Ad tech firms argue that behavioral tracking improves efficiency across the ecosystem. They maintain that it delivers more relevant ads, reduces wasted spending, and increases publisher revenue. The concern, however, is not simply whether tracking improves performance. It is whether, in a concentrated market, tracking reinforces the firms that control the infrastructure rather than delivering broad gains for advertisers, publishers, and consumers. 

New research puts that debate to the test. 

Economic Rationales for Regulating Behavioral Ads, by Pegah Moradi, Cristobal Cheyre, and Alessandro Acquisti, reviews economic evidence on behavioral advertising. The authors evaluate whether tracking delivers the efficiency gains intermediaries claim. They find that when a small number of firms control key parts of the system, behavioral advertising often strengthens those firms rather than delivering broad gains across advertisers, publishers, and consumers. 

A federal judge reached a similar conclusion about market structure in United States v. Google LLC. The court ruled that Google unlawfully maintains monopoly power in key segments of the ad tech market. It found that Google’s control over both the publisher ad server and the ad exchange enabled it to entrench its dominance across multiple layers of the stack, restrict alternatives, and distort competition. The case now moves into a remedies phase that will determine whether structural or behavioral changes are required. 

Together, the research and the ruling point to the same issue: control over infrastructure shapes outcomes in digital advertising. 

Intermediaries capture a large share of revenue 

The research examines how digital ad auctions allocate value as advertiser competition increases. As more advertisers bid to reach the same users, bidding pressure rises. The intermediaries operating those auctions capture a significant share of that incremental spending. Studies cited in the report show that dominant ad tech firms can take 30 percent or more of each advertising dollar that flows through the system. 

The authors do not argue that advertising lacks value. They argue that who controls the trading systems strongly influences how that value is divided. 

In the Google case, the court examines how control over publisher ad servers and exchanges affects competition. By maintaining dominance across multiple layers of the ad tech stack, Google gains the ability to influence pricing, auction mechanics, and access to demand. The court concludes that this structure harms competition. The ruling supports the conclusion that control over ad tech infrastructure plays a central role in shaping market outcomes. 

Behavioral targeting and market adjustment 

The report explains how behavioral targeting allows firms to group users based on data and earn more from certain audiences. It then examines whether this practice expands total value in the market or mainly shifts revenue among advertisers, publishers, intermediaries, and consumers. The authors find limited evidence that tracking consistently produces substantial new gains across the ecosystem. 

This finding shapes the debate over privacy regulation. Critics argue that limiting tracking would damage innovation and eliminate free digital content. After reviewing evidence from GDPR and Apple’s App Tracking Transparency framework, the paper finds little support for predictions of market collapse. Digital advertising continues, firms adjust their strategies and markets adapt. 

The report finds that when tracking declines, companies adapt. Competition shifts, but digital advertising and content remain in place. 

Ad infrastructure determines outcomes 

The debate over behavioral advertising comes down to two competing explanations. One holds that tracking improves ad performance and increases revenue across the ecosystem. The research challenges that claim. It shows that when a few firms control the data and auction systems, tracking often strengthens their market power rather than delivering broad gains. 

The court’s ruling in United States v. Google LLC reflects the same concern. Its findings about monopoly power and harmful tying focus on how control over key ad tech systems can distort competition. 

For premium publishers, this is not an abstract policy question. The rules of the system and who controls them shape outcomes. The federal ruling signals that the structure of digital advertising markets warrants continued scrutiny. As the remedies phase proceeds, changes could alter how value flows among advertisers, intermediaries, and publishers.  

Market structure determines who sets the terms of pricing, how bids clear, and whether investment in trusted content is rewarded through open competition. Sustainable digital markets require competition, transparency, and balanced bargaining power. Strong markets reward content creation and innovation rather than control over infrastructure and data extraction. The research and the courts have made one thing clear: digital advertising has reached an important inflection point. 

The post Ad tech dominance defines market power and pricing appeared first on Digital Content Next.

As many readers will know, Gingras spent nearly two decades as Google’s head of news and still appears to hold an internal quasi-advisory role. Gingras now also serves as Chair of Village Media, a company Google routinely holds up as its model “publisher success story” before parliaments and regulators.

Just last week, I happened to see Gingras across the room at the International Center For Journalists (ICFJ) annual awards dinner. Not insignificantly, Google, and Gingras personally, have generously supported them with tens of thousands of dollars. So I was grateful to see him there; journalism certainly appreciates the financial support.

Later that same night, I listened to a new episode of the Future Media podcast, in which Gingras shared his assessment that serious news has “no value to consumers,” and that “the economic value of a news query” is so negligible that, if rounded, “would be zero.” It was jarring to say the least.

Few people have had more influence over the digital distribution of news and premium content than Richard Gingras. Yet here he was, Google’s longtime news advisor, perpetuating the false narrative that serious journalism has almost no value simply because Google’s preferred metric – its pay-per-click search text advertising monopoly – generates the least revenue from a news query.

An actual journalist holds big tech accountable

Two weeks ago, a different sort of Gingras interview appeared. In the Coda Story, fearless, independent interviewer, Natalia Antelava did something that almost no journalist does when facing a senior big tech executive: she directly challenged him on his role in helping create the mess.

She also pressed him as he repeatedly slipped into a collective “we” when describing Google’s relationship to the news business. The subtext was unmistakable: Google sees itself as the arbiter of news value, even as its public talking points and industry actions deny that value even exists.

Rewriting failure as generosity

When she asked Gingras what he considered his biggest mistake in his nearly two decades with Google, his answer was telling: “I would say the biggest mistake, honestly, was in our work with the industry, the Google News Initiative. We spent over a billion dollars over eight years, a billion and a half dollars trying to drive innovation.”

This is where I am obliged to note Google’s revenues over the last 10 years approximate to $2 TRILLION. So Gingras, Google’s chief evangelist to the news industry, would like us to know his biggest mistake in his 18 years at Google was sharing less than one tenth of one percentage of Google’s revenues with the news industry.

