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CMA takes strong stance on Google’s display ad platform practices
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An investigation by the Competition and Markets Authority (CMA) has provisionally found that Google is using anti-competitive practices in open-display ad tech, which it believes could be harming thousands of UK publishers and advertisers.

As set out in a statement of objections issued to Google on 6 September, the CMA has provisionally found that, when placing digital ads on websites, the vast majority of publishers and advertisers use Google’s ad tech services in order to bid for and sell advertising space.

The CMA is concerned that Google is actively using its dominance in this sector to preference its own services. Google disadvantages competitors and prevents them competing on a level playing field to provide publishers and advertisers with a better, more competitive service that supports growth in their business.

In its 2019 market study into digital advertising, the CMA found that advertisers were spending around £1.8 billion annually on open-display ads, marketing goods and services via apps and websites to UK consumers.

Juliette Enser, Interim Executive Director of Enforcement, said: “We’ve provisionally found that Google is using its market power to hinder competition when it comes to the ads people see on websites.

“Many businesses are able to keep their digital content free or cheaper by using online advertising to generate revenue. Adverts on these websites and apps reach millions of people across the UK – assisting the buying and selling of goods and services.

“That’s why it’s so important that publishers and advertisers – who enable this free content – can benefit from effective competition and get a fair deal when buying or selling digital advertising space.”

The US Department of Justice and European Commission have also opened separate investigations into Google’s activities in ad tech. These proceedings are currently ongoing.

The digital advertising technology sector, commonly referred to as the ‘ad tech stack’, consists of various intermediaries that facilitate the sale of online open-display advertising space on websites or mobile apps between ‘sellers’ (i.e. publishers) and ‘buyers’ (i.e. advertisers).

When a user opens a website or app, while the content loads on the page, a near-instantaneous series of auctions and transactions takes place to determine which ads will be shown to that user on that webpage or app. This process involves sending requests for bids and, in response, advertiser bids being sent through a chain of various intermediaries to match the space on the webpage with the advertiser willing to pay the most for it.

The CMA’s investigation has focused on Google’s role as an intermediary in three key parts of this chain, where it has a powerful market position with high market shares. For advertisers, Google operates two ad buying tools, known as “Google Ads” and “DV360”. For publishers, it operates a publisher ad server, known as “DoubleClick For Publishers” (DFP). In the centre of the ad tech stack, Google operates an ad exchange, known as “AdX”. Ad exchanges typically receive requests for bids from publishers and responding bids from advertisers, and then conduct an auction to match these two sides. AdX is where Google charges its highest fees in the ad tech stack (approximately 20% of the bid amount).

Simplified overview of the ad tech stack, key intermediaries and Google’s ad tech products

The CMA’s provisional findings relate to anti-competitive ‘self-preferencing’ by Google. The CMA has provisionally found that, since at least 2015, Google has abused its dominant positions through the operation of both its buying tools and publisher ad server in order to strengthen AdX’s market position and to protect AdX from competition from other exchanges. Moreover, due to the highly integrated nature of Google’s ad tech business, the CMA has provisionally found that Google’s conduct has also prevented rival publisher ad servers from being able to compete effectively with DFP, harming competition in this market.

Google has done this through various practices that give AdX competitive advantages, disadvantage Google’s rivals, and are against the interests of Google’s advertiser and publisher customers. These practices have evolved over time and include:

  • providing AdX with exclusive or preferential access to advertisers that use Google Ads’ platform;
  • manipulating advertiser bids so that they have a higher value when submitted into AdX’s auction than when submitted into rival exchanges’ auctions; and
  • allowing AdX to bid first in auctions run by DFP for online advertising space, effectively giving it an ‘right of first refusal’ – with rivals potentially not having any chance to submit bids.

The CMA has provisionally found that this anti-competitive conduct is ongoing. The CMA is therefore considering what may be required to ensure that Google ceases the anti-competitive practices, and that Google does not engage in similar practices in the future.

The CMA will now carefully consider representations from Google before reaching its final decision.

For more information, visit the CMA’s investigation into suspected anti-competitive conduct by Google in ad tech case page.

IAB welcomes ‘opportunities’ from third-party cookie phase-out
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The IAB has welcomed Google’s reaction to the Competition and Markets Authority’s (CMA) investigation into internet giant’s Privacy Sandbox initiative, asserting that it creates an opportunity to ‘reset’ the ad-funded web.

Back in January, the CMA launched an investigation into Google’s Privacy Sandbox in response to concerns that Google’s plans for the removal of third-party cookies from Chrome and its introduction of alternatives could impede competition in digital advertising markets.

At the time, Google welcomed the development and has described it as an “opportunity to engage with a regulator with the mandate to promote competition for the benefit of consumers”. 

Google has now announced a range of binding commitments to address the CMA’s concerns. These include: 

  • That it will work with the CMA to resolve concerns and develop agreed parameters for the testing of new proposals. Google will also provide transparency around the timetable, as well as a clear notice period for changes.
  • Once third-party cookies are phased out, Google’s ad products will not access synced Chrome browsing histories (or data from other user-facing Google products) in order to track users to target or measure ads on third party web inventory.
  • As the Privacy Sandbox proposals are developed and implemented, that work will not give preferential treatment or advantage to Google’s advertising products or to Google’s own sites

You can read the full list of commitments here. The CMA has now launched a consultation on whether to accept Google’s commitments, which you can respond to by submitting written representations to Angela Nissyrios and Simon Deeble at  50****************@cm*.uk  by 8 July 2021 at 5pm.

IAB UK’s CEO Jon Mew said: “At the IAB, we have always been really clear that the phasing out of third-party cookies is an opportunity to reset the ad-funded web for the better, which is why we have laid out clear principles that we believe any viable User ID solutions must meet. I think that the CMA’s investigation into Privacy Sandbox and Google’s commitments to address its concerns about the potential impact on competition are an important and valuable part of this process. 

“The commitments  allow the wider industry to have confidence that Google’s proposals are being developed in a way that takes into account both competition and privacy objectives, with the benefit of regulatory oversight brought by the CMA. The phasing out of third-party cookies is the most seismic shift that the digital ad industry has ever experienced and it’s only right that developments in this space are subject to appropriate scrutiny.”

Measurement budgets ‘critical’ to senior level content marketers…
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A new study conducted by the Content Marketing Association (CMA) has determined that measurement continues to be seen as a critical factor as dedicated spend is set to grow over the next 12 months.

Measurement is considered to be ‘very important’ to a content marketing strategy by 73 per cent of senior level marketers; with half of marketers currently spending 6-15 per cent of their content marketing budget on. Almost half of respondents (45 per cent) are planning to increase their measurement budgets within the next year, and 56 per cent have ‘automatically’ offered it as part of their strategy.

In addition, the research indicates a high demand to ‘expand the boundaries’ of content marketing measurement, with 68 per cent claiming marketers should seek to measure emotional engagement.

Managing director at the CMA, Claire Hill, said: “Measurement is central to the content marketing industry and this research proves how critical it is to senior marketers. It is great to see the industry joining together to address the key challenges, growing budgets to stay at the forefront of measurement and ROI.”

‘The Measuring Effectiveness Report’, was conducted with senior level marketers, including the CMA membership of over 40 companies, plus brands such as British Gas, Sainsbury’s Bank and Barclays UK. It is the fourth report in a series consisting: ‘Video Engagement Industry Report’, ‘The Role of Social in Content Marketing’ and ‘Content Marketing and Data Intelligence’.

 

Download the full report here