Privacy, Antitrust and Google Ads
Digital advertising is in a tight spot. Dominated by a handful of players — Google, Facebook and Twitter — the industry’s fortunes rise and fall with decisions of Tech Giants. In the last year or so, the forces of antitrust, privacy and misinformation have started driving Big Tech to make some changes. The industry needs to pay close attention to events outside of its immediate sphere — particularly politics and policy — if it wants to continue to thrive in the face of the business altering changes will just keep coming.
Google: Antitrust and Privacy
Google dominates search ads, and, with Facebook, controls more than 60% of the broader digital ad market, according to one estimate (although the possible waning effectiveness of Google ads was on display in the end-of-year 2019 financial report). With information on how billions of users move around the internet, what they click on, when they drop off and what they buy, Google ad data is a goldmine for marketers. For years, there has been pressure for Google to share more about their users with the ad industry.
Google has resisted. This resistance has added some marketers to the growing call to investigate Google for antitrust issues (for a quick, interesting read about the the history of antitrust in the US and the argument for using it against Big Tech — not just Google– check out Tim Wu’s The Curse of Bigness). Some presidential candidates have built a Big Tech Breakup into their platforms. The EU is already a step ahead, announcing in February a plan to restrict machine-learning technologies.
Realizing the issue is not going away any time soon, Bloomberg reports that Google has been considering a breakup of its business before regulators demand a breakup in some future scenario. Specifically, Google seems to be considering a preemptive spin-off of Adsense to shake off US and European antitrust investigations, at least for a time. It’s anyone’s guess what will happen to Google’s ad data if that happens.
And, right there — the personal data Google has amassed, gold for marketers — is the other force shaping the future of advertising. Worries over privacy have started becoming codified — in laws like GDPR and CCP. Google, as well as other tech companies, has started limiting, not expanding as marketers would like, what information leaves its platform in an attempt to avoid theoretically huge fines.
Google announced in January that it was starting a two year journey to completely remove support for third-party cookies on Chrome. This will cause massive changes to the advertising industry that depends on marketers’ ability to track users across the web. Google, wanting to preemptively calm the panic, over the summer announced a proposal for a Privacy Sandbox — “an initiative aimed at evolving the web with architecture that advances privacy, while continuing to support a free and open ecosystem.” According to TechCrunch, this would
“ideally still allow advertisers to show you relevant ads while also allowing you to share as little about you and your browsing history as possible.” It’s still unclear exactly what this looks like.
Then, in February, Google took the next step and started limiting access to key tools that track ad spending, focusing on the ads that persuade people to install apps — a corner of the advertising world that generates billions of dollars of revenue for Google and other tech giants. The move sent panic through the halls of marketing agencies — it is now harder to independently track conversions. According to Adweek, some estimate it could depreciate campaign result visibility by more than 50%.
Unfortunately for marketers’ blood pressure, this is just the beginning. Already a reality in Europe, by Q3 2020, Google plans to stop advertisers from pulling data about who clicks on their web banner and video ads out of Google’s system.
Privacy and antitrust are forcing Google to make changes that have outsized effects on the advertising industry that has grown up around Google’s data treasure trove. Google’s moves in the last year and the increasing likelihood of more drastic actions in the year to come, throw into high relief exactly the power of the search giant (too much, say the antitrusters). Marketers need to be flexible and adaptable and pay close attention to the bigger, macro trends that are (finally) forcing Big Tech’s hand.