USA v. Google LLC - Part 35 - VI. RELEVANT MARKETS - B. Product Markets - 3. Advertiser Ad Networks

VI. RELEVANT MARKETS

B. Product Markets

3. Advertiser Ad Networks

297. Advertiser ad networks for open web display advertising is a relevant antitrust market. An advertiser ad network provides easy-to-use, self-service bidding tools that facilitate ad placement on open web display ad inventory. Advertiser ad networks are accessible to less sophisticated advertisers, although sophisticated advertisers may also use them. Advertiser ad networks typically configure their simple bidding tool with proprietary targeting data that uniquely values website publisher inventory based on a combination of data sources, including information about the website, where the ad will be displayed, and the particular user visiting the website. Advertiser ad networks typically charge advertisers on a cost-per-click basis rather than a cost-per-impression basis. Because advertiser ad networks generally purchase advertising inventory on a cost-per-impression basis, they must have substantial data and scale to successfully predict the likelihood the user will click on the advertisement and thereby effectively arbitrage the difference between their cost to acquire inventory and the cost-per-click price charged to advertisers.

298. Google’s advertiser ad network for open web display ads has been called the Google Display Network (“GDN”), and is a portion of Google’s Google Ads product (formerly known as AdWords).

299. Many advertisers that use advertiser ad networks continue to be significantly limited in their abilities to substitute all or most of their advertising spend to demand side platforms (or “DSPs”), the other major advertiser buying tool for accessing open-web inventory. DSPs require the buyer to directly manage their advertising campaigns, are not reasonably accessible to less sophisticated advertisers, and often require buyers to utilize their own proprietary data to effectively bid on advertising inventory. Google has described the distinction between advertiser ad networks like Google Ads and demand side platforms like Google’s Display & Video 360 (DV360) as follows:

300. Advertising networks that facilitate the sale of digital advertising on search, social media, or app platforms do not purchase inventory from such open web website publishers and have distinct, more limited reach.

301. Google has monopoly power in the relevant market for advertiser ad networks. Google built the open web display advertising component of Google Ads by providing easily accessible bidding tools for advertisers, including less sophisticated advertisers. Google documents state that Google Ads provides access to over 2 million websites and reaches over 90% of internet users. Google Ads’ United States and worldwide shares of the market for advertiser ad networks for open web display advertising has not dropped below 70% (measured by impressions) since 2015; it currently stands at around 80%. Google experimented with increasing the revenue share charged on advertising demand available through Google Ads, and found that it could profitably impose an increase in excess of 5%. This demonstrates that advertisers would not substitute away from Google Ads to any alternative ad buying tool in sufficient volume to defeat such a price increase.

302. Google’s market power in advertiser ad networks for open web display ads is protected by significant barriers to entry. Google was able to build Google Ads’ large pool of unique, often small, advertisers through its search product, as it was able to opt search advertisers into extending their campaigns into open web display. Few companies have such a product available, nor could one be readily built for this purpose.

303. Any advertiser ad network seeking to compete meaningfully with Google Ads would need to build a large enough pool of advertiser demand to be attractive to ad exchanges and publishers. Building such a pool is difficult, even for well-funded market participants.