Google and Facebook execs allegedly approved dividing ad market among themselves(theregister.com)
theregister.com
Google and Facebook execs allegedly approved dividing ad market among themselves
https://www.theregister.com/2022/01/15/googles_facebook_advertising/
91 comments
There is a legitimate reason to oppose header bidding: it results in higher latency than using traditional ad services. Ads served at lower latency tend to get more clicks, and so they have more value. Unfortunately, that means that header bidding results in less money for the website.
...or so Google says, paternalistically. Yet for some reason this technique is used by about two thirds of publishers. I guess they're just throwing their money away? Somehow they fail to realize that Google knows best?
There are good reasons to not use Google ads if you are a news site: you are competing with Google for being a news provider. Even if you would make more without header bidding, you might not want to use solutions like Google ads since that means supporting someone who is competing with you. I personally think header bidding is the next good evolution of the ad markets (and the ad market seems to agree), but there is a cost to it.
How does Google compete with news providers?
How is a service presenting links to a publication competing with that publication?
For a lot of people, the headlines are all they really want to read plus maybe a snippet of a sentence or two. News outlets that expect to sell those eyeballs lose out and consider this unfair competition from Google.
Google, for its part, has been perfectly happy to remove publications from Google News at their request. Or leave entire countries.
Google, for its part, has been perfectly happy to remove publications from Google News at their request. Or leave entire countries.
Because that completely replaces the front page of the news site, a page people normally visit just to find out if there are any articles worth reading. I can see how that leads to less ad impressions on the news site itself if people only visit it when they found an interesting article (and just that article) on google news.
To be fair most newspaper websites form pages I have seen have been eyebleedingly bad; stuffed to the gills with anti-patterns, obnoxious amounts of ads and some of the worst user interface designs I have seen on the internet. is it any wonder people use google instead of newspapers own sites?
Client side header bidding requires an HTTP request / response for each bidder, followed by an HTTP request to the primary ad server (very often, Google Ad Manager), that usually runs its own ad selection process (against lime items from direct sales, and programmatic demand sources such as Google Ad Exchange). Server side header bidding offsets the call to each bidder to the server side and it somewhat improves latency, but it still takes some time to complete the auction, and there's still need for an extra HTTP request / response to the header bidding server.
> Unfortunately, that means that header bidding results in less money for the website.
Can they make up the difference in not getting ripped off by Google?
Can they make up the difference in not getting ripped off by Google?
Yes, this is why many larger media sites opt to use header bidding. The decrease in CTR (click through rate) is offset by increased demand for each ad unit, driving up CPM (effectively the price of the ad).
The downside of this for websites is more middlemen extracting away value - but it’s usually still a net gain, otherwise publishers just wouldn’t use header bidding.
(I’ve worked in several large media companies and have implemented header bidding solutions for them in the past)
The downside of this for websites is more middlemen extracting away value - but it’s usually still a net gain, otherwise publishers just wouldn’t use header bidding.
(I’ve worked in several large media companies and have implemented header bidding solutions for them in the past)
Probably not, since I doubt the ad network sends that much more of the margin it makes without Google back to the website.
You'd be surprised. Every time I've observed a switch to header bidding, revenue goes up like 50% or so. And I've heard the same from many other people. I don't think I've ever heard someone say it didn't improve revenue. And yes, that increase is after the new middleman takes his typical 20% cut!
I feel like a late loading ad that pops under peoples mouse gets more clicks than any other ad does. So are we sure about your statement that low latency leads to more clicks?
> Google's dominance of the ad market
It isn't just dominance. I certainly don't love advertisers, but this is illegal monopolistic price setting. This should be ample evidence for the DOJ to sternly penalize (or break up) Google and Facebook.
Google controls too much surface area on the web and mobile, and they're using it in harmful ways. They've been caught colluding, price setting, and wage fixing on multiple occasions. They're using their disproportionate power to alter the entire market to fit their needs.
