US District Court Judge Leonie Brinkema has a task few outside of the advertising world would ever take on willingly: try to comprehend ad tech.
Beginning this week at a courthouse in Alexandria, Virginia, Brinkema is set to preside over the advertising trial of the decade, as the Department of Justice will attempt to show that Google, the world’s biggest advertiser, has monopolized advertising technology.
The trial, which is expected to last anywhere from four to six weeks, represents the largest existential threat Google has ever faced, and could have wide-reaching effects across the advertising landscape as lawyers unpack how Google’s advertising tools have dominated the industry. It’s not the ad juggernaut’s first bout with the DOJ, which just last month succeeded in its case arguing that Google had acted illegally to maintain a monopoly in the search-engine industry.
The arguments: The crux of the DOJ’s complaint focuses on the complex (and perhaps mind-numbing) details around programmatic advertising, including the bidding and targeting systems that help determine how a digital ad is bought and sold. The DOJ alleges that Google made acquisitions that allowed it to both stave off competition and maintain its hold on the most important parts of the ad tech “stack” or supply chain.
According to the DOJ, this has allowed Google to control the digital ad ecosystem, bidding on behalf of advertisers as well as owning the auction platform itself (see this nifty chart the DOJ published when it announced the suit).
On the publisher side of things, the DOJ alleges that Google made access to Google Ads contingent on using its ad server, thus cornering the market. The DOJ will argue that, as a result of Google’s dominance, publishers made less money and ads cost more. On average, Google keeps “at least 30 cents—and sometimes far more—of each advertising dollar flowing from advertisers to website publishers through Google’s ad tech tools,” according to the complaint.
In a January blog post, Google responded to the DOJ’s argument by emphasizing that ad tech is a messy, busy, and competitive space, with plenty of worthy competition including The Trade Desk, Facebook, Amazon, TikTok, and Netflix. The company argued in a recent filing that “expanding the existing degree of interoperability between Google Ads and third-party exchanges” would be time-consuming, labor-intensive, and could risk exposing advertisers to “invalid traffic and brand-safety risks.”
Who’s who: Throughout the trial, many ad-tech industry stalwarts are expected to testify, although Google has attempted to block testimony from some of the DOJ’s witnesses. Potential witnesses include representatives from The Trade Desk, the New York Times, Vox Media, and Amazon, as well as former agency execs from Dentsu and IPG. Google executives Neal Mohan, who is currently CEO of YouTube, and Dan Taylor, Google’s VP of global ads, are also on the witness list.
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As part of its argument, the DOJ is expected to dive into specific projects Google implemented that it claims it used to maintain its dominance, like Project Bernake, where Google allegedly subsidized competitive bids to win more market share but made up the difference with higher fees, or Poirot, which, according emails released ahead of the trial, allowed Google to reduce bids in some instances by up to 90%. A deal between Facebook and Google that the DOJ claims was aimed at reducing competition between ad auctions is also expected to be scrutinized.
Thanks to the trial, hundreds of internal documents and communications from inside Google have been made public, and they provide a partial look at how the company pulled the levers of the digital advertising ecosystem behind the scenes. There are messages exchanged between three Google employees about shifting advertiser demand, a competitive analysis of The Trade Desk, and an email exchange involving execs from across the industry, including Hearst, Google, and the IAB, in which the Hearst exec describes “inequities” in the ad market as a result of the close integration of Google’s ad server and ad exchange.
In another, Scott Spencer, a longtime Google ads employee who left the company in January 2023, wrote about the importance of exclusivity around Google’s ad exchange in a 2013 email: “Our goal should be all or nothing—use AdX as your SSP or don’t get access to our demand,” he wrote.
Ad-tech vets told Marketing Brew that Google’s market power was never in doubt, but that the documents have still proven to be illustrative.
“It’s sort of like we’ve been in an abusive relationship for 10 years, and now we’re reading the abuser’s diary,” Ari Paparo, an ad-tech vet and founder and CEO of Marketecture, said.
Ruben Schreurs, chief strategy officer at the media investment and analysis firm Ebiquity, told Marketing Brew that there has long been a sense among advertisers that Google leveraged its dominance in ways that could harm competition. Now, Schreurs said, the industry is getting a look behind the curtain.
“My entire career has been revolving around Google—not by choice, but because of their dominance,” Schreurs said, later adding that “as one of the only parties in the entire industry, or the only party in the entire industry, they see it all.”