Google’s decision to remove YouTube from its AdX ad exchange has effectively blocked many third party DSPs from buying YouTube inventory. Here Danny Hopwood, Vice President of Solutions & Platform Operations EMEA, at Vivaki, explains how he thinks many in the industry will be reading between the lines on what Google will have anticipated being a highly controversial move, especially in the European market.
We have been expecting a move like this from Google for some time now (both VAN and ExchangeWire covered it last year). Google are certainly not the only ones doing this. Every big digital company is in some shape or form keeping the best for themselves in their owned walled gardens – Amazon’s data in Amazon DSP, AOL premium inventory in AOL platforms and Facebook data in Facebook’s platform.
This is certainly the next logical step for some of these companies who have spent millions (if not billions) building their stacks over the years. In some respects, it was also an inevitability – I’m sure consumers of Facebook and Amazon probably wouldn’t be happy that their purchases and social profiles are being sold to other companies for example.
The removal of YouTube from the DoubleClick Exchange is an inventory rather than data challenge. Google has had great success with the TrueView format. Clients love this format as it performs very well, much better than what you see from the standard CPM bought inventory from YouTube/ADX. So in that sense it certainly will benefit the consumer but many within our industry won’t see that as the real message here. Many (myself being one of them) will be reading between the lines as to what this means for third party DSP’s, MCN’s and any YouTube resellers. The market has suddenly become very flat in that area and very hard to differentiate if everyone has to buy via TrueView.
I have no doubt we will see some innovation from third parties on how to differentiate their TrueView via DBM or Adwords resell, but whatever that innovation is, it won’t have the longevity or uniqueness you could once deliver on a simple CPM trade. Anything on top of the true-view metric will be targeting orientated and there are only so many ways you can cut and slice inventory from YouTube.
This will affect businesses across the industry in different ways and we can certainly expect massive criticism of Google and a compounded effect on the ongoing Google antitrust debate.
The difference with Google is they are big. When they make a move, 40 percent of the internet feels it and this needs to be factored in. When you have a hotbed of ad tech companies looking for any avenue of disruption and or innovation a closing door on YouTube is sure to scare some VC’s as well as the companies that depend on this video resource to create that disruption/innovation.
The market is definitely going to be vocal on this subject for some time. Google will need to be very clear on their reasoning for this change with plenty of evidence which I have no doubt they will have. This could well be a first move with the knowledge that they may have to take a few steps backwards after any discussions and debates on this subject and leave the door to YouTube slightly ajar for third parties to access some YouTube inventory.