It’s astonishing how casually he rewrites failure as generosity.

The real “mistake” wasn’t spending too much on the Google News Initiative; it was believing that sprinkling what equates to less than 0.1% of Google’s revenues at the industry could offset the damage Google inflicted on the economics of media. Google’s chief evangelist for their news efforts believes serious news has no economic value and his biggest mistake was sharing a pittance of their revenues with the very companies it used to help maintain its adjudicated illegal monopolies in search, ad exchanges and publisher ad servers.

Yet, in their spare time, these same publishers provide one of the few remaining checks on power: scrutinizing leaders, governments, institutions, and abusive companies. But in Google’s calculus, “economic value” is whatever its ad system can monetize, and the civic value of news simply doesn’t register.

But here’s the irony: AI companies are now proving, more clearly than ever, that news and premium content are among the most valuable resources in the world. Not just culturally. Not just civically. Economically.

AI exposes what Google denies about news

Across the AI ecosystem, the most advanced large language models were trained disproportionately on the very materials Silicon Valley once dismissed as “legacy media”: reported information, fact-checked analysis, archives, scientific journals, books, documentaries, and professionally produced entertainment content. Their capabilities come from absorbing narrative, structure, relevance, serendipity, ground truth and cultural cornerstones created by expert journalists, television and film professionals.

This professionally crafted work is not interchangeable with memes, scraped Wikipedia summaries, or social media and user posts.

The value of news, entertainment and vetted information

Laundering professional content through Reddit or Common Crawl (the profile of which is a must-read in The Atlantic) doesn’t strip its economic value; it merely reveals that protections have not yet been duly enforced. High-quality training data is scarce, slow to produce, and expensive. It requires human expertise, legal standards, editorial judgment, and public trust in the sources, whether individuals or the brands that employ them. These are the exact qualities that distinguish premium publishers.

And this isn’t theory.

The law is catching up

A growing list of court cases and disclosures shows the same reality: AI companies rely on publishers’ journalism while avoiding paying for it. In Thomson Reuters v. Ross, a federal court confirmed that training AI requires licensing copyrighted content, recognizing a real market for high-quality data. In the Kadrey v. Meta case, unsealed documents showed Meta employees downloading pirated books and skirting licensing. And in U.S. v. Google, we learned that Meta pays Google for an API into its daily scraping to ground its own AI.

Yes, that means that Meta is apparently paying Google for access to publishers’ work.

Penske Media’s recent lawsuit argues that Google’s AI Overviews scrape and replace news directly in search results; a practice publishers cannot realistically opt out of because Google controls search through an illegal monopoly. When Google ingests news, sports and entertainment and places AI summaries above it, that is not “zero value.” It is extracted value.

Extracted value is an extinction level event

If we find ourselves in a world where AI replaces the need to click through to trusted journalism and premium content by using that same content to train its responses without compensation, the entire economic infrastructure – advertising, subscriptions, licensing – collapses. You cannot build sustainable media when distribution intermediaries extract the full economic value upstream.

DCN’s position is clear: premium content is the most valuable resource on the open web. Not only because of the cost of creating it, but because of the trust signals behind it. It is the core asset that fuels AI’s predictive capabilities and factual grounding on the most recent events. And publishers cannot and should not continue to allow it to be scraped, ingested, repurposed, and monetized without specific and freely given consent – not the kind coerced by a company already found to hold an illegal monopoly.

The future of AI relies on premium content

The future of AI should and will not be defined by who has the best model or the cheapest compute. It will hinge upon access to the highest-quality data, and whether that data is lawful, licensed, accurate, original, and kept current.

Publishers sit on the motherlode. This should be their moment. Unlike synthetic content and scraped user forums, premium content has enduring value because humans create it with standards.

This is why DCN has warned policymakers and the copyright office that improperly scraped training data threatens the economic foundation of news and entertainment. That’s why licensing must be the rule, not the exception.

The industry must align around three principles:

1. No free training. High-quality content cannot be scraped without permission for search, training, or grounding.
2. AI cannot substitute for news without fair value. AI Overviews and similar features must not cannibalize traffic using the very journalism they ingest.
3. Licensing markets must continue to be built. Early negotiating will set the pricing floor; platforms that acknowledge fair value should be the greatest allies.

Gingras may claim that news has no value. But Silicon Valley’s behavior proves the opposite. In the AI era, premium content isn’t just valuable; it’s the most valuable input in the entire system.

Publishers must stop giving it away.

The post What AI reveals about premium content: It was valuable all along appeared first on Digital Content Next.

In the 115-page decision, Judge Leonie Brinkema found that Google willfully acquired and maintained monopoly power in the publisher ad server market and the ad exchange market. The ruling states that Google unlawfully tied its publisher ad server and ad exchange, in violation of Sections 1 and 2 of the Sherman Act.

Judge Leonie  Brinkema found that Google’s exclusionary conduct not only limited competitors’ ability to compete. In fact, it “substantially harmed Google’s publisher customers, the competitive process, and, ultimately, consumers of information on the open web.”

A brief history of ad tech

Advertising and publishing have always been intrinsically linked, with the former owing much of its initial success to the latter. The emergence of newspapers and other print publications allowed the advertising industry to solidify and grow, providing advertisers with a platform to place their content.

As both industries increasingly turned digital, programmatic advertising emerged, which automated the process of matching the available ad space publishers sought to sell, with the ads advertisers sought to place. In the milliseconds that it takes a user to open a website, a real-time bidding process takes place, in which the user’s impression is auctioned off to advertisers competing for available ad space to capture this impression.

These auctions are facilitated by ad exchanges, which “serve as the critical intermediary between advertisers’ ads and publishers’ inventory by facilitating real-time auctions in which advertisers can bid on inventory.” In order to manage and sell this inventory, publishers utilize publisher ad servers which “make it easier for publishers to place multiple sources of advertising demand in competition against each other.”

Ad exchanges, publisher ad servers, and other technologies make up what is commonly known as the “ad tech stack.”

