Google Is Pulling YouTube Inventory from AdX

Have you been buying YouTube inventory through a DSP not owned by Google? By the end of this year, that’s going to change.

Neal Mohan, VP of Display & Video advertising at Google, posted this to the DoubleClick Advertiser Blog on Thursday, announcing that YouTube programmatic inventory would be pulled from the company’s AdX exchange by the end of 2015.

After this point, advertisers will strictly find YouTube inventory through either the DoubleClick Bid Manager (formerly Invite) or Google AdWords. Third-party DSPs — such as Turn, The Trade Desk, and MediaMath — will not have the opportunity to bid on these impressions. 

The move to pull YouTube inventory from AdX is a little surprising, but does make some sense for Google. The company has, of late, been focused on getting advertisers to buy into their TrueView product, which only charges for impressions when a viewer watches 100% of the video ad without skipping. Selling this kind of “pay for play” media would be virtually impossible with third-party DSPs involved.

From an ad tech side, limiting YouTube impressions to Google-owned products is clearly a move to force more media buyers onto their platforms; thereby, in theory, eventually getting them to migrate other buys in the future.

With the general industry swing towards programmatic media buying, however, this self-imposed limitation on YouTube inventory could certainly hurt Google’s advertising revenue in the near-term. While Mohan claims that there’s only a “small amount” of YouTube ad buys coming through outside DSPs, I can attest from my own data that this can represent a majority of advertisers’ video buys in certain instances. Aside from the loss of revenue from third-party DSPs, given that Google has publicly blamed YouTube for declining CPCs across the board, it is rather shocking that the company would want to potentially show investors a further loss by cutting out the higher CPC-yielding CPM buys.

For advertisers, this means not only having to utilize another ad tech platform (for those that aren’t using AdWords or DBM already), but it also means the inability to incorporate first and third-party data that may not reside within the Google environment. Brett Wilson, CEO of TubeMogul, told AdExchanger Thursday that this move was an “unfortunate development [for advertisers] as they are now effectively prohibited from buying non-skippable video ads and from using data for targeting on YouTube.”

We should have a more exact date for Google’s discontinuation of YouTube programmatic inventory later this year.

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