As The Open Web Becomes More Real, Will Google Be The First To Fall?

Arnaud Créput, CEO of Equativ

Data-Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.

Today’s column is written by Arnaud Créput, CEO of Equativ.

Google’s latest legislative dodge has fallen flat. Following an alleged proposal to section off its ad tech business (Google Ad Manager, DV360, AdSense and AdMob) under parent company Alphabet, reports about likely rejection by the Department of Justice (DOJ) could mean a fresh lawsuit. 

How will this high-stakes game of antitrust chicken play out? Is Google truly sincere about its willingness to compromise?

I believe its proposal could be seen as a first important proactive step toward true structural change – not just at Google but across many of the biggest players in the industry.

An indicator of growing resistance

As scrutiny builds, the need to give ground is growing. It is becoming more untenable for Google to resist reconfiguration. If they call the DOJ’s bluff, they will likely force officials’ hands to exact separation of the business within the next two to three years. To avoid that, Google must voluntarily cede some power.

Amid mounting evidence that minor concessions won’t pass muster, the only way to squelch further antitrust measures is accepting the inevitable shift toward reduced end-to-end dominance and heavily conflicted business models. 

The decision by Disney+ to dump Google earlier this year in favor of a new ad tech partnership with The Trade Desk, and Netflix’s move to launch its ad-supported tier with Microsoft, are just two of many recent signs that big publishers are tired of being bullied. They are standing up to Google’s strong-arming tactics by choosing alternative vendors. Another indicator is that leading SSP PubMatic reported 27% year-over-year revenue growth, exceeding 21% market expectations in its recent Q2 results.

The downfall of social’s leaders

There are signs that the charge for greater neutrality, transparency, and equality is spreading beyond just the supply side. The second quarter of 2022 brought sizable declines in year-over-year advertising revenue for social media and advertising titans. That includes Meta’s very first loss (-1%), historically low growth for YouTube (+5%), and subpar estimated results for Twitter (-1%) and Snapchat (+13%, but only +4% in the US).

Unsurprisingly, the big platform honchos have been keen to blame losses on financial turbulence. This explanation, however, doesn’t wash for many reasons. In sharp contrast to Meta and Google, the big six holding company agencies all posted better than expected revenues for Q2. Some even bested their numbers for Q1. And this in a digital advertising market, which is still expected to grow by 17.8% in the US in 2022.

There are also wider issues affecting the previously powerful position of social players. Not only is IDFA tracking on iOS devices impacting businesses of all sizes, but the rise of hate speech, fake news, and poor quality content has also led to the loss of advertiser confidence and control. Adding to that is growing demand from buyers for a broader range of audience, more quality inventory, format choice and more diversified consumer data. All this is better provided by the open web than by moated walled gardens.

A call for an open web

The digital advertising space needs stronger, more sustainable alignment of interests between media owners and ad tech, with advertisers relying less on walled gardens. As Meta, YouTube and others are pushed to address their flaws, we should start to see the beginnings of a rebalancing of the digital advertising market – from walled gardens to the open web. 

At that point, market share should finally become more evenly distributed for independent publishers, data owners and platforms, bringing enhanced value and opportunity to all. While the exact rate of evolution isn’t easy to predict, this transition is in motion. And in my opinion, Google knows it.

Follow Equativ (@Equativ) and AdExchanger (@AdExchanger) on Twitter. 

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