Google currently operates the largest ad exchange, AdX, and the largest publisher ad server, DoubleClick for Publishers (DFP).

Google’s monopoly

In her ruling, Judge Brinkema found that both publisher ad servers and ad exchanges constitute distinct relevant product markets, and that Google possesses monopoly power in both markets. This conclusion was based on Google’s predominant share of both markets and high barriers to entry and expansion for competitors.

(Judge Brinkema also found that advertiser ad networks, another component of the ad tech stack, did not constitute a distinct relevant product market, as argued by the DOJ.)

In terms of the publisher ad server market, Google’s DFP held between 91% to 93.5% of the worldwide market from 2018 to 2022. This market share has been durable due to publishers’ ability to only use a single ad server for open-web display ads and the complex and resource intensive nature of attempting to build an ad server.

As a former Google executive stated, switching publisher ad servers “[t]akes an act of God to do” and is a “nightmare” because “[n]othing has such high switching costs.” In fact, even Meta, one of the world’s largest tech companies, shut down a project aiming to build an ad server “due to the significant barriers to gaining scale in a market dominated by Google.”

In terms of the ad exchange market, Google’s AdX holds a market share about nine times greater than that of its next-largest competitor while charging a higher “take-rate” per display transaction. The inability of competitors to constrain AdX’s pricing, despite charging nearly half what AdX does per transaction, directly points to its monopoly power in the market.

Google willfully maintained its monopoly power in both markets by tying DFP to AdX by imposing “technical and policy restrictions that prohibited publishers from receiving real-time bids from AdX (the tying product) unless they also used DFP (the tied product).” This tying forced customers to use a product they maybe would not have chosen otherwise and reduced the market share for rivals that could not compete on the merits.  

How this monopoly impacts audience experiences

Although “search” is likely the concept people most closely correlate with Google, Google is fundamentally in the business of advertising. With the majority of its core services being offered at no financial cost to users, nearly 80% of the company’s revenues come from digital advertisements.

Due to its prevalence in search, browsing, email, mapping, file storage, word processing, translation, and video sharing, “Google arguably sits on the most valuable data asset in the world.” For years, this data asset, comprised of information from every action made on its properties, has been used by Google as a bargaining chip in its quest to control more of the advertising market that feeds its ever-growing gargantuan power.

The monetization of their websites is “crucial for publishers who wish to retain a greater degree of editorial independence.” As a result, the world’s most trusted publishers have been left with no realistic alternative in the publisher ad server and ad exchange markets as they continue to weather the storms of the digital landscape.

As publishers are forced to pay significant fees to Google and contend with policies that prevent them from securing the most value for their ad space, they are precluded from investing these resources in fostering their editorial operations and bettering the consumer experience. This means fewer articles from your favorite authors, fewer episodes of your favorite podcast, fewer detailed statistics on your favorite sports teams, all while Google uses your data to keep publishers captive to its products.

As Google and the DOJ now contend with the possible remedies to be imposed, consumers should remain engaged on this issue and be wary of arguments that Google’s monopoly is somehow beneficial to the average person. For too long, consumers and publishers have been on the losing side of Google’s control of the ad tech stack. Judge Brinkema’s decision points to a brighter and fairer future ahead.

The post It’s official: ad tech is stacked against you appeared first on Digital Content Next.

If Google’s first witness serves as any indication, it’ll be a long week of the company’s textbook weaponized complexity, jazz-hands, and word games. So, some of us in the courtroom made our own word games to help pass the time: I’ve created more Buzzword Bingo cards for the week for those that are in EDVA. But why should we get all the fun?

Click here to download our US v. Google II crossword puzzle.

Now, as week three of this monumental trail begins, here’s a recap from inside the courtroom of week two along with predictions on what we can expect this week.

Revelations and receipts from week 2

More detail can be found in my daily updates, but here are some key moments from last week, with receipts (i.e. Trial Exhibits).

1. Google thought Yield Manager tech was “irrelevant.” Yet they paid $100M over valuation to “park it somewhere.”

While some have pointed out that Google integrated the Yield Management capabilities, the discussion at trial was focused on the RTB capabilities Google chose to deprecate to perpetuate AdX’s advantage via Dynamic Allocation. (See: PTX0085, PTX0112, PTX0060, PTX0058).

2. The IAB Tech Lab declined to take in Prebid.js because Google, its largest funder at the time, “vehemently objected.”

For more on this, have a listen to the Marketecture podcast featuring Brian O’Kelley, and check out AdExchanger’s coverage. It would have been nice to be able to point to a response here from IAB Tech Lab, but it doesn’t seem like that is going to happen.

3. The sell-side product team wanted to make Exchange Bidding much better than Header Bidding to legitimately serve the interests of publisher customers. Leadership told them to aim lower.

Jonathan Bellack’s testimony shed more light on internal dynamics, reminiscent of Eisar Lipkovitz’ comments that “the machine won.” Bellack wanted EB to be a superior product that wins over publishers, but leadership said “slightly better” is good enough.

What is the incentive to invest in innovation that serves the interests of customers when they have nowhere else to go? The market power is further illustrated by a 2014 experime which revealed that Google could profitably raise GDN prices by +7% for buyers to hit a higher margin target without a care in the world.

What to expect during week 3

Google’s first witness was sell-side sales VP, Scott Sheffer, who has been with the company for 18 years and counting. They began with a charade that came to be known as the adtech Spaghetti Football, where Sheffer walked through a clearly-rehearsed exercise of mapping out Google’s view of the adtech ecosystem. Naturally, Google is everywhere.

Those in the courtroom seriously questioned the strategy behind the use of this visual because it so clearly illustrates that Google’s control over the adtech ecosystem extends well beyond even the scope of this trial. Google has been known to weaponize complexity. The less people feel they understand, the more susceptible they become to Google’s narrative filling in the blanks. However, if their big plan is to confuse Judge Brinkema into siding with them, they may want to consider that strategy.

