The stagnation of Consumer Platforms
The growth and diversity of the consumer landscape has been stunted by the chokehold of a few nation-state tech players. As a result, the B2B space is booming but user acquisition comes at a price.
The growth and diversity of the consumer landscape has been stunted by the chokehold of a few nation-state tech players. As a result, the B2B space is booming but user acquisition comes at a price.
Consumer advertising offers only few options
Where do you go to advertise? Google. Facebook. Maybe Amazon if you're in e-commerce. And there is a good reason for that: The big players keep the consumer landscape in a chokehold.
The acquisitions of Instagram and Whatsapp by Facebook and Youtube and Android by Google might have been mistakes from a regulator and anti-trust perspective. But this was years ago and there is a good reason why Big Tech doesn't bid on TikTok (with the exception of Microsoft, maybe). But by acquiring these up and coming startups, Google and Facebook secured growth for decades.
Most traffic still comes from Facebook and Google. It's a market power both companies are not afraid to leverage or give up.
Speaking of TikTok, it's very telling that the biggest contender to Facebook & Co comes from outside of the US. Ironically, TikTok spent $1b on Facebook, Snapchat, Instagram, and Co to grow (source).
What about Twitter? Well, Twitter (as much as I love it) has such a bad targeting capability that it’s thinking about a subscription model.
In conclusion, it's no wonder the consumer landscape of companies has been stagnating over the last decade. Compare, for example, the over 8,000 SaaS startups listed in Scott Brinker's Martech 5,000 with the number of big consumer companies.
Another important development is publishers going DTC (direct-to-consumer) with subscription offerings. The New York Times is the best example here with now 6,000,000 subscribers. But they are not alone. Papers like Financial Times, Wall Street Journal, Bild, Washington Post, or The Athletic have replaced a lot of their advertising revenue with subscriptions.
The New York Times even reached it's pre-newspaper-apocalypse stock price.
And the worst? Customer acquisition tactics lose their efficiency over time. That was. a problem before COVID but a recession could lead to a real shake-up of the DTC space.
The consumerization of B2B
Another trend that reinforces Google's and Facebook's chokehold is the consumerization of B2B. In simple terms, B2B uses more B2C tactics to acquire customers as companies adopt freemium SaaS models and customers are less and less fond of interacting with salespeople.
As B2B products become increasingly self-serve - enabled by the cloud and AWS - products have become more user-friendly, cheaper, and collaborative.
The challenge this imposes on the consumer landscape is increased competition in SEO, paid channels, and audio/video content.
Play the game and play it well
At this point, there is not much more left to do than looking for creative ways to reach customers, differentiate content, keep a strong pulse on the space, and go for competitive advantages quickly.
I personally think we've reached the peak state of this gridlock and I'd expect to see a change of the landscape in the next 12-18 months, either due to a new competitor on the scene or regulation from the US government.