Sources: Google is directing advertisers to work with third-party resellers directly to reduce its ad services overhead and position itself as a SaaS outfit
Ronan Shields / Digiday : Tweets: @rustybrick See also Mediagazer Tweets: Barry Schwartz / @rustybrick : Hey Google Ads #ppcchat - what ya think of this? https://twitter.com/... See also Mediagazer
Context & Ripple Effects
Google's ad services operation has been squeezed from two directions in the related coverage: Amazon built its own display ad offering and stopped buying Google shopping ads in its move to pull merchant spend off Google, and the EU's antitrust order forced Google to auction shopping ad space to rivals with a price cap on its own bids in the shopping-auction compliance offer. More recently, Google told publishers it is hiring dedicated staff to market its ad tech to big advertisers and agencies — a renewed push to sell its ad tech as a product rather than just run it.
First-order effects
- Advertisers lose Google as their direct services counterpart and must route campaign management through third-party resellers, shifting the service relationship — and the fees attached to it — onto those resellers.
Second-order effects
- Resellers gain direct advertiser accounts and become the service layer of Google's ad business, while Amazon's competing display offering gets a wider opening to court advertisers unhappy with an extra intermediary.
Third-order effects
- If the pattern holds, Google's ad business structurally converges on a SaaS model — software licensed through partners, service margins ceded to resellers — echoing the ad-tech-as-product posture behind its publisher ad tech hiring.
The trend: Google is converting its full-service ads operation into a software business, with third-party resellers absorbing the service layer it no longer wants to carry.