By Marty Swant and Ronan Shields • September 13, 2024 •
Ivy Liu
On Thursday in federal court, the U.S. Justice Department introduced internal Google documents — including emails, chat logs and audio recordings — that showed Google execs’ plans around the introduction of new publisher tools to compete with header bidding.
Evidence submitted by the DOJ suggests Google knew about industry unease over the evolution of DoubleClick — Google’s publisher platform in question as part of the antitrust trial — but continued on its path to monetization anyway and even took measures to allegedly thwart efforts to side-step its control. Documents also gave a behind-the-scenes look at how Google execs understood why publishers wanted to diversify revenue away from the Google-controlled advertising waterfall and employ rival monetization technology header bidding instead.
One of the DOJ’s witnesses for Day 4 was former Googler Rahul Srinivasan, who at the time was product manager for Google Ad Manager between 2016 and 2019. Srinivasan discussed the rollout of various features within Google Ad Manager, such as a move to a first price auction, removal of publishers’ Last Look, and the introduction of Unified Pricing Rules (UPR).
The DOJ asked Srinivasan why he labeled certain documents as confidential attorney-client privilege, despite there being no legal matters discussed, adding that the emails were more about confidential business discussions rather than anything that would require a lawyer. One of the emails even shows Srinivasan reminding his team to follow Google’s Communicate with Care policies related to any information that might be subject to investigation.
When Google proposed purchasing DoubleClick for $3.1 billion in 2007, fears that it would build the ultimate mousetrap for online ad spend were such that it took a year of making assurances for the U.S. government to approve it. Google’s promises at the time included its commitment to open market competition and a pledge that users of its platform would retain control and continue to enjoy a level playing field. However, documents and witness testimony now provide a glimpse at what’s happened since then.
A decade and a half later, the resulting unit, widely known as Google Ad Manager or still referred to under the earlier DoubleClick moniker, faces a potential breakup under charges leveled by the Justice Department. (Read more about Digiday’s ongoing trial coverage from the courthouse and beyond.)
In the mid-2010s, some forward-thinking publishers sought to reduce their reliance on Google by setting higher floor prices in its ad exchange (AdX) compared to rival offerings. This setting is known as dynamic floor pricing, with the above pricing tactics often meaning that AdX lost ad impressions to rival exchanges. However, a 2018 email exchange admitted into evidence by the DOJ shows former Google exec Sam Cox (now of Integral Ad Science) inquired as to whether it was possible to switch this function off.
“I think pushing ‘push Google harder’ is more difficult in the world without the ability to set floor prices higher [in AdX],” wrote George Levitte, who was Google’s senior product manager for AdX, in reply to Cox’s question.
Meanwhile, the DOJ also played audio from a 2019 event Google held for dozens of publishers to announce and explain the rollout of UPR. The event was attended by notable luminaries of the space, including Stephanie Layser (a then-News Corp. exec), who occupied the witness stand earlier in the week. In the audio clip, publishing execs expressed concerns over how Google’s changes might remove publishers’ control and only benefit its own platform. Emails from Google execs before and after the meeting show Google execs were worried about how to articulate the introduction of tools that took control away from publishers.
“We just have to hope Google is acting in our best interest. And that’s kind of a hard thing to swallow,” said Emry Downinghall, the former vp of advertising at Chegg, in audio from the meeting.
“We introduced Unified Pricing Rules and other updates as a way to improve the transparency and fairness of the auction and help publishers achieve their goals,” a Google spokesperson wrote in a statement after today’s testimony. “During the rollout, we made changes and introduced new features in response to publisher feedback.”
On Thursday afternoon, execs from ad tech’s biggest players also took the witness stand. Pubmatic CEO and co-founder Rajeev Goel described the evolution of programmatic advertising, the ways publishers integrate ad tech stacks and the challenges PubMatic and others face when competing with Google for display ad inventory. The DOJ also showed a 2009 email from Pubmatic co-founder Amar Goel to Neal Mohan, YouTube’s current CEO who at the time was still at DoubleClick. The email showed Goel asking DoubleClick to integrate Pubmatic via API, but the request was never granted.
The DOJ also showed Mohan’s email after Goel’s inquiry. According to evidence, Mohan told fellow Googlers he was “pretty open” about working with outside vendors via API “as long as they were brought to us by a competitor.” He then added that working with PubMatic goes “directly against our dynamic allocation value prop with ads.”
Google used its cross-examination of fellow witness The Trade Desk CRO Jed Dederich to discuss the company’s financials. To show both publicly traded companies have seen growth despite being challenged in the display ads space, Google attorneys asked questions about the growth of other areas like CTV, mobile app ads and digital audio. However, the DOJ noted the case is about Google’s display network and that growth in other areas were not relevant to the case.
Google’s attorneys also asked Goel about PubMatic’s acquisition of Activate to suggest that it took a similar tactic to Google’s acquisition of DoubleClick. However, Goel clarified that PubMatic’s strategy for supply path optimization was different — something the DOJ noted in response to Google’s line of questions.
When court ended for the day on Thursday, the DOJ was mid-way through questioning Tom Kershaw, the former CTO of Rubicon Project, who explained why Rubicon Project called itself an “independent advertising exchange.”
“We called it independent to stress the fact that we didn’t have any ‘conflicts of interest,’” Kershaw said.
Quote(s) of the day: Excerpts from internal Google emails shown in court by the DOJ
- “Unlike Last Look, which only benefits us, this makes the publisher strictly more money and can be viewed as an optimization feature for them.” — 2017 email from Jim Giles, who at the time was engineering director for Google Ad Manager and Ad Sense
- “I think the strategy of ‘push google harder’ is more difficult in a world without the ability to set floors higher.” — 2018 email from George Levitte, who was Google’s senior product manager for AdX
- “I’m concerned we can’t really tell them that the revenue won’t go away with this change [for header bidding].” — April 2019 email about UPR from Fabrizio Angelini, Google’s former head of product marketing
Up next
Along with continuation of Kershaw’s testimony, Friday’s will feature witnesses including Brian Boland, a former Facebook exec who previously oversaw publisher solutions and other partnership; Chris Lasala, former director of news products and solutions for Google’s publisher business group; followed by YouTube CEO Neal Mohan on Monday morning.
https://digiday.com/?p=555252
