A conversation with Google’s VP of global ads

In late January, the US Department of Justice, joined by eight states, sued Google for allegedly operating an ad-tech monopoly and violating antitrust laws.

The deeply detailed case, which reads almost like a history of the internet, claims that, on average, the company pockets at least 30 cents from every advertising dollar that flows from advertisers to publishers through its ad-tech tools. It alleges Google’s sweeping control over how ads are bought and sold online has created an environment that’s “raised barriers to entry to artificially high levels, forced key competitors to abandon the market for ad tech tools, dissuaded potential competitors from joining the market, and left Google’s few remaining competitors marginalized and unfairly disadvantaged.”

Specifically, the DOJ is seeking to order Google to divest from or sell its sell-side business—the tools it offers to publishers to run ads and help monetize their sites. Like everything in ad tech, the case is complex—there are servers, exchanges, and references to header bidding—and many predict that it could be years before there’s anything close to a resolution.

So far, Google has responded with a blog post written by Dan Taylor, Google’s VP of global ads, in which he wrote that the lawsuit “ignores the enormous competition in the online advertising industry.” Marketing Brew spoke with Taylor about the case and how it might impact publishers.

This interview has been lightly edited and condensed for clarity.

What are you communicating to publishers right now? A divestiture—selling your sell-side business—would seem to complicate that relationship.

Publishers are really supportive right now of the technology tools that we’re providing. Similar to my perspective, they see this—the DOJ suit—as kind of out of touch with today’s competitive reality.

The average large publisher that we work with uses six different providers simultaneously to help drive monetization for their ads, or their websites, or their apps. When you think about the current or newer players that have gained traction, whether it be Amazon or Apple, or [the] Microsoft and Xandr combo, along with the bigger shift toward apps, mobile, and connected TV…this feels really more competitive than ever, and so publishers kind of see this as a little bit of an anachronistic view of how digital advertising has evolved.

Publishers I’ve chatted with say that sometimes they feel like they can’t change servers because they don’t want to lose some of that Google traffic. What would your rebuttal be there? (Editor’s note: The suit states that since 2015 or so, “Google’s share of the publisher ad server market in the United States has remained above 90% for many years,” with similar numbers worldwide.)

Publishers can and do use Google’s Ad Exchange with another ad server. And Google Ad Manager is integrated not only with Google Ads’ buy-side products but also with hundreds of other different demand partners.

I think the crux of your question is around Google demand, and whether it comes from Google Ads or DV360…[They] integrate with over 80 different ad exchanges and are buying on all of them in addition to Google Ad Manager, AdSense, and AdMob. There’s interoperability between all those tools, and there’s an opportunity to continue to drive monetization on those tools. Not only do publishers not have to worry about switching in order to access all the demand that they can from various providers, they’re using multiple ones simultaneously.

How do you dispel this notion that Google doesn’t have an inherent advantage as a buyer and as a seller?

I think the suit mischaracterizes how the digital advertising marketplace works, going so far as to make an analogy that it’s like the New York Stock Exchange and Citibank. (Editor’s note: The lawsuit notes that a Google executive once said, “[I]s there a deeper issue with us owning the platform, the exchange, and a huge network? The analogy would be if Goldman or Citibank owned the NYSE.”)

I think that’s a convenient analogy, but it’s also a deeply flawed one. First of all, it’s common in the digital marketing industry to provide tools for both advertisers and publishers. Amazon, Microsoft, and yes, of course, Google does that as well. So does Comcast. And there are other players that aren’t household names doing the same thing, particularly in the apps and mobile space…The buy and the sell side providing tools for both is common in the industry; they’re interoperable with others, and there’s a ton of choice.

Another thing that stood out—you mentioned Apple, The Trade Desk, and TikTok as competition. Isn’t that indicative of a lack of competition here, that Google is able to compete on multiple fronts?

We’re competing for advertising dollars. I worked in the traditional advertising, radio, and broadcast industry for 15 years, and I saw advertising dollars follow consumers. When consumers were starting to move online, that’s when the advertising industry started to also move online…I don’t think there’s an inherent advantage for a company to be able to compete in all these places—every company is trying to follow where the consumer is.

To the publishers that are reading the suit, I think the number that stands out is that 30 cents on every advertising dollar is going to Google. Do you at all feel like you need to rebuild trust with publishers?

One of the reasons we haven’t been worried about publishing that sort of information is, first of all, our buyers and our sellers know the fees. Second of all, our fees are competitive or lower than reported industry averages. Even so far as regulatory inquiries, where they’re trying to assess rates in the marketplace, like the UK’s Competition and Markets Authority, they’ve illustrated time and again that our rates are competitive.

And so I don’t need to refute it so much as to say we’ve been transparent with it and there’s no news here.

Do you feel like you are hampered because the future is uncertain? Do you feel like you’re competitively hamstrung by the suit?

We’re living in a time of uncertainty, whether it’s economic, whether it’s the war in Ukraine, whether it’s living in a post-pandemic society, or the energy crisis. And that’s just kind of the broader landscape.

Even within the advertising landscape, when we think about deteriorating third-party signals, loss of cookies, the rise of apps and identifiers and cross-site tracking, and all the different regulatory and privacy pressures that come with this, for the whole industry, we’re absolutely living in a time of uncertainty. That’s when our partners are looking to us more than ever to understand how to navigate this uncertainty, how to get through some of the complexities with technical innovation.

So if anything, I think our partners and customers are looking to us to innovate during a time of uncertainty. And they’re not getting distracted by the fact that there’s a DOJ inquiry, especially since that inquiry largely duplicates the Texas Attorney General-led suit, much of which was already dismissed. (Editor’s note: A judge granted Google’s motion to dismiss one of four counts in the Texas case.)

The government has said that, as an advertiser that purchases display ads, it is among those “harmed by Google’s anticompetitive conduct.” Did you look into that?

I did not look at that specifically. But I can tell you if, if the US government is buying our advertising services, they get the same level of service and treatment and cost opportunities than any other publisher or advertiser would. I do recall seeing that, but no, I didn’t go look at their account.

What comes next?

What happens is the legal teams get into their portion where they’re doing their discovery and they’re building their arguments. As I’ve said to multiple folks, we really look forward to defending this business.

Someone asked me recently, “Hey, this is going to be a big headache for you. Why are you in this business at all? Why are you hanging onto it so tenaciously?” My answer to that is that we’ve always been supporting an ads-based business model for the web because we think it’s core to our mission. An internet that provides free content to users really only stands up today on an ads-based business model.

A fun but relevant question: A lot of publishers are turning to AI-generated content. Some were probably doing this before this hype cycle. As it stands now in your publisher policies, you don’t allow copyrighted material; you don’t allow [ads to run on] stolen material…Are you considering disincentivizing publishers that use AI content? Is that on the table?

No, I think it’s very early days for generative AI, particularly in the chatbot space. We don’t quite know where all that’s gonna go, let alone monetization models and ad formats and policies and so on. What I can tell you is that we built AI into our products for the last decade—you mentioned Performance Max as one. Another is implementing things like large language models to help improve the performance of search ads…I think we’ve always had a track record of being able to make a good shift when the ecosystem has shifted; mobile is a great example of that. We also have a great track record of being able to help publishers figure out how to monetize their content. But I don’t think that the specific thing you’re asking is an active conversation right now.

So you’re not at all concerned about a wave of publishers turning to AI content, or am I missing the forest for the trees here?

I think it’s very early days to be able to look that far down the road. We want to figure out the opportunities within AI, and with opportunities also come challenges, right?