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  • Googles ad monopoly is harming journalism with sky-high fees for news publishers, antitrust trial hears

Googles ad monopoly is harming journalism with sky-high fees for news publishers, antitrust trial hears

Googles alleged monopoly of online display advertising is negatively impacting the ability of news organizations to invest in journalism, a senior publishing executive told a federal court in the United States.

Googles alleged monopoly of online display advertising is negatively impacting the ability of news organizations to invest in journalism, a senior publishing executive told a federal court in the United States.

Matthew Wheatland, Chief Digital Officer at DailyMail.com, said the tech titan suppressing revenue publishers receive from advertising restricted investment in journalism.

Mr. Wheatland was giving evidence on the eighth day of an antitrust trial brought by the U.S. Department of Justice (DOJ) against Google.

Government lawyers accuse the technology giant of seeking to dominate display advertising on websites, including those of news publishers.

Google s alleged monopoly of online display advertising is negatively impacting the ability of news organizations to invest in journalism, a senior publishing executive told a federal court in the United States

Google s alleged monopoly of online display advertising is negatively impacting the ability of news organizations to invest in journalism, a senior publishing executive told a federal court in the United States

It is alleged Google engaged in monopolistic behavior and anti-competitive practices by locking customers into using its products, crushing would-be competitors, stifling innovation, and depriving the publishing industry of hundreds of millions of dollars in revenue.

The case is being heard by Judge Leonie Brinkema, without a jury, in Alexandria, Virginia, just outside Washington D.C., and is expected to last several weeks.

She could ultimately decide Google is operating a monopoly and force it to sell off part of its advertising business.

During 90 minutes of evidence Mr. Wheatland told the court: We are a news publisher that produces content that we believe Americans find important and interesting, and monetization 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 case centers on the adverts that appear on a web page when a user opens it, particularly the rectangular blocks at the top and right-hand side.

Every day, billions of those adverts are bought and sold through automated, instantaneous auctions, taking just milliseconds, in a process known as programmatic display advertising.

DOJ lawyers have accused Google of rigging the auctions to favor its own products.

There are three distinct tools involved in selling the adverts.

The first is an Ad server used by publishers to sell space on their websites.

An Ad network is used by advertisers to buy the spaces.

And, in between, is an Ad exchange, which operates a bit like a stock exchange in matching publishers and advertisers.

All three components of the process are controlled by Google products, allowing it to charge higher fees, the court has heard.

Overall, it keeps up to 36 cents on the dollar of every advert it processes.

Its exchange - AdX - alone charges a 20 percent commission, which was significantly higher than any of the much smaller would-be competitor exchanges, the court has heard.

Mr. Wheatland told the court that DailyMail.com had looked into switching away from Googles Ad server - known as DFP - which 90 percent of publishers use.

However, it had calculated that doing so would mean losing 28 percent of its revenue from programmatic display advertising.

That is because DFP is linked to the AdX exchange, which in turn is linked to Google Ads.

Google Ads has previously been described in court as the largest pool of advertisers on the planet.

Mr Wheatland said: We are unable to move ad servers because it means we would have to forego that revenue. Its not financially feasible.

We are still using DFP because losing AdX would be financially detrimental to us.

Mr Wheatland said 40 to 60 percent of DailyMail.coms programmatic advertising goes through AdX and the next biggest exchange accounts for only 6 or 7 percent.

While the AdX take rate is 20 percent other exchanges charged around 10 percent, and one took only 7 percent, he said.

The court was shown an internal DailyMail.com email from February 2020 relating to Unified Pricing Rules (UPR), a complex new system introduced by Google in 2019.

The email said that, under UPR, the AdX exchange was monetizing X3 the amount of DailyMail.com inventory but we dont see much change in revenue.

Mr Wheatland told the court: (Our) revenue didnt increase but they got more inventory at lower prices.

He said publishers were unhappy with UPR.

As Mr Wheatland was cross-examined Google lawyers told the court DailyMail.com was also a big publisher on TikTok, Facebook and Instagram.

They also showed a Google blog post from May 2019 for which DailyMail.com had approved a quote giving positive feedback about UPR.

Earlier, Dr. Rosa M. Abrantes-Metz, an antitrust economist, told the court that in 2011 Google carried out a killer acquisition of a rival called AdMeld, which had been a competitive threat to DFP.

She said the 20 percent fee charged by Googles AdX exchange was too high and works as a tax.

She said: The advertisers and publishers both paid the extra tax so they were both harmed.

The advertisers are paying too much, the publishers are receiving too little, and AdX in the middle is taking an extra chunk.

Because publishers were getting less money consumers of those adverts, and products related, are likely to have been harmed, she added.


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