In the world of performance advertising, there was a long-held belief that being first wins.

Automated bidding, budget allocation, automated ad creation — tools that implemented these optimization features early could hold their position in the market for years at a time. Adobe Media Manager, Kenshoo — both were used in Japan’s performance advertising market for a long time. Once a first-mover established their position, it wasn’t easily overturned.

That common wisdom, I feel, has crumbled over the past few years.

Two Cases

When Google released P-Max, many Google Ads PPC tools vanished from the market.

When Meta released Advantage+, many Facebook advertising tools disappeared in the same way.

These were separate platforms, separate timings — independent events. And yet the shape of what happened was exactly the same. The platformers themselves assembled automated bidding, budget allocation, and creative optimization in-house, as standard features. The very core of the value that tool vendors had been providing was pulled inside by the platforms.

One case, you could call coincidence. But two — occurring independently, in the same shape — should be understood as structure.

Why It Got Faster

Behind this is, needless to say, the rapid advance of AI.

There was a time when building out the optimization algorithms was itself the barrier to entry. That’s why the tool vendors who moved first there earned a moat made of time. It took the platformers a fair number of years to build the same thing, and in the meantime the vendors could hold their advantage.

Now it’s different. The platformers can develop and implement optimization features in-house at a speed incomparable to before. And they hold, from the very start, the richest data and the deepest access to their own systems. When the same wave of AI arrives, the ones who can ride it faster and deeper are — naturally — the platforms.

The “moat of time” that once protected the vendors has, we can safely say, dried up.

Disappeared, or Moved?

Here, it’s tempting to rush to a conclusion. That first-mover advantage has disappeared.

But that might not be accurate.

What disappeared is first-mover advantage in the layer adjacent to the platform’s core features. You can be first at automating bidding, first at budget allocation — but that territory will eventually be swallowed by the platform. The value of moving first here has, we can safely say, evaporated.

Yet first-mover advantage itself hasn’t disappeared. It moved somewhere else. To the places the platform doesn’t swallow, can’t swallow, or doesn’t want to swallow.

Which parts get swallowed, and which remain? Where to draw that line — the instinct for that is, I feel, what’s being asked of us now.

One thing is certain: the naive kind of first-mover advantage — strong because you built it first — no longer works. What works is only the first move that correctly chose which layer to lead in. A head start in the wrong place gets swallowed first, if anything.

The tools that were culled weren’t slow. Many, in fact, were fast. It’s a conclusion drawn in hindsight, but — they were fast in a place that gets swallowed.

Masaki “Mark” Iino
Founder & CEO
SOPHOLA, Inc

P.S. The list of places I want to go with my kids keeps growing. In this relentless heat, shaved ice is the finest kind of relief.