We were all at the edge of our seats last week as the entire industry tuned in each day of the DOJ vs. Google antitrust trial. 

The ad tech world is on high alert, gripping the industry with every twist and turn. To help make sense of it all, the AdMonsters editors dive deep into the first week of the trial in our premiere episode of ‘Google on Trial.’ This is more than just a courtroom drama—it’s a potential turning point for publishers, advertisers, and digital media.

In this episode, Lynne, Andrew, and I unpack key moments, testimonies, and implications that could reshape how we think about Google’s role in ad tech. We explore everything from data brokerage and market manipulation to publishers’ challenging negotiations with Google. The discussion even touches on global regulatory impacts, secretive maneuvers by Google, and how small players might be the most affected.

Curious to hear the full breakdown? Watch the video and join us in dissecting this critical moment for the industry.

Lynne’s Takeaways:

Data Brokerage and Market Manipulation – Lynne references an AdMonsters article by Adam Heimlich, arguing that Google’s true power lies in its massive data trove and how it uses it to broker ad placements. Google’s dominance is not just about having better tech but leveraging data to manipulate the ad marketplace in its favor.

Global Regulatory Impact – The trial could have global implications. She mentions fines imposed on Google and Apple in Europe and the UK’s CMA pushing for more transparency in ad tech. This trial could be part of a larger global reckoning against tech giants like Google and Apple, or “GApple.”

Stephanie Layser’s Testimony – Lynne highlights former NewsCorp exec Stephanie Layser’s testimony about publishers feeling held hostage by Google’s dominance. The lack of transparency and the difficulty of finding alternative demand sources means that publishers are stuck with Google, despite the potential for higher costs and complications if they switch away.

Yakira’s Takeaways:

Negotiating with Google Was Never Easy – Yakira emphasizes Goodway Group’s Jay Friedman’s testimony, noting that negotiating with Google is almost impossible due to its dominance. Friedman compared the alternative options to Google’s services as choosing between high-end and budget hotels, underscoring the unrealistic nature of switching away from Google without suffering revenue losses.

Header Bidding Was ‘Not the Answer – Header bidding was supposed to provide an alternative to Google’s dominance, but it actually made things worse for some publishers. Gannett’s attempt to switch to header bidding led to a 15-20% increase in CPMs, illustrating the difficulty of finding viable alternatives to Google’s ad services.

Why Is Google Being So Secretive? – Google’s attempts to exclude certain testimonies and make the switch from a jury to a bench trial by paying the government $2 million. This move highlights Google’s extensive power and raises questions about their transparency and motives in the trial.

Andrew’s Takeaways: 

The Small Player’s Reliance on Google – Small businesses and publishers see Google’s ad tech as a cost-effective and streamlined solution. Breaking up Google’s ad business could complicate ad management and increase costs, negatively impacting their ability to advertise and grow.

Check My Ads’s Two Cents – Ariel Garcia from Check My Ads argues that Google’s monopolistic practices stifle competition and transparency in the ad tech space. The trial could lead to structural changes and more global regulation, and reignite discussions on legislative measures like the America Act for digital media transparency.

What’s Next?

The trial has highlighted the complexity of breaking up major tech monopolies, the potential ripple effects on small businesses and publishers, and the intricate balance between legislative oversight and market self-regulation.

Stay tuned for weekly updates and deep dives as we continue to unpack this monumental trial. We will bring you the latest developments and expert analyses on what it all means for the future of digital media and ad tech.

Bye everyone, and see you next week!

The post Inside the DOJ’s Big Tech Showdown: AdMonsters Breaks Down Week 1 of Google’s High-Stakes Trial appeared first on AdMonsters.

As the US vs Google ad tech trial unfolds, Chalice’s Adam Heimlich explores how Google used data to dominate display advertising, manipulate auctions, and crush competition. Discover the hidden tactics behind its market power and what it means for the future of digital advertising.

Since a broker is an intermediary, and the basis of audience targeting is data, there should be no doubt Google is an enormous data broker — maybe the biggest of all time. That’s the big takeaway from Week 1 of US vs Google, the ad tech case currently in session in the Eastern District of Virginia.

