Google Aware of Publisher Backlash Over Ad Tech Change Benefiting Its Profits

In 2019, Google knew publishers would resist a change it made to limit their ability to redirect ad sales to competitors, a move that ultimately benefited Google’s profits. Internal documents, revealed during the company's antitrust trial on Thursday, showed how Google tried to make the change more acceptable to publishers.

A key part of the case, brought by the U.S. Department of Justice and several states, focuses on Google’s removal of a feature that allowed publishers to reduce their reliance on the tech giant. This feature had enabled publishers to set higher minimum bid prices on Google’s AdX compared to other ad exchanges, resulting in publishers often selling ads through competitors rather than Google.

Documents presented in court reveal that Google understood publishers were willing to accept lower revenue on some ad sales if it meant they could work with ad tech companies that charged lower fees. In a 2017 email, Google executives acknowledged, "It helps them keep Google at bay and put pressure on us (just like in any industry)."

As Google planned to eliminate the feature in 2019, internal discussions highlighted concerns about backlash from publishers. "Rolling the change out on its own would be seen as a pure loss of functionality for our own (perceived 'self-serving' reasons)," wrote Nitish Korula, a research scientist at Google, in an email.

To soften the blow, Google paired the removal of this feature with other updates that publishers appreciated, such as ending the practice that allowed Google's ad tools to get a "last look" and outbid other exchanges. These changes were positioned as efforts to make the system fairer and simpler, and according to former Google employee Rahul Srinivasan, the top 500 publishers saw a median 2.7% increase in ad auction revenue.

However, publishing executives, including those from The New York Times, News Corp, and The Weather Company, pushed back against the loss of control. In a 2019 meeting, Jana Meron, then an ad executive at Business Insider, expressed frustration, saying, "You've made it nearly impossible for any of us to figure out how to increase our yield with partners outside of Google."

The antitrust trial is expected to continue for several weeks. If U.S. District Judge Leonie Brinkema rules against Google, she could later decide whether the company must sell off its Google Ad Manager platform, which includes its publisher ad server and ad exchange.