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Home›Monopolistic›Avoid a bad Google break

Avoid a bad Google break

By Levi Bailey
May 25, 2021
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Publishers and ad technology companies have recently received some interesting new information about how Google has handled its programmatic advertising business over the years.

Specifically, they uncovered Project Bernanke, a secret program in which Google made previously undisclosed deals with big partners like Facebook to ensure preferential pricing and winning deals. He also adjusted the revenue share to ensure that auction price floors were clear for these large partners and he dynamically changed the floors based on historical auction data. Google laid out the details in an unredacted court file unintentionally obtained by the the Wall Street newspaper.

In this industry, we shake our heads and say “it matters”. It would be surprising if Google did do not have secret deals with other big companies or what they have done do not over-design their technology to have full control over what ad gets placed where and at what price. Google is a for-profit company with little government oversight.

What happens next is more important.

The technical details of the Bernanke project can confuse people in the Department of Justice, the Federal Trade Commission, or the many US courts who hear cases – for example, how price floors work or why it is reasonable or unreasonable to adjust. dynamically them. What will be clear, however, is that Google has too much power and control over too many parts of digital advertising. There is a distinct possibility that these revelations, along with the numerous ongoing lawsuits against Google, could lead to a business disruption.

Our industry must play an active role in dictating what this disruption looks like. Done well, this trust-breaking exercise will preserve the real value that Google’s technologies bring to publishers and consumers while diminishing its unfair benefits. If not, the impact of the ad technology industry could be neutral or negative.

Avoid a bad break

Let’s clarify one thing – Google is programmatic advertising activity. It has a DSP, an ad server and an SSP. It has the best browser on the web. It is one of the largest online publishers. The business is both the end-to-end supply chain and the customer.

If Google were really forced to divest some of its products, there could be a number of ways that this could happen.

There is a storyline separating Google’s content properties, like YouTube, from its ad technology business. For the ad technology industry, this type of disruption would require YouTube inventory to have the same functionality and availability in other SSPs / DSPs as other publisher content.

Another perspective is that Google’s search activity is separate from its display activity. This scenario would disrupt many of Google’s revenue channels, as it could make it harder to deliver the same AdWords search and display advertising package to the millions of small businesses that are bread and butter. When it comes to monopoly offers, AdWords clearly tops this list online, and this kind of disruption would hit Google hard. But, again, for the ad technology industry, this is not the crux of the very significant.

For display advertising, the real issue is Google’s built-in DSP and trading platforms.

What the industry doesn’t know is whether Google’s DV360 is leveraging the information it has on floors set by publishers. Does Google use its ad server to train its SSP – optimization in Ad Manager based on the information it has in the auctions of other business partners like Kargo, IndexExchange, OpenX and other SSPs? Using the information in this way would give it an unfair advantage in the market.

These nuances should not be overlooked. It’s up to the folks in our industry to set the record straight – to make regulators and officials understand that the DV360 contains an unparalleled reserve of price history, won bids, floors, and other programmatic market information. Ideally, Google should choose to be on the buy or sell side and relinquish end-to-end ownership of each ad slot.

Banging the drum hard

Google is ready for this fight. In an email to The Verge, a Google spokesperson said that the 2020 lawsuit against Google by Texas Attorney General Ken Paxton “distorted many aspects of our ad technology business. We are eager to take our case to court. Technically there will likely be holes in the deal, but the bigger problem is Google’s outsized influence on the advertising market as a whole.

For this reason, Google must be dismantled, and the way it happens is the difference between a healthy ad market and a market that continues to be dominated by a single titanic player.

Now that government entities are fighting for stronger regulation of Big Tech, all of us operating in the shadow of Google have a responsibility to advocate for the best possible outcome.



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