This approach further backfired when the DOJ untangled the graphic in order to leave only the products on-screen that allow publishers to indirectly sell display ad inventory on their websites, and enable advertisers to buy it.

Indeed, Google’s approach at this point appeared to be off to a very rocky start. As for where Google may be headed, the company faces some significant roadblocks:

1. Before they started their case-in-chief, Judge Brinkema already made it clear that there’s no way Google wpi;d be allowed to call six witnesses related to government advertising. “One, maybe two,” she said. Three of the planned six were advertisers, and three were Google account managers on government business.
2. If Google had been planning to call a lot of their long-time employees, they’re likely reconsidering that after Judge Brinkema suggested much of Sheffer’s testimony was “tainted” and “highly questionable” given Google had already been on notice about litigation during the events he attempted to recount. The DOJ has done a great job of ensuring the spoliation issues remain a constant rain cloud over the heads of their opponents and their witnesses. Nevertheless, I’m sure we’ll hear from at least one engineer about how daunting it would have been to enable unrestricted real-time bidding on third party exchanges, or to allow publishers to get AdX real-time pricing in ad servers other than DFP.
3. Google’s full witness list also included a lot of “Grow with Google” businesses and small publishers, and Sheffer’s testimony leaned heavily into Google’s purported goal to foster the creator economy. If they’re planning on calling more than one or two of each, they are likely in for another rude awakening.
4. We can expect that Google will over-index on expert witnesses. The core of their defense is to play games with market definition and to reframe tying and exclusionary conduct as legitimate refusals to deal. We already have a preview of we’ll hear (at length) from Mark Israel.
5. We can expect that Google will rely significantly on deposition read-ins, where they don’t have to worry about unexpected cross-examination, and can cherry-pick what they feel they need to be part of the official record, with a keen eye on the inevitable appeal.

It’s slim pickings on what Judge Brinkema will allow, much less find compelling, so it makes sense that they expect to wrap up their case-in-chief by Thursday. I wouldn’t be surprised if it’s sooner, now that they’ve been told that testimony by conflicted loyalists will not be persuasive.

Google’s games and tricks

One of my observations throughout Google’s defense is their affinity for jumping from side to side as it suits their argument. They bob-and-weave around the DOJ’s allegations by speaking to alleged advertiser benefits of conduct that harmed publishers, and publisher benefits of conduct that harmed rivals. The most frustrating manifestation of this is via their argument that the DOJ’s markets are overly-narrow and gerrymandered. Google loves to try to land the point that certain channels can be interchangeable to advertisers, and that they do face competition in the single two-sided market they insist adtech is. This completely evades the DOJ’s core point.

The DOJ has focused heavily on publishers as the key victims of Google’s conduct, with a specific focus on the majority of publishers that have both direct sold and indirectly sold display ad inventory on their websites, and thus need an ad server. No amount of alleged advertiser alternatives addresses the stronghold Google has publishers in. Only when pressed does Google point to a swath of (impractical and incomplete) alternatives available to publishers (e.g. running prebid.js without an ad server, or using two ad servers, where one of them is still GAM).

It often makes this trial feel like watching chickens and ducks try to have a conversation, and Google revels in this game of rhetorical fallacies. Ultimately, however, dancing around the core issues and harm to publishers only makes Google’s alleged stated ambition to fund the world’s information appear that much more disingenuous.

earlier coverage:

A recap of week one of US v. Google II

The post A recap of week two of US v. Google II appeared first on Digital Content Next.

Google fees

It has always been unclear how much Google charges when it is involved with an ad. However, the recent evidence shows that they charge on all sides of the transaction — and they charge a lot. The suit lays out the scope of Google’s ad business: “Google operates the largest electronic trading market in existence.” In fact, it appears that 75% of all ad impressions in the United States were served by Google’s Ad Manager. In Google’s words, “more daily transactions are made on AdX than on the NYSE and NASDAQ combined.” Eleven billion online ad spaces each day.

At the same time, Google owns the largest buy-side and sell-side advertising platforms. As one senior Google employee admitted, “(t)he analogy would be if Goldman or Citibank owned the NYSE.” More accurately, the analogy would be if Goldman or Citibank were a monopoly financial broker and owned the NYSE, which was a monopoly exchange.

And, because of this dominant position on all sides of the market, Google can charge monopoly rents. Most ad exchanges charge a take rate of four to five percent of ad spend. Google takes 22 to 42 percent. And, on top of that, Google charges another 10% if a publisher wants to divert inventory outside of Google’s system.

Oh, and that’s just on the sell side. The suit lays out similar predatory fees and anticompetitive practices on the buy side as well.

Header bidding, an existential threat

When “header bidding” came along, it offered publishers the ability to make their ad inventory available to multiple ad exchanges simultaneously, fostering competition and innovation. Publishers hoped it would give them greater flexibility to monetize their ad inventory and increased leverage to negotiate better deal terms – something that would have resembled a healthy marketplace. Apparently, the very notion of header bidding hit hard at Google’s core.

As noted in the evidence, Google identified header bidding as an “existential threat.” In the unsealed complaint, we see that one of Google’s most senior executives declared eliminating the threat his top priority, which merited an “all-hands on deck approach” for the leadership team.

Then, in a stunning play to protect its dominance, Google struck a covert deal with Facebook. At the time, Facebook was actively considering getting into the header bidding space, which would have put them on a direct path of competition with Google. However, both companies recognized that they had more to gain by fixing the market for themselves than by competing openly.

The unsealed evidence reveals that a senior Facebook executive understood why Google wanted the deal: “They want to kill header bidding.” That’s a clear quid pro quo around an alleged violation of Section 1 of the Sherman Act. This could translate into criminal charges, depending on how the courts see this evidence.

Google also promised that Facebook would win a certain percentage of auctions in open bidding, Google’s alternative to header bidding. In return, Facebook promised a minimum spend and bidding frequency. They also capped the number of line-items that publishers could use, which severely hindered publishers’ ability to use header bidding. Google likely figured that it would pressure publishers to use open bidding instead.

