Digital Gabe
Cutting Edge Commentary On All Things Media

Google Overhauls Its Ad Biz

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It’s hard to overstate Google’s influence over US and European digital ad sales.  According to eMarketer, Google is expected to haul in a staggering $104B in global ad revenue during 2019, which is more than Facebook, Amazon and Instagram combined.  What makes Google’s ad biz particularly dominant is that in addition to their on-platform ad sales, they also control massive chunks of the industry’s AdTech infrastructure, including the largest search network, DSP, and data aggregator.  With the exception of Facebook, every other publisher is in some way dependent on Google to run their rev opps, which makes them the gazillion pound gorilla in the room.

With that as the backdrop, last week’s announcement by Google’s advertising chief Prabhakar Raghavan that they’re reoging their ad business made many in the industry sit up and take notice.  According to multiple sources at Google, Raghavan’s strategy is to create an org of four concentric circles, with the innermost circle being Google’s O&O properties, including search and YouTube. The next circle outside is Google’s buy-side and sell-side businesses. And the two outermost circles span the organization: measurement and privacy.

Google is trying to achieve two goals with this reorg.  First, by separating the buy and sell sides of their biz they hope to curtail future antitrust litigations.  Google is currently dealing with four antitrust investigations in the US, and was already hit with a $1.7B fine in March from the EU for violating antitrust rules.  Privacy’s promotion to a full business unit is the other big change.  Creating a separate Privacy team with span of control over the other circles speaks to the importance of securing user data, especially during the GDPR/CCPA world digital pubs are now living in.

While interacting with Google as a user or digital publisher won’t change too much at first, these moves will create some bright lines between their biz operations that weren’t always visible before.

 

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