I spent the first 11 days of 2024 in a more retrospective and reflective mood than any new year I can recall. There is so much to think about.
We’re still managing the impact of the pandemic — whether that’s our own mental health or global inflation. There are major wars and conflicts around the world. This is a consequential election year for many democratic nations — including the U.S. And the internet is changing dramatically. It’s easy to surf from headline to headline in the 24-hour news cycle and get worried, anxious, or negative. But if we zoom out, we often find that many of the challenges of the past were ultimately our greatest opportunities.
My company, The Trade Desk, grew more during the pandemic than all its 10-year history prior to that. We gained market share more rapidly than ever, and we grew from around 1,000 people in 2019 to well over 3,000 today. I still wish the world could have avoided the pandemic, but I’m proud that as a company and with our partners on the open internet, we helped the world fund the transition to streaming premium TV content.
Admittedly, 2024 would be better if I knew there was a Ted Lasso season 4 to look forward to, but we’ll all have to face the challenges of this year without Ted, Roy, Rebecca, Beard, Sam, and team. I digress.
I recently read that Fortune magazine cited Chester Carlson’s greatest invention — the Xerox 914 — as “the most successful product ever marketed in America measured by return on investment.” It got me thinking about how we all stand on the shoulders of giants. The Xerox 914 machine changed business. It changed information distribution. The company even changed its name to Xerox because of that product.
One ad promoting the Xerox 914 used monkeys to show how easy it was to use. At the time, there was no shortage of protestors suggesting that the machine would take office jobs away and that a monkey could now do office work. It’s easy to look back and appreciate how technology has helped advance office productivity — and helped all of us shift to higher-value work — but the focus is often initially on the fear of jobs being taken.
"Advertising is changing — again — forever."
If you zoom out, often the existential threats we thought were super scary were actually not that existential, and not that scary. Not unlike the copier, ATMs helped banks automate routine tasks and shift resources to work that generated more strategic value. There was once a lot of fear that Y2K would produce some kind of digital zombie apocalypse, but it didn’t. When Safari got rid of third-party cookies, advertising spend shifted but efficacy grew, and the open internet accelerated its move to connected TV (CTV) after the Apple–cookie speed bump. In the end, the advertising market grew, and advertisers had more options.
Xerox was once a flagship global technology company. Kodak too. Then IBM, then Microsoft, then Apple, and then Google. But every technological era ends, and companies have to evolve. And new companies emerge to challenge the status quo.
I love it when a company like Tesla comes along. I bought one of the first P85 Model S’s. I knew it was a game changer. Faster, better, great UI right on my dashboard, less carbon — a clear winner. But what I love most about the Tesla story is that they showed the world what was possible by innovating something new. It rapidly became clear to everyone that this was the future. And the rest of the auto industry had to evolve. Companies that had spent almost a century cultivating a business based exclusively on gasoline-powered cars quickly embraced new electric vehicle technology. Whether Tesla wins or not — and regardless of what you think of Elon Musk — Tesla (under his leadership) changed the world.
Similarly, the advertising industry is currently facing a series of unprecedented and complicated shifts. Advertising is changing — again — forever.
For the last two months, ever since Google brought forward the date that it would begin deprecating third-party cookies in its Chrome browser (the latest among many date changes), I’ve been answering the same questions over and over. What do I think about Google’s Privacy Sandbox product? Or the Protected Audience API? What about Google’s Topics initiative? Will The Trade Desk test them?
We’ll test them all. Of course, we’re considering the product carefully. We’ve spent a lot of time with the specs — or better said, the ever-changing specs. But I honestly leave the examination of their many docs and APIs wondering if we’re witnessing the end of an era for Google.
Across the industry, experts and veterans are looking closely. Most see this as Google hiding behind privacy and complexity to make more data and dollars route through Google. The docs are so complex that their full scope and implications are probably only fully understood by a few engineers at Google. But after all that consideration, honestly, my primary reaction is different from most. I’m just disappointed.
Privacy Sandbox is not innovative. It’s not good for the open internet. And I don’t even see how it’s good for Google. All those brilliant minds inside of a nearly $2 trillion company couldn’t do better than this?
