Long Before Lawsuits, Publishers Have Puzzled at Google’s Ad Auction Irregularities

The fresh allegations that Google rigged ad auctions in their favor is hardly surprising for publishers. For years, publishers have noticed irregularities about the platform’s ad-tech stack, which processed an estimated 90% of all impressions in 2020. According to four publisher executives and consultants who spoke to Adweek, it is hard to get robust data from Google about the ad auctions on their inventory. Also, the results of Google’s auctions can defy the laws of supply and demand. Most frustrating, publishers say, is how there is no clarity from Google into why these problems exist. “The general feeling was a magic show," said one publishing executive, who requested anonymity to protect industry relationships. "What are you guys doing, what’s going on and why can’t I see it?” Google has vigorously denied the claims in a suit brought by Texas Attorney General Ken Paxton, parts of which became public last month. Google, a $1.8 trillion company, has filed a motion to dismiss the suit. LinkedIn Provides a Peek at the Inner Workings of Its Ads Auction Process "We run a fair, first-price auction and have been transparent about our ad-tech fees, which are consistent with or lower than reported industry averages," a Google spokesperson told Adweek. "Our products include a number of features that give publishers visibility into and help them better understand how their inventory was sold, and we continue to invest in this area." Lack of impression-level data An ongoing frustration with Google’s ad-tech setup is publishers do not have access to log data at the impression level, granular data that is collected about every ad request, which allows publishers to see who bid on and won each impression, according to two publishing executives. A second publishing executive who also requested anonymity said the lack of data is particularly harmful given that upwards of 40% of their inventory receives bids from Google Ads. "They never give us access," the executive said. "They made it so we couldn’t see who won the impression or the header bidding responses.” It's not that Google gives publishers no data, publishers can track bids on a specific piece of inventory but not at the impression level because of the potential for data leakage of sensitive user data, according to people familiar with how Google's auctions work. Impression level data deals with user targeting, as different users are served different ads depending on their identifiers. Google has a high bar for privacy, and must weigh its responsibility to protect user privacy with supporting publishers, these people said. Header bidding was really the advent of publisher frustration against auction transparency.Publishing executive Despite these concerns, impression-level data is essential as header bidding—which allows publishers to sell inventory on multiple exchanges simultaneously—has become the industry standard. And without impression-level data from Google, it's harder for publishers to compare Google's bids to those of other exchanges. Header bidding was devised to bring scale and efficiency to digital auctions, but those aims are undermined if publishers can't fully understand how Google and other exchanges are working to sell their inventory. “Google protects their data under the guise of trust, safety and privacy. When publishers wanted to access their log data, they could get glimpses but they couldn’t connect all the pieces, which made it impossible to audit auctions," the first executive said. "Header bidding was really the advent of publisher frustration against auction transparency." It's worth noting that Google is not the only ad-tech player that is hard to trace. PwC's explosive 2020 report found that publishers only get half of online ad spend. And 15% of that spend, auditors simply could not account for. However, the second publishing executive said other ad-tech platforms can be more consistent about providing quality log data. If Google made this data accessible, our source claims, it could be used for a range of revenue optimization practices, including audience development and building a paywall. Publishers use revenue optimization to see if a reader is worth more as a paying subscriber or as a set of eyeballs for advertisers, for example. But the lack of a fuller set of data from Google, especially given the share of publishers’ revenue attributable to Google’s tech, makes it harder for publishers to do this accurately, the source said. “They think it’s their data, and it is my data," the executive said, "and I don’t get access to my own data in order to verify the bids.” Inconsistent payouts Another irregularity, sources have noted, is the seeming defiance of the laws of supply and demand. There is a higher volume of bids from advertisers using Google’s demand-side platform, said Robert Webster, founder of digital advertising consultancy Canton Marketing Solutions. This increased demand should translate into publishers receiving higher rates for their inventory, but rates did not change as a result of volume. “We were getting higher volumes from Google and that did not translate to better rates,” the second publishing executive said. Webster said this inconsistency is unique to Google, and not other ad-tech providers. “It was clear that somewhere that straight dice weren’t being thrown,” Webster said. The rates of Google Ads auctions can differ from other ad-tech providers for a variety of reasons, including that Google Ads does less lucrative direct deals than competitors, and Google works with customers to address discrepancies, those familiar with the auction said. Irregularities don't mean foul play Of course, irregularities do not necessarily mean foul play. Google's size and dominance may draw scrutiny, but it doesn't necessarily behave differently than any other company, said Paul Bannister chief strategy officer of publishing network Café Media. “They do stuff that’s good for their bottom line, that’s not good for everyone. But all companies do that,” Bannister said, adding that anything Google does to lessen costs for advertisers doesn’t necessarily hurt publishers. For now, it will be up to the courts to decide whether Google's ad-tech business is anti-competitive. In the interim, publishers will have to continue using the information they get from Google to account for their ad revenue, and may continue drawing blanks. "I think the core to this conversation is 'I can give you a bunch of ways which shit seemed weird,'" the second publishing executive said, adding, "I can’t explain why it functions."