversions, and user behavior.
- Conversion Tracking: Implement tracking for actions like purchases, form
submissions, or phone calls.
- UTM Parameters: Use UTM codes in URLs to track specific campaigns, ad
groups, and keywords in Google Analytics. UTMs are small text fragments
added at the end of URLs to improve monitorization of campaigns. For
example, in this line, all that comes after the question mark is an UTM:
https://www.yoursite.com/shop/product?utm_source=instagram&utm_medium=social-
ad&utm_campaign=igproductlaunch0323
- Set Up Google Ads Conversion Tracking: Ensure proper tracking is set
within Google Ads or Bing Ads to monitor the performance of the ad
campaigns.

Step 9. Launch the Campaign

After finalizing all the setup, the SEM professional launches the campaign.
During the initial phase, they monitor closely to ensure there are no issues.

Step 10. Monitor, Optimize, and Refine

Once the campaign is live, ongoing optimization is necessary. A good

optimization will improve CTRs and therefore improve our QS, improving our
ads positioning.
- Monitor Performance: Check metrics such as CTR, CPC, conversion
rate, and ROI daily or weekly.
- Adjust Bids: Modify bids on keywords that are either underperforming or
exceeding budget limits.
- Pause Low-Performing Keywords/Ads: Identify and pause ads or
keywords that are not generating sufficient ROI.
- A/B Testing: Continuously test different versions of ads, landing pages,
and targeting settings to improve results.
- Optimize Ad Copy: Adjust ad copy based on performance data to
increase relevance and click-through rate.
- Review Negative Keywords: Add negative keywords to prevent ads
from showing for irrelevant searches that waste budget.

In general, our goal should be that obtaining the first position in the ads is key,
as users tend to fix their attention to this ad. In fact if you are not among the top
two or three results on Google, you are losing out.
Most eye-tracking studies show that users focus
their attention in the top left corner.
(https://cxl.com/blog/10-useful-findings-about-how-
people-view-websites/)

However, users that are looking for a product or

service will enter the first ad and, after checking
prices, will compare it with other services. Therefore

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SEM strategies follow the principle of “Trial and Error”, rather than previous
meticulous planning.

Step 11. Reporting and Analysis

A good SEM professional will:

- Create weekly or monthly reports summarizing performance
(impressions, clicks, conversions, cost).
- Analyze insights from the data to make recommendations for future
campaign improvements.
- Present findings and strategic advice to optimize future campaigns.

GOOGLE ADS

Google Ads is an online advertising platform developed by Google that allows

businesses to display ads across Google Search, YouTube, websites, and apps
within the Google Display Network. It operates on a pay-per-click (PPC) model,
where advertisers bid on keywords to display their ads to potential customers.

Launched in 2000 as Google AdWords, it was rebranded as Google Ads in

2018. It is the one stop shop for Google Ads inventory.

Advertisers can create ad campaigns with Google Ads using many objectives,
campaign types, targeting options, and many different formats: text, image,
video, shopping ads, display ads, responsive ads, call-only ads, mobile ads…

Advertisers can purchase 9 different products today:

• Search Ads (text ads) – best for lead generation, ecommerce and services.
• Display Ads (Banner ads) – websites and ads within the Google Display
Network (GDN). Best for awareness, retargeting and app promotion.
• Video Ads (YouTube ads) in YouTube and partner video sites. Best for
awareness, engagement and product showcases.
• Shopping Ads (Product Listings) in Google Shopping Tab, Google
Search, YouTube and the GDN. Best for ecommerce.
• App Promotion Ads (Google App) in Google Search, YouTube, Google
Play and GDN. Best for mobile app installs
• Discovery Ads (Native ads) in Google Discovery, YouTube home, Gmail.
Best for brand storytelling and visually rich promotions
• Local Ads in Google Search, Google Maps, YouTube, GDN. Best for local
businesses.
• Performance Max Ads – AI driven campaigns across all properties. Google
has claimed that “advertisers who adopt Performance Max see an average
increase of 27% more conversions or value at a similar CPA/ROAS. This is
even when they already use broad match and Smart Bidding in their search
campaigns.

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GOOGLE’S TOOLS

Google also has several tools and technologies that are widely used by
publishers, advertisers and agencies. Each tool serves a different role in the
digital advertising ecosystem:
• Google Ads → For advertisers to buy ads.
• Google Ad Manager → For publishers to manage and monetize ad
inventory.
• Google Marketing Platform → For enterprises & agencies to optimize
large-scale campaigns. Includes several tools like Campaign Manager 360,
Display & Video 360, Analytics 4, Tag Manager.

