Google's tool that lets publishers sell advertising space on their websites is ubiquitous, but that's largely a testament to how difficult it is for customers to opt out of it, a former publishing executive testified in federal court Tuesday.
“I felt like we were being held hostage,” said Stephanie Layser, a former programmatic advertising executive at News Corp (which owns brands like The Wall Street Journal and the The New York Post) who now works at AWS. Layser testified as a government witness in the Justice Department’s second antitrust case against Google, which accuses the company of monopolizing markets for advertising technology tools and illegally tying two of its products together.
Layser was one of three witnesses the court heard Tuesday, spanning the perspectives of publishers, advertisers and insiders at Google. Through his testimony, the government is attempting to paint a picture of a company that exerts so much control over markets for advertising technology tools that customers don’t walk away, even in the face of unfavorable changes. That’s because, the government says, Google has protected its monopoly power, preventing adequate alternatives and true competition from emerging. Google, for its part, says the government is punishing it for success and trying to force it to deal with rivals on more favorable terms.
Layser was drawn to a change Google implemented in 2019, which prevented publishers from setting higher floor prices for just Google’s ad exchange, AdX, under what it called unified pricing rules (UPR). With UPR, Layser said it was still possible to set different floor prices for other exchanges within each of their systems, but not for Google. Publishers might want to set a higher floor price for AdX to allow for more competition during ad auctions in the hopes that it would result in a higher price than the floor they’re willing to accept, she said.
When Google introduced the UPR, Layser arranged a meeting with Google executives to voice his concerns and said he believed the program was “in the best interest of Google and not in the best interest of its customers.” He did not recall how Google responded, but said “nothing changed” and the program was implemented.
Despite his complaints, Layser said switching to a different tool was not a viable option. That’s because using Google’s publisher ad server — known at the time as DoubleClick for Publishers (DFP) and today as Google Ad Manager — was the only way to tap into Google’s large advertiser demand base with real-time pricing, which is important in a system where computer-run ad auctions happen in milliseconds.
Layser even helped put together an analysis at News Corp looking at the pros and cons of switching to another publisher’s ad server, AppNexus (later bought by Microsoft and rebranded as Xandr), but determined the risk of losing revenue without the same access was a major factor. The demand for Google Ads was too great.
The decision, however, was not really about the quality or price of Google’s product, Layser testified. “DFP is a 25- to 30-year-old piece of technology. It’s slow and clunky,” she told the court. Google also provided News Corp with less information about its transactions than it could have gotten with AppNexus, Layser said. She “begged” Google for what she called “record-level data,” but never got it. And because of DFP’s limitations, Layser said she couldn’t take on projects she thought could maximize revenue. “I couldn’t innovate,” she said. “I felt stuck.”
“DFP is a technology that is 25 to 30 years old. It is slow and clumsy.”
Despite DFP’s alleged drawbacks, the Justice Department claims the tool has nearly 90 percent of the market share in the United States. Layser, who previously worked as a consultant for more than 70 publishers, said she could think of “maybe three publications out of hundreds that don’t use DFP.” Because of its near-universality, she said there are “legions” of publishing professionals who have only worked with Google’s tool their entire careers.
During cross-examination, Google's lawyers noted that News Corp believed it was competitive with Google in some areas, bolstering its claim that the Justice Department is trying to force deals with its rivals. In its analysis of the move to AppNexus, News Corp wrote that since Google owns a media business, it was unlikely to have interests aligned with Google in the long term.
Later, the court heard from Jay Friedman, CEO of Goodway Group, who shed light on the advertising side of the market. Friedman testified that Google's AdX has been the only platform his company has been unable to negotiate rates with, despite its fee being higher than others. “We were told it wasn't an option,” he said.
The court then heard a pre-recorded testimony from Eisar Lipkovitz, former vice president of engineering for display and video ads at Google. Lipkovitz said he still has “PTSD” from his time at Google and expressed frustration with colleagues who disagreed with his vision of how tools should work or moved too slowly on projects.
Lipkovitz said he acknowledged a potential conflict of interest in the way DFP and AdX were integrated, describing those within the company who denied it as “self-serving arguments.” Still, he attributed the difficulty of operating such a product to the lack of alternatives to Google’s DFP. “It’s a business that nobody wants,” he said.
