Understanding Google's Ad Tech Changes and Their Impact on Publishers
In 2019, Google made significant changes to its advertising technology, a move that has become a focal point in an ongoing U.S. antitrust trial. These changes primarily involved the removal of a feature that allowed publishers to reduce their dependency on Google's ad services. This feature enabled publishers to set higher minimum bid requirements for Google's AdX compared to other exchanges, giving them the ability to preference alternatives that may charge lower fees.
Why the Change Was Controversial
Publishers, including major entities like the New York Times and News Corp, were not pleased with this change. The internal documents revealed during the trial showed that Google was aware that the removal of this feature would not sit well with publishers. This feature allowed them to negotiate better terms with other ad exchanges, thus keeping Google "at bay."
Google's Strategy to Ease Tensions
To mitigate potential backlash, Google introduced these changes alongside other features that publishers found appealing. One notable adjustment was the elimination of the "last look" practice, where Google could outbid other exchanges after seeing their offers. This was framed as a step towards a fairer bidding process, with claims that it simplified the system and increased auction revenue by a median of 2.7% for its top 500 publishers.
Publishers' Reaction and Legal Implications
Despite Google's efforts to present these changes as beneficial, publishers expressed dissatisfaction. Jana Meron, an advertising executive from Business Insider, highlighted the challenges publishers faced in optimizing their ad revenue with partners outside of Google in an April 2019 meeting.
The trial, which is expected to last several weeks, aims to determine if Google unlawfully dominated the online advertising market. Should the U.S. District Judge Leonie Brinkema find Google at fault, potential remedies could include forcing Google to sell off parts of its ad technology, specifically the Google Ad Manager.