GOOGLE’S CHALLENGES

In January 2023, the U.S. Department of Justice (DOJ) filed a significant

antitrust lawsuit against Google, alleging that the company unlawfully
monopolized the digital advertising technology market. This legal action is
distinct from a previous 2020 lawsuit that accused Google of monopolizing
search and search advertising markets. The 2023 lawsuit claims that Google
engaged in anticompetitive practices, such as acquiring competitors and
manipulating auction mechanisms, to maintain its dominance in the ad tech
industry. The DOJ is seeking remedies that could include the divestiture of
certain Google assets to restore competitive balance in the digital advertising
sector.

The rise of AI-powered search engines and tools poses several challenges to
Google’s future. AI-powered search alternatives (like ChatGPT or Perplexity)
offer more direct answers, integrating conversational AI into search
experiences. Google is investing heavily in its own AI infrastructure. If AI
startups continue to capture search traffic, Google’s dominance could be at risk.

FINAL REMARKS

Advertising in Google has several advantages:

• The consumer zero moment of truth: when consumers show intent
• Granular segmentation capabilities (time, geography) and formats (video,
display…)
• Measurable results in the short term
• Pay per click
• Instant visibility (compared to SEO or social media strategies)
• Good for high value products
• Budget Control

Some disadvantages are:

• Might be expensive compared to Facebook ads, for example (intent has
a price)

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 • Limited reach: might be limited search volume for your product,
especially if is niche
• Google Ads is more complex and sophisticated
• Facebook Ads can get more exposure & reach faster

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META AND SOCIAL MEDIA

“A brand is no longer what we tell the consumer it is – it is what consumers tell

each other it is”. Scott Cook

The origins of social networks can be traced back to the late 1990s and early
2000s when the internet began to transform how people communicate. The first
recognizable social network site, Six Degrees, was created in 1997, but closed
down in 2001 due to lack of users. In 2002, Friendster was launched, offering a
new way for people to connect online. It quickly gained popularity, boasting
millions of users in its first few months. However, technical difficulties and
competition led to its decline. MySpace, launched in 2003, capitalized on
Friendster's shortcomings by offering more customizable profiles and becoming
a favorite for musicians and bands. By 2006, it was the most visited website in
the United States, surpassing even Google.

In February 2004, Mark Zuckerberg, along with his college roommates,

launched Facebook from their Harvard dormitory. Originally called "The
Facebook," the site was intended to connect Harvard students. It quickly
expanded to other Ivy League universities, and by the end of 2004, Facebook
had over a million users. Unlike its predecessors, Facebook's clean interface,
real-name policy, and exclusive network structure attracted a large and loyal
user base.

Facebook opened its doors to the general public in 2006, allowing anyone over
the age of 13 with a valid email address to join. This move significantly boosted
its growth. By 2008, Facebook had overtaken MySpace in terms of unique
monthly visitors. The platform continued to evolve, introducing features such as
the News Feed, Like button, and Timeline, further enhancing user engagement
and interaction.

Facebook went public in 2012. With the acquisitions of Instagram, Whatsapp

and the launch of Threads the company grew to become the absolute leader in
the social space. In 2021 it change its name to Meta Platforms, marking a
strategic shift towards building the Metaverse and immersive technologies.
Today, almost 4 billion people use at least one of Meta’s products every month.

Facebook's success paved the way for a multitude of other social networking
platforms, including Twitter (X today), Instagram, LinkedIn, and Snapchat. It set
the standard for what a social network should be and influenced how people
connect, share, and communicate globally. All social networks have different
user profile and use cases, so advertisers must understand their particularities,
user profiles and uses.

The following table summarizes the key characteristics:

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 Global
Social
Users User Profile Key Advantages for Advertisers
Network
(Billion)
Broad audience, 25-55 Highly targeted ads, strong
Facebook 3 years, strong in emerging retargeting, largest social media
markets reach, low frequency
News-focused, urban, Real-time engagement, trending
X (Twitter) 0,6 professionals, journalists, topics, brand awareness, high
18-49 years frequency,
Younger audience, 18-34
Influencer marketing, strong
Instagram 2,4 years, high engagement with
engagement, visual storytelling
visuals
Gen Z, highly engaged, 13- High virality, short-form video,
TikTok 1,6
34 years strong organic reach
All demographics, strong Long-form content, high watch time,
YouTube 2,5 video consumption, 18-54 strong for brand storytelling, 2nd
years search engine after Google
Teens & young adults, 13-29 Ephemeral ads, AR filters, high
Snapchat 0,8
years, ephemeral content engagement among Gen Z
Women-dominated, 18-45
Strong e-commerce intent, high
Pinterest 0,5 years, DIY & lifestyle
conversion rates, visual search
interests
Gamers & esports fans, 16- Engaged live audiences,
Twitch 0,14 34 years, live streaming sponsorships, direct interaction with
audience viewers