How is this any different from Ma Bell? And given the pervasiveness of technology now versus back then, how is it not worse?
It isn't just dominance. I certainly don't love advertisers, but this is illegal monopolistic price setting. This should be ample evidence for the DOJ to sternly penalize (or break up) Google and Facebook.
Google controls too much surface area on the web and mobile, and they're using it in harmful ways. They've been caught colluding, price setting, and wage fixing on multiple occasions. They're using their disproportionate power to alter the entire market to fit their needs.
How is this any different from Ma Bell? And given the pervasiveness of technology now versus back then, how is it not worse?
Header bidding also means that websites blast your page visits to every provider that might want to bid on it, instead of "only" to the ad exchange and the winner. Just a massive surveillance spout to anyone at all.
Just because Google is against something doesn't mean that it is good for us as consumers.
Just because Google is against something doesn't mean that it is good for us as consumers.
This has more details about Google’s move to unified auctions and first bid pricing: https://digiday.com/media/what-is-a-unified-ad-auction/
Title had to be trimmed to fit 80-character limit, from "Google's and Facebook's top execs allegedly approved dividing ad market among themselves".
This reports on an amended complaint filed Friday 14th January 2022.
"On Friday, Texas et al. filed a third amended complaint [0 PDF] that fills in more blanks and expands the allegations by 69 more pages. The fortified filing adds additional information about previous revelations and extends the scope of concern to cover in-app advertising in greater detail."
...
"The third amended complaint explains, "Facebook’s Chief Operating Officer [REDACTED] was explicit that '[t]his is a big deal strategically' in an email thread that included Facebook CEO [REDACTED]. When the economic terms had taken their form, the team sent an email addressed directly to CEO: 'We're nearly ready to sign and need your approval to move forward.' Facebook CEO wanted to meet with COO [REDACTED] and his other executives before making a decision."
[0] https://storage.courtlistener.com/recap/gov.uscourts.nysd.56...
This reports on an amended complaint filed Friday 14th January 2022.
"On Friday, Texas et al. filed a third amended complaint [0 PDF] that fills in more blanks and expands the allegations by 69 more pages. The fortified filing adds additional information about previous revelations and extends the scope of concern to cover in-app advertising in greater detail."
...
"The third amended complaint explains, "Facebook’s Chief Operating Officer [REDACTED] was explicit that '[t]his is a big deal strategically' in an email thread that included Facebook CEO [REDACTED]. When the economic terms had taken their form, the team sent an email addressed directly to CEO: 'We're nearly ready to sign and need your approval to move forward.' Facebook CEO wanted to meet with COO [REDACTED] and his other executives before making a decision."
[0] https://storage.courtlistener.com/recap/gov.uscourts.nysd.56...
Good thing they redacted the Facebook CEO. He might not enjoy the negative public attention.
It looks like the court has roughly the same standard as facebook when it comes to anonymized data.
Good thing they redacted the Facebook CEO. He might not enjoy the negative public attention.
The local newspaper's version of the story was nice enough to name Sundar Pichai by name.
It also included a poor response from Google which was along the lines of, "He signs agreements all the time, but doesn't know what's in them, and so he's not really responsible in any way for this." Which is exactly the opposite of what the newly revised documents show.
It's also very telling when a company's PR department pivots from protecting the company to protecting an individual at that company.
The local newspaper's version of the story was nice enough to name Sundar Pichai by name.
It also included a poor response from Google which was along the lines of, "He signs agreements all the time, but doesn't know what's in them, and so he's not really responsible in any way for this." Which is exactly the opposite of what the newly revised documents show.
It's also very telling when a company's PR department pivots from protecting the company to protecting an individual at that company.
"He signs agreements all the time, but doesn't know what's in them, and so he's not really responsible in any way for this."
That’s exactly the point why he needs to sign to get his written approval. Defending him that we didn’t tell him everything would be pretty concerning.
