Posted: 2019-05-15

Talking in Google I/O, Google’s developer conference, company officials claimed the new privacy updates are designed to give users more control over how their online browsing on Chrome is being tracked and shared with third-parties.

According to Google’s announcement, if a user has opted out of third-party tracking, advertisers will no longer be able to use this kind of cookies to personalize ads. Google has also blocked advertisers for bringing cookies data into its advertising products.

Some claim that Google will indeed only block tracking cookies, and only if the user will choose by himself to opt-out. But, looking at Google’s history, it is very possible that this is just the first step in yet another plan to solidify their power. Google tends to introduce small (but powerful) changes in regulations throughout their products, and enforcing them from a certain point, without any deliberations, much like their adblocker, scheduled to go live worldwide in July.

Many in the AdTech industry, AdMaven among them, are in favor of allowing users to opt-out from tracking cookies, but not if it will give Google an unfair anti-competitive advantage over the entire industry. Since Google also control the browser, the operating system, the search engine, users’ actual locations and much more, they can collect a great amount of data on users without needing to rely on tracking cookies at all.

What will be the effect on Publishers? And on everyone else?

In this case, the publishers’ community can be divided into 2 different types:

  • Publishers who work with Google – this type can be classified as “premium” publishers and it contains publishers such as CNN, Forbes, etc.

In the first phase, the effect on premium publishers will be minor, however, Google’s competitors will be under pressure. As we explained above, Google controls the browser, the search engine, the operating system and several other sources where they obtain data about the users without having to use tracking cookies. Since their competitors does not have any of these, Google will have an anti-competitive advantage. Until today Google could keep to themselves a high percentage of the revenue share with Adsense customers thanks to the lack of sufficient competition, but if Google will execute their plan, many competitors will close their gates, the lack of competition will grow, and Google will be more comfortable to take a higher percentage of its customers’ revenue-share. This process will be gradual. It may take a year or 5 years, but it will inevitably happen.

  • Publishers who does not work with Google– this type of publishers consist of many different websites, who for various reasons, can’t work with Google. Among them are publishers from the adult industry, APK publishers, Youtube converter publishers and more.

For many years, Google has been trying to affect advertisers and ad networks in these sites in order to make sure no “actual” competitor can rise through them and eventually take market share from Google in their home turf. For example, Google has been targeting this type of publishers for years with regulations in their browser about what content is allowed in the ads, which ad sizes are allowed, and which ad types are allowed (Google’s ad filter feature). All just to block the advancement of possible competitors who might rise through the adult industry.

The companies who work in these sites do not have their own browser, operating system or search engine, the only way they can do retargeting ads is through cookies. As a result, if Google will have it their way, these companies will not be able to collect data, CPM’s will drop instantly, and publishers will lose a lot of money.

How about the rest of the industry?

As of this moment, there are no big public AdTech companies who pose a challenge to Google.

This latest action by Google is designed to keep the status quo as is, by affecting all companies along the value chain. Networks such as Taboola and Outbrain who specialize in a specific area, networks like Rubicon and Appnexus who specialize in other niches. Also, many other DSP’s, SSP’s, and even data companies will all suffer from a decrease in revenues if Google’s plan will take form.

So, what’s going to happen?

As it seems now there are only 2 options:

  1. Google will allow users to opt-out from tracking cookies, they will not use their other assets to collect data and gain an anti-competitive advantage, and they will not use this step to gain more power in the future as part of some greater plan. In this case, there will be a small decrease in revenues for publishers from both groups.

Result –good.

  1. Google will use this new policy in an unworthy manner. Publishers who does not work with Google will suffer a drastic drop in revenue in a short while. Publishers who work with Google will see the earnings gradually drop along the process.

Result – bad.

Smart networks, publishers and advertisers have already started planning for both options, but for now, the future is still unclear.