Google Expected Publishers to Oppose Ad Tech Changes That Boosted Its Profits

Google anticipated that publishers would resist its 2019 measures aimed at preventing them from redirecting ad sales to competitors. As a result, the company attempted to present these changes in a more favorable light, according to internal documents revealed during the tech giant’s antitrust trial on Thursday.

Google’s removal of the feature that publishers used to lessen their reliance on the company is a central element in the case where the U.S. Department of Justice and a coalition of states aim to demonstrate that Google unfairly controlled the markets for online advertising technology.

The Justice Department presented emails and documents revealing that Google employees discussed the company’s revenue losses because publishers were setting higher minimum bids for Google’s AdX compared to other exchanges. As a result, when ads were available through multiple exchanges, publishers frequently chose to sell through platforms other than Google’s.

According to the documents, the company was aware that publishers were willing to earn less on some ad sales in exchange for the option to favor other ad tech companies, particularly those with lower fees.

“It helps them to keep Google at bay and put pressure on us (similar to any industry),” Google executives discussed on an email thread in 2017.

Google ultimately implemented the change along with other features that publishers preferred, such as ending the practice where Google’s ad selling tools received a “last look” advantage to outbid other sellers.

The changes were intended to simplify and make the system fairer, and Google estimated that its top 500 publishers saw a median increase of 2.7 percent in ad auction revenue, according to former Google employee Rahul Srinivasan’s testimony.

However, publishing executives from organizations like the New York Times, News Corp, and The Weather Company strongly opposed losing control, as evidenced by recordings of an April 2019 meeting played in court.

“You have made it next to impossible for any of us to figure out how to increase our yield with partners outside of Google,” Jana Meron, then an advertising executive at Business Insider, said in one clip.

The trial is anticipated to continue for several weeks. If U.S. District Judge Leonie Brinkema determines that Google violated the law, she will subsequently review prosecutors’ request to require Google to sell off Google Ad Manager, which encompasses the company’s publisher ad server and ad exchange.