Google has spent more than a year preparing for GDPR, updating more than 12 million contracts and alerting its own users.

(Bloomberg)—For months before European data-privacy laws came into effect, Google’s rivals fretted that the search giant was poised to benefit at their expense. After one day operating under the new rules, those concerns look warranted.

Alphabet Inc.’s Google captured a larger share of marketing spending flowing through Europe’s digital advertising market on May 25, according to a leading ad technology company.

Europe’s General Data Protection Regulation, or GDPR, requires companies to gain consumer consent for data they collect, including the cookies that track where users go online and enable billions of dollars in targeted ads. To comply, Google told clients of its ad-bidding service to be cautious about some of the third-party companies that offer marketing tools or track users online. Google noted that it couldn’t verify that all companies in the complex digital advertising market received user consent. The new law includes steep fines for violations, so the industry is treading carefully.

One result of that early on: More ad money flowed through Google. The company runs the largest machinery behind automated and targeted online advertising, software called DoubleClick Bid Manager or DBM. It has spent more than a year preparing for GDPR, updating more than 12 million contracts and alerting its own users. Marketers and ad agencies can use DBM to purchase ads with Google or with smaller firms, like AppNexus Inc. and Rubicon Project Inc.

Two days before the law went into effect, European advertisers spent about half of their marketing money through DBM to Google, according to AppNexus. On Friday, day 1 for GDPR, about 95% went to Google as marketers and websites shied away from other providers.

advertisement

AppNexus, along with some media groups, have criticized Google for placing the onus of obtaining consumer consent on publishers and other website providers—and waiting too long to draft its policies.

“Google has a ton of leverage. They’ve been kind of ridiculous about how they approached it,” AppNexus CEO Brian O’Kelley said in a recent interview.

“The GDPR is a big change for everyone. Over the last year, we’ve engaged with over 10,000 of our publishers, advertisers and agencies across nearly 60 countries through events, workshops and conversations around the changes we’re making to be compliant with the GDPR,” a Google spokesperson said. “We will continue to open our doors to our publisher partners to engage in these discussions on GDPR compliance.”

Some in the industry have worried for months that GDPR would inadvertently help Google and Facebook Inc. box out rivals further. The two control more than three-quarters of digital advertising and have the cash to pay lawyers for compliance steps and handle any fines. Smaller ad firms, which provide alternative services for marketers to target ads, have less financial muscle.

Last week, Google sent out a video internally congratulating thousands of staff who worked on GDPR preparations. Advertising chief Sridhar Ramaswamy and general counsel Kent Walker featured in the clip. One of the main messages: GDPR is the type of complex problem that Google excels at by having experts in different disciplines collaborating.

advertisement

The law could provide convenient cover for Google and Facebook to hide more of its measurement data from others in the industry, Harry Kargman, CEO of ad firm Kargo, said before GDPR kicked in. With their massive audiences, most advertisers will have no choice but to continue using Google and Facebook, he added.

Some publishers stopped running automated digital ads altogether when GDPR began on Friday, industry news website Digiday reported. Some ad exchanges, which automatically match buyers and sellers of marketing slots, saw demand from Europe drop as much as 40%, according to Digiday. “Anybody who feels good about it is either a monopoly or a liar,” O’Kelley said.

The Google spokesperson said the company has worked with ad exchange partners “to develop an interim solution to minimize disruption.” The internet giant is integrating its ad systems with an industry framework that will standardize how to get the right consent from European consumers, the spokesperson added.

Google attempted to calm publishers on Thursday. Bonita Stewart, a Google vice president, wrote that the company would have an option for publishers to use its services to deliver personalized, more lucrative ads to people by June, according an email obtained by Bloomberg News.

Still, several media groups found Google’s offering inadequate. A trio of publishing organizations sent a blistering statement on Friday morning about GDPR.

advertisement

“Google is effectively putting a gun against publishers’ heads,” the statement said. “This is a flagrant abuse of their dominant position.”

Favorite