Antitrust trial: Google’s ad monopoly a threat to publishers and advertisers alike?
Google’s grip on Google ad supply and delivery severed a monetary lifeline and damaged the Daily Mail’s ability to invest in journalism, a top exec told the antitrust trial yesterday.
Chief digital officer Matthew Wheatland was one the last witnesses for the Department of Justice, which is winding up eight days of giving evidence.
Over 90 minutes, he told the court: “We are a news publisher that produces content that we believe Americans find important and interesting, and monetisation we receive is generated by display advertising which runs through Google.
“’Google suppressing prices for publishers ultimately reduces publisher revenue which, in turn, means we do not invest in journalism in a way that we potentially otherwise could.”
The DoJ has alleged that Google has built an ad monopoly by controlling 91 per cent of publisher ad servers, and 80 per cent of ad demand, as well as the exchange that matches them together.
The court has heard this network delivers 13 billion ads on publisher pages per daily and charges a 36 per cent levy on every ad on its ad tech.
This includes a 20 per cent charge for AdX, which the DoJ argues is excessive compared to credit cards or stock market traders who charge one to three per cent.
Earlier in the week, a former News Corp executive revealed that four in five of its ad dollars are reliant on Google, and it had abandoned plans to leave Google’s ad network.
Mr Wheatland told the court that DailyMail.com had also investigated leaving Google’s ad server but calculated it would mean losing 28 per cent of its programmatic ad revenue.
That amounted to US$350,000-a-month and would have been commercially catastrophic, he told the court
The court heard Google Ads was the “largest pool of advertisers on the planet” so losing access was near impossible.
And Google’s ad server is linked to the AdX exchange, so its ads are only available if publishers use both. The DoJ calls this “tying” and argues it’s anticompetitive.
Mr Wheatland told the court: “We are unable to move ad servers because it means we would have to forego that revenue. It’s not financially feasible.
“We are still using DFP because losing AdX would be financially detrimental to us.”
He added that up to 60 per cent of DailyMail.com’s programmatic ads came from AdX, with the next exchange just “six or seven per cent”.
He also told the court that AdX’s 20 per cent was more than double what its rivals charged.
Earlier, the court heard from an antitrust economist Dr Rosa Abrantes-Metz, who said AdX;’s high charges amounted to a “tax”.
“The advertisers and publishers both paid the extra tax so they were both harmed,” she said.
“Advertisers are paying too much, the publishers are receiving too little, and AdX in the middle is taking an extra chunk.”
She told the court that because publishers were “getting less money” there was less investment into journalism and “consumers of those adverts are likely to have been harmed”.
The prosecution is now wrapping up its evidence, before Google begins its defence. The case is listed to run for another four weeks.
– By Future Media’s Ricky Sutton