Leaving Google’s Tech Stack Nest
This one’s a little complicated so stay with me. All digital publishers use a back end “tech stack” to run their sites and apps. One of the more important functions of these tech stacks is to serve the digital ads which keep these companies afloat.
The problem with tech stacks is that they’re very hard to build from scratch. While tech needs might vary for different publishers, it usually requires complicated and expensive engineering work to build server functions. For that reason most publishers usually don’t build their own stacks. Instead they rent their tech needs from a publisher who already owns a fully functioning tech stack. Often Google, with its vaunted tech stack, is the one publishers use. In the near term this can be a good move because using Google allows publishers to get a state of the art tech stack overnight. However the long term problem with using Google is that their tech stack’s purpose is to run their own business, with third party publishers’ needs being a distant afterthought. So when Google decides to update their tech stack to meet their own business needs it affects everyone else downstream from them.
Publishers are starting to wake up to the fact that having their own proprietary tech stack, however painful it may be to create, provides the freedom to run their business in a way that’s best for them instead of what’s best for Google. We’re starting to see breakaway success stories like the example of Axel Springer SE, which is a German company who owns several publishers including Business Insider. Axel Springer has been strident about breaking free from Google’s tech stack and has already shifted their ad server to AppNexus. The early results of the change have been good – especially with programmatic ad delivery. ePCMs and sell through rates are both up, which means Axel Springer can better monetize what they now control. It makes you wonder if other Google-dependent publishers will follow Axel Springer’s lead?