Google’s impending data platform restrictions raise concerns

Google’s ad network is the market leader, accounting for 16 percent of the market, according to market research firm LeadLedger.

Google pointed to previous comments in which it described the move as a way of preventing data leakage, which hurts the publishers in its ad network. Data leakage occurs when a third party — in this case, a DMP — collects information on a website’s users and subsequently advertises to those same users on different sites. When data leakage occurs, the value of a website’s audience data diminishes. Having a large number of pixels fired on the same webpage can also slow down users’ Web browsers.

This rule could have significant effects on the entire ad tech industry. Hybrid demand-side platform/data-management platforms such as Turn would not be affected. But standalone DMPs, such Krux and Oracle Data Cloud (formerly BlueKai), would be put at a disadvantage because it would make campaign analytics and frequency capping harder. It would also hurt an advertiser’s ability to retarget users on other networks from data gleaned via campaigns run on the Google ad network. (The change, first announced last October, was originally scheduled to take effect on Jan. 1, but in mid-December, Google extended the deadline to the end of March.)

Complicating the situation is Google’s unusual role in the ad tech system since it offers a competing DSP in Google Bid Manager. Naturally, competitors are crying foul.

“Sadly, Google’s new policy forces marketers to fly blindly by stripping them of the instrumentation they need to manage and meter their messages. In fundamental terms, the policy subverts Google’s espoused objective to bring an end to marketing without accountability,” Tom Chavez, CEO of DMP company Krux, wrote in a November op-ed in ad tech trade publication AdExchanger. “Without DMP pixels, marketers must revert back to carpet-bombing users.”

The move has triggered consternation not just with vendors but with some agency executives and marketers, who fear being constrained in their choices of vendors. And executives familiar with the decision said that the impending change is both a means for Google to shift brands and agencies to Google’s own DSP and data products from competing solutions, and a defensive measure against Facebook, which has made significant ad tech developments over the past two years.

“If our partners are not allowing us to track our audience across channels, then it creates an inefficiency in buying, and we don’t know if we’re buying the same audience twice,” said Oleg Korenfeld, svp of advertising technology and platforms at media agency MediaVest. “Google would like as much of the buying processing to go through them, and buying is not about media now, it’s about data.”

Megan Tweed, Razorfish’s vp of media, noted Google has a history of limiting third parties from accessing its ad tech products in order to have brands and agencies use all of its ad tech products. Razorfish used to work closely with Teracent, an ad tech company that allowed brands and agencies to serve display ads customized to specific consumers. Teracent was integrated into some of Razorfish’s software, and there were plans for Teracent to create more customized features for Razorfish in the future.

But those plans were scrapped after Google bought Teracent in November 2009. Google only prioritized working with clients that were consolidating on its suite of ad tech products, she said. Razorfish, which was using Atlas as its ad server at the time, and was therefore not included in those plans.

“The idea is you create difficulties, then you create a solution,” Tweed said of Google prohibiting DMPs. And that solution is to use Google at every stage of the digital ad buying and measurement process, she said.

Having a media seller measure the effectiveness of its own media invokes objectivity issues, however. Instead of having to use Google technology to judge the effectiveness of Google-sold ads, brands should be able employ impartial third parties, said Jon Suarez-Davis, vp of global media and digital strategy at Kellogg.

Kellogg doesn’t use Adometry, an ad attribution company Google acquired last May, because it isn’t an unbiased party, he said. Kellogg also doesn’t buy YouTube — the largest video platform on the Web — because it does not allow third parties to measure the effectiveness of ads there. Google’s limitations on third-party data providers are a means for it to sell brands on using Google’s trove of first-party data, he added.

“It’s darn well concerning,” Suarez-Davis said of Google restricting DMPs. “You have to balance the efficiency that you can get from having a consolidated stack with the need for independent, unbiased measurement and performance.”

Both Suarez-Davis and Tweed both speculated that Google is building a DMP solution of its own.

“We are working on data management capabilities as part of our advertiser offering (and are subject to the same policies as our partners),” Google spokeswoman Andrea Faville said in a statement.

The move comes as Google girds for more competition in ad tech from Facebook, which has revived Atlas as a rival ad server. Some industry executives expect Atlas will soon have both DSP and DMP functionality. Atlas is certified to fire pixels on Google Display Network.

“It’s hard for me to see a world where marketers unify their customer and audience data on Facebook, but laying that aside, it’s even harder to imagine Google allowing Facebook to drop a pixel on their media,” Chavez told Digiday. “How does Google incent marketers and agencies to buy its media while staving off encroachment from Facebook? Navigating that tension is likely to be one of the most delicate dances Google has had to do since its founding.”