Google Ad Revenue Increases, Competitors Drop, After EU's New Privacy Rules

Mike Mish Shedlock

The EU is targeting Google. Preliminary results show one part of the plan has backfired already.

Here's the hoot off the day: Google Emerges as Early Winner From Europe’s New Data Privacy Law.

GDPR, the European Union’s new privacy law, is drawing advertising money toward Google’s online-ad services and away from competitors that are straining to show they’re complying with the sweeping regulation.

The reason: the Alphabet Inc. GOOGL 3.18% ad giant is gathering individuals’ consent for targeted advertising at far higher rates than many competing online-ad services, early data show. That means the new law, the General Data Protection Regulation, is reinforcing—at least initially—the strength of the biggest online-ad players, led by Google and Facebook Inc.

Hundreds of companies along the chain of automated bidding and selling of digital ads—from ad buyers to websites that show ads—have been scrambling to comply with the law while continuing to target people based on the personal information such as web-browsing histories, offline purchases or demographic details.

Since the law went into effect, Google’s DoubleClick Bid Manager, or DBM, a major tool ad buyers use to purchase targeted online ads, has been directing some advertisers’ money toward Google’s own marketplace where digital-ad inventory can be bought and sold, and away from some smaller such ad exchanges and other vendors. That shift has hurt some smaller firms, where Google says it can’t verify whether people who see ads have given consent.

Google is applying a relatively strict interpretation of how and where the new law requires consent, both on its own platforms and those of other firms. The stringent interpretation helps Google avoid GDPR’s harsh penalties and pushes the company to buy more ad inventory from its own exchange, where it is sure to have user consent for targeted advertising.

Bottom line: Google has taken a strict interpretation of the EU privacy law. As a result, it uses its own ad exchange more frequently.

The EU's expected result was to drive Google to other ad exchanges.

Never underestimate the EU's ability to come up with silly solutions to alleged problems.

Mike "Mish" Shedlock

Comments (15)
No. 1-15
2banana
2banana

Why isn't Google declared a monopoly and broken up?

shamrock
shamrock

Googles market share has dropped from 91% to 86% in the last 8 years.

Bam_Man
Bam_Man

EU bureau crats = "The Gang That Couldn't Shoot Straight".

Snow_Dog
Snow_Dog

You’ll have to ask your Congressman, er, um, make that ask your Congressman’s campaign manager.

caradoc-again
caradoc-again

"Any data you provide will be primarily stored and processed in the United States, pursuant to the laws of the United States, which may provide lesser privacy protections than European Economic Area countries." Long story short, there is a way round anyway -if you click "NO" as response to above (a cut down version of a statement) site access is limited. If you want the data you need to sign away rights under GDPR. So, if you have proprietary data you have leverage/control as you have to sign away protection. I sat through GDPR backgrounder recently and the above "idea" of how to get round it was not mentioned, just how to comply. If you process data outside EU, and your offering has unique value, users will sign away their GDPR rights anyway else can't accept the info.

caradoc-again
caradoc-again

In summary, the big players and those with really needed/useful/unique data don't have much of an issue. Small EU based companies do and especially if their offering is relatively commodity. They've built a wall off-shore companies can easily walk around if they don't mind losing a few users who insist on GDPR protection. I find GDPR is trying to be on the side of the consumer, the idea is sound, execution not so perfect perhaps.

caradoc-again
caradoc-again

As usually the case, if you offer something unique/special/needed the consumer will usually bend to gain access & non-global regulators have a problem exercising their control. On the web be big or be unique or be a victim. Small and non-unique EU offerings are now handicapped vs others.

Snow_Dog
Snow_Dog

“The EU's expected result was to drive Google to other ad exchanges”

The Clinton campaign’s expected result was Hillary becoming the US president after it brought Eric Schmidt in to advise them about reaching Americans online.

Stuki
Stuki

It’s always surprising, that difficult and expensive to comply with nonsensical laws and regulations, benefit those with the most resources to spend on compliance.

Also, regulations tending to favor those with the most resources to spend on influencing those writing them, is surprising as well.

And that laws written by The People’s Party, tend to favor those in the Party, rather than those who are merely people.

Webej
Webej

Mish is being silly. The GPDR is not a reponse to Google monopolization, but to blatant abuse of citizens by too big to discipline parties who fail to treat user data in a trustworthy manner.

caradoc-again
caradoc-again

Agreed, but it's so easy to get around if what you offer online is wanted. Click a box and sign away your rights in exchange for access to data. This is a global data exchange and no matter how big and important the EU believes itself to be it's < 10% of global population and shrinking. Think on.

Stuki
Stuki

Like all nonsensical “law,” this one is nothing but yet another attempt by useless dimwits vastly too incompetent to have even a prayer at creating any service anybody would consider actually wanting, to utilize government to insert themselves, by force, into value chains created by their in-every-conceivable-manner betters.

Noone in neither Europe nor elsewhere is forced to use Google. Europe was Europe long before Google was even a clever algorithm on its’ founders PC. And would stay Europe if no European cared for Googles’s particular mix of convenience, QOS and presumed data protection.

IF GDPR was valid law in a free society, either Jefferson and pals would have included it in their enumeration of proper government powers, or Moses and his Pal would have included it in theirs of valid law. Neither did. Simply because this kind of regulation-for-regulations-sake drivel has nothing in common with anything that would be considered law in any society aspiring to even the slightest pretense of freedom. Being instead just another progressive powergrab. By the enemies of freedom, forces of darkness, incompetent simpletonian scumbags on the make, or whatever else your favorite descriptive synonym for progressives happen to be.

Webej
Webej

Value chains are not based on theft. That's the problem with a large part of the economic malaise the world is facing. Zero-sum monopolist games and financial speculation pyramided on top of it. In the end it will all collapse because there are no real income streams girding it. And part of the problem is the refusal to apply existing laws and sanctions, and to re-assert sovereign power against the people gaming the system for everything it' s worth.

Stuki
Stuki

Google Search is about as far away from theft as you can get. Demand is pretty much entirely organic. Heck, it’s one of the few services left whose demand is not driven, or massively modified, by bans, mandates and other coercive threats, by the usual army of incompetent idiots incapable of creating anything that anyone else see value in on their own. Noone is forced to use Google search. Anyone who doesn’t feel he derives more value from it’s use than he gives up in “personal” data, can simply point his browser somewhere else. Done deal. No army of half literate trash required.

There is zero benefit from the idiot classes even being aware of what Google is storing. The only thing resulting from their involvement, is that Google as well, must now hire, lobby, pay and listen to armies of otherwise pointless leeches on their own. Driving up costs, gumming up innovation, slowing down growth, and making America even more of a totalitarian dump ran by and for worthless expendables, than it already is.


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