Advertisers Are Hedging on Google as It Enacts GDPR-Compliant Policies

Google is reportedly eager to placate growing calls for data privacy, telegraphing a move that would emulate Apple’s implementation of intelligent tracking prevention in its Safari browser. While Apple's maneuver was seen as a win for privacy, its effect on advertisers has been muted due to its browser's (Safari) limited use; worldwide, Safari only has a 15.56% market share, compared to Google's Chrome, which sits at 62.63%, making any such privacy policies from Google industry-changing, with huge ripple effects on the ad industry. As federal data privacy laws expect to be drafted relatively soon, those controlling significant media budgets are listening to the noises emanating from Mountain View and starting to examine their reliance on its ad tech. Sources say there are “literally dozens” of RFPs for buy-side ad servers in the North American market at present, with the vast majority of these issued by advertisers reflecting on the impact of Google’s GDPR-compliance policies—i.e., limiting data passbacks to advertisers using its DoubleClick ad stack—that hampered their attempts to implement independent attribution strategies, and in some cases outright shut them down. Maja Milicevic, principal at Sparrow Advisers, said that Google’s dominance in the buy-side ad server market dates back to when there were few alternatives. And that position gives advertisers who use the ad server the ability to get access to Google-owned and operated inventory more easily. “There’s been very little incentive for people to reevaluate the decision, especially in the U.S. where people tend to be more conservative,” she said, adding that it can also be difficult to find staff with knowledge of alternative ad serving tools. Some suggest that Google’s (comparative) lack of client support for its ad server product was a source of frustration for many advertisers and that the cessation of the DoubleClick ID passback post-GDPR was the final straw. Victor Wong, CEO of ad server Thunder, estimated that his company saw a 50% uplift in the number of inbound inquiries in the GDPR zone in the aftermath of Google’s compliance policies. “The movement to restrict data-sharing by Google essentially removes any transparency into how it attributes and delivers ads,” he added. “And I think people have realized now that the priority is transparency.” Advertisers at some multinationals like Adobe are applying lessons they learned in the GDPR zone to the U.S., with one source speaking on condition of anonymity claiming this includes “five to 10 really big brands that are probably going to move” off the ad server formerly known as Google Campaign Manager (now part of the wider Google Marketing Platform). Among the early marketers to make such a decision are those representing some of the largest tech brands that provide alternatives to the Google ad stack, with Adobe opting to pair with Flashtalking for its buy-side ad serving. John Nardone, CEO of Flashtalking, observed three distinct movements within this trend, the first being those advertisers that foresaw the difficulties the cessation of the DoubleClick ID passback would pose and subsequently chose to move early. Then there are those who were aware of the impact but had other operational priorities, such as changing agencies, but made a switch away from the Google ad server an early 2019 priority. “The other group were those who didn't appreciate the downstream impact that the loss of the ID was going to have or were told by Google that Ads Data Hub was going to meet their needs,” said Nardone. “And it was only after working with it for six months they then realized it wasn't going to meet their needs.” Other companies that stand to benefit from such a shift in mindset include those with a far smaller array of priorities than Google such as Adform, Jivox and Sizmek—a company whose recent bankruptcy filing (prior to certain assets being acquired by Zeta Global) threw doubt over the entire industry subsector. Dethroning Google, or even coming close to rivaling it, in the buy-side ad serving space will not be an easy task and is an area where Facebook’s efforts fell short of initial expectations some years back with its Atlas project. Ramon Jimenez, an adviser to venture capital and private equity firms that specialize in ad tech, said that such companies will have to find alternative revenue sources if they are to compete as the profit margins on an ad server are slim. “All the money has to be made selling other services," he said. "Just not being Google isn’t a really sustainable business model.”