Why Australian Advertisers Should Follow The US Government Vs. Google Court Case
In this opinion piece, James Bayes vice president, ANZ at The Trade Desk (pictured) explains why Australian advertisers should be keeping one eye on the US Department of Justice’s antitrust case against Google.
During a recent interview with American journalist Kara Swisher, the CEO of Google, Sundar Pichai, named only two companies as the tech giant’s competitors: TikTok and The Trade Desk.
We were quite surprised then and still are now. Because Pichai may have inadvertently made the American government’s point as it prepared its antitrust lawsuit that dropped a few weeks ago.
Our CEO, Jeff Green, often says that The Trade Desk competes with something like the 37th-highest priority at Google. And in that one area, The Trade Desk is a fierce and successful competitor.
What The Trade Desk doesn’t do is compete with Google’s hundreds of other priorities. The Trade Desk is not a search engine, a space program, an ad network, a video streaming service, an email service, or even a publisher ad server. In fact, we compete with Google in a market that most consumers have likely never heard of.
We help brands buy digital ads across the open internet – BVOD ads, ads on music streaming and podcasts, programmatic digital out-of-home ads, mobile ads, etc. We help brands use data to figure out which ads to buy, and at what price, in millions of online ad auctions that take place every second.
In doing so, we help these businesses differentiate themselves and grow. Research suggests that advertising is a lynchpin of economic growth, contributing to as much as 20 per cent of a country’s GDP. It’s also core for entrepreneurialism, helping small businesses establish themselves in the early stages of growth. And key pillars of our society, such as trusted journalism, rely on advertising to fund their important work.
All these important economic dynamics, however, rely on an open, transparent, and competitive market for advertising – where advertisers can be sure their ads are showing up, understand the kinds of audiences they are reaching, and be confident they are paying the right price. In light of the U.S. Department of Justice’s (DOJ’s) case, we can reflect on how this affects the Australian market and the country’s history in dismantling advertising monopolies.
Talk of Google owning a monopoly on advertising is not a new topic in Australia. In 2021, Australia made global headlines in world-first legislation, which saw the country take on the advertising behemoth, forcing Google to pay for the news content it profits from in an act to protect local publishers. Google did not respond kindly, and at one point even threatened to rescind the ever-popular Google Search from the region. But once the passionate retaliations and threats dissipated, Australia saw real results. In a move that marked a score on advertising’s runsheet, Google actually made deals with a number of local publishers including Nine Entertainment and Seven West Media.
Even prior to this, in 2018, the Australian Competition and Consumer Commission (ACCC) conducted an investigation into the dominant position Google had in the industry. Findings revealed that for every $100 spent by Australian advertisers, $49 went to Google.
The problem with Google is that it makes money on all sides of the advertising transaction. In many cases, Google is even buying from Google on behalf of brands. Unlike Google, The Trade Desk does not own any content sites or search engines, so we can objectively buy the ads that have the most value to any given brand.
But what surprised us most about Sundar’s response is that he couldn’t name any other competition prior to The Trade Desk. From priorities one through to 36, Google has wiped out all potential competitors.
While we’re flattered to have been named a competitor, there’s no seeing past the fact that The Trade Desk has a market capitalisation of around 2 per cent of Google’s USD$1.4 trillion valuation.
Google has dominated to the point where it owns all aspects of our digital lives and nowhere should we be more concerned about the lack of competition than its effect on the broader advertising market. Without a competitive, transparent advertising market, so much of what we cherish will be under threat.
Google has left consumers and ad buyers with very few choices. With so many touchpoints to ad buyers and consumers, Google can route ad spend to itself and never be challenged on the self-serving, anemic walled garden marketplace that eliminates choices. This is exactly how $49 dollars end up in Google’s pocket from every $100. This number is only set to increase if Google continues to control the narrative in Australia.
Real change can come from governments standing up to Google. With precedence of this occurring in Australia, there’s potential that the DOJ will succeed in its case against Google in the United States. As the case continues to unfold, we will continue to compete. For now, we take the proceedings as a win in fighting for an open internet.
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