More than a month after Adalytics’ report on Google’s TrueView inventory quality problem, the furor hasn’t abated. With Alphabet’s stock price soaring and buyers left with few alternatives, we’re not likely to see conditions improve absent further developments.
Google’s response has been notably ham-handed.
After two nondenials on their blog, rumors are swirling about an executive departure, and buyers’ requests to remove GVP inventory from their campaigns are reportedly going unheeded.
Let’s start by looking at Google’s (non)response.
We actively monitor the Google Video Partners network, using a combination of automated filters and human reviews, and if our systems detect invalid traffic, we don’t bill an advertiser. Even when invalid traffic is detected after-the-fact, Google marks this traffic as invalid and we issue credits to the affected buyers when appropriate and possible.
With a strategically placed “if,” “even” and “when appropriate and possible,” we’re left with enough room to drive a semi-trailer full of inaudible, nonviewable impressions through.
In other words: We don’t always detect invalid traffic when it’s happening; we might never find it; and if we do, you still might not get your money back.
Stack that onto debunked claims about GVP inventory being MRC accredited and a false claim that IAS and DoubleVerify can detect these issues, and you’re left with some vague insinuations that Adalytics has been “irresponsible and faulty” in its report.
But Google’s protestations aside, two questions remain: Why is any of this happening, and why is change unlikely in the short term?
Price matters
There are two lenses through which the entire scandal makes perfect sense: inventory (or price) limitations and Google’s stock price.
Performance advertising always boils down to the concept of blending. Take some garbage, mix it with the right amount of gold, and sell the result to buyers at an appealing price.
Google’s performance products, such as PMax and TrueView, likely follow this industry-standard formula.
With TrueView, blending GVP inventory with premium YouTube inventory solves a myriad of problems: keeping the clearing price low, expanding overall inventory supply and helping creators make money when their distribution occurs off-platform.
Buyers sacrifice quality for convenience. Sophisticated buyers know the game, and for the long tail of smaller or less sophisticated buyers, the price is worth the trade-offs. Plus, the alternatives are limited.
Try buying premium-only YouTube inventory directly, and you’ll see the price differential. The process is both unaffordable and cumbersome.
Premium inventory shortages
Although marketers like paying lower prices, problems arise when Google starts misrepresenting its inventory. Even some seasoned media buyers have been surprised to learn that their TrueView ads appeared on GVP.
And it’s especially problematic when the buyers happen to be the US and EU governments and the inventory allegedly includes placements on Russian and Iranian sites that are under sanction.
The need to blend in GVP inventory points to a lack of YouTube on-site inventory that meets TrueView’s completion and/or brand safety standards at optimal price points. Blending in lower-cost GVP inventory keeps the CPM/CPC low, but is presumably harder to police for viewability and audibility standards.
This is not likely to change anytime soon.
Google’s compensation is famously generous and stock heavy. With its stock price continuing to soar, it’s hard to understate the power that hundreds of thousands – potentially millions – of dollars of Alphabet stock are likely to have on decision-makers.
Whether those incentives point to keeping the TrueView prices low or the distribution broad, the net result is a strong push for the use of blended products.
Buyers lack choices
No other CTV buying environment provides a single point of access to attention as effectively as YouTube does. Advertisers that require mass attention have no choice but to buy the eyeballs that YouTube offers. And none of the alternatives are necessarily appealing or issue-free.
In 2019, when buyers encountered serious brand safety issues on YouTube, the combination of large buyers suspending their buys and the attention of regulators seemed to have a meaningful impact.
The TrueView scandal doesn’t (yet) seem to be rising to the same proportions.
For now, all we can do is make a handful of predictions:
- We’ll see additional issues related to blending exposed by third parties like Adalytics.
- Advertisers’ efforts to remove GVP inventory from their buys will continue to face headwinds.
- Only a coalition of large advertisers and regulators will get Alphabet’s attention.
In the meantime, as Frank Herbert famously wrote in Dune, “The spice must flow.”
“On TV & Video” is a column exploring opportunities and challenges in advanced TV and video.
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