Late last year, the CEO of Google, Sundar Pichai, was asked pointedly by Kara Swisher where he sees competition in his business. Sundar named only two companies: TikTok and The Trade Desk.
As the founder and CEO of the The Trade Desk, I was quite surprised then. I still am now. Because he may have inadvertently made the government’s point as it prepared its antitrust lawsuit that dropped Tuesday.
I often say that I compete with something like the 37th-highest priority at Google. And in that one area, The Trade Desk is a fierce and successful competitor.
But I don’t compete with big Google. We aren’t building a search engine, or a space program, or an ad network, or a video streaming service, or an email service, or even a publisher ad server. I compete with Google in a market that most consumers have likely never heard of.
At The Trade Desk, we help the biggest brands in the world buy ads online — banner ads, ads on podcasts, digital out-of-home ads, mobile ads, and especially connected TV ads. We help them use data to figure out which ads to buy, at what price, in millions of online ad auctions that take place every second.
And in doing so, we help these businesses differentiate themselves and grow. Research suggests that advertising is a lynchpin of economic growth, contributing to as much as 20 percent of a country’s GDP. It’s also core for entrepreneurialism, helping small businesses establish themselves in the early stages of growth. And key pillars of our society, such as trusted journalism, rely on advertising to fund their important work.
All these important economic dynamics, however, rely on an open, transparent, and competitive market for advertising. Where advertisers can be sure their ads are showing up, understand the kinds of audiences they are reaching, and be confident they are paying the right price.
Because we don’t own any media content or sites (destinations like YouTube), or a search engine (like Google.com or the much smaller, not-so-dominant Bing), we can objectively buy the ads that have the most value to any given brand. We always set up our system and incentives to do the best thing for the brand. As the DOJ lawsuit points out, Google, on the other hand, makes money on all sides of the advertising transaction. In many cases, Google is even buying from Google on behalf of brands.
Perhaps the most surprising aspect of Sundar’s answer is that he didn’t, or perhaps couldn’t, name competition on what I see as Google priorities 1 through 36. Think about it. In Search, there’s no competition to mention. Chrome and Android? They each boast dominant market positions.
Instead, he names TikTok, a company founded and based in China — a place where the DOJ will have difficulty deposing executives and where learning user counts and revenues is almost impossible — and The Trade Desk, a company that while hugely successful, enjoys a market capitalization of around 2 percent of Google’s $1.4 trillion valuation.
I should be flattered. But I can’t help thinking it’s a bit like Amazon citing Roku as a major corporate competitor (not to compare The Trade Desk to Roku, as I believe TTD’s business model likely has more staying power). Roku isn’t competing with Amazon Web Services (AWS) or selling over $740 billion in retail goods this year. Of course, it currently is a fierce competitor to Amazon Fire devices. But beyond the oddity of Sundar’s comment, the fact that he could not name a larger-scale competitor should be of concern to anyone who cares about the importance of open competition. The graveyard of companies that have died under Google’s influence is large and growing. Take the travel category: Companies like Yelp and other travel aggregators have been devastated by Google.
Nowhere should we be more concerned about the lack of competition, and Google’s seeming nonchalance about it, than the broader advertising market. Without a competitive, transparent advertising market, so much of what we cherish will be under threat.
Furthermore, looking forward, to move the needle on a balance sheet as large as Google’s, even larger game in the advertising business must be hunted. Recent Google policies have taken aim at Facebook’s portfolio of businesses, for example. Google even seems to use the my-friends-were-doing-it-too excuse as it points at Apple. Incidentally, that tactic didn’t work for me as a teenager and likely won’t hold up here. In my view, Facebook’s ad performance during the recent tech market correction is largely a function of moves made by Google and Apple to tilt the market in their direction.
The Trade Desk is in the unique position of winning against a small division of Google, because size and lack of objectivity work against Google when dealing with sophisticated buyers who have lots of choices. And on the open internet, brands have choices, nowhere more so than in the exploding world of connected TV.
In other parts of its advertising business, Google has left consumers and ad buyers with very few choices. With so many touchpoints to ad buyers and consumers, Google can route ad spend to themselves and never be challenged on the self-serving, anemic walled garden marketplace that eliminates choices.
As a result, today, for a substantial percentage of online advertising impressions, Google controls the decisioning, the routing, the audit trail, the bid, and the ask — seemingly playing the role as judge, jury, bailiff, prosecutor, defense attorney, and warden in many of the ad transactions they try to assert are finding justice.
This control jeopardizes the ability of advertisers to act with precision and differentiate their businesses, and it prevents publishers from fully monetizing their content, products, and services. The downstream economic impact of this control is significant.
I’m extremely proud of the company I’ve built. I think Sundar is right. I believe we can and will compete with Google on their 37th priority.
But what about everywhere else? What happened to Yelp? What happened to Marin or AppNexus? Why is Project Bernanke necessary? Why would Google create Project Poirot to undermine publisher innovations such as header bidding if it really cares about fair and open markets? Why would Google create incentives internally to perpetuate the win-at-all-costs culture I see hurting journalism, entrepreneurship, and the open internet?
I hope we are building a new era where markets are competitive and fair enough that consumers and businesses are winners and not hostages to a world with fewer options.
There is so much more that will be said about this, including what should be done, and I look forward to being part of that conversation in the days and months ahead.