Google’s Ad Server Share, Agency M&A and the Not-So-Deminimus Impact of Chinese Marketers on the US Ad Market
Madison and Wall: Saturday Summary for September 14, 2024
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This past week saw the continuation of the trial of the United States vs. Google in a Virginia courtroom. Although it’s impossible to say how the case ends up, it’s providing valuable information about many of the mechanics, strategies and financial details of ad tech – which, to be clear, is important to everyone in the advertising industry, because ad tech is how the industry operates. Some of the best and most rapidly updated coverage of the trial we’ve read is coming from Marketecture, whose daily posts can be viewed here.
Our own focus has been less on the legalities of actions taken and the mechanics involved and more on the minutiae of the money. Or more specifically, how big different parts of the market are, and how everyone involved is defining those parts of the market. In our work this past week, we tried to reconcile claims (from both sides) that Google’s ad server has an approximate 90% share of the publisher market with newly disclosed data for marketer ad spend through Google and our own media owner-based analysis suggesting a substantially lower share. Of course, as in the case itself, how the market is defined is likely everything underpinning its analysis.
Next, with news of the acquisition of New Commercial Arts by WPP, we performed an analysis of that company’s financial data along with many other recent transactions to assess current trends in agency M&A (and, importantly, the right way to define or estimate net revenue).
Finally, we also wrote about the news on Friday that the Biden Administration would be using executive authority to reduce the volume of shipments of products into the United States which benefit from the de minimus tariff exemption. As long time followers will recall, we’ve been very focused on the importance of the likely-impacted Chinese marketers to the advertising industry (and Meta in particular) for almost a decade. We provide an updated view on the potential implications for advertising in our note.