That’s exactly the point why he needs to sign to get his written approval. Defending him that we didn’t tell him everything would be pretty concerning.
can I use this excuse to get out of all my legal obligations and not pay my mortgage or my ad bills to Google?
If you are the boss, you are responsible for everything the company does.
You don't know? It's your job to know.
You don't know? It's your job to know.
Anyone want to weight in on how this falls legally? Price fixing can be a felony, and result in jail time[1]. Not sure if this falls under that, or similar anti-trust laws.
[1] https://www.washingtonpost.com/archive/business/1987/06/20/p...
[1] https://www.washingtonpost.com/archive/business/1987/06/20/p...
The proposed "win rate guarantee" Google gave Facebook appears to be the same economically as Google buying up a bunch of ad slots, and then giving them to Facebook for free.
Assuming the same was done in reverse, this is both companies reducing the pool of ad slots available to others, and pushing up the price.
It would be equivalent to one oil company giving lots of oil to a competitor to destroy, and that competitor doing the same in return.
Assuming the same was done in reverse, this is both companies reducing the pool of ad slots available to others, and pushing up the price.
It would be equivalent to one oil company giving lots of oil to a competitor to destroy, and that competitor doing the same in return.
So price fixing?
It’s all civil law right now. It’s doubtful that criminal law would be very useful. First, because the standard of proof would make criminal charges much harder to sustain. Second, because, judging from all those emails, it’s much more of a group effort between and inside these organizations.
Group efforts can definitely be subject to criminal investigations. Look, for example, at Enron.
It would be great if finally at least someone from this group got some serious jail time. It would restore my faith in humanity. I'd vote for Suckerberg, but I'd settle for Brin too.
A reminder that this isn’t the first time Google has been caught colluding with competitors.
https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_L...
https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_L...
It’s increasingly looking like there is a reckoning coming for the online advertising business.
As the owner of an e-commerce business dependent on online advertising I fear it will be small business that are most adversely affected by the coming changes.
As the owner of an e-commerce business dependent on online advertising I fear it will be small business that are most adversely affected by the coming changes.
There should be a reckoning. NASDAQ is not allowed to trade on its own exchange with more information than their customers the way Google does. Even _Coinbase_ isn't allowed to trade on its own exchange in an unfair way. Google is an exchange, a broker, a buyer, and a seller, and there are no financial regulations for the ad markets. Facebook is the same.
When politicians hold the share of Alphabet & Facebook, are there any high incentives for them to introduce financial regulations?
[deleted]
Businesses have always invested the same % of revenue in advertising. They ll keep doing it without google, and they will still need publishers to display the ads. Other companies will reemerge
It’s looking there should be a reckoning, I’m not optimistic though.
Have you found the CAC to be lowest on FB?
Do you mostly run facebook ads?
That's some mustache-twirling evil stuff.
As a side note, this is a problem with ads as a business: since the morality of the very practice is dubious, the companies that sell them aren't expected to behave ethically.
As a side note, this is a problem with ads as a business: since the morality of the very practice is dubious, the companies that sell them aren't expected to behave ethically.
> since the morality of the very practice is dubious
Really? What's "dubious" about selling attention for money and/or physical goods? The practice is older than money itself.
The current social contract where advertising is clearly marked as out-of-stream information is a very good thing. Because the alternative is all advertising is "native", meaning lies and deception.
The only unethical part of the landscape is the fact that Google (et al.) disrupted the traditional advertising markets and managed to avoid having to comply to existing legislation.
Really? What's "dubious" about selling attention for money and/or physical goods? The practice is older than money itself.
The current social contract where advertising is clearly marked as out-of-stream information is a very good thing. Because the alternative is all advertising is "native", meaning lies and deception.
The only unethical part of the landscape is the fact that Google (et al.) disrupted the traditional advertising markets and managed to avoid having to comply to existing legislation.
Advertising may be old, but personalized advertising and the required large scale spying is not.