The Topics API, for example, has pretty much adopted the audience categories a few of us defined almost 20 years ago at the Interactive Advertising Bureau. We’ve made so much progress since then, and rewinding the clock to a much more primitive approach represents a major downgrade for advertisers. Degraded relevance will mean decreased revenue for most publishers on the browsing web — in the form of lower costs per mille. Inside of Google, DV360 will likely be deprioritized further. The platform formerly known as DoubleClick will be a weaker product with less signal. Measurement will be worse, more opaque, and less auditable. And through it all, particularly on measurement, Google will be saying “Just trust us” to publishers that have questions about Google Ad Manager’s yield management, prices, and auction integrity. And to advertisers they’ll say the same thing about prices, auction integrity, and attribution.
Google has had thousands of engineers spend more than three years creating a product that takes the industry backwards.
"In many ways this is an amazing opportunity for the rest of us to do what Google should be doing."
In general, I’m a Google admirer. So, naturally, I’m also a Google shareholder. The company is arguably capitalism’s greatest-ever success story. But I’m disappointed in this “privacy” product. This is it? Google invested billions to make the internet worse?
Perhaps most disappointing is that Google has taken a pass on the opportunity to do what other technology leaders have traditionally done so well. Whether it’s IBM building a vast partner industry around its game-changing mainframe technology in the 1960s and ’70s, or Salesforce doing so more recently in the CRM space — there’s an opportunity to develop a thriving ecosystem of innovation, opportunity, and growth. Google didn’t make the bold move Tesla did: Innovate and then open-source the innovation. Instead, Google is creating thrash for advertisers and publishers with little apparent upside, aside for perhaps Google itself.
I don’t think the covering of Google’s legal ass on privacy is worth the anticompetitive scrutiny this will likely bring over the next few years. That scrutiny will come after the impact is felt by other internet businesses. A few will benefit from this, like The Trade Desk, Apple, and Facebook. But this will hurt thousands of others, especially browser-based publishers such as news publishers.
For the small ad-funded internet companies that are compelled to do a lot of expensive development work with little hope of making more money, and for the publishers that will have to cede more control and revenue opportunity to Google with fading hopes of survival, I believe Google will unfortunately make new enemies.
The future will be claimed by innovation, not deprecation
So, in many ways this is an amazing opportunity for the rest of us to do what Google should be doing. While Google is intent on ripping out pipes, other companies, including The Trade Desk, are building new pipes and building new ecosystems. Pioneers of the open internet will work together and continue to innovate.
I genuinely believe that by the end of next year, we will be thanking Google for accelerating the adoption of the new identity fabric of the internet. New technologies such as Unified ID 2.0 (UID2) have already been deployed by hundreds of the most important players that comprise the internet’s core infrastructure. Google’s actions are helping propagate the deployment of UID2 by advertisers and publishers to all corners of the digital advertising ecosystem.
In this way, I see Google’s lack of innovation as an opportunity for everyone on the open internet to step in and build something better: New single sign-ons; better ways to enhance the value exchange of relevant advertising for free content; improvements in consumer privacy; and identity tools that work across all advertising channels and support the needs of today’s modern marketer. These are all innovations that make the internet better. Not worse. That’s what we should aspire to. These kinds of innovations, among many others, are embedded in our latest platform launch — Kokai.
One thing is for sure: 2024 will not be boring. There is more opportunity for the open internet than ever. More opportunity for publishers to develop the authentication strategies that make ads more relevant and customized for their users, and which will put them in control of their own destiny. More opportunity for advertisers to help build the new identity fabric of the internet that helps them fund today’s amazing digital experiences with more precision than ever. And more opportunity for consumers to enjoy those experiences with fewer, more relevant ads and better control over their privacy.
As with any seismic technology shift, there will be winners and losers. 2024 will be a year of change and opportunity. Most importantly, this will be a year of action.
Every advertiser and publisher will have to make changes, as will every technological and service company in between them. Those who innovate will win.
The Current is owned and operated by The Trade Desk, Inc.