Behind The Curtain: The Adtech Truth – is a Game-of-Thrones-esque bloodbath in adtech coming?

Behind the Curtain is a monthly column from Redbud, the ‘adtech voice of truth’, digging deep each month to discover what’s really going on buried deep in the adtech layers around publishers’ sites.

By Rhys Denny, Co-founder, Redbud

A record 17.8 million tuned into the finale of HBO’s hit fantasy series last month. But many slammed the writers of the TV show for ruining the ending of the eight-series saga. Viewers felt they had become swept up in the Hollywood glitz and glam, and created a finale that neither adhered to, or made sense of, its former chapters. There’s now a petition to have the final series completely re-written.

I’d argue the same is happening in adtech. I know, I know – how on earth am I going to compare Game of Thrones to adtech? Bear with me.

Adtech is no longer fit for purpose

Programmatic advertising has become overly complicated and convoluted. Our tool DIAGNOSE has now seen thousands and thousands of distinct domains, most of which are involved in the delivery of real time advertising.

Thing is, it’s easily done within such an open industry where you can access a buying platform with just a credit card and inject creative with tracking.

But we got carried away. We got swept up in the technical glitz and automated glam of remnant inventory revenue, bad retargeting and Soho House lunches on a Monday afternoon.

Unlike the Game of Thrones ending, adtech can’t rewrite its story. Our world is happening in real time, and so we need to make a change. And it seems the word ‘change’ is finally resonating. The release of the latest LUMA Partners State of Digital Media report, 2019 saw ‘change’ being the melody that echoed throughout.  

So, the million-dollar question is how do we change our future? How will we write our series nine in the world of adtech? Change is coming…

Episode One: The Last of the Third-Party Cookies

Google hit the headlines over the past few weeks with its announcement on locking down on third-party cookies via its browser, Chrome. The tech giant will make it easier for users to block cookies and harder for adtech companies to perform fingerprinting.

But what does this mean for the future of digital advertising?

A staggering 61% of all adtech vendor requests/responses we’ve seen so far on DIAGNOSE from February 2019 until today will read an existing cookie or drop one. Many middlemen vendors are reliant on partners that are implemented physically in the source code of websites to be able to cookie users.

Should users embrace the Chrome 3rd party cookie purge feature, it’s going to be a GoT-esque bloodbath in adtech. We’re hoping it will mean publishers’ share of ad revenue will increase.

Episode Two: The Break-up Bells

News publications have been discussing the potential break-up of Facebook and Google.

Their reach outside of their owned and operated environments is scary. We see Google and Facebook across respectively 97% and 65% of the sessions DIAGNOSE captures.  Search, video sharing, ad serving, analytics – almost every component of the Internet is operated, managed or tracked by Google and it has the power to seriously damage its competition.

When Google announced it was no longer allowing 3rd party adtech on Youtube and when they told advertisers they needed to use Google’s products to continue advertising on Youtube, it seriously damaged AppNexus (and other tech player’s) growth.

In a demonstration before the Senate Judiciary Committee in the United States of America, Brian O’Kelley, founder and former CEO of AT&T-owned AppNexus, shared some thoughts on how he’d start to fix the chaos of programmatic advertising.

One idea is to change the mindset entirely. Looking at the antitrust law, the only measure of consumer welfare is price. In short, anything that lowers price is a good thing for consumers, and anything that raises price is bad.

But these calculations fall apart when you’re talking about free ad-supported services, such as those Facebook and Google provide. He argues that this loophole has allowed Google and Facebook to complete hundreds of acquisitions over the past decade without any significant FTC review.  I couldn’t agree more.

“Let’s apply some common sense to the regulatory process just by acknowledging that consumers pay for ad-supported content with their data and their attention.” said O’Kelly.

The break-up of Google could mean healthier competition in the adtech space and a redistribution of the gigantic 80% of digital advertising spend that currently goes to Google and Facebook. We’re hoping this means more revenue for publishers.

Episode Three: The GDPR Throne

And this brings me nicely onto the GDPR Throne: the throne that is finally starting to impact.

Last week, Ireland’s Data Protection Commission (DPC) opened a formal investigation into the sustainability of Google’s ad exchange and data processing practices. The investigation was based on the GDPR, which celebrated its 1st birthday last week.

Prompted by a filed complaint back in September last year, the formal inquiry slams RTB (real-time bidding) and the ways in which adtech currently works. Just a couple of days ago DIAGNOSE identified a widespread malvert attack flowing through the pipes of a large global adtech vendor. Every week we find a very dubious overseas vendor with no privacy policy dropping cookies on users in Europe: RTB has made websites very vulnerable to privacy vulnerabilities.

The industry has rapidly outgrown the system we so heavily rely upon, and the reality is fines will follow. This will probably help rid the industry of middlemen that add little value.

There are big changes ahead that we think will limit the volume of middlemen and redistribute the digital advertising spend more equally among vendors and publishers. Watch this space as the adtech Game of Thrones continues.

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