META’s ADVERTISING

Meta (formerly Facebook) has built one of the most powerful digital advertising
ecosystems, making it a dominant player in the industry. Meta’s revenues from
advertising represent 98% of its revenue. Its success in advertising can be
attributed to several key factors:
1. Massive global user base. Almost 4 billion people use at least once a
month one of Meta’s products (Facebook, Instagram, Messenger,
Whatsapp, Threads) and in the Meta Audience Network, which includes third
party websites and apps that can accept Meta’s advertising.
2. Ability to tap into user’s emotions through interactive features like the Like
or other emotional reactions on Facebook and Instagram. Although the
engagement that social media used to powered is now in smaller, closed
communities: the social networks have evolved into content platforms.
3. Unmatched audience targeting capabilities
4. High performing ad formats, such as video ads, stories, reels, carousel ads
and interactive formats.
5. Integration of shopping and ecommerce
6. Cost effective ads, based on CPM, CPC, CPA
7. AI driven creative optimization and ad delivery with Advantage+
Campaigns, creative testing and automated bid strategies

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Meta uses its own advertising platform, Meta Ads Manager. The process of
planning a campaign in Meta Ads Manager is similar to any other planning
process.
1. Establishing Clear Objectives
• Define what you want to achieve: Brand Awareness, Lead Generation,
Sales, Engagement, or Traffic.
• Align objectives with Meta’s campaign goals (Awareness, Consideration,
or Conversion).
• Set measurable KPIs (CTR, ROAS, CPA, CPM, etc.) to track success.

2. Defining Your Target Audience

• Use Meta’s Audience Insights to analyze potential customers.
• Create audiences based on:
o Demographics (age, gender, location, interests).
o Behavior & Interests (purchasing habits, device usage).
o Custom Audiences (retargeting website visitors, email lists).
o Lookalike Audiences (expand reach to similar users).

3. Crafting Compelling Ad Creatives

• Choose the best ad format:
o Image Ads (great for direct messaging).
o Video Ads (high engagement, storytelling).
o Carousel Ads (multiple products or features).
o Collection Ads (best for e-commerce).
• Follow Meta’s best practices:
o High-quality visuals.
o Mobile-first design.
o Clear and concise messaging.
o Strong Call-to-Action (CTA) (e.g., “Shop Now,” “Learn More”).

4. Allocating an Appropriate Budget and Schedule

5. Establishing a Bid Strategy

• Choose the best bidding option:
o Lowest Cost (Auto-Bidding) → Good for maximizing results within
budget.
o Cost Cap → Controls cost per conversion.
o Bid Cap → Sets max bid per action, ideal for competitive markets.
• Adjust bids based on performance over time.

6. Include A/B Testing (Split Testing)

• Test different variables:
o Creatives (image vs. video, color variations).
o Ad copy (long-form vs. short, CTA changes).
o Audiences (broad vs. niche).
o Placements (Facebook Feed vs. Instagram Stories).
• Analyze results and scale the best-performing version.

7. Monitor, Optimize & Scale

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META’s CHALLENGES AND OPPORTUNITIES

Meta has faced in his short history significant challenges and developments.
Among them:

1. Privacy and Data Protection Regulations

- In 2018, Meta’s trust & reputation scandal when it was revealed that user
data had been misused for political advertising without consent
(Cambridge Analytical)
- Data regulation compliance: GDPR (Europe) & CCPA (California)
- iOS 14.5 ATT: impacting ad targeting capabilities
- End of third party cookies

2. Brand safety issues

- In 2020 many large brands like CocaCola, Unilever, Ford and Adidas
paused advertising in Meta, demanding stricter content moderation.
- As Meta eliminated in 2025 their fact checking for political content, Meta
is increasing the risk of unchecked misinformation, which may create a
more volatile advertising environment.

