Interview with Gal Turjeman, CEO of Artimedia, Which Just Sparked an Antitrust Investigation of Google in IsraelFriday, December 22, 2017, 11:13 AM ET|Posted by Will Richmond
Coincidentally, while I was in Israel a couple of weeks ago for the Video Trends conference, the country’s Antitrust Authority opened an investigation into Google and its dominance of the Internet advertising market as a restraint of trade.
The investigation was prompted by a complaint from Artimedia, a global company that entered the Israeli online video advertising market 3 years ago. Artimedia is backed by Singaporean investors, mainly by Mr. Ching Chiat Kwong, chairman and CEO of Oxley Holdings, which is publicly traded in Singapore Exchange market (SGX:5UX). I interviewed Artimedia’s CEO Gal Turjeman to learn more about the investigation. Following is an edited transcript.
VideoNuze: Explain Artimedia’s role in the Israeli market?
Gal Turjeman: Going back to when we started we’ve had a mission to help local premium publishers win back video advertisers and advertising budgets and become a meaningful player in the market. Next to the two global giants - Google and Facebook, who currently draw most of the advertising budgets all around the world, local publishers are left with a small share to compete for. Artimedia entered the video market in Israel almost 3 years ago and managed to unite almost all the major Israeli publishers into one programmatic video advertising network, providing them technology, data management and optimization and measurement abilities, and actually changed the local Israeli video market from 0% to 100% programmatic in only 18 months.
VN: Artimedia has initiated a complaint against Google with Israel’s Antitrust Authority. Can you describe what your concern is with Google generally and with YouTube specifically?
GT: Google is acting as a monopoly all around the world and it exploits its status, starting with its walled gardens conduction and lack of transparency which led to recent scandals in YouTube serving ads on terror organizations content for example as part of its inability to control the content on its platform, and moving on to varied and sophisticated ways of pushing competition aside and exploiting its endless and dominant power in almost all aspects of the digital advertising field.
Google’s control of the digital supply chain gives it a major advantage - Google can tie its different services together and therefore can respectively maximize its market share and revenue, at each point of a digital campaign. This situation is bad for every player in the market, including advertisers. For example: a key part of Google's business is selling advertisements through Google Display Network (GDN). On the other hand, Google operates the DoubleClick for Publishers (DFP), which offers a technical service for helping Web publishers manage their ad inventories and upload ads. In principle, the DFP operates independently and offers ads from GDN and rival services, but we have no doubt that the DFP gives preference to GDN, since rivals can’t access from DFP all the information they need to manage ad inventory.
We are glad that the antitrust authority decided to take action and start a formal inquiry regarding Google’s conduct in Israel and we hope that the actions taken against the duopoly of Google and Facebook by regulatory bodies throughout the world will continue to grow and will put an end to the unfair competition.
VN: In a perfect world, what kind of action would you want the Antitrust authority to take regarding Google?
GT: The antitrust authority should strive for a healthy competition and limit powers that can distort it. We are not afraid of competition, but it needs to be fair. The terms for this situation are transparency, even opportunities and restrictions for all players, without anyone playing with its hands tied. Start with paying taxes. I think it's absurd that Google and Facebook, taking most of advertising budgets, will not pay taxes and return money back to the state, due to the fact they are not registered as local companies, while the struggling local publishers will need to carry the burden alone. This issue alone is a starting point to a more even and healthier competition for example. Moreover, the Antitrust authority needs to examine the many cases where it seems that these two giants take advantage of their great power and restrict them according to market and competition regulations.
VN: What is the market share for YouTube in Israel as compared with other publishers and how has this evolved over past 2-3 years?
GT: When we started our activity in Israel in 2015, Google and Facebook enjoyed most of advertising budgets and local publishers were left with approximately 20% or even less. The local publishers had and have premium and professional content in which they invested great sources, but didn’t have the technology that Google and Facebook offered.
There were a lot of small players (each publisher separately) fighting for leftovers and struggling to survive. Since dealing with the giant duopoly is a worldwide problem for publishers, we see all kinds of initiatives from publishers’ side to unite and use their data, scale and premium content in order to lure marketers back. But Israel is the first and only example nowadays of a broad coalition of publishers, giving advertisers an end to end solution, that succeeded in shifting the needle and brought its local publishers back to life, taking approximately 40 percent of video market share in Israel. We see a constant growth in demand, so I am very optimistic regarding the future.
VN: How applicable do you believe the issues you’re raising with Google/YouTube are to other markets, specifically the U.S.?
GT: As we saw in recent months, there are global issues that have relevance to almost all countries in which Google and Facebook operate in. The lack of transparency, the usage of monopolistic power ( for example, the huge fine imposed on Google by the European Union for its abuse of its dominance of the search engine market in building its shopping comparison service), the lack of control over content, etc. These discussions regarding the use of power become more and more frequent and regulators all around the world should force standards and limit their great power because the price everyone else is paying is too high. The relations between all platforms, local advertisers and publishers should be transparent and I believe it is very much applicable to each and every market including the U.S., which unfortunately did not take active actions yet like the EU for example.
VN: Artimedia works with Israeli content publishers to monetize their video. What challenges do these publishers have and how does Artimedia assist them?
GT: Premium publishers own great content with high demand. Their first party data is a valuable asset but separately they lack scale and most of them don't have the resources to invest in technology. When we started, each of the publishers were in a different technological level which caused a serious issue. Using Artimedia's technology, the local publishers succeeded and became a third and a very powerful network in Israel, that can offer a real alternative to the global competition. Today, not only are premium publishers in Israel equal to Google and Facebook in technology and data, they also offer a real advantage with premium content that is proven to be much more effective for advertising, since a viewer that is engaged with the content is engaged with ads appearing on it.
Now, as a network, publishers can continue to invest in content while Artimedia is investing in technology and the scaled data over all the Israeli network for them. Together we can offer a premium video product in a model that has proven itself - advertisers are investing back in local publishers and as I already mentioned, we see a constant growth in demand for video in Artimedia.
VN: There is a lot of concern in the U.S. TV industry that Google and other large platforms are a significant threat to draw traditional ad dollars. Do you think this concern is warranted?
GT: I can't deny that digital is a real threat to the traditional TV. But although viewing habits are changing and the TV screen is not the center anymore, TV content is still dominant and it will only get stronger, now that every screen is a portable TV in a way. Viewers look for quality and engaging content, the TV industry is the number one supplier for this demand and I don’t think this is going to change. TV should adapt and welcome digital aspects it can take advantage of to minimize and even eliminate the threat. We already see first steps with addressable and programmatic TV for example. The industry is going to change completely, and I think we are heading into a very interesting phase nowadays.
VN: Thanks for your time and good luck.