Google Ad Tech Fees Transparency; Tik Tok Ban Could Hurt Pubs; RIP Recode

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This Week
March 16, 2023
Google's Ad Tech Fees Transparent?
Tik Tok Ban Could Hurt Pubs
RIP Recode
In Interview, Google Says its Fees are Transparent
In an interview with MarketingBrew, Dan Taylor, Google’s VP of Global Ads claimed that the DOJ’s antitrust lawsuit is “kind of out of touch” and that the market felt “more competitive than ever.”

Part of the DOJ’s complaint is that Google pockets $.30 out of every ad dollar that flows from advertisers to publishers through its ad-tech tools. To Taylor, that 30% is nothing unusual for the industry. What’s more, it’s kind of old news to publishers that use Google’s products.

“One of the reasons we haven’t been worried about publishing that sort of information is, first of all, our buyers and our sellers know the fees. Second of all, our fees are competitive or lower than reported industry averages,” he tells MarketingBrew. “There’s no news here.”

He’s correct in one respect, high ad-tech fees isn’t news to anyone in the industry. About a year ago, a study by Adalytics found that supply fees charged by various middlemen can account for 80% to 85% of the revenue advertisers pay for media. In some cases, ad-tech fees take up to 98% of revenue, leaving publishers just pennies on the dollar.

In July of last year, Google announced Confirming Gross Revenue, a tool that “gives buyers and publishers a privacy-safe way to verify that no hidden fees are taken from digital advertising transactions when using Google Ad Manager.”

Specifically, publishers can access a Revenue Verification Report to see the aggregate gross revenue received from a specific buyer and verify that the media cost from the buyer’s reporting matches the gross revenue received from the publisher.

But publishers still claim that transparency is lacking. Earlier this year, Terry Guyton-Bradley, Senior Director of Programmatic Advertising Operations, Red Ventures told us that contrary to Google’s play, he has a difficult time determining if Google is giving Red Ventures a fair price for its inventory. "There is no transparency. Google tells me the CPM I receive, but not what the buyer actually pays Google and what it takes."
Why This Matters
A lack of transparency has been a perennial complaint in the sector, but to some, it’s more complex than some may realize.

“I think a lot of times we’re confusing standard auction dynamics with a lack of transparency. Auctions drive programmatic sales, and they have a lot of impact on the revenue a publisher ultimately receives,” explains Rob Rasko, Founder and CEO of The 614 Group, a corporate advisory firm that works within the digital ad-tech space.

“Depending on who’s bidding, the spread between what the advertiser pays and what the publishers receive can vary. If you have five suppliers offering that publisher’s inventory at slightly different prices, the buy-side technology will pick the lowest price. That’s what it’s designed to do. Lack of transparency is an easy answer, but it's not the complete answer. The answer is getting a better understanding of the combination of fees and auction dynamics. For that we need supply-side optimization,” said Rasko.
How a Tik Tok Ban Could Hurt Pubs
Photo by Solen Feyissa on Unsplash
Grumblings about TikTok and the potential for the Chinese government to spy on American citizens are finding a receptive ear on Capitol Hill. A new bill, introduced by Senator Mark Warner, will “authorize the Secretary of Commerce to review and prohibit certain transactions between persons in the United States and foreign adversaries, and for other purposes.”

The Act, called Restricting the Emergence of Security Threats that Risk Information and Communications Technology Act (RESTRICT Act), would make it easier for the Biden administration to restrict access to TikTok.

According to Senator Warner, the bill creates a formal process for the Department of Commerce to “deter, disrupt, prevent, prohibit, investigate, or otherwise mitigate” services that are potential risks if they have access to “sensitive personal data” from more than 1 million US persons.

“While TikTok is not explicitly named in the bill text, the measure covers companies in adversarial countries including China, Cuba, Iran, North Korea, Russia, and Venezuela,” explains Makena Kelly in The Verge.

