Ad-Tech Firms Spy an Opportunity in YouTube Inventory Quality Scandal
YouTube has been on the defensive after a June report from research outfit Adalytics accused the video giant of misleading buyers.
Now, some independent ad-tech firms, long in an uphill fight with Google for digital ad spend, are trying to use the findings to win new business and accelerate sales cycles, according to sources.
A sales executive at one ad-tech firm, who requested anonymity because they did not have authorization to discuss their company’s strategy publicly, has said about five agency clients, (or between 5%-10% of their sales), have agreed to commit money to their firm on the back of the Adalytics YouTube report. The campaigns haven’t yet started.
“[We’re] putting that elephant in the room,” the sales executive said, referring to bringing up the Adalytics report during meetings with clients. The firm contrasts its approach with Google’s, telling clients, “We are fully transparent.”
Digital agency Chalice Custom Algorithms won a new agency client last week on a much quicker timeline than a typical sales cycle, said Adam Heimlich, the company’s CEO, after the client was looking to diversify its spend away from YouTube.
“The advertiser’s perception [was] that taking control of the algorithm was suddenly essential,” Heimlich said.
A buyer source at a media agency said their organization is now working with several new ad-tech firms since the report dropped. The agency, along with several others, is planning to pull spend from YouTube’s network of third-party inventory, Google Video Partner (GVP) network, after the Adalytics report found that buyers were inadvertently paying to have their ads on GVP, where inventory was lower quality than promised.
“A ton of budget from YouTube… needs to be allocated,” the buyer said. “We now have more flexibility to experiment where before we did not.”
The Adalytics report presents ad-tech firms with an opportunity, though not necessarily rare. Negative headlines regularly come out about Google, from antitrust suits to layoffs, to the threat of generative AI on its search dominance. But less often do reports strike such a direct blow at Google’s relationship with media buyers, its dominant revenue source. What remains to be seen is whether more ad-tech firms can capitalize on this opportunity and whether this particular news item will stick.
