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Google gave the world an unintended taste of the ad-free internet this week. And publishers who rely on the tech giant’s ad serving software have been reminded of just how much power Google wields over their ad revenue.
Google Ad Manager (GAM) was down for about three hours Thursday night across web, app and video inventory. Any ad placement served through GAM, even ads monetized by a non-Google SSP, went dark, resulting in lost revenue for publishers of all sizes at a time when they can least afford to lose income.
GAM service has since been restored, and Google has identified and corrected the problem, according to a Google employee who worked to restore its service.
But the outage left publishers “shooting holes in their pages,” said Matt Barash, SVP of Americas and global publishing at Index Exchange. He was “the longest [GAM outage] in memory and eternity by K4 standards,” he said.
The worldwide GAM outage began around 8:06 PM ET and lasted until 10:40 PM ET, according to Google. But some publishers said they began seeing signs of an outage that began around 7:04 p.m. ET.
Publishers have seen their impressions and GAM revenue drop to zero. One publisher, who asked to share the data anonymously, shared a chart showing how the outage affected his revenue.
“Given the number of publishers GAM serves globally, this time of year represents a peak in digital ad spend and the macroeconomic factors that have caused ad spend to be lower than we’ve seen in previous years, it’s safe to say that last night’s outage will have a significant impact on publishers’ revenues,” said Paul Bannister, chief strategy officer at CafeMedia. “Every dollar counts now.”
But as bad as the timing was, it could have been worse. “Fortunately, this was relatively late at night for US buyers, so the traffic should have been a little lighter and the big campaigns should have been running during the day,” said Scott Messer, an ad technology expert and industry consultant.
Assuming a constant number of impressions per hour, a three-hour downtime costs publishers about 12.5% of their daily GAM revenue, or about 0.4% of their monthly GAM revenue.
However, 0.4% of the big number is still a big number, so it’s unlikely that Google will offer publishers any kind of commodity for the loss of revenue “given the scale and prevalence of this,” Messer said.
Google probably isn’t bound by any service level agreements (SLAs) with publishers, said Krzisztof Franaszek, ad-tech researcher and founder of Adalitics. “Which is crazy,” he said. “[Publishers are] they are very dependent on this software and have no guarantees from the vendor that the product will work as intended.”
“There are no SLAs from Google regarding GAM,” Messer agreed. “There are basic platform terms and then there’s usually an order form for each specific customer.”
Google declined to comment on any plans to release publishers as a whole as a result of the discontinuation of its GAM service.
While this episode illustrates how much the programmatic infrastructure of the open web relies on Google’s advertising technology, publishers have alternative ways to reconnect their inventory in case of problems.
“My guess is that publishers are refocusing on an outage backup plan,” Barash said. “It’s important to protect yourself in an industry where exclusivity can often increase risk and exposure.”
One example is Salon, which lost about $500 in revenue due to the GAM outage before its ad tech partner Sovrn was able to stop the bleeding. “The ads were turned off for about two hours, but we were able to continue serving ads.” [on Salon] around 9:00 PM ET bypassing ad requests to GAM and showing programmatic ads from our SSP partners until the end of the outage,” said Carson McGrath, director of ad management at Sovrn, which works with Salon to monetize its ad revenue.
Instead of an ad server serving ads, ads can also be served directly from Prebid or other header bidding solutions, Messer said. “So while you won’t need a backup ad server, publishers may want to explore connecting directly to demand sources,” he said. “This could inspire some programmatic-only publishers to rethink their entire pipeline.” While it would be expensive to skip Google Search, it would be possible to monetize your site entirely without an ad server by serving header bidding ads directly to your site.”
Another approach would be to have a system that serves fallback direct-offer ads embedded in the website’s code in case programmatic ads don’t load, Franaszek said. Safeguards like these are used by some publishers like the Washington Post, he said.
“Hard-coded AdSense and any video ad serving outside of GAM were still active,” Messer said. “Let’s not forget that on-page code juggernauts like Taboola and Outbrain also continued to generate revenue for publishers.”
All in all, GAM’s termination is more of a case for antitrust arguments against Google’s crackdown on digital advertising. “This event serves as a stark reminder of how dependent web publishers are on Google and how the company has a firm grip on the ad serving market,” Barash said. “It’s also a reminder of the critical importance of independent ad technology, the need for optionality and greater overall vendor choice in our industry.”
But while Google may be one of the biggest targets of scrutiny in the ad industry, the way it handled the incident speaks well for the company, Messer said. “This could have happened to anyone, and it was still a very quick recovery for a global outage,” he said. “It’s actually great to have such a solid technology partner driving the backbone of Internet revenue.”
And the incident provided food for thought about how much the open web’s advertising infrastructure is slowing down the internet. “This was an interesting experiment in how publishers can work to make their websites and apps load much faster by optimizing parts of their digital advertising experience,” said Franaszek.
Publishers now have a unique opportunity to measure how loading their ads affects time on site and pages per session. “Google Made an Ad-Free Test Across the Internet”, tweeted Emre Downinghall, SVP of Programmatic Revenue and Strategy at Unwind Media. “The timing of the K4 is complete crap, but [it’s] an opportunity for pubs to look at which UKS metrics were affected during the outage.”
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