Youtube ADEX closure – Is the future a closed ecosystem?

Originally written for Digiday – link hereimages.

I have watched with interest the backlash against the Google decision to pull its YouTube inventory back from DoubleClick Ad Exchange. It got me thinking about the past and the present and the fact that there is this view that all companies must make everything equal to everyone. Google has disabled something that represented 5 percent of its total YouTube sales — is that really worth all the fuss?

While it is an issue insofar as many businesses are built on the back of disruption and filling niches and a multitude of other business models, Google has no obligation to make life easy for them. Indeed, Google is not alone. Facebook locked everything up; Amazon would rather shut sales down that let you get hold of its data; AOL, Yahoo and others hold all their best inventory back so you can only buy it through their platforms.

Welcome to the future. These companies have invested billions into their product, and they have no obligation to make other competitive businesses rich on the back of their investments. It is called competitive advantage.

Holding on to the Google debate a little longer, five years ago it had a poor ad server and limited display business. It was seemingly going backwards in terms of innovation outside of search and video. And then a few things happened: Some smart people made some smart decisions. Google bought companies, it invested in their stack, it invested in data, and before you knew it, it was dominating display. It did the same in video, so if it chooses to limit the access to just three entry points from four, then that is Google’s business. If AOL, after investing in content, tech and data, wants to only allow access to the best of what they have via its platform, that is its prerogative.

It was only five or six years ago that we were all forced to work like this. If you wanted inventory from The Telegraph, you rang up The Telegraph, likewise Guardian, ITV and so on. We were forced to deal with hundreds of walled gardens. We have improved the situation with technology, so now we have many fewer entry points to inventory, but when we started down this road no one ever said everyone had to sign up to this new way of working, the deal was that we could buy inventory through platforms and use data — not — be able to access all inventory through any platform.

As an example, AppNexus is the self-proclaimed independent solution outside of Google. It is doing well. But should Google then help AppNexus or worry about whether it can get access to YouTube inventory via AdX? Of course not. The same would go for many other demand-side platforms that would issue complaints on the topic.

Now, as a buyer, we would prefer to see an ecosystem where we can access whatever we want from wherever we want. And we do rally against the approaches of Google, Facebook and Amazon. But at the same time, we have options. We can work around most of this, and we will create solutions that help us navigate and deliver against the utopia we were once searching for. That said, this is business. This is about companies investing and then looking to make returns off the back of it. YouTube is not the BBC, and it can decide how you buy its content.

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