An unfair market: the state of ad tech in a Google-dominated world 

 

Ever wondered what one of the most important dates in digital marketing and ad tech history is? No, probably not. But I will tell you anyway: 

March 11, 2008.  

This was the day Google acquired DoubleClick for $3.1 billion, and few of us could have predicted just how seismic this acquisition would be for our industry.  

Now, a second date for you: 

September 11, 2024. 

The day ATS London was hosted, 600 delegates from marketing, media, and commerce had a chance to collectively commiserate about the challenges of the years leading up to 2024 and tentatively anticipate the years to come. 

Google’s Acquisition of DoubleClick 

Since the acquisition in 2008, it has been difficult to quantify the control, power, and hunger that Google has subsequently possessed and wielded within our industry. The current DOJ case has exposed some of this perceived control, such as: 

• 20% publisher adserver cut which Googles own ex Global Product lead stated was “irrationally high rent.” Other ad exchanges charge within the 10% region.  
• Shifting adservers is near impossible. Quoted by previous DoubleClick CEO as changing adservers…“Takes an act of God to do it” 
• Google acquiring companies that they perceived as a threat to their business e.g., Admeld in 2011 who helped publishers monetise display ads and quickly shutting them down two years later in 2013. 

Fast forward to ATS this year, the first speaker of the day, Jeff Green, CEO of The Trade Desk explained it best; “Imagine a courtroom where you are the judge, jury, defence, prosecutor and witnesses…that is Google’s position in ad tech.” 

There is a reason I’ve never seen Google in the room at ATS London; Ad tech hates Google. Why? Because Google has created an unfair market where it represents the buyer, the seller, and everything in between.  

Ad tech went from being one of the most exciting investments for VCs and private investors to a wavering, fledgling, tentative investment opportunity in 2024. Sure, the space is complex, but one of the biggest blockers is simply that Google dominates.  

Admittedly, this isn’t Google’s fault. More and more growth is expected by shareholders every year and the pressure mounts as each year ticks by to meet the same growth expectations of the previous periods.  

In my view (a view seemingly shared by many others at ATS London), this has resulted in Google caring very little about the impact of its decisions on publishers, sellers, suppliers, and buyers in the rest of ad tech. But why would they or should they care?   

Not convinced of Google’s dominance yet? Let’s deep dive into the numbers: 

• The Trade Desk are one of the very few examples of ad tech surviving and growing in an arena dominated by Google, but to put their success in context, their yearly revenue is 0.7% of Google’s.  
• Similarly, Criteo, a long-surviving ad tech business, is only 0.6% off Google’s yearly revenue.  

As you can see, we’re talking fractions.  

The dominance of Google is truly staggering. That’s why all eyes are on the current US DOJ case against Google.  

This case represents one of the many attempts to challenge Google’s standing and highlight the pain that our industry is feeling. In the same way you wouldn’t want a prosecutor to also represent the defendant, an industry isn’t ‘fair’ when one company completely shadows its competitors, discouraging any form of fair competition. 

At this stage, we can only speculate on outcomes. However, if Google is ordered to part with even one of products or components it holds within the digital ad space, the impact on our industry will be immediate.  

So, what could that mean for brands and advertisers?  

Fear? Opportunity? Muted excitement?  

All of the above.  

For decades, Google has been the trusted investment partner for the marketing dollar. By first offering the end-to-end measurement confidence media buyers needed, they’ve subsequently presented a single-source marketplace, which, although forms the basis for the reason they’re in hot water with the DOJ, it does have its benefits.  

As Dhanush Raja, CMO at Qred, explains, “We rely on Google for its simplicity and end-to-end delivery…it means we don’t need specialists or big teams, and on a small budget, we can diversify.” 

Dhanush makes a great point. While developing this monopoly, Google has also simplified campaign delivery and execution for media buyers. 

Speculations aside, we don’t know what Google’s potential ‘break-up’ would look like or how it would change our industry. One thing we do know is that we are entering 2025 with a certainty that massive changes are coming, one way or another. 

Watch this space.