Advertising doesn't want or need personalization or spying. (Media) Ad agencies are applied sociology and work on the law of large numbers.
The large-scale spying doesn't come from advertiser or agency demands. That's a thing that the large digital monopolies invented to give themselves even more social leverage.
(Source - Over 17 years of experience in the digital advertising space.)
The large-scale spying doesn't come from advertiser or agency demands. That's a thing that the large digital monopolies invented to give themselves even more social leverage.
(Source - Over 17 years of experience in the digital advertising space.)
So, you're saying that ad agencies are okay with just passively buying NxM pixels on somesite.com's homepage that is the same regardless of who is viewing them? If so, why is that business model so rare?
It's a serious question, because I probably wouldn't block ads if they were passive images that just existed on a page.
It's a serious question, because I probably wouldn't block ads if they were passive images that just existed on a page.
> So, you're saying that ad agencies are okay with just passively buying NxM pixels on somesite.com's homepage that is the same regardless of who is viewing them?
Yes, because that's exactly how TV advertising works, and ad agencies view TV advertising as much more effective than digital.
> If so, why is that business model so rare?
For this model to work, you need somebody to do the statistical real-world sampling for you, using surveys, experiments and all of the rest of the classical sociology tools.
Companies like Google and Facebook are very much against this because it shifts the balance of market power away from data collection (Google's strong suit) to neural third parties that do meatspace data science and data interpretation.
Yes, because that's exactly how TV advertising works, and ad agencies view TV advertising as much more effective than digital.
> If so, why is that business model so rare?
For this model to work, you need somebody to do the statistical real-world sampling for you, using surveys, experiments and all of the rest of the classical sociology tools.
Companies like Google and Facebook are very much against this because it shifts the balance of market power away from data collection (Google's strong suit) to neural third parties that do meatspace data science and data interpretation.
I'm lost, you would need different (invasive?) data to replace the invasive spyware? Magic wand, I'm not sure what data you need to know.
I'm curious about this because you're the first person in advertising I've talked to whose not all about microtargeted ads.
I'm curious about this because you're the first person in advertising I've talked to whose not all about microtargeted ads.
Advertising is an attempt to steer your thoughts in a specific direction for personal gain. Surely you can understand how some people are not okay with that?
No. Selling a fiction book is also "an attempt to steer your thoughts for personal gain".
Advertising is a more specific thing: an implicit social contract where demands on your attention are rewarded with non-monetary bonuses.
As such it's a good thing, because a world with no social contract or rewards would be shittier.
Advertising is a more specific thing: an implicit social contract where demands on your attention are rewarded with non-monetary bonuses.
As such it's a good thing, because a world with no social contract or rewards would be shittier.
Millions of people installed adblock. When YouTube increased the number of ads, lots of people complained about it. People often complain about TV ads and switch to Netflix.
There's no social contract - a company shows ads and gets money, so they do it.
Do you really think customers are happy when an ad interrupts their favorite TV show? The answer is no fucking way. You've worked in the business for 17 years so it may cost you to believe it, but it's obvious to everyone else.
There's no social contract - a company shows ads and gets money, so they do it.
Do you really think customers are happy when an ad interrupts their favorite TV show? The answer is no fucking way. You've worked in the business for 17 years so it may cost you to believe it, but it's obvious to everyone else.
You misunderstand. If tomorrow interrupting TV shows was banned you'd get 30 minute product placement fake "shows" instead. Imagine the TV show equivalent of autogenerated search spam clickbait.
This is probably not what you really want.
This is probably not what you really want.
In other words, advertising is socially-acceptable corporate-sponsored brainwashing.
Advertising has been a thing since before the time of town criers. There’s nothing inherently immoral about telling people what services you offer.
Here is the most recent discussion on this topic: https://news.ycombinator.com/item?id=28976487
Isn't proof that these players are abusing their market power? Short trial?
