Google To Yank YouTube Inventory Out Of AdX By Year’s End

OursThe writing was on the wall.

Google revealed late Thursday it will no longer sell YouTube inventory through the DoubleClick Ad Exchange (AdX).

Neal Mohan, VP of video and display advertising at Google, said in a blog post that the tech giant is yanking YouTube inventory from AdX to focus its development efforts on “the formats and channels used by most of our partners.” Popular formats and channels include the video ad format TrueView and the Google Preferred program.

“To enable that, as of the end of the year, we’ll no longer support the small amount of YouTube buying happening on the DoubleClick Ad Exchange,” he wrote.

By “small amount,” that reportedly means 5%. It did not elaborate why YouTube inventory on AdX would inhibit investments elsewhere.  

Brett Wilson, CEO of video buy-side platform TubeMogul, said in an email statement to AdExchanger this development was an “unfortunate development [for advertisers] as they are now effectively prohibited from buying non-skippable video ads and from using data for targeting on YouTube.”

He claimed the impact on TubeMogul is “immaterial, since less than 5% of total ad spend through our software in Q2 was directed to YouTube.”

Third-party demand partners, of course, still have access to AdX’s publisher marketplace, and can still buy TrueView ads through AdWords. Google enabled programmatic buying of TrueView formats in April – through its own technology, DoubleClick Bid Manager.

It’s easy to see the importance certain video products have for Google.

TrueView supposedly makes up 85% of ads bought on YouTube; advertisers like its cost-per-view pricing and consumers like its skippability.

Meanwhile Google Partner Select and Google Preferred (a buying option for advertisers wanting the top 5% of YouTube video inventory) are both programs designed to help Google position itself as a premium buy for brands and agencies – and, some sources claim, increase sell-in for its own ad tech.

Google has reportedly reached out to software partners to assure them of their continued importance within the Google video ad ecosystem, despite these changes.

Google declined to comment beyond its blog post.

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  1. AdEx is the largest inventory exchange in the world. Advertisers, DSPs, Networks, and Agencies all access it through various means to gain reach against their campaign objectives. Google has a clear position as the leader in the exchange market and programmatic buying is taking off at an amazing clip. Predictions for the demise of direct sales have been fueled by their success and publishers have been fearful of having to play in the AdEx pool and lose their differentiation.

    So Youtube pulled their inventory. Youtube inventory will no longer be available through AdEx. What does this mean? What is Googles play? Will all Youtube inventory be sold direct only? Can a sales force be effective selling selling 100% of this volume of inventory? What will happen to private marketplaces and programmatic direct deals?

    Is this deal rate driven? How will rates be affected? How can aggregated CPM values hold up in a direct sales environment where demand is limited to a relatively small number of buyers and 100% fill is unlikely.

    Then there is the question of what this will do in the marketplace. How is a publisher who is working with AdEx for their video inventory be convinced it’s the best thing to do when Google itself is not doing it?

    Google has always driven toward automation and the elimination of humans in the ad sales and delivery chain. Why the change now? What is up their sleeve?

    We can certainly assume that Google has good reason to make this move. What that is is entirely unclear at this point.

    • This seems more like a push to promote its own DSP. YouTube will still be available through TrueView, which can be bought programmatically through Google’s DBM.

      With the huge increase in online video budgets going to programmatic, having exclusive access to the largest supply of video ad inventory will give DBM a competitive sales advantage. This illustrates the problem with companies like Google being on both the buy and sell side. It’s anti-competitive, stifles innovation, and drives worse results for advertisers.