3. Increased Competition
- Meta struggles to retain younger audiences, as Reels underperforms
against TikTok.
- Facebook user base is declining and younger generations spend less
time in the platform

4. Increased Investment needs

- Meta has always invested heavily in new ventures that finally did not
materialize: the largest example is the Metaverse.
- Meta is investing heavily in AI, with an open model. For 2025, Meta will
continue to develop their AI infrastructure with announced investments
over $60bn.

5. Regulatory & Antitrust issues

- Meta has faced lawsuits in the US and Europe over monopolistic
practices and the spread of misinformation. The EU’s Digital Markets Act
(DMA) will force meta to change how it handles user data and
interoperability with competitors.

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RETAIL MEDIA AND AMAZON
Retail media (online advertising on retailer websites) has emerged as the
fastest-growing digital advertising channel. In a few years it has rapidly become
the third-largest digital advertising channel behind paid search and social
advertising. Forecasts predict it will reach $160 billion by 2027, making up 18%
of global digital advertising and 11% of total advertising.

Retailers have been creating and delivery media to their audiences for ages,
starting with instore signage and displays. But the current RMN boom started
when Amazon launched into the space in 2012, followed over the years by
many of the biggest brick-and-mortar players, from Walmart to Target to
Costco.

Retail Media represents huge business growth opportunity not only for retailers,
but also has significant revenue potential for the entire e-commerce ecosystem.
E-commerce pure players, generalists, vertical retailers, and delivery apps are
all looking for the best e-retail media solution to monetize their web traffic.

What explains the success of retail media? There are several reasons:
• The rise of ecommerce is the main driver of growth: $1Tr in 2023 (15% of
US retail)
• Advertisers shift from TOFU channels (awareness) to BOFU (purchase)
media strategies. Growth is particularly notable for top spending categories
such as fast-moving-consumer-goods (FMCGs).
• Retailers have access to first party data from shoppers. With the deprecation
of 3rd party cookies, the 1st party data becomes a key asset.
• With retail media, a new model of advertising closes the loop between media
impressions and commerce transactions, to improve targeting and provide
new audience insights.
• Retailers seek new ways to monetize their websites: retail media is a new
revenue stream and a new operating model.
• With the data collected and the massive user base, e-retailers can improve
customer experience and improve conversion

This idea of using first party data to offer advertising is not exclusive of retail:
many other industries (travel, finance, telco, entertainment…) have jumped to
the trend to provide advertising services to its users. As Luma Partners said,
“Ad Tech is eating the world”.

Retail media is currently much more developed in the US that in Europe, and it
has a very dominant player: Amazon, who captures more that three quarters of
all retail media revenues. Let’s dive a bit into its history and products related to
advertising.

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AMAZON HISTORY

Amazon was founded by Jeff Bezos in 1994 as an online bookstore. It rapidly

expanded into other categories, like electronics, apparel, music or cloud
services (AWS), becoming the largest global e-commerce retailer.

Amazon has masterfully turned its major costs into profit centers, transforming
traditional expenses into revenue-generating businesses. Its cloud
infrastructure, originally built to support its e-commerce operations, evolved into
Amazon Web Services (AWS)—now the leader in cloud computing market.
Fulfillment and logistics became Fulfillment by Amazon (FBA), allowing third-
party sellers to pay Amazon for storage, shipping, and logistics services. Even
its Prime subscription model, which initially subsidized shipping costs,
became a major revenue driver by bundling perks like Prime Video, increasing
customer loyalty and lifetime value.

In advertising, Amazon leveraged its vast shopper data to build Amazon

Advertising, turning product search placements into a highly profitable ad
business. Initially, Amazon focused on third-party sellers and sponsored product
listings to drive sales. In 2012, Amazon Marketing Services (AMS) launched,
allowing brands to promote their products directly within search results. By
2018, Amazon consolidated its ad products under Amazon Advertising,
positioning itself as a major competitor to Google and Meta in digital advertising.
In 2024, Amazon generated $51bn in advertising revenue.

Amazon has become a dominant search engine for shopping, often surpassing
Google for product-related searches. Today, a significant percentage of
consumers begin their product discovery directly on Amazon rather than on
traditional search engines.

AMAZON ADVERTISING

Amazon offers several advertising solutions, enabling brands to reach shoppers

at different stages of the buying journey. Below are the key Amazon ad types
currently commercialized:

Sponsored Ads (CPC)

These ads appear within Amazon’s search results and product pages, helping
brands to promote their products. They can be:
- Sponsored products:
o Targeting specific keywords or competitor products.
o Customers have high purchase intent.
o This is often the first Amazon Ads solution that avertisers
implement.
o Native looking elements familiar to amazon
o They are ideal to boost product visibility and sales.
o Promote individual products.