Isn't proof that these players are abusing their market power? Short trial?
Isn't what proof?
Rather Molotov–Ribbentropesque.
LOL, you almost invoked Godwin's law, but not quite.
I think this is slightly different, in that the Google-Facebook pact seems to have had a specific focused purpose.
I think this is slightly different, in that the Google-Facebook pact seems to have had a specific focused purpose.
I would be surprised if this was not the case for the last 10+ years.Every new player gets to a point where if they're relevant they will be offered a paycheck.Refusal of that paycheck means war, and usually the older and bigger player wins, sooner or later.The reasons being simple: a new player often provides new interesting features, but scales very hard due to lack of resources.The old player just has to effectively copy these new features into it's existing product(which takes less time than scaling infrastructure).
Again, this is not news.Besides actual leaks we've had tv shows/movies depicting this phenomenon for at least a decade, and usually mainstream pictures hit the screen when it's already obvious that something was partially true.
Again, this is not news.Besides actual leaks we've had tv shows/movies depicting this phenomenon for at least a decade, and usually mainstream pictures hit the screen when it's already obvious that something was partially true.
this was demonstrated in the case of tiktok. Essentially, every other player tried to emulate them, and then facebook lobbied USA and it's minions (like india) to mount pressure on tiktok for being "chinese spy app".
I don't care about the specifics here, but can someone school me: What possible mechanisms are there to prevent cartels? I hear a lot about how to deal with monopolies (which are trivial to identify) but very little about colluding oligopolies.
The first sentence of the Sherman Antitrust act (same one that grants the DoJ authority to break up monopolies) declares "every contract... or conspiracy, in restraint of trade or commerce" illegal, which would generally include cartels.
12 years ago [1] this law was invoked against big tech companies, who entered no-poach agreements to reduce inter-big-tech-co hiring competition, with the side effect of wage suppression.
Anti-competitive collusion is illegal, full-stop. Proving anti-competitive conspiracy without an explicit paper trail is hard. The emails in the article are pretty explicit. Should be interesting!
[1]: https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_L...
12 years ago [1] this law was invoked against big tech companies, who entered no-poach agreements to reduce inter-big-tech-co hiring competition, with the side effect of wage suppression.
Anti-competitive collusion is illegal, full-stop. Proving anti-competitive conspiracy without an explicit paper trail is hard. The emails in the article are pretty explicit. Should be interesting!
[1]: https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_L...
The strategy the European Union is going is to guarantee the first party that sings about a cartel immunity/impunity and all others can be fined up to 10% of global turnover.
Okay, that makes sense. Hopefully we have whistleblower protections and reward for individuals too, like a bug bounty program for the economy :)
Wouldn't surpise me at all, if true. Both are running on ad money (and selling personal data) and have much to lose and much to win. Ad business being typically a dubious business of questionable real worth with huge smoke screens all over the place and a lot of make believe, it might make for a more opportunity, if secretly the market is strictly divided and stepping on eachother's toes is avoided.
These companies don't sell personal data. They use personal data to target ads.
Does that distinction matter? The thing their customers would do with that personal information is target you with ads. So they were subcontracted the task as opposed to selling them the information to do it themselves.
There have already been large threads about this (I mean the latest revelation, not the earlier ones) but I don't have time to find them just now. Anyone?
[deleted]
Google/Facebook employees: do something good for civilisation and quit your jobs. There are plenty of employers out there where you can create something real and positive.
This is a solution but not really a long-term one.Google/FB/Apple can already de facto buy less principled people or foreigners and also buy them citizenships to work for them.90%+ of the time such individuals who take these deals won't give a shit about principles[There are cases when they do, and often these outliers become leakers when booted out,but for the vast majority of cases this does not happen], given that it's obvious the motive(money) for such a move.