Finally, after pushback from Facebook, Google agreed to remove the ability for publishers to set a floor price for their inventory. In Google’s ad marketplace, which was already  stacked against publishers, this tilted the playing field even further in favor of Google and Facebook.

AMP, the offer publishers could not refuse

Google created a new format for content creators called Accelerated Mobile Pages (AMP), which was pitched as a way to improve the consumer experience on mobile. Not coincidentally, Google announced that it would start giving priority to AMP pages in search results, which gave the Google-led project a path to fast adoption. Essentially, Google made an offer that no publisher could refuse: Use AMP or lose the ability to be found via the dominant search engine.

Despite Google’s claims, there are multiple benefits for Google’s business baked into AMP, as well as downsides for publishers:

• It’s a Google domain so Google can collect even more data as a first party about a publisher’s audience;
• Custom ad formats don’t work on AMP, nor does header bidding, so publishers make less money (40% less according to Google);
• It’s another platform that requires resources to manage; and
• The unredacted documents show that Google also inserted an artificial one-second delay into non-AMP pages in order to give AMP “a nice competitive boost.”

The takeaway

All this new evidence shines a bright light on a pattern of behavior by Google to close off competition at every turn. Suffice to say that the harm to publishers has been dramatic. Google’s goal was not to build better products or services. And it certainly wasn’t trying to improve the overall health of the advertising ecosystem.

In these unredacted transcripts, we see the details of Google’s anticompetitive strategy articulated in Google executives’ own words. Their goal was to choke out competition: by killing off a new technology that would have improved the health of digital advertising; by cutting a deal with Facebook to rig the market; and by forcing publishers to use AMP.

I expect this case will only get more attention going forward. We are likely to see additional private suits filed as competitors realize they were conned by Google (and Facebook). I suspect we will see additional states join this lawsuit or file similar suits as it is clear that consumers were harmed by a dysfunctional market.

Finally, many speculate that the Department of Justice could add its considerable weight to this fight as soon as Jonathan Kanter is confirmed as the head of the antitrust division. Given the scope and impact of this case, we welcome any and all help to fight one of the most brazen examples of anticompetitive behavior in recent memory.

The post An unredacted view into Google’s unbridled ambition appeared first on Digital Content Next.

In the seven years since the Obama-era FTC issued its decision not to take action against the cool kid in their class, Google, the company has managed to triple its U.S. ad revenues (source: GOOG SEC filings) in line with the overall U.S. digital ad market (source: IAB/PwC Internet Advertising Reports). Put differently, Google has maintained its market share, which is hovering at around 50%.

How on earth has Google maintained share during the same period in which Facebook has grown from virtually nonexistent to the other half of the two-headed duopoly monster? Answer: Pilfering the open web by establishing a walled garden to shift revenues from everyone else to Google’s own properties.

Tired arguments

Yet a small handful of academics, analysts, and influencers (who often fly too close to the sun) continue to rehash the tired arguments that were widely shared back in 2013. They start by broadly painting any scrutiny of Google as a combination of the jealousy of dying legacy media and protectionism by Europe. Often, they claim that news media is manufacturing outrage with an “axe to grind” rather than rightly doing its job of holding the powerful accountable.

They misleadingly suggest that Google makes no revenue from Google News while turning a blind eye to the billions in value they collect from harvesting news content. Much of the value of search would disappear without news content for consumers to find. And when these pundits finally get down to pragmatic analysis, they point out the “gift of web traffic” publishers receive from Google’s free search engine, as if the web, and publishers, couldn’t exist without Google’s pixie dust.

The new wave

However, what these arguments miss is that the voices and minds leading the case in 2020 have evolved their understanding of tech and the marketplace. There is a significant and growing body of consistent research and investigation around the globe about Google’s anticompetitive action from savvy digital thinkers in academia, think tanks, state and federal regulator offices. Say what you want about the various Congressional hearings these days, but they undoubtedly make the committees, public, press, and thought leaders wiser on the topic

Reading long investigative competition reports may not be your cup of tea, particularly during a global pandemic. So, I’ll summarize what DCN is focusing on, what the latest research shows, and what is most important to the health of our members’ businesses.

The latest research

Two key investigative reports have been released: The Australian Competition & Consumer Commissioner (ACCC) July 2019 Final Report and the U.K.’s Competition & Markets Authority (CMA) Dec 2019 Interim Report. If you can only read one, read the latter (and don’t miss Appendix E). The U.K. investigation launched well before those in the U.S. and it offers a solid look into how Google and Facebook are being examined.

I was also delighted to see a Yale professor, Dr. Fiona Scott Morton and co-author David Dinielli, publish “A Roadmap for a Digital Advertising Monopolization Case Against Google” earlier this week. They lean heavily on the U.K. CMA report and did a masterful job of translating hefty regulator documents into a readable form that anyone who has followed our industry will understand. They assert that any eventual court case will demonstrate how Google’s established monopoly in the search business was subsequently leveraged for market power in the design, growth, and capture of value through its intermediation of ads across the open web.

Inside Google’s walled garden

It is important to understand that approximately 90% of Google’s revenue growth (3x over the last seven years) was captured on its own properties (search, Gmail, YouTube, etc.). This led to a shift of Google’s source of revenue to increase from a total of 74% to 84% from their own properties, where their costs to acquire traffic approaches zero. Not coincidentally Google was, all the while, cementing a dominant position in the buying, selling, serving, and measuring of all ads across the open web.

This shift in revenue growth towards areas where Google keeps the most revenue has only been possible because of Google’s market power and ability to see large amounts of data throughout the consumer and advertiser journey, in its own so-called “walled garden.” This allows them to optimize the customer experience in a way that will inevitably keep consumers and advertisers driving the most profit to Google.