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 - Sponsored brands:
o Appear at the top of search results, featuring a brand logo, custom
headline and a number of products.
o Customers have high purchase intent.
o Direct to a Store, product listing page, or product detail page
o Ideal for brand awareness and showcase product portfolios
- Sponsored display:
o Amazon DSP inventory for Amazon site and external sites.
o Ideal for brand retargeting.
o Can help increase product awareness, consideration, and
conversion by displaying the ad to shoppers both on and off
Amazon

Display Ads – Amazon DSP

- Located in multiple placements, on and off amazon
- Uses Amazon’s first party data to target shoppers
- Sold on a CPM basis
- Ideal for brand building

Video Ads – Amazon DSP

- Streaming ads in Prime Video, Freevee, FireTV, Twitch and Amazon-
owned content
- Non skippable

Audio Ads
- Amazon Music (ad-supported version) and Alexa enabled devices

Amazon operates on a PPC auction system, similar to Google Ads: the

positioning of ads depends on bidding price and relevance (CTRs, conversions,
reviews & ratings and product listing quality). Amazon’s advertising algorithms
reward sales conversions over time with better rankings.

As we know from one of the Double Jeopardy Law, big brands have more
buyers that buy more often, so larger brands tend to win this without trying.
Amazon therefore rewards larger brands as they enjoy better conversions and
have more resources to spend. They enjoy better positionings with lower CPCs.

Smaller brands can still win by focusing on long-tail keywords, optimizing

listings, and leveraging Amazon DSP for brand awareness.

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CONNECTED TV
Connected TV (CTV) refers to video content consumed on a TV screen,
delivered via an internet connection, instead of traditional cable, airwaves or
satellite TV. This includes:
- SmartTVs, i.e. directly connected to the internet (LG, Samsung, Sony…)
- Streaming devices (Amazon Fire TV, Apple TV, Chromecast…)
- Gaming Consoles (PlayStation, Xbox)

We typically access through them OTT (Over-the-Top) Platforms: Netflix, Prime

Video, Disney+, YouTube, Max, etc.

CTV adoption is skyrocketing worldwide, driven by:

- Cord-cutting: Viewers are abandoning cable in favor of streaming
services.
- Cross-device viewing: People watch content on TVs, smartphones, and
tablets interchangeably.
- Advanced targeting: Advertisers can use behavioral data for more
precise audience segmentation.
- Measurability: Unlike traditional TV ads, CTV ads provide real-time
analytics (views, conversions, engagement).

CTV ADVERTISING FORMATS

Instream Video Ads

- Can be pre-roll, mid-roll or post-roll
- Non-skipable

Banner & Overlay Ads

- Display on-screen banners or pop-ups during streaming
- Less disruptive than full-screen video ads

Pause Ads
- Appear when viewers pause streaming content

Branded Content and Sponsorships

- Brands partner with streaming platforms for product placement,
sponsored content, or co-branded series.

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TIK TOK

In 2016 TikTok was launched in China as Douyin by ByteDance. In 2017,

ByteDance acquired Musical.ly, a popular lip-syncing app, and merged it with
TikTok in 2018.

During the next years, TikTok experienced explosive global growth, particularly
among Gen Z and Millennials, becoming the first digital platform in reaching 1
bn users. Today is one of the most downloaded apps worldwide, surpassing
Instagram and Facebook in engagement.

In 2019, TikTok introduced TikTok for business, allowing brands to run brand
promotions. Its explosive growth made them built an ad platform, similar to Meta
Ads Manager.

TikTok is today a key media for engagement and influencer-based campaigns

through several ad formats. Among them:

In-feed ads (PPC)

- Appear within the “for you” feed as users scholl
- Include a CTA button (for example: shop now!)
- Best for drive traffic, conversions and app installs

TopView Ads
- Most high-visibility ad: appearing when users first open the app
- Autoplay video, non skipabble within first seconds
- Best for awareness and product launches
- Special premium: Branded Takeover Ads (once a day).

Branded hashtag challenge

- Encourage users to create content around a sponsored hashtag
- Best for engagement and virality

Branded Effects
- Custom stickers, filters and AR features
- Best for inmersive, fun brand experiences

Spark Ads (Boosted Organic content)

- Allow brands to boost organic videos as paid ads
- Works for influencer marketing amplifying creator content
- Best for brand awareness and user engagement through social proof.