The possibility of such a law passing is closer than it’s ever been, she explains, following closely on the heels of a measure to restrict access to TikTok by the House Foreign Affairs Committee. As Kelly notes in her article, a TikTok ban is becoming more of a reality.

Overall, reports state the Biden Administration is hardening its stance against ByteDance, the Chinese owners of TikTok, moving from merely talking about it to demanding that they sell their stakes in the app to a US company or they will definitely face a ban.
Why This Matters
Banning TikTok in the US won’t be easy or popular. TikTok has long been synonymous with the “creative economy,” a sector that some 165 million people tap into to earn a living, including 11.5 million Americans. Lawmakers can expect to hear from many of those influencers, along with the brands that partner with them to sell products.

It’s not just influencers who rely on TikTok to build their audience. Earlier this year, Digiday noted that news organizations were “flocking” to TikTok for the exact same reason. “Most (78%) of Comscore’s top 50 news publishers — or 39 publishers to be exact — created an account on TikTok over the last two years.”

For instance, CNN created over 800 videos in about a three-month period, racking up 1.3 million followers and 11.3 million likes in the process.

It’s a smart strategy for publishers looking to build an audience among the emerging generation of news consumers. The bulk of TikTok’s billion users are Gen Zers, and for many, the platform is their main source of news.

A potential ban comes at a time when Meta is deemphasizing news on Facebook. “??Most people do not come to Facebook for news, and as a business, it doesn't make sense to over-invest in areas that don't align with user preferences," a Facebook spokesperson told Axios. Without TikTok, how will young people be exposed to the news?
RIP Recode.
Image sourced from Wikimedia Commons
Vox recently announced it would retire Recode, a brand it acquired back in 2019. But not to worry, its editors promised readers, the great content isn’t going away. It will simply be absorbed into the tech section of Vox. Ditto for the Recode reporters we know and love.

Why retire a known and beloved brand? In a separate article, Vox explained that it was ushering in a “new era of technology coverage” for the publication. Evidently, readers are confused by the sub-brands, and retiring Recode, evidently, will bring clarity to readers.

“Over time, we’ve heard some feedback from readers who found Vox’s sub-brands confusing — the exact opposite of what Vox strives for — so this change will help us more clearly communicate to our audience what Vox covers,” writes Adam Clark Estes.

Brian Morrissey has a different explanation. “Brands are milked for all their worth, cut to the point of plausibility and eventually disappear. Such was the unfortunate fate of Recode,” he wrote in his newsletter, The Rebooting.

Recode, and its predecessor All Things D, had an enviable roster of tech writers through the years, including Peter Kafka, Ina Fried, Arik Hesseldahl, Liz Gannes, Ken Li, Mike Isaac, Nellie Bowles, Jason Del Rey, Edmund Lee, and many more. “And it didn’t need to churn a ton of pageviews with a business model reliant on influence vs reach,” Morrissey said.

Influence can turn into subscriptions, as Morrissey points out, and it’s a pickle that Vox opted to eliminate the brand altogether rather than offer it on a subscription basis.
Why This Matters
Recode is exactly the type of content that news organizations, like the New York Times and Washington Post, are leveraging to create new products that build audiences (think New York Times Cooking or Games). Publishers are creating content that’s hyper-geared to a specific audience and using that content to build readership and ultimately a paid subscriber base.

Moreover, advertisers are finally starting to respect niche publications like the former Recode. That respect will only get stronger as they continue to lose signals due to privacy regulations.

Folding Recode content into Vox feels like a lost opportunity on multiple levels.
Sweet Tweet
Too Pig to Bail?
I would hate to see a double standard -
Wall Street circa 2008:
Silicon Valley circa 2023:
Worth a Listen
A Congressman Goes to A.I. School + How to Ban TikTok
Representative Don Beyer thinks artificial intelligence is “the most amazing technology since fire.” So what does it mean that most of Congress seems not to understand it? Then David McCabe discusses a bill that could dramatically expand the Biden administration’s power to ban TikTok.
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