Revealing revenue research

Just a few weeks ago, the U.K. advertiser group ISBA published a transparency report. For the first time, the report laid out empirically just how much revenue was captured by intermediaries. Google was, of course, the most substantial player on all sides of the market. (Though there was a curious mystery 15% that the researchers couldn’t lock down.) At this point, it’s beyond hypocrisy each time Google preaches “transparency” but refuses to report both gross and net revenue for its advertising services.

Based on various investigations, Scott Morton and Dinielli expose how Google has achieved this dominance. They examine how Google collects 40% of the revenues across the open web, limits the use of data, and steers consumers to its Google-owned properties with its own higher-margin ads. Google does so while appropriating publishers’ data and audiences for its own gain on its own properties and elsewhere on the web.

Anticompetitive conduct

Morton and Dinielli clearly lay out 20 examples of Google’s potential anticompetitive conduct. Many of them tie to previously published concerns and research from DCN. All will require further investigation and subpoena power – but I’m sure we can agree that they pass the sniff test.

1. Acquiring Independent Companies To Cement Its Role Across the Ad Stack
2. Leveraging Market Power in General Search into Display
3. Designing Auctions That Facilitate Arbitrage and Rent Seeking
4. Cross-Subsidizing Competitive Functions of the Ad Tech Stack with Monopolized Functions In Order to Rise Rivals’ Costs and Foreclose
5. Deceptive Gathering and Integration of Data
6. Strategic Disabling of Interoperability To Disadvantage Rivals
7. Withholding Interoperability to Steer Demand and Supply Through Its Own Exchange
8. Providing Exclusive Programmatic Access to YouTube Though Google’s DSP
9. Retiring the Third-Party Cookie
10. Disadvantaging Rival Exchanges by Google’s Publisher Ad Server
11. Undermining Header Bidding Through the Development of So-Called “Open Bidding”
12. Undermining Header Bidding Through Exclusionary Features of AMP
13. Designing Analytics to Steer Market Participants to Google Products and Prevent Entry
14. Resisting Transparency at All Levels of Ad Tech Stack
15. Obscuring Fees So That Competitors Cannot Enter and Compete Effectively
16. Using Privacy Laws as an Excuse to Hide Performance Data
17. Thwarting Publisher Efforts to Understand Source of Payments
18. Designing Attribution to Favor Search and Disadvantage Publishers
19. Raising Rivals’ Costs and Foreclosure of Existing and Potential Horizontal Competitors
20. Capturing Publisher Data in Order to Monetize Their Audiences

Antitrust investigations

Finally, we should still ask whether Google’s lobby and power somehow afford it unique protection in the U.S. market. Only time will tell. But we expect Congress’ antitrust investigation to issue a report in the next 90 days.

Nearly 50 state attorneys general, who previously announced their inquiries, are expected to move forward along with the (not easily intimidated) Department of Justice. Both have broad subpoena power as well as the U.K. and Australian reports to inform their deliberations. Providing further confidence thus far is that the Texas Attorney General office is leading the states’ investigation. They provided Google with an extensive list of nearly 130 questions focused mainly on Google’s advertising business. (Note: DCN received this “CID” through a public records request). It certainly looks like they want answers to Morton and Dinielli’s claims.

The internet has evolved, and it continues to do so. While many of the arguments media pundits and academics may have made a few years ago seemed plausible at the time, that time has passed. It is clear that serious research and reflection is being done that will inform any discussions around the duopoly, antitrust in the advertising ecosystem, and restoring the value exchange between premium content and the “virtual pipes” of technology that control and make money off its flow.

The post The Google antitrust ship has set its course appeared first on Digital Content Next.

The issue at hand is the ability of these aggregators to monetize content that they did not create, to the detriment of those who created the content – often at significant cost. The original value proposition was the delivery of a click/consumer to the content creator’s site. However, over time, aggregators have taken great liberties with the quantity of content they display, often negating the need for consumers to visit the content creator’s site at all.

Snipping snippets

The directive was specifically intended to extend copyright protection to news ledes and snippets. In response to French law that memorialized the Directive, Google announced that it would flaunt the new law altogether by removing from Google News and Google Search the snippet descriptions, news organization brand, and photographs associated with the news articles.

Instead, Google would only display the headline and URL putting the content at a disadvantage to other results. Aggressively but maybe not surprisingly, Google said it would reinsert the snippet description, news organization brand and any photographs if the publishers would give a free license. The French authority ruled that this constituted an abuse by Google of its dominant position.

Coming off the heels of the French ruling, Australia’s Competition and Consumer Commission reached a similar boiling point with big tech platforms. For months the Commission has been negotiating with Google and Facebook on a voluntary code to ensure a fairer balance between news publishers and platform aggregators. And, for months Google and Facebook had been reportedly stonewalling.

Revenue matters

On Monday, Australian Treasurer Josh Frydenberg pulled the plug on talks and announced that the Commission will release mandatory rules in July to compel platforms such as Google and Facebook to, among other things, fairly compensate news publishers for the use of their content. The move could not come at a more important time as over 50 news publishers in Australia have recently closed shop. Meanwhile, Google rakes in approximately 47% and Facebook approximately 24% of digital advertising revenue in Australia.

The impact could be profound, particularly if the platforms respond as Google did in France. Imagine Google search results, news, or your Facebook feed without any reputable media sources. Clearly, quality news content is valuable to the big tech platforms, just as the ability to reach new audiences is valuable to publishers. As the Commission recognized, the current value exchange is not a fair balance of interests.

Big tech, big flex

Of course, these countries’ frustrations with big tech platforms should not be surprising to anyone. Google has a particularly long track record of using strong-arm tactics to achieve and maintain its dominance. A recent example occurred when the European Union was preparing to enforce the General Data Protection Regulation (GDPR), the sweeping data privacy and security regulation.

While GDPR is intended to give consumers greater control over the collection of their data, Google used it as a land-grab opportunity. Just weeks before enforcement began in May 2018, Google announced to industry (and only after journalists were prepared to break the news) their non-negotiable terms for publishers and advertising in complying with the GDPR. Any company which used any Google service or product would 1) need to get express, affirmative consent from consumers for Google to collect consumer data; 2) would not be told how Google would use or secure the data (which would render any consent invalid); and 3) would be liable for any GDPR violation by Google.

