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Sandbox

The programmatic ecosystem has been bracing itself for changes at the back of cookie deprecation and impending introduction of the Privacy Sandbox. However, the latest test reports from both IAB Tech labs and Criteo have brought into focus the many challenges and risks to publishers and the overall programmatic supply chain.

1. Unfair advantage to Google: Google Ad Manager’s market share is likely to increase from 23% to 83%. Criteo found that the Privacy Sandbox creates an enormous advantage for Google’s advertising business as it is setting up rules and technologies that align well with its existing infrastructure and business model, providing it with a competitive edge, thereby marginalising third-party tracking technologies that competitors rely on. The integration of Privacy Sandbox within Google’s advertising ecosystem (Google Ads, AdSense, DV360) would further tilt the advertiser preference towards consolidating their spending with Google. Case in point is the TEE (Trusted Execution Environment) that is needed to run the auctions. Currently Google only permits TEEs that run on AWS or Google Cloud Platform. This is a competitive concern as it levies an unfair potential tax on independent publishers, exchanges, and other ad tech platforms.
    
2. Latency: With 28% more latency for Privacy Sandbox auctions compared to others, this could be a major issue. This latency is primarily due to the requirement for Google to be the top Seller in protective audience auctions. The only way around this is if Google creates a level playing field for all publishers and ad exchanges to compete directly in a client-side auction.
    
3. Decrease in publisher revenue: With a 33% decline in CPMs on Sandbox-enabled impressions, the publisher revenue is expected to decrease by an average of 60% for those that have fully integrated the Privacy Sandbox.

These findings have been shared with the regulator, UK’s Competition and Markets Authority and they have warned not to implement the tools until anti competitive concerns have been resolved.The way to level this playing field is more participation in the rigorous testing by publishers and other stakeholders.