Alphabet Inc.’s Google has taken advantage of the European Union's General Data Protection Regulation (GDPR) to gain a larger share of digital marketing spending in Europe. On the first day that the GDPR took effect, approximately 95% of European advertising spend went to Google. The company’s example is a case study in how regulatory preparedness can have a tangible impact on market advantage.
Google spent over a year preparing for the GDPR by updating more than 12 million contracts, with the end result being Google’s ability to gather user consent for targeted advertising at a much quicker pace than competitors. A Google spokesperson stated, “over the last year, we’ve engaged with over 10,000 of our publishers, advertisers and agencies across nearly 60 countries through events, workshops and conversations around the changes we’re making to be compliant with the GDPR,” as reported by Bloomberg. While many other companies have been caught flat-footed and are still scrambling to comply with GDPR privacy rules, Google seized the opportunity and has emerged an early winner.
Google’s DoubleClick Bid Manager (DBM) is the software used to purchase automated and targeted online advertisements. The software directs advertisers away from companies where Google has not been able to verify whether user consent for targeted advertising has been obtained. This move has caused some media groups, including AppNexus, to criticize the impact of Google’s processes on small companies.
Google has stated that it is working on interim solutions—such as standardizing how to obtain consent and showing non-personalized advertisements—in an attempt to lessen the disruption on advertising exchange partners. For example, Google recently struck a deal with AppNexus whereby AppNexus assured Google that they have proper consent, which has allowed advertisers to use DBM to buy from AppNexus again.
Despite deals that are being worked out between Google and its advertising exchange partners, Google continues to hold an advantage based on its GDPR compliance preparations. Tech & Sourcing @ Morgan Lewis will continue to track this and other impacts of the GDPR during the coming months.