Google’s Doubleclick & Admeld Takeover

Instead of selling consumer data to ad tech companies, Google opted to dedicate its brokerage to the service of Google advertisers. By 2007, these were demanding more cheap clicks than Google search could drive.

In glaring contrast with what an honest broker would do, Google decided to acquire Doubleclick and Admeld, assume the role of a trusted sell-side broker helping publishers monetize, and then use buy-side data against those publishers.

Cream Skimming and Auction Manipulation

Google monopolized the market for intermediary auction software by replacing fair and open auctions with auctions manipulated through Google’s secret use case for consumer data: cream skimming.

It’s relatively easy to predict conversions if you know what nearly everybody has been searching for online lately. But Google wasn’t satisfied with simply bidding to place, say, Proactiv ads in front of people they knew were worried about pimples. Google felt it necessary to place relevant ads without ever paying above market rate on behalf of Proactiv or any other advertiser. Overbidding is a natural consequence of winning a lot of auctions, which is why sellers like them. There’s no way to know what bid price you have to beat to win. Usually!

Secret Projects: Bernanke, Jedi, and Poirot

Acting as a dishonest broker with unique auction privileges, Google implemented a series of secret tactics to place ads in front of future purchasers for prices lower — sometimes much lower — than those placements were worth.

These include First Look, Last Look, Project Bernanke, Project Jedi, and Project Poirot. (It says a lot that only the DOJ was able to uncover these conducts, despite intense publisher scrutiny and dozens if not hundreds of ex-Google employees knowing about them. The amount of power required to keep a secret so big for so many years is immense.) Though auction manipulation is rightly the focus of the federal case, advertising professionals should note it’s data that drove the outsize profits Google reaped from digital display.

Data Power vs. Market Power

There’s nothing illegal about having the most data or using it to win continuously in search. There’s also nothing illegal about selling data, though reputable data brokerages somehow came to be regarded as less ethical than Google (I wonder how that happened). Where Google crossed a line was in exporting its data advantage from search to display.

Cream skimming radically altered what had been thriving competitions for buy- and sell-side ad tech. US law looks askance at market winners crossing into adjacent markets for an excellent reason: success in this sort of “monopoly maintenance” closes off markets from what they need to grow properly. Without a route to success through competition, markets see less investment, a slower pace of innovation, and lower value at every price. This is what happened to display.

The Downfall of Display Advertising

The trial includes a great deal of evidence on CPMs: which way they changed, at which times, and by how much. We who worked in digital display over the last decade can recall what we saw: deteriorating quality, persistent fraud, opacity on fees even when transparency was promised, constant reputational and corporate risk, and routine non-disclosure of even the basic facts about what we purchased or sold. There has been a great deal of finger-pointing at allegedly bad actors, though not enough at the biggest one. Finally, we can be grateful to have reached a moment of accountability, and an opportunity to reset.

A Market in Need of a Reset

Google thrived while the market suffered because it used its data advantage to cherry-pick display opportunities of high value to search advertisers. Besides lowering the overall value of display and rewarding corrupt players, Google’s bias tilted the display market toward direct response advertising, which values last actions over persuasion and sentiment lift. This has been extremely costly to brands, whose use cases for advertising were simply not served by the dominant technology. Also victimized were quality publishers, as monetization was (and still is) determined almost entirely by decision algorithms that ignore quality signals such as ad-to-content ratio, refresh rate, and share of returning readers. No one knows as well as we do what drove the devolution of news toward clickbait.

If Google’s data had been left within its search walled garden or brought to an open market for display advertising, that market would not nearly be so ruined. Google’s case unravels if you doubt that winning an arms race in data should grant a company the right to dominate in AI. If the data world champions hoard what they know about us, and only use it to fuel their own predictions, they will kill competition in many markets. It will be better for America if the world’s biggest data collectors, with their detailed digital dossiers on us all, are forced to be honest brokers.

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