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POV: Google AdX Inventory Removal

Mindshare Point of View: 

Background
Google has announced that it will be changing the way advertisers buy ads on YouTube. Last Thursday, Google disclosed that it will be withdrawing all YouTube pre-roll video and display inventory from its Doubleclick Ad Exchange (AdX) programmatic network by the end of 2015. 

In addition, all reserve YouTube and mobile video inventory will only be available through Google’s Adwords and Doubleclick Bid Manager (DBM) platforms. Finally, TrueView (which accounts for 85% of Google’s inventory) will only be available programmatically through DBM.

Details and Implications
This move clearly demonstrates that Google would like greater control over its ad business. 

AdX currently works with third-party technology firms to aid campaign management and provides additional data to them – data which Google itself does not disclose to advertisers. By removing buying through AdX, Google has taken the first steps in reclaiming control over its data. 

It is also important to remember that in the future no other Demand Side Platform (DSP) will be able to buy TrueView inventory programmatically. Although this update will impact third-party programmatic resellers such as TubeMogul, networks that sell YouTube pre-roll inventory, predominately in emerging markets, will feel the biggest impact. These networks usually opt to buy inventory via AdX because it isaffordable and avoided by the majority of bigger networks and agencies. Now it will not be available to them through AdX. 

The impact this will have on third-party trade desks (e.g. MediaMath, One/AOL) is debatable. It will have a somewhat detrimental effect upon their inventory, but as they also buy from DBM they will still be able to access YouTube inventory. Furthermore, advertisers who have chosen not to align with Google’s tech stack will face a decision whether to risk incurring significant operating inefficiencies when deploying new technology or face losing a substantial source of supply.

For Google this update seems a logical move. By forcing others to work within its closed ecosystem, Google has not only gained greater control over its data, but has increased control of the relationships with advertisers and its ability to maximize profits. Google probably will not be the last of the big players to adopt this stance. This follows a trend of inventory providers from Amazon to Yahoo of limiting programmatic access to inventory to users of their own proprietary tools.

Summary/ POV
It is important to remember that these changes will not come into force for another five months and will only impact upon a small proportion of YouTube inventory. GroupM is prepared for the changes, as GroupM Connect, which supports all GroupM agencies is specifically set up to operate with multiple DSPs, including DBM, meaning that access to inventory is unaffected. Despite this, and our respect for Google’s position, we do not believe that an accelerated trend to closed markets or walled gardens is to the benefit of advertisers. Especially as it is still questionable whether this is "Google's data" or the advertiser's data, as the later are paying for the ads.