How Do Digital Publishers Get Their Ads? The First Witnesses in the Google-DoJ Experiment at the Second Antitrust Trial

“Control is the defining characteristic of a monopolist,” DOJ counsel Julia Tarver Wood said during opening statements in the federal government’s second antitrust trial against the search giant, which kicked off Monday in Alexandria, Virginia. To the government, Google exerts too much control over every step in the way publishers sell advertising space online and how advertisers buy it, resulting in a system that benefits Google at the expense of nearly everyone else.

Google’s attorneys poked at the witnesses’ arguments and credibility during cross-examination, pointing out ways players like Avery would benefit if the court forced Google to share access to its tools. There will be witnesses from Google who will argue in the trial.

It could take years for the ad market to shake out, says Adam Heimlich, a longtime digital ad executive who’s extensively researched Google. There could be new competition that could lower supply chain fees. He runs a software company and says that it would drive better monetization of websites.

Google’s tools play an essential role in the process, with some of them holding about 90 percent of the market, according to the government. Publishers can sell their ad space on the Ad Manager, a server that was formerly DoubleClick for Publishers. The ad exchange, AdX, facilitates transactions. And it owns an advertiser ad network, rounding out its trifecta of major products across different parts of the ad world.

The first witnesses were called by the DOJ and focused on the tools publishers use to monetize display ads. The ads at the top of the page on news websites and the side of the page on a website are what are called “super-quick auctions.” These are the ads that are displayed at the top of the page while the page loads. During the auction, an ad exchange helps match publishers and advertisers based on things like topic and price without active intervention by a human. The process is called programmatic advertising, and it’s used by The Verge’s parent company Vox Media among many others. Ryan Pauley, the president of revenue and growth forVox Media is on a list of potential witnesses but was not called today.

The Google case for DoubleClick: An ad-buying software developer facing competition from Google and rivals in an ongoing antitrust trial

To Google, the government is seeking control over a successful business by making it deal with rivals on more favorable terms, disregarding the value of its investments in technology and the unique efficiencies of its integrated tools.

Of course, all depends on the outcome of the case. Over the past year, Google lost its two other antitrust trials—concerning illegal search and mobile app store monopolies. The company’s critics are optimistic about the trial, even though the verdicts are under appeal.

Tim Vanderhook, CEO of ad-buying software developer Viant Technology, which both competes and partners with Google, believes that consumers would encounter a greater variety of ads, fewer creepy ads, and pages less cluttered with ads. “A substantially improved browsing experience,” he says.

“Google is able to extract hiked-up costs, and those are passed on to consumers,” he alleges. Consumers will have more access to content that is supported by advertising revenue and people who are seeking advertising won’t have to pay inflated costs.

In March 2007, Google’s then senior executive in charge of acquisitions, David Drummond, emailed the company’s board of directors a case for buying DoubleClick. It was an obscure software developer that helped websites sell ads. But it had about 60 percent market share and could accelerate Google’s growth while keeping rivals at bay. A “Microsoft-owned DoubleClick represents a major competitive threat,” court papers show Drummond writing.