The antitrust trial against Google in Virginia, concerning advertising technologies, has revealed how the company has used its dominant position in the programmatic advertising market to the detriment of publishers. The trial has become a source of revelations about Google's methods of profiting from its all-encompassing presence in the digital advertising ecosystem.

Publishers shared their enthusiasm with AdExchanger about the U.S. Department of Justice’s focus on Google’s monopolistic control over the ad server market. According to them, this is the main obstacle to fair negotiations with Google, unlike interactions with other SSPs.

"Publishers complain about various policies and practices, but ultimately Google controls the ad server and other key points of the ad pipeline," says Danielle Coffey, president and CEO of News/Media Alliance. "They manage such a large volume of demand through AdX and AdWords that they hold all the leverage."

Publishers also welcomed scrutiny over Google’s attempts to weaken header bidding based on Prebid by introducing open bidding. In their view, this attempt shows that Google has never acted in publishers' interests.

Ad Server Separation

The key issue of the lawsuit is whether Google's ad server restricts competition among SSPs and publishers' control over ad sales.

Today, the ad server, formerly known as DoubleClick for Publishers (DFP), is part of Google Ad Manager (GAM) along with Google's ad exchange and ad network.

According to the U.S. Department of Justice, Google controls about 90% of the ad server market for publishers in the U.S..

Ads from Google Ads only flow through AdX, forcing publishers to use Google's exchange to access the largest source of ads. The only way to get pricing data for this inventory is by using GAM.

This setup has allowed Google to extract up to 30% (or even more) of publishers' ad revenues sold through its platform, Coffey claims. She emphasizes that many of Google's most anti-competitive policies were implemented at the ad server level.

Google declined to comment on this article but noted that since 2015, Google Ads has expanded the ability to buy on third-party exchanges through the AwBid program. However, this demand is limited to certain retargeting campaigns.

Many publishers hope that a U.S. Department of Justice victory will bring changes that will allow them to use third-party ad servers and SSPs (not owned by Google) while retaining access to Google Ads demand. To achieve this, the court could order Google to either spin off its ad server into a separate business or otherwise separate it from SSP operations.

"Separating AdX from DFP would change programmatic strategies across the entire industry," says Justin Wohl, CRO of Snopes.com and TV Tropes. "It would also give publishers the freedom to experiment with new, more innovative ad servers."

Coffey believes that splitting Google’s ad business would not only increase competition but also lower prices and provide publishers with the opportunity to choose the most suitable option for them. "There’s no reason for Google to continue controlling a dominant ad server, ad exchange, and demand-side platforms," she stated.

However, some market participants fear that a more competitive ad server market might not necessarily benefit smaller publishers.

According to an anonymous source familiar with publisher concerns, switching to another ad server would require significant technological and resource investments. This could lead to increased costs for publishers and likely negatively impact their short-term revenues.

Prebid as a Solution

Completely dismantling Google’s ad business would be an extreme measure. A simpler way to limit the company’s ability to gain advantages in programmatic auctions exists.

Publishers generally support the suggestion by Stephanie Layser, the current head of AWS and former head of News Corp. She suggests that Google create its own Prebid adapter for AdX to compete directly with other SSPs in header bidding auctions.

According to several AdExchanger sources, header bidding—mostly conducted through Prebid today—has become the most significant innovation in the industry, allowing publishers to reduce their dependence on Google’s ad platform.

Google countered header bidding by introducing its own version—open bidding. In it, Google allowed other SSPs to participate in AdX auctions but with limitations. A fairer and simpler solution would be Google’s participation in Prebid auctions on par with other SSPs.

"Consolidating all demand in one place—Prebid—would be more beneficial for publishers. This would enable a unified auction instead of the current chain of auctions," noted an executive at a publisher tech company on condition of anonymity.

However, a source close to publisher issues warned that for publishers to truly benefit from Google’s participation in Prebid auctions, it is necessary to separate the DFP ad server from AdX.

"Participation in Prebid would theoretically allow AdX to compete equally with other demand sources, but the owner of the ad server and exchange still has greater access to data than the rest," said the source. "The ad server remains responsible for direct campaign traffic and serves as the final point of profitability, so its owner will always know winning bids, final prices, and more."

What Happened to UPR?

Discussing Google’s impact on auction pricing dynamics, publishers welcomed the court’s focus on Google’s Unified Pricing Rules (UPR). These rules restrict publishers’ ability to set floor prices for individual SSPs in AdX auctions.

"UPR is the most hated feature Google ever released because it provided no benefit except to the company itself," said one publisher.

For example, the implementation of UPR led to a 40% increase in Google’s revenue. This happened because UPR allowed Google to bypass the price limits set by publishers for AdX. Previously, these limits gave other SSPs the opportunity to win header bidding auctions. This information is contained in an internal Google email presented as evidence in the trial.

The increase in Google’s revenue from UPR likely came at the expense of other SSPs losing auctions, a source close to publisher concerns noted. "But the question is whether such an auction environment led to pricing that continues to reduce publishers’ CPMs due to unfair competition in the bidding process," the source added.

Wohl from Snopes.com argues that the 40% growth from UPR clearly shows that Google AdX has not been a good-faith partner for publishers as one might expect from an SSP. "We, of course, are not seeing a 40% increase in our revenues," he noted. "And that gain for Google has not returned to publishers in the form of reinvestments."

"When header bidding was gaining popularity, Google spread misinformation about its slow performance and tried to discourage people from using it," Wohl said. "The fact that the company devised product changes to combat [header bidding] is entirely consistent with its public actions."

He also noted: "The strikingly low prices of open bidding when it launched indicated that Google recognized the full dominance of header bidding in the market. The company understood that inaction would lead to even greater losses than it had already suffered."

Overall, publishers seem to have confirmed their suspicions—but were not at all surprised—by the revelations of Google’s attempts to enrich itself at the expense of publishers and other participants in the digital advertising ecosystem.

"It's a shame, but nothing surprises me," Wohl said. "Almost a decade of working with Google has prepared me for this completely."