Along with several other trade associations representing publishers, we detailed our concerns directly to Google. Of course, it’s not surprising that Google would attempt to deflect as much legal risk as possible. Liability is often a major point of negotiation in any contract. However, Google is so dominant, that this is not a real negotiation.

Perhaps more surprising is that Google did not even entertain the possibility of restraining its massive data surveillance regime. Under the GDPR, companies that collect and use data only on behalf of the website or app (and do not use the data for an unexpected secondary purpose) are considered “processors” of data. Typically, processors are not required to get consumer consent, instead they can rely on other legal bases such as “legitimate interest.”

Reverting to the role of a processor would have placed Google more in line with consumer expectations and it would have made for a much better user experience (e.g. no messy pop-ups asking for vague consent). Instead, Google dictated its “take it or leave it” terms to the industry and consumers. And it’s data profiling would continue uninterrupted. Sounds familiar.

Titanics do sink

The French and Australian rulings could have huge implications going forward. And they are likely only the tip of the iceberg. Many other regulators in Europe and the U.S. are actively looking at the anticompetitive behaviors of big tech platforms. As we noted above, this couldn’t come at a more important time.

As the Covid-19 crisis continues to impact the world, news organizations are redirecting significant resources and personnel to cover the health and economic impact, separate fact from fiction, and hold public officials accountable. More broadly, entertainment companies are working overtime to create and distribute content to audiences “staying at home.” Yet, these content creators are often swimming up-stream to generate sufficient revenue to fund the news and entertainment that consumers love and need because the digital distribution channels are dominated by the big tech platforms.

We’re glad to see public officials pushing back on the anticompetitive behavior of big tech platforms and helping ensure a more equitable balance of interests. As the current crisis has clearly demonstrated: We need quality, reputable, trusted content more than ever.

The post The dominance and obstinance of big tech platforms appeared first on Digital Content Next.

The core of Google’s strategy relies solely on the Google News app. Typically, social feeds aren’t aligned with publishers’ needs. This is because social lacks brand awareness, revenue opportunity, and data about the end audiences. Furthermore, social feeds are often blamed for creating “filter bubbles” that negate a holistic approach to a topic and disintermediate the publisher/reader relationship. The Google News app has put some serious work into addressing some, but not all, of these concerns.

Here are the top four concerns that they appropriately addressed.

1. Featuring the Publisher Brand

The publisher brand is well-featured and prominent in the app experience. This helps bolster publisher brand awareness and avoids the “I read it on Facebook” dilemma. (This is what over 50% of readers answer when asked which publisher authored an article they read online.)

2. Avoiding the “Filter Bubble”

The “Headlines” section of the new app lets readers view what everyone else is reading. This helps address the “filter bubble” effect that comes from a 100% curated social experience. Discovery of new content from outside your social circle or creating more engaging ways to expose interesting content is critical.

3. Delivering Full Coverage

Our favorite geek-out feature is “Full Coverage,” which is a link placed under most news topics. Full Coverage provides multiple points of view from many different sources. As stories evolve over time, Full Coverage hosts a timeline so readers can understand the changes in the storyline. To enable Full Coverage, Google uses temporal co-locality. In layman’s terms, Google can understand the people, places and things related to a story in real-time and then package them. Even tweets, fact-checking and commonly asked questions are included in Full Coverage.

4. Creating Better Content Experiences

In the ‘make it easier to consume content’ category, “Newscasts” is a new user experience for packaging content. It neatly combines articles, videos, quotes and other types of content on a single topic, no matter where you are in the app. Upstill referred to it as “a preview that allows you to get a feel for the story.”

At Outbrain, we applaud any effort that helps readers discover new content, and addresses publisher concerns. We aren’t ignoring the legitimate business issues publishers have with Google, but are more than willing to highlight a great product, we’re all readers at the end of the day.

The post How Google’s News App is tackling some of social delivery’s tough problems appeared first on Digital Content Next.

This encouragement is now a directive. As of February 15, the latest Chrome version (v64) began to filter all failing ads across every website with a failing status as listed on the Ad Experience Report. Given that Chrome dominates the browser market (60-65%, depending on the source), this news has serious repercussions for ad-supported websites. Never has so much hinged on ad quality.

Defining bad ads

The classification of a bad ad is no longer in the eye of the beholder (or media publisher). Formed in 2016, the Coalition for Better Ads (CBA) researched the acceptable advertising experience of 25,000 consumers in North America and Europe. The result is the Better Ads Standards, released in March 2017.

In a nutshell, 12 ad types regularly annoy consumers and correlate to the adoption of ad blockers: four for desktop and eight for mobile. Google is using the Better Ads Standards to evaluate ads on ad-supported websites. Upon initial review last summer, less than 1% of 100,000 websites contained ads violating the standards.

Fixing bad ads before they fix you

When it comes down to it, meeting the CBA standards shouldn’t be that difficult, especially if you’re a premium publisher that knows all parties contributing content to the user experience. This knowledge makes it easier to communicate and enforce any policy—be it ad quality, security, data leakage, performance and more—and cease business with those that don’t have your—and, therefore, the user—best interests at heart.

What happens if you chose to ignore the Chrome audience? Your website will be assigned a “failing” status, and if this status remains for more than 30 days, then Chrome will filter all ads running on your website. Therefore, your choice directly affects the website’s ad-based revenue continuity.

Be proactive. Adopt a holistic creative quality assurance approach to continuously assess ads—creative and tags—for compliance with regulatory requirements, company policies and industry practices, like those promoted by CBA. By developing a tactical ad governance structure, you can codify what constitutes an acceptable ad and ensure compliance with multiple industry standards.

Check: What’s your status?

