Landing adtech regulations that don’t restrict innovation a ‘tall order’

Mariam Cheik-Hussein
By Mariam Cheik-Hussein | 27 October 2021

Digital agency boss Sarah Melrose has backed calls for regulation in the adtech sector but cautions new rules don’t stifle innovation.

The Australian Competition and Consumer Commission (ACCC) released its final report into its adtech inquiry last month. A key finding was that Google dominated the supply chain which harms businesses and consumers across Australia.

The watchdog noted “significant” competition concerns and argued existing laws are not enough to address the issues. Instead, the ACCC recommended it be given powers to develop new regulations in response.

AdMatic managing partner Sarah Melrose agrees there should be regulations but says they need to be thoroughly considered due to the sector's complexity.

“The adtech supply chain is complex to understand in its entirety and is constantly advancing and evolving for the benefit of not only advertisers, but consumers too,” Melrose tells AdNews.

“Any such regulation imposed therefore must not remove or dilute innovation and advertising advances in any way, so that the adtech industry can continue to propel forward.”

Melrose adds that for regulators to understand the supply chain in depth in order to make such regulatory decisions without restricting innovation is a “tall order”.

“It could be just as damaging if rules and regulations are made by people who do not fully understand the intricacies of adtech and advertising solutions,” she says.

“The right people for the job must be selected who understand adtech and supply chain management thoroughly, to balance the fine line between reasonable regulation and ensuring fair competition, whilst avoiding burdening the entire industry with unnecessary regulation.”

The report estimated Google had a 90-100% share of impressions for publisher adservers. For SSPs it has 70-80% share of impressions and 40-50% share of revenue.

“There are plenty of great alternatives to Google when it comes to choosing an SSP - Pubmatic, Telaria, OpenX to name a few and this shows in the data,” Melrose says.

“Clearly, there is something useful about Google's products or they wouldn’t have ~50% share of SSP revenue in market.

“Yet when it comes to adsevers, it’s no wonder the majority of advertisers and publishers choose Google's adserver when the competition and viable adserver alternatives are nowhere to be found. It’s unfair to blame the owners of that life raft for dominating the sea, if that brand of life raft is the only one that won’t sink. Unfortunately, they are now a victim of their own success.”

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