A publisher, an ad exchange, an ad buyer and an ad server walk into a courtroom.
But Day Two of the Google antitrust trial in Alexandria, Virginia, on Tuesday was just as intensely focused on the intricacies of ad tech as on Day One.
Testimony began in the morning with Stephanie Layser on the stand sharing her often maddening experiences using Google’s ad server from her time at the New York Post, MailOnline and News Corp. (Layer is now global head of publisher ad tech solutions at AWS.)
To hear Layser tell it, using DFP (DoubleClick for Publishers, Google’s ad server) was like being held hostage. And switching ad servers wasn’t an option, because the revenue risk of losing Google Ads demand was too high.
Not that News Corp didn’t try.
Log off
In 2017, News Corp did a six-month internal evaluation called Project Cinderella (Google isn’t the only one that gets to come up with project code names) to figure out whether it would be possible to swap out DFP for AppNexus.
The upshot was … nope. Not only would it take too long, the fear of losing Google’s ad demand was just too great.
The same year that News Corp ran this assessment, Google Ads demand made up between 40% and 60% of News Corp’s programmatic revenue.
And so Layser began an ultimately unsuccessful pressure campaign to push for product features that would make News Corp less dependent on Google. One of her deepest and most long-held desires for years was to access and merge log-level impression data from DFP and AdX so she and her team could make more informed buying decisions.
As Layer told it from the stand, Google finally promised to give her a key to match the data sets, and she was really excited. But right before it was supposed to happen, Google obfuscated the key for supposed privacy reasons, she said, and there was no leverage to negotiate.
“It’s impossible to negotiate with Google,” Layser said. “Other exchanges were easier to negotiate with because they have to compete in header bidding.”
‘Nothing changed’
Even so, Layser doggedly kept being that squeaky wheel.
In 2019, Google announced Unified Pricing Rules (UPR), which eliminated a publisher’s ability to use variable pricing floors within DFP. Just a fancy way of saying publishers could no longer use price floors as a way to funnel spend to particular exchanges.
Previously, News Corp would often set higher floors for AdX, which allowed it to be less reliant on Google demand. These floors would automatically weed out lower-priced, lower-quality demand from AdX.
But UPR “took the control out of our hands,” Layser said, “so we could no longer choose how to best monetize our inventory. … I felt stuck.”
At her wit’s end, Layser sent an email to Google asking for a meeting to talk about concerns and to press, once again, for access to AdX advertisers without also having to use Google’s ad server. Eventually, she was able to meet with two (female) Google employees who were completely unsympathetic.
“They called me emotional and unproductive,” Layser said.
And what happened after that?
“Nothing changed,” Layser told the DOP attorney.
Everyone, chill
Meanwhile, Layser – one of the original architects of header bidding – was also a vocal champion of Prebid, the open-source header bidding wrapper, which is now used by every major exchange, with the exception of Google.
It’s long been Layser’s contention that Google should build a Prebid adapter for AdX.
She made that point in a July 2019 column published on AdExchanger, which was cited by Google’s attorney during Layser’s cross examination. In the piece, Layser wrote that Google should “contribute AdX to Prebid.org” – and that triggered an odd line of questioning from Google’s lawyers accusing Layser of wanting Google to make AdX into an open source “community asset” and not run it as a for-profit business.
The judge in the case, US District Court Judge Leonie Brinkema, gave Layser an opportunity to clarify. The judge turned to Layser on the witness stand from her perch on the bench and asked, “What do you mean by ‘community asset’?”
Layser replied that she believes there should be a standard set of protocols that are followed by everyone in the industry, like OpenRTB, for example. “When we’re competing against each other,” she said, “software should be something we work on together.”
That’s a lot different than calling for Google to hand over the AdX code to Prebid, which isn’t what Layser was suggesting.
The ghost of Quora
After Layser’s testimony closed, the government called Goodway Group CEO Jay Friedman to keep on hammering home that “open web display advertising” is a distinct market.
“It’s been around for 10 or 15 years,” Friedman said. “It’s a very common term in the industry.”
To spare you a recap of multiple hours of testimony about market definition, upper-funnel versus lower-funnel marketing tactics and an exceedingly long (and related how?) detour about frequency capping, here’s the upshot: Buyers don’t treat every channel the same, even if those channels can drive similar outcomes.
But Google’s attorneys also landed a few jabs by quoting Friedman to himself from material that contradicted and muddied his assertion that many media channels aren’t easily substitutable, including passages from his two self-published books about marketing and ancient Quora posts he’d written.
In one 9-year-old Quora post, Friedman responded to the question, “Is there an effective alternative to native and banner ads?” by saying “How about in-stream video?”
The internet never forgets.
‘Neal decided, probably’
The day wrapped with testimony from Eisar Lipkovitz, Google’s former VP of engineering, who was in charge of video and display ads between 2014 and 2019.
Lipkovitz wasn’t there in person. Instead, parts of his deposition from last year were read out loud in court – ums, ahs and all – and the rest was a recorded video.
And it was fascinating, folks.
Having left Google a few years before, Lipkovitz was still close enough to remember details but also far enough removed that he didn’t feel the need to sugarcoat his statements.
For example, he talked about how there was no love lost between the team in charge of Google’s ad exchange and the DFP folks. “The AdX team was very entrepreneurial and disliked the DFP team,” Lipkovitz said. “The AdX team was aggressive and built a lot of stuff and the DFP team was lazy and slow in terms of innovation.”
(Steph Layser from News Corp would probably agree with the last part of that statement.)
Sridhar Ramaswamy, who was then Google’s SVP of ads and commerce, moved Lipkovitz to the display and video side of the business from a different division to try and change the dynamic.
But Lipkovitz hit a wall when he attempted to get things done.
For instance, he was very in favor of a product called AWbid (AdWords bidding), which allowed the Google Ads platform to buy inventory in third-party exchanges for remarketing campaigns. But unnamed others at Google were “vociferously opposed” to AWbid and, in the end, they wore him down.
This experience and others like it were deeply frustrating. It took the better part of a year, for example, to come up with an ultimately unsatisfactory (Lipkovitz called it “wimpy”) proposal for how to lower AdX margins from 20% in order to appease publishers after the rise of header bidding.
“I still have PTSD,” Lipkovitz said.
By the way, if you ever wondered why exactly AdX’s take rate was set at 20%, we’ve now got the reason. The DOJ attorney deposing Lipkovitz happened to ask about that in passing.
“Neal decided, probably,” Lipkovitz said. (Sounds … arbitrary.)
Coming up
The Neal being referenced is Neal Mohan, now the CEO of YouTube. But before that, he was SVP of display and video ads at Google between 2008 and 2015. Mohan is on the DOJ’s witness list, and when he takes the stand (timing TBD) he’ll no doubt be classified as an “adverse witness,” which is lawyerspeak for hostile witness.
And speaking of adverse witnesses, we’ve got one on the docket for Wednesday: Brad Bender, who joined Google as part of the DoubleClick acquisition in 2008 and held multiple top ad tech exec roles at Google until leaving in 2022. Bender unsuccessfully tried to get his subpoena quashed so he wouldn’t have to testify, but no dice.
And there’s also a decidedly non-adverse witness scheduled to testify on Wednesday: Jed Dederick, CRO of The Trade Desk. 🍿
Although, word to the wise, there’s no food or drink allowed in the courtroom.