The CBA also announced a self-attested certification program whereby publisher participants pledge to abide by CBA standards. The program is free during the trial period, with an expectation that it will run at least until July when fees will be announced. As of now, Google agrees to not filter ads for any company participating in the CBA program. With the program’s initial steps only requiring registration, self-attestation and no fees, it makes sense for publishers to participate.

Remedy for Bad Ads

Regardless if you register with CBA, all media publishers should verify their status and take steps to remediate offending ad quality as soon as possible.

1. Verify ownership of your website on Google Search console: https://support.google.com/webmasters/answer/34592 (note that your webmaster may have already done this.)
2. Initiate verification by selecting “Manage property” and downloading the HTML file to your site. (Note that there are alternative methods such as using your Google Analytics or Tag Manager.)
3. Once your website is verified, Google will initiate scanning. The process may take some time.
4. Access the Ad Experience portal: by selecting “Desktop” or “Mobile” (https://www.google.com/webmasters/tools/ad-experience-desktop-unverified?hl=en )
5. Review your website’s status for both desktop and mobile
   • Warning or Failing status requires immediate attention
6. Remediate all ad quality issues, especially those promulgated by CBA through these steps:
   • Identify the source of the issue
   • Communicate digital policy requirements, i.e., CBA standards
   • Demand correction or remove the source from your digital ecosystem
   • Document your remediation steps in the “Request review” area of the portal
7. Submit for review by clicking “I fixed this”

As a member of Coalition for Better Ads, The Media Trust has various solutions to address ad quality, from creative policy enforcement, to campaign verification. Whatever your decision, you can achieve ad revenue objectives while delivering a clean and regulatory-compliant user experience. Clearly, a more positive ad experience benefits everyone—publishers, ad/martech and agencies and, most of all, consumers.

The post The Google Chrome ad filter is live. Here’s what to do if your ads are deemed bad appeared first on Digital Content Next.

So, it might seem that the recent uproar around Google YouTube ad placement could be seen as a boon for premium publishers. But as has been well-documented, a lack of marketer trust in digital advertising is bad for the entire ecosystem, not simply the bad (or careless) actors. So it is with great interest that our industry has watched Google’s YouTube brand safety saga unfold.

Here are the highlights of how the story has developed so far:

March 16, 2017

• The Guardian | Guardian pulls ads from Google after they were placed next to extremist material 

March 17, 2017

• The Times | Taxpayers are funding extremism 
• News Corp | Statement of Robert Thomson, Chief Executive of News Corp On Havas Media Group UK Decision To Pull Advertising From Google and YouTube
• Google | Improving our brand safety controls 

March 21, 2017

• Google | Expanded safeguards for advertisers 

March 22, 2017

• The Wall Street Journal | AT&T, Verizon Pull Ads From Google Over ‘Hate’ Videos
• Business Insider | The real motivations behind the growing YouTube advertiser boycott

March 23, 2017

• The Wall Street Journal | This Graphic Shows Why Google Got in Trouble Over Ad Placement
• USA Today | Google, YouTube boycott over extremist ads slams shares

March 24, 2017

• The Wall Street Journal | Google’s YouTube Has Continued Showing Brands’ Ads With Racist and Other Objectionable Videos
• Recode | YouTube’s ad mess gives advertisers leverage for what they really want: More data
• ABC News | More big brands pull ads from YouTube in widening boycott
• The Verge | YouTube is facing a full-scale advertising boycott over hate speech
• Bloomberg | YouTube’s Better-Than-TV Pitch Undermined by Offensive Video
• The Guardian | Starbucks and Walmart join growing list of advertisers boycotting YouTube
• MediaPost | ANA Issues YouTube Advisory, Tells Google ‘To Do No Harm’

March 25, 2017

• Wired | YouTube’s Ad Problems Finally Blow Up in Google’s Face

March 26

FT | Advertisers seek Google discounts in video backlash

March 27, 2017

• Business Insider | Analysts predict the YouTube advertiser boycott will cost Google $750 million
• Fortune | Why the YouTube Ad Boycott Could Cost Google $750 Million
• AdAge | Meet the Man Behind YouTube’s Sudden Ad Crisis. He Has a Patented Fix

March 28, 2017

• AdAge | Who Wins and Who Loses in YouTube’s Falling Out With Brands
• Wall Street Journal | TV Networks See an Opportunity in Google Ad Backlash

March 29, 2017

• The Wall Street Journal | TV Networks See an Opportunity in Google Ad Backlash
• AdExchanger | Premium Pubs Tout Their Alternatives Amid Brand Safety Concerns – But Will Advertisers Arrive?
• The New York Times | Chase Had Ads on 400,000 Sites. Then on Just 5,000. Same Results.

March 30, 2017

• The Financial Times | TV companies offer shelter from YouTube 
• Advertising Age | As YouTube Tinkers With Ad Formula, Its Stars See Their Videos Lose Money

March 31, 2017

• Advertising Week | 3 Digital Ad Players Cashing In on YouTube’s Brand Safety Issues

April 3, 2017

• Recode | Google says its YouTube ad problem is “very very very small” but it’s getting better at fixing it anyway
• Digiday | Big brand pullouts will have had limited impact on YouTube 
• Bloomberg | Google Updates Ads Policies Again, Ramps Up AI to Curtail YouTube Crisis
• Advertising Age | YouTube to Offer Third-Party Brand Safety Tools Following Revolt by Marketers
• INMA | With backlash against Google, YouTube ads, is it time for publishers to step up? 

April 4, 2017

• Advertising Age | YouTube Invites in Safety Inspectors, but Powers Are Limited 

April 28, 2017

• The Financial Times | Google parent Alphabet allays ad boycott concerns

May 15, 2017

• Barron’s | Several Major Advertisers Remain Wary of YouTube

October 12, 2018

• MarketWatch | YouTube advertiser boycott appears to be over

February 2019

• Axios | Companies pull ads from YouTube Again
• Adweek | Can YouTube Ever Be Completely Safe for Advertisers?

The post A timeline of the YouTube brand safety debacle appeared first on Digital Content Next.