Ad tech is “a giant fee extraction machine,” says Richard Kramer, founder and managing director of equity research firm Arete Research.
But it doesn’t have to be, he argues on this week’s episode of AdExchanger Talks.
If the Department of Justice wins its ad tech antitrust case against Google, it shouldn’t force a breakup of Google’s ad tech stack.
Instead, Kramer says, Google should offer to spin out its network business – the entire end-to-end ad tech stack that deals with third-party publishers – and turn it into a public interest corporation with no hidden fees.
A nonprofit ad tech platform? Well, why not.
Google can either spend the next who knows how many years filing appeals that “leave its internal operations hamstrung and end up with a still low-margin business,” Kramer says, “or spin it out and allow that business to oxygenate the market.”
Heck, he says, Performance Max could even become a large buyer on this new network, he says, and the business would attract smart, talented people who want to stay in ad tech but also work for a mission-driven company.
For now, though, there are “too many players with the wrong incentives in the market,” Kramer says.
“So let’s take the largest player and change their incentives,” he says. “Instead of their incentive being to hide what they’re doing and make as much money as possible, [make] their incentive to show everyone what they’re doing and do it at the lowest-possible price.”
Also in this episode: Pondering potential remedies in the Google search antitrust case, why The Trade Desk isn’t a monopoly but does “[share] some characteristics with Google,” the rise of “forensic ad tech” and a few good fiction book recommendations.