TikTok Shop Ads

- Directs users to TikTok Shop
- Best for DTC and impulse purchases

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TikTok has faced significant scrutiny from US lawmakers, mainly due to data
security and national security concerns linked to its Chinese ownership.

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ANNEX: SEARCH ENGINE OPTIMIZATION
Search Engine Optimization (SEO) is the practice of optimizing a website or
online content to improve its visibility in search engine results pages (SERPs)
organically, without paying for placement. The goal of SEO is to ensure that a
website ranks as high as possible for relevant search queries, driving more
traffic to the site from users searching for products, services, or information
related to a business or niche.

Today search engines are the main entry to any business website. 80% of
offline shopping have been influenced by search results, in what is called
ROPO (research online shop offline). Appearing in the first positions in the
search results becomes paramount for any business to exist.

A website can experience an average increase of 32.3% in its CTR when it

moves up one position in Google’s SERPs. This highlights the critical
importance of securing a high-ranking position in SERPs to boost CTR and
website traffic.

Key CTR Benchmarks for Google Ranking Positions

(Source: https://www.wearetg.com/google-ctr-by-position/) Data from 2024
Google Search Feature CTR
Ad Position 1 2.10%
Ad Position 2 1.40%
Ad Position 3 1.30%
Ad Position 4 1.20%
Search Position 1 39.80%
Search Position 2 18.70%
Search Position 3 10.20%
Search Position 4 7.20%
Search Position 5 5.10%
Search Position 6 4.40%
Search Position 7 3.00%
Search Position 8 2.10%
Search Position 9 1.90%
Search Position 10 1.60%

How search engines sort results

Understanding the Google’s algorithm is key to obtain good positions. SEO

experts mention more than 500 factors that Google uses to evaluate and
position any website. However those factors are unknown and also they are
changing overtime.

Any search engine has performed three activities previous to the moment a
user types a search:

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 1. Crawling: Search engines use spiders, also called web crawlers or bots,
to identify every website. Spiders move from one site to another through
links in the websites. Those links are the key to evaluate the relevance of
a website.
2. Indexation: Search engines capture and store all content in the website
and ads and assigns a unique ID, interpreting all data in the HTML files.
They also look at all the links that the website has, which are key for the
search results.
3. Sorting: Search engines order all these files, and the final order depends
on the words used in the search by the user, by relevance (if the search
result links with the user’s search) and authority (a relative evaluation of
each page).

As the formula of SEO is unknown, there are not absolute responses to improve
our position. However, users can rely on some common principles:

1. Onsite SEO: Focuses on optimizing elements within a website itself,

which help the search engine to crawl efficiently. This includes having a
logical, user-friendly URL structure, meta-tags, internal linking, reducing
loading times, keywords linked to our business (for example, in the title of
each HTML page). This will make the website more relevant and clear.
2. Offsite SEO: Any actions that we do outside our website, including
backlinks from other websites, social media mentions and influencer
outreach. This will reinforce our credibility and authority.

In essence, a good SEO strategy focuses in bringing qualitifed traffic to our

website. This is a long term effort and is not only technical: it implies having a
good strategy in place which knows how users think about our brand. We offer
our product to our customers, not to Google, so understanding those customers
is critical.

In SEO, it’s crucial to recognize that achieving sustainable, high rankings

requires time and ethical strategies. Black Hat SEO tactics—like keyword
spamming, cloaking (showing search engines different content than users), link
farms, and keyword stuffing—may seem tempting due to their promise of quick
results. However, these shortcuts often lead to penalties from search engines,
and in severe cases, the website may be banned from search results entirely.
Focus instead on White Hat SEO techniques, which prioritize user experience
and content quality to build long-term search visibility.

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BIBLIOGRAPHY

- Chaffey, B., Ellis-Chadwick, F. (2016). Digital Marketing: Strategy, implementation

and practice. (Pearson)
- Galloway, S. (2022). No Mercy, No Malice: Attentive.
(https://www.profgalloway.com/attentive/)
- Gupta, S., Carter, E. Davin, J. (2019). Digital Marketing. Teaching Note. (Harvard
Business Publishing)
- Gupta, S. (2018). Driving Digital Strategy: A Guide to Reimagining Your Business.
(Harvard Business Publishing)
- Hoffman, B. (2024). The Three Word Brief. (Type A Group, LLC)
- Nelson-Field, K. (2020). The Attention Economy and How Media Works. (Palgrave
MacMillan)
- Sharp, B. (2013). Marketing: theory, evidence, practice. (Oxford University Press).
- Edited with ChatGPT 4.o

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