Facing Regulatory Pressure, Google Outlines Its Ad-Tech Fees for Publishers
The digital ad giant takes roughly a 30% cut
Google has laid out some of its ad-tech fees as it faces increased scrutiny from regulators looking into the company’s dominance in digital advertising.
In two separate blog posts published Tuesday, Google outlined the cut it takes from publishers that sell ads using its products. When transacting through Google’s ad-tech stack, publishers keep an average of 69% of revenue generated. When selling ads directly through Google Ad Manager, publishers keep around 95% of the revenue.
Google controlled roughly 37% of the digital ad market in 2019, according to eMarketer. Given its dominant position, regulators are expected to file suits against the company later this year.
The Alphabet-owned company is expected to see its digital advertising market share drop to 29.4% this year partly as a result of the economic impact of the coronavirus pandemic. eMarketer forecasts that Google’s ad revenue will drop by 5.3% to $39.58 billion in 2020, which would be the first time the company’s ad revenue didn’t increase year-over-year.
Google has two major buy-side platforms: Google Ads, for smaller advertisers; and DV 360, for large brands and agencies. According to a blog written by Sissie Hsiao, vp and general manager of apps, video and display advertising at Google, the company only charges advertisers using Google Ads a fee when a consumer takes an action on an ad, like clicking on it.
“Because Google Ads does not charge advertisers for most impressions, it does not have a fixed per-impression fee. Instead, Google’s share of revenue varies over time based on various factors, including the advertisers’ specified objectives, the types of display ads they choose to run and how users respond to them,” Hsiao wrote.
Google’s take rate for DV 360 is up to 15%, and its exchange takes a cut of up to 20%.
“Although we don’t know what other companies charge, we’ve shared our pricing to provide clarity into how our display business works. By helping businesses large and small reach customers, we can help publishers fund their content online and contribute to sustaining the ad-supported web for people around the world,” said Hsiao.
Publishers typically only receive 51% of every dollar spent through programmatic, according to a recent report from the Incorporated Society of British Advertisers (ISBA). Google’s take rates seem favorable, but neither blog post details every single fee, such as the company’s agency fee. Also, Google’s 20% sell-side take rate is roughly double the average cut that ISBA found.
The blog posts only addressed how Google works with publishers, where the digital ad giant earns a minority of its revenue. Google’s main revenue sources are its owned and operated properties, like YouTube and Google Search. Marketers can only buy that inventory through Google’s ad-tech stack.
However, the posts were met with derision from some in the industry with vocal Big Tech critic Jason Kint, CEO of Digital Content Next, a trade org that represents the interests of publishers, taking to social media in order to make his opinion known.
