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So the DOJ complaint alleges that Google's "monopoly" reduces publisher earnings and increases how much advertisers pay and that's where the alleged 30%+ margin

by jmyeet 2y ago

So the DOJ complaint alleges that Google's "monopoly" reduces publisher earnings and increases how much advertisers pay and that's where the alleged 30%+ margin Google gets comes from. If this is true, 2 of the 3 parties here are motivated to bypass Google to increase the money publishers earn and how much advertisers play, are they not? If's not that hard to set up an ad server from scratch. The issue of course is inventory. But publishers and use multiple ad servers. In fact there are tools for them to pick whichever impression will pay them the most from those available. Advertisers are free to buy on multiple platforms. At least I see no allegation that Google is actually or effectively restricting the use of other tools. So can't Google use this to say that publishers use them because they pay the most? And advertisers use them because the ads are the most effective? Advertisers in particularly are heavily metrics-focused. In the background, they're analyzing ad performance (in terms of impressions -> clicks -> action) based on audience segmentation. Now the DoubleClick cookie does have value because it's so widely deployed, Google has a lot of information to derive behavioural characteristics about the user. Just based on what sites you go to, Google builds a profile of your interests, your likely (implied) demographics and so on. You can argue that this cookie is anticompetitive. But I don't see "cookie" mentioned once in this article. So I'm really not sure where this goes. It could be the reporting just isn't great on the case because it requires some legal knowledge. I guess we'll see.

hiddencost 2y ago
No, it is not easy to compete with Google on ad sales. It's much harder because of how much behavioral data Google hordes. If Google were to sell its behavioral user data to anyone, at a fair price, that would increase competition. If Google were to allow anyone to bid on the search page, that would increase competition. If Google stopped acquiring competitors with any sign of life, that would increase competition. If Google sold their pricing and bid matching algorithmic advances that would increase competition.
bbor 2y ago
Ahh an expert! All right on, but I think you're missing the big picture: advertisers can buy from multiple (networks of) publishers, and publishers can sell to multiple (networks of) advertisers, very true. But there's a sneaky little box in the middle of that system diagram that actually coordinates all that: AdX. I think. IMO they intentionally conflate product names and acronyms in this space to confuse us lol. But either way, that box is singular -- they control some insane percentage of the market, ~~like 95% or something.~~ This is profitable for a few direct reasons (charging fees) and a lot of indirect ones (privileged insights into market trends, ability to tip the scales of auctions to favor whoever you want, a threat to hold over buyside or sellside customers that get out of line, etc). Lots of links in my other comments in here - in particular you might find "project Bernanke" of interest, if you've spent serious money on Google before. EDIT: Their exact market share is really hard to pin down... again, definitely a situation that Google encourages. But the trend is clear: https://www.justice.gov/opa/pr/justice-department-sues-google-monopolizing-digital-advertising-technologies https://www.justice.gov/opa/pr/justice-department-sues-googl...
- riku_iki 2y ago
  > advertisers can buy from multiple (networks of) publishers > But there's a sneaky little box in the middle of that system diagram that actually coordinates all that: AdX. AdX handles networks of publishers on Google publisher platform. When advertiser buys ads from say Facebook, it doesn't use AdX, right?
  - bbor 2y ago
    Well, lets get into it! Great question, because that's definitely how the word "AdX" is used by many players in the industry. Hilariously/embarrassingly, I worked there and still never really got to the bottom of these questions -- they have a strong "don't ask questions about what isn't broken" ethos there when it comes to terminology. I posted this link above, which is a google-published doc that's much, much clearer than the usual "Help" pages: https://static.googleusercontent.com/media/www.google.com/en//adexchange/AdExchangeOverview.pdf https://static.googleusercontent.com/media/www.google.com/en... The DoubleClick Ad Exchange is a real-time marketplace to **buy** and sell display advertising space. Right off the bat, that's an awfully good sign that AdX is the exchange, not the publisher network. This also meshes with the image published by the DoJ[1] showing "DoubleClick for Publishers" as the pub network that you're referring to, and "Google AdExchange" as the omnipresent exchange that people who are neither buying nor selling through google must nonetheless go through if they want to leverage the wider ecosystem. It goes on like this, e.g.: ### Who Participates in the Ad Exchange? 1. The large online publishers (sellers)—websites like portals, entertainment sites and news sites 2. **Ad networks and agency holding companies** that operate networks (buyers)—companies that connect web sites with advertisers Of course anyone, Facebook included, can setup their own walled garden for direct ad sales, and AFAIU big fish like NYT and CNN do that already, not to mention the separate search ads ecosystem. But to take part in the wider algorithmic Display Ad sales market, my understanding of the DoJ's complaint is that you're (de facto) mandated to use Google's exchange. But, again; I struggled to understand these distinctions even with access to internal explainers, and the doc I linked is at least somewhat OOD (it mentions AdWords, which was retired in 2018[2]). So I could easily just be somewhat slow and mistaken on this complex issue :) [1] https://www.justice.gov/d9/styles/d09/public/press-releases/images/2023/01/24/google_0.png https://www.justice.gov/d9/styles/d09/public/press-releases/... [2] https://en.wikipedia.org/wiki/Google_Ads https://en.wikipedia.org/wiki/Google_Ads

