As Featured On Advertising WeekRecently, France ruled that Google’s advertising practices created unfair advantages by favoring its own ad server and ad exchanges over third parties. Google owns a variety of different technologies across the advertising supply chain, from ad server to exchange to SSP. This breadth of capabilities has been a source of frustration for publishers, as Google often is the biggest player in the room.
By not denying the claims in France, Google is conceding that it has advertising practices and technology in place that is too influential over the market. There are immediate good effects for publishers that come from the ruling, which helps educate other markets as to how Google can participate in programmatic advertising as fairly as possible. However, there are also cautions for publishers, as Google plays a vital role in many parts of online advertising, which needs to be managed well in order to keep the market stable.
Reset Google To Unlock SSP Innovation
A recent report from Advertiser Perceptions puts Google’s SSP market share at over 74%—no other SSP comes close, not even Amazon. This is clearly a problem and one that requires the attention of governments around the globe.
In the short term, the France ruling creates opportunities for other SSPs to win greater market share in France, as they will immediately see higher win rates in the programmatic auction. It’s likely that other countries will watch for the effects and determine if they should enforce a similar requirement. In effect, all SSPs, including Google, must be more transparent and behave in a more neutral manner during the bidding process.
It also provides opportunities for innovation in the ad tech space. If publishers have confidence that header bidding within Google is fair, they can lean into it more, for example by building out capabilities that improve accuracy, test new data or ID solutions, and open up header bidding to new channels like CTV.
However, we must also be careful that dialing down Google’s dominance doesn’t hurt publishers, many of whom rely heavily on Google. It’s important to keep an open dialogue with publishers to understand what functionality is integral to their own operations as governments find ways to reduce Google’s footprint.
Balance Google’s Full-Stack Dominance
Google has promised to open up the bidding process and provide fair treatment to competitors, but there are other advantages Google has over the competition. Google still has a unique ad server/DSP/SSP ad stack that provides insights into both sides of the advertising market. It also has the advantage of demographic data from DV360 and searches insights. And, Google can decide who to work with and how to configure its relationships without disclosing how these decisions affect its own bottom line.
Despite these obvious imbalances in the market, Google is still an important, even vital, player in our industry. It provides highly efficient technology, scale and quality audiences. Now that there are active investigations in other countries, it is up to all of us to ensure that Google’s unfair advantages are reduced while its value proposition is preserved.
Breaking up the “buy, trade, sell” vertical stack is clearly a priority, but so is taking away insights gleaned from AdWords and YouTube. Creating more transparency around its ad server and exchange will help buyers and sellers better understand if they are spending or making the right amount.
Each scenario offers new opportunities for fair business, but also creates unknowns. Many small businesses rely on AdWords and don’t have many other advertising choices. Many media buyers have built their own programmatic technologies on top of Google and will need time to unwind if necessary. We must ensure that the government rulings are informed not just by current market dominance, but also by potential outcomes of different scenarios.
The reality is that Google has created tons of very popular and effective technologies for advertisers, publishers, and of course, billions of people. But its outsized presence is hard to ignore. What we need is to add transparency and fairness to these innovations while separating the elements that provide unfair market advantages. With the France ruling, that balance between limiting Google’s power while preserving Google’s benefits seems to be met. Only with input from our industry will other rulings do the same.