As of January you’ll only be able to buy YouTube ads from Google’s sales team, the software platform DoubleClick Bid Manager (a demand-side platform/DSP that allows for more automated ad buying), or Google AdWords. And that makes lots of people nervous—from marketers to programmatic ad networks.
So how does this play out?
According to the Wall Street Journal, less than 5% of the ads sold by YouTube were sold via Google’s ad exchange. So, in the short term it mayhave less impact than you might expect—at least according to some insiders interviewed by AdExchanger: “YouTube represents less than 2% of total inventory for both The Trade Desk and Conversant, for instance. For Turn, that’s 1% on average – with an even smaller amount that’s actually purchased.
“One would think video pure plays would feel the blow, but TubeMogul CEO Brett Wilson said just 5% of Q2 spend went to YouTube. Videology’s Ferber said that since 2015, its US users allocated 3% of total impressions toward YouTube inventory.”
How does Google figure this benefits its bottom line?
Perhaps the theory is that the more enmeshed advertisers become because of using Google’s software, the more likely they are to spend with Google over the long haul. Or it may be an attempt to inflate the scarcity of its YouTube inventory and force greater reliance on its ad stack.
That’s why it seems to be yet another example of Google throwing its weight around, forcing advertisers to use its ad-buying software—especially since it comes on the heels of other “It’s-My-Sandbox!” moves: Last October, it barred third-party pixel firing on ads running through the Google Display Network. In April, it opened programmatic access for TrueView formats to its own bidder DBM. And starting in September Google’s Chrome browser will establish as a default setting “detect and run important plugin content.” This will stop Flash banner ads from playing on websites unless the user changes the plug in settings.
Brett Wilson, chief executive at the video ad tech company TubeMogul is quoted in the Journal as saying, “Google has multiple constituents to serve, including its users, investors and advertisers, but this move clearly wasn’t intended to benefit the latter.”
But Google keeps claiming it’s a fair and neutral marketplace. “To continue improving the YouTube advertising experience for as many of our clients as possible, we’ll be focusing our future development efforts on the formats and channels used by most of our partners,” wrote Neal Mohan, vice president, YouTube, Video & Display Advertising.
So Where’s The Pain?
The worst repercussions are from the effect it has on the digital advertising ecosystem as a whole. And–with any luck—on Google itself: “Yahoo once pulled inventory out of their exchange for a while and had all these controls for separate seats,” observes Maureen Little, SVP of business and corporate development at buying platform Turn, “and it nearly killed them.”