by jmyeet 2y ago

hiddencost 2y ago

No, it is not easy to compete with Google on ad sales. It's much harder because of how much behavioral data Google hordes. If Google were to sell its behavioral user data to anyone, at a fair price, that would increase competition. If Google were to allow anyone to bid on the search page, that would increase competition. If Google stopped acquiring competitors with any sign of life, that would increase competition. If Google sold their pricing and bid matching algorithmic advances that would increase competition.

bbor 2y ago

Ahh an expert! All right on, but I think you're missing the big picture: advertisers can buy from multiple (networks of) publishers, and publishers can sell to multiple (networks of) advertisers, very true. But there's a sneaky little box in the middle of that system diagram that actually coordinates all that: AdX. I think. IMO they intentionally conflate product names and acronyms in this space to confuse us lol. But either way, that box is singular -- they control some insane percentage of the market, ~~like 95% or something.~~ This is profitable for a few direct reasons (charging fees) and a lot of indirect ones (privileged insights into market trends, ability to tip the scales of auctions to favor whoever you want, a threat to hold over buyside or sellside customers that get out of line, etc). Lots of links in my other comments in here - in particular you might find "project Bernanke" of interest, if you've spent serious money on Google before. EDIT: Their exact market share is really hard to pin down... again, definitely a situation that Google encourages. But the trend is clear: https://www.justice.gov/opa/pr/justice-department-sues-google-monopolizing-digital-advertising-technologies https://www.justice.gov/opa/pr/justice-department-sues-googl...

riku_iki 2y ago
> advertisers can buy from multiple (networks of) publishers > But there's a sneaky little box in the middle of that system diagram that actually coordinates all that: AdX. AdX handles networks of publishers on Google publisher platform. When advertiser buys ads from say Facebook, it doesn't use AdX, right?
- bbor 2y ago
  Well, lets get into it! Great question, because that's definitely how the word "AdX" is used by many players in the industry. Hilariously/embarrassingly, I worked there and still never really got to the bottom of these questions -- they have a strong "don't ask questions about what isn't broken" ethos there when it comes to terminology. I posted this link above, which is a google-published doc that's much, much clearer than the usual "Help" pages: https://static.googleusercontent.com/media/www.google.com/en//adexchange/AdExchangeOverview.pdf https://static.googleusercontent.com/media/www.google.com/en... The DoubleClick Ad Exchange is a real-time marketplace to **buy** and sell display advertising space. Right off the bat, that's an awfully good sign that AdX is the exchange, not the publisher network. This also meshes with the image published by the DoJ[1] showing "DoubleClick for Publishers" as the pub network that you're referring to, and "Google AdExchange" as the omnipresent exchange that people who are neither buying nor selling through google must nonetheless go through if they want to leverage the wider ecosystem. It goes on like this, e.g.: ### Who Participates in the Ad Exchange? 1. The large online publishers (sellers)—websites like portals, entertainment sites and news sites 2. **Ad networks and agency holding companies** that operate networks (buyers)—companies that connect web sites with advertisers Of course anyone, Facebook included, can setup their own walled garden for direct ad sales, and AFAIU big fish like NYT and CNN do that already, not to mention the separate search ads ecosystem. But to take part in the wider algorithmic Display Ad sales market, my understanding of the DoJ's complaint is that you're (de facto) mandated to use Google's exchange. But, again; I struggled to understand these distinctions even with access to internal explainers, and the doc I linked is at least somewhat OOD (it mentions AdWords, which was retired in 2018[2]). So I could easily just be somewhat slow and mistaken on this complex issue :) [1] https://www.justice.gov/d9/styles/d09/public/press-releases/images/2023/01/24/google_0.png https://www.justice.gov/d9/styles/d09/public/press-releases/... [2] https://en.wikipedia.org/wiki/Google_Ads https://en.wikipedia.org/wiki/Google_Ads