The ad tech fight between DOJ and Google is all about control
The DOJ’s Second Antitrust Trial: Ad Exchange Perspective on Publishers’ Control of Dispatch Networks in the Search Engine Marketplace
“Control is the defining characteristic of a monopolist,” DOJ counsel Julia Tarver Wood said during opening statements in the federal government’s second antitrust trial against the search giant, which kicked off Monday in Alexandria, Virginia. The government thinks there is a system where advertisers buy space online and publishers sell it, because the government thinks that it’s harder for them to sell than it is for people to buy it.
The witnesses had their arguments poked at during cross-examination by the attorneys of the search engine company. Later in the trial, GOOGLE will call its own witnesses.
According to Casale from the ad exchange perspective, publishers rarely do switch ad server because of the technical lift. It is difficult to build a new one. Reducing fees had little impact on the ability to gain more business in the ad exchange market compared to competing with AdX. Because of the network effects and the fact that it only gets visibility into ad impressions it is hard to start a new exchange today.
The government says that one of the essential factors in the process is the role played byGoogle’s tools. Publishers can sell ad space on the ad server called the Ad Manager from the name DoubleClick for Publishers. It operates an ad exchange, AdX, that facilitates transactions. And it owns an advertiser ad network, rounding out its trifecta of major products across different parts of the ad world.
After opening statements, the DOJ began calling its first witnesses, focusing on the tools publishers use to monetize display ads. These are the ads that typically pop up at the top or the side of the page on news websites and blogs, populating through super-quick auctions that run while the page loads. During the auction, an ad exchange helps match publishers and advertisers based on things like topic and price without active intervention by a human. The process is called programmatic advertising, and it’s used by The Verge’s parent company Vox Media among many others. Ryan Pauley was on the list but wasn’t called to testify today.
Google’s Misleading DoubleClick Trial: Implications for Advertisers, Publishers, and Digital Ad User Experience and the Digital Advertising Supply Chain
To Google, the government is seeking control over a successful business by making it deal with rivals on more favorable terms, disregarding the value of its investments in technology and the unique efficiencies of its integrated tools.
Of course, all depends on the outcome of the case. Over the past year, Google lost its two other antitrust trials—concerning illegal search and mobile app store monopolies. Though the verdicts are under appeal, they’ve made the company’s critics optimistic about the ad tech trial.
Tim Vanderhook, CEO of ad-buying software developer Viant Technology which is both a competitor and a partner withGoogle, thinks that consumers will see more ads, less bad ads, and pages that aren’t cluttered with ads. “A substantially improved browsing experience,” he says.
It’s a big amount. Publishers would receive an additional hundreds of millions of dollars a year if the case had not been brought, according to court documents. Publishers are being pushed to put more ads on their websites, to have more content behind paywalls, or to cease business altogether, because of the funding Starved of that potential funding, publishers are being pushed to put more ads on their websites, to have more content behind paywalls Colorado attorney general Phil Weiser says it’s a subpar experience for consumers on the web.
The government contends that controlling DoubleClick enabled Google to corner websites into doing business with its other services. That has resulted in Google allegedly monopolizing three big links of a vital digital advertising supply chain, which funnels over $12 billion in annual revenue to websites and apps in the US alone.
