Is Google Using GDPR As An Excuse To Restrict Advertiser And Publisher Choices?

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 Joshua Koran, managing director, DMP, at Sizmek.

As the May deadline for GDPR compliance approaches, many companies have been asking how Google may react.

So when Google recently announced as part of its GDPR compliance efforts that YouTube would stop supporting third-party ad serving on reserved buys in Europe, it raised concerns. It just so happens that one implication of that decision is that Google would be the only ad server that serves and tracks ads on YouTube in Europe.

Google could use its wide reach as a global publisher, leading browser and prominent operating system provider to educate consumers and gather consent on behalf of the wide range of third parties whose services help support the rest of the digital world. Alternatively, Google could use its dominant position to restrict marketers’ ability to easily work with multiple publishers and their preferred technologies.

Marketers have a variety of needs based on their KPIs, objectives and budget. The advertising ecosystem evolved as a symbiotic but competitive network of technologies that deliver insights into advertiser spend and publisher properties. But Google’s decision to restrict third-party ad serving will give agencies and marketers fewer choices, hindering targeting and measurement while giving a major advantage to Google’s own services.

The perception in the industry is that Google is using the upcoming GDPR laws as an excuse to force advertisers into adopting only Google-approved vendors, ultimately stifling competition. There was a general outcry from marketers when Google previously announced it would restrict which objective measurement companies were allowed on Google-owned websites. Google agreed to allow a limited set of vendors to provide third-party services to buyers of Google inventory. Missing from this list were competitors to Google’s own ad server.

Unfortunately, therein lies the problem. Google seems to be picking winners and losers in what was supposed to be a competitive marketplace.

The internet fundamentally transformed many facets of entertainment, communication and commerce precisely because of the competitive startup landscape. Don’t forget: Facebook, Waze and WhatsApp were all once new players. The DMA and IAB estimate $20 billion-plus is spent annually on third-party-supported advertising [PDF]. Yet it appears as if Google is interpreting the new GDPR law in a manner that reduces competition.

GDPR requires companies to have a legal basis to collect and process personal data, including cookies, mobile advertising IDs and IP addresses. The two primary legal bases on which many advertising companies rely are consent and legitimate interest. GDPR recognized the importance of marketing among the enumerated legitimate interests by its explicit mention in the text.

What if Google required all third-party vendors to operate only if they gathered explicit consent, yet simultaneously prevented them from even having a chance to ask consumers for their consent? What if Google went further and suggested publishers not work with vendors who did not agree with Google? Or what if it went even further and told publishers they could only work with Google-approved vendors? In many ways, Google’s recent actions seem to suggest this may be the direction it is heading.

Obviously, Google has the resources to support a competitive marketplace or lobby for restrictions that undermine its existence. The entire industry should support diverse opinions from independent publishers and the free speech required by vibrant democracies. It would not be a desirable outcome if new policies force independent publishers to rely more on only Google, at the expense of a competitive marketplace. And policies that centralize personal data within even fewer market players seem opposed to the basic tenets behind GDPR.

It is no secret Google makes most of its money from selling consumer intent. Its ability to match content to consumers is core to its success in search. Many consumers, myself included, enjoy the free content and services it provides, all of which are enabled by its ad-supported business model. While once a small search startup, Google’s current dominance of the advertising ecosystem is an impressive feat.

Ideally Google would use its position to educate consumers, marketers and publishers on consent management and stand behind solutions that help meet GDPR requirements for the entire ecosystem. As I said, I enjoy the free services Google’s ad-supported model provides. My hope is we leave our kids a better internet than what we have today. I hope Google wishes this too.

Follow Sizmek (@sizmek) and AdExchanger (@adexchanger) on Twitter.

1 Comment

  1. Good article. Regulation always end up helping bigger, more established companies by eliminating smaller competitors who will not be able to deal with the costs of compliance. This pattern always presents itself and GDPR will be no different. Reduced competition is also the reason why Mark Zuckerberg is in favor of the "right regulation" and why Netflix is in favor of net neutrality. Governments have for the most part left the internet alone. It's a shame that they are finally getting their hands on it and picking winners and losers.

    Reply

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