This is not an argument or a talking point against immigration, or importing workforce, what I'm saying is that by doing this and (at least) not reforming companies(or better: shut them down), you effectively empower these corporations to be even less-principled and the pressure from employers becomes smaller.Now theoretically this can be curbed by the government, but there are a few problems here: you cannot do this and think you can remain competitive as a global power;such policies are very unpopular in US;FAANG companies can easily lobby and overthrown this(they already probably did and do this) policy;
So the solution imo has to be a bottom->up one: pressuring the company internally, though this rarely works in practice.Google has become more transparent (even if a facade) in the latest years towards the average user.But at the same time it has engaged in shady projects for the military that are very concerning,so who knows what's going on.
This is not an argument or a talking point against immigration, or importing workforce, what I'm saying is that by doing this and (at least) not reforming companies(or better: shut them down), you effectively empower these corporations to be even less-principled and the pressure from employers becomes smaller.Now theoretically this can be curbed by the government, but there are a few problems here: you cannot do this and think you can remain competitive as a global power;such policies are very unpopular in US;FAANG companies can easily lobby and overthrown this(they already probably did and do this) policy;
So the solution imo has to be a bottom->up one: pressuring the company internally, though this rarely works in practice.Google has become more transparent (even if a facade) in the latest years towards the average user.But at the same time it has engaged in shady projects for the military that are very concerning,so who knows what's going on.
I think many of the top employees already are. they have no worries finding alternative employers. it would be even better if it turns out that average to mediocre is all there is left.
Google/FB strategy to keep their employees quite is to throw money at them. It works for the majority.
feels like my privacy is on the auction block
[deleted]
The advertising equivalent of Sykes-Picot, or the Molotov-Ribbentrop pact x)
When I bring the anti trust case against Google up with others (which this allegation stems from), no one seems to care about the actual content of the case. Their opinion is entirely dependent on their political "team": if you're a democrat, this is a republican witch hunt, if you're a republican, these companies are limiting free speech. They just repeat what their bubble tells them to.
There's a lot of pieces involved here, and I wish the political divisions in this country didn't stop people from actually researching the case and forming their own opinion. The outcome of this case will have massive effects and could bring about a lot of changes (both good and bad).
There's a lot of pieces involved here, and I wish the political divisions in this country didn't stop people from actually researching the case and forming their own opinion. The outcome of this case will have massive effects and could bring about a lot of changes (both good and bad).
I don't know where you got the idea that Democrats think this is a witch hunt. Are you talking to Democrats who work in tech and/or the companies being hunted?
House Democrats were unable to find Republicans to support a recent antitrust investigation's recommendations[1].
Prominent Democrats have been pushing reinvigorating antitrust legislation for years[2], in fact.
The only partisan issue is whether the govt can or should compel social media platforms to carry speech that they don't want to carry, which is a violation of the First Amendment[3] and something Republicans support.
1. https://www.protocol.com/critics-say-what-house-democrats-go...
2. https://www.washingtonpost.com/powerpost/breaking-from-tech-...
3. https://www.lawfareblog.com/no-florida-cant-regulate-online-...
House Democrats were unable to find Republicans to support a recent antitrust investigation's recommendations[1].
Prominent Democrats have been pushing reinvigorating antitrust legislation for years[2], in fact.
The only partisan issue is whether the govt can or should compel social media platforms to carry speech that they don't want to carry, which is a violation of the First Amendment[3] and something Republicans support.
1. https://www.protocol.com/critics-say-what-house-democrats-go...
2. https://www.washingtonpost.com/powerpost/breaking-from-tech-...
3. https://www.lawfareblog.com/no-florida-cant-regulate-online-...
I looked up "header bidding" [1][2] and basically it seems to be a way for sellers to auction their space to all potential buyers at once, rather than letting Google be the middle-man and rig the game in its favor... for example, by reserving the last bid in an auction for Google Ad Exchange.
No wonder Google is against it.
[1] https://www.lotame.com/back-basics-header-bidding/
[2] https://adage.com/article/digital/how-header-bidding-wars-le...