Google cuts AdX from YouTube advertising network

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B2B marketers who advertise on YouTube through DoubleClick Ad Exchange (AdX) will soon have to look at other options. According to an Aug. 6 blog post, the tech giant will no longer allow YouTube inventory to be sold through AdX, placing restrictions on the ways marketers can buy ads to display on the popular video site.

This change will take effect by year’s end.

Google directs marketers to AdWords and DBM

Advertisers will still be able to buy ads on YouTube, but they will have to do this through Google’s AdWords or DoubleClick Bid Manager. Google reasons only a small percentage of its clients use AdX on YouTube.

The post, by Neal Mohan, Google’s VP of Display & Video Advertising, said client feedback for Google’s programmatic advertising was positive and TrueView ads, which are the skippable ads you see on YouTube, are most in demand. TrueView ads have never been linked to DoubleClick Ad Exchange.

“At YouTube, over the past few years we’ve heard from clients that they want to access our marquee formats, such as TrueView, through programmatic channels,” Mohan writes. We’ve been investing to make that happen and recently made TrueView ads, which represent 85% of YouTube in-stream ads, available programmatically in DoubleClick Bid Manager (DBM).”

Additionally, Google says its advertisers are seeing higher engagement rates when compared with other video formats. The company also states it believes this change will improve the YouTube advertising experience for its clients.

“With this change, we’ll be able to invest even more in creating the best and most effective YouTube advertising and buying experiences possible, continuing our efforts in TrueView and offerings like Google Preferred,” Mohan writes. “Video advertising and programmatic buying are growing rapidly and being focused in our investments will help us drive them forward at an even faster rate.”

Google taking more control

According to AdWeek, AdX works with third party ad firms which allows them to gain access to data Google does not deliver to advertisers. By taking DoubleClick Ad Exchange out of the equation, Google’s ad sales representatives will manage all of the advertising for YouTube. This decision gives Google a lot more control over the ways advertisers by YouTube ads.

This move by Google has generated much criticism from those in the industry. Many feel an exclusion of AdX will have an impact on the overall digital advertising ecosystem, noting Google is segregating itself and will, ultimately, benefit its own business.

“It’s the same concept that Apple used in the music business,” Scott Ferber, CEO of video ad platform Videology, told AdExchanger. “Now, Apple iTunes is by far the dominant source to buy music.”

Growth of programmatic advertising

All indicators point to programmatic advertising playing an important role in the future of advertising. Programmatic advertising is, according to eMarketer in Oct. 2014, one of the “hottest buzzwords,” noting 2014 was a “pivotal” year for programmatic advertising. At that time, it was predicted U.S. programmatic digital display advertising would grow 137.1 percent in 2015, totaling $10 billion. Predictions for 2016 said this figure would double to $20.41 billion, equating to 63 percent of U.S. digital display spending.

Earlier this year we reported that Canada is lagging behind the U.S. with programmatic, but some companies “aren’t content to wait on the sidelines.”

Google’s decision can truly have an impact on ad-tech firms. According to stats published by Contently earlier this year, firms that advertise on YouTube see a 20 percent boost in web traffic. Forty-three percent of new customers purchase something they spotted in a YouTube ad. If firms want to use platforms other than Google, they’ll effectively be shut out from these audiences.

Also read our report on YouTube offering “click to buy” options on videos 

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Leigh Goessl

Leigh Goessl

Leigh Goessl has been writing on the web since 2007. She currently is a freelance writer and enjoys writing about business and tech topics. Leigh's previous work includes ghost writing for a a legal website, a major online college and an education website. Her education includes an MBA with a concentration in information security.