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- [00:00]
Zeta Global
This episode is brought to you by Zeta Global. Do you know what it takes to transform marketing into a data driven profit center? Are you able to align the C suite around your AI vision and strategy? Zeta Global has the Playbook to help you get started. Download Driving growth in the AI era today at ZetaCMO AI book. Again, that's Zeta CMO AI book.
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Kate
When the going gets tough, the tough seem to maneuver their way out of responsibility. That seems to be the theme for big tech lately. I'm Kate with marketexture, and this is the Refresh, your weekly download on what went down in advertising. Today is Monday, April 28, and this week I do have a bit of bad news for you. We're covering two Google stories, the final chapter in the cookie deprecation saga and the start of their search remedies trial. We'll also explore where Apple may be heading with ads. So let's get into it. It ended with a sigh of defeat, not a shout of joy. I'm talking about Google's announcement on Tuesday last week that it has effectively given up on cookie deprecation and will no longer be rolling out a user prompt to opt out of cookies. And with one nonchalant blog post, a whole lot of hell experienced by the ad industry over the past five years has been politely dismissed. The privacy sandbox is still in play and apparently will have its roadmap adjusted, but it's probably on life support at this point. It's really hard to think it would continue to receive meaningful levels of investment, considering its primary reason for being cookies is kaput. In the wake of this news, some have speculated is Google backtracking because they couldn't hit the hat trick of satisfying privacy regulation and antitrust law, all while not causing significant harm to their business? Or is the potential divestiture from its Chrome browser influencing their decision? Maybe, maybe not. Either way, I don't feel that Google deserves any more airtime here, and we certainly do not deserve any more strife. So let's post mortem. What have we learned? The first no one man should have all that power. And yes, I do risk quoting Kanye in 2025. But there is some truth to this statement. This was Google's pet project, and to some extent allowing them to call the shots was unavoidable. But ultimately we gave them too much power to control how we as an industry responded, yielding the vast majority of decision making to Google. And this leads us to learning number two, which is we should be more comfortable taking bold stances and calling out the bs. This industry is full of deeply intelligent and discerning people, and eventually we caught onto the fact that Google was not going to be who we should rely on to blaze the cookie list trail for us. I hope and believe this experience has emboldened people to speak up sooner if something doesn't seem right and the math just ain't mathing. Finally, the industry was forced to find a better way, and that was ultimately a very good thing. We developed better ways of capturing, identifying and activating audiences, revamped legacy measurement approaches, and started to explore different measurement solutions entirely, and we can expect to see the industry use AI to continue this work. It's going to take some time, but AI has always been one of the most reasonable antidotes to cookies. It just wasn't ready to be at the time of Google's decision to deprecate them. With this final decision by Google, not Nothing has changed and yet everything has changed. And if you do want to deep dive a bit more, Trey over at AdTech explained part of market wrote up a fantastic recap of the last five years. You'll find that at AdTech Explained com moving over to Google's search remedies trial, which began on Monday, kicking off a three week period where the DOJ and Google will spar over how best to resolve Google's search monopoly problem. And regardless of the outcome, Google has already said it will appeal. For their part, the DOJ has proposed a few solutions, the big one being selling Chrome. This would be a massive hit to Google, and in all reality there isn't an elegant solution for how this would actually be carried out. We did see OpenAI and Perplexity's ears perk up at the potential of Chrome being on the market, but could that ultimately pave the way for them to be the next monopoly? The next solution proposed by the DOJ is to ban default search deals or the ability to strike deals with other large players like Apple for Google to be their default search engine. Another proposed DOJ remedy is that Google has to license its search data to anyone. This proposed remedy yielded a pretty noteworthy response from one of Google's lead lawyers, John Schmittlein, who argued in his opening statements that Google search data includes massive quantities of private information, which would be dangerous for other companies to have. And yes, data sharing opens up that data to vulnerability. But the implication here is that having access to that much data isn't dangerous for Google to have simply because they gathered it. This also disregards the means through which they came to be the data gatherers in the first place. As a final remedy, the DOJ is hoping that judgemetta will allow them to keep the sale of Android on the table. Google also gets to propose its own remedies for its own behavior, which is mildly comedic, but due process, I guess. Most of Google's proposed remedies lie in their default search browser Deals, stating that deals can be non exclusive, open for renegotiation every year, and that companies should be able to choose a different browser for private browsing. As it stands right now, Google's proposed remedies are a bit weak. On the other hand, none of the DOJ's proposed remedies in their current form would avoid a severe disruption to the status quo, with businesses and consumers alike left to absorb their impact. Ultimately, something needs to be done about Google and other companies like it that are left unchecked and just grow too powerful. This trial is really the first of its kind in this iteration of the Internet, and it does raise a few questions to contend with, one being at what point is it appropriate for the government to step in? This case was filed in 2020 and Google had established their dominance long before then. And in the time between when the case was filed and now, their power has only continued to build and grow, making it even more complicated to establish appropriate remedies. Another question, and it's one that's key to this case, how do you establish remedies that will adequately break down monopoly power without breaking down the technology and platforms that society ultimately relies on to function? Alongside this, I think we're seeing an evaluation of what our risk tolerance threshold is as a country for a shakeup of this magnitude, especially in the current and geopolitical climate. All of this will be for Judge Mehta to decide, and ultimately his decision may not even matter, at least not immediately given Google's plan to appeal, making this trial a marathon and not a sprint, unfortunately. Finally, let's talk a bit about the Apple ads. Rebrand. Seb Joseph and Crystal Scanlon over at Digiday had a great write up on this and I wanted to touch on it since Apple often is overlooked from an advertising perspective given its current lack of robust ad offerings. For a long time, Apple has enjoyed the luxury of sitting at a very exclusive table comprised of top tech giants, and they built this dynasty off of their hardware, Mac computers, ipods, once upon a time, the Apple watch and of course the iPhone. And in 2024, hardware accounted for roughly 75% of Apple's revenue. But those sales were either flat or declining, making up the other roughly 25% was its services business. Small but mighty, this business saw the fastest growth, with revenue increasing 13% year over year. Apple has always had the raw materials it needed to build a formidable advertising business, especially since rolling out App Tracking Transparency back in April 2021. Fun fact there. We actually just passed the four year anniversary of App Tracking Transparency back on Saturday, April 26th. Behind the scenes, they've been doing exactly that quietly, slowly assembling an ad empire under the banner of privacy, empowered by proprietary data and closed loop measurement within a robust ecosystem. Apple's dominance has bought them the luxury of time, which they've clearly leaned into. But as they struggle to launch truly innovative products, advertising could become the revenue lifeline they lean on next and recent moves signal the time may be coming. In July 2024, they announced a partnership with Taboola to sell ads in its News and Stocks apps. They've made updates to their Attribution framework to better account for signals in non click environments like CTV and audio. And most recently, of course, they've rebranded from Apple Search ads to the simpler, more expansive Apple Ads. For Apple, it's not really a matter of if they'll get into the ads business in a meaningful way, but when. And when they do, it will carry the double edged promise of a powerful advertising opportunity that exists inside one of the most powerful walled gardens. In closing, pour one out for all of your cookie list future POVs, the late nights, the WTFs and the JFCs. That's all we have time for today. Thanks for joining us for the refresh and we'll catch you next week.