Google Makes Its Ad Exchange’s Real-Time Bids Exclusive to Its Publisher Ad Server

IV. GOOGLE’S SCHEME TO DOMINATE THE AD TECH STACK

B. Google Uses Its Acquisitions and Position Across the Ad Tech Stack to Lock Out Rivals and Control Each Key Ad Tech Tool

2. In Turn, Google Makes Its Ad Exchange’s Real-Time Bids Exclusive to Its Publisher Ad Server

104. At the same time, Google used what most publishers saw as AdX’s must-have status to reinforce and grow its already dominant publisher ad server, DFP, ultimately pushing remaining publishers to adopt Google’s ad server and forcing rivals to exit the market. With its relaunch of the ad exchange after the DoubleClick acquisition, Google required publishers to use its ad server to obtain real-time bids from its ad exchange. If a publisher chose not to use DFP, it was relegated to selling impressions to AdX at a floor price based on historical average prices, which were often much less than the real-time, impression-specific bids AdX made through DFP. As a 2018 Google presentation bluntly noted, “[DFP] is the only way to access [AdX] as a publisher.”

105. Google did not need to make AdX exclusive to DFP in this way, but nevertheless decided to pursue the most restrictive alternative. In 2011 and 2012, Google developed a feature that would enable AdX to compete for inventory in the same way on other publisher ad servers. The feature was available in beta to some partners and required only “minimal effort” to roll out commercially. But Google saw that this feature risked taking away a “key differentiator for DFP”: access to real-time AdX demand. As one Google employee explained in September 2012, “it is too early to give AdX to non-XFP [DFP] partners. . . . This is an amazing time to ‘lock in’ impressions by offering XFP [DFP] to publishers . . . . AdX can serve as a tool to pull publishers onto XFP [DFP]. . . . Ad Servers are sticky, and hard to replace. The next 12 months are a very good time to switch publishers over.” By 2013, Google decided to end this experiment in openness, with Google’s lead product manager for AdX declaring: “[O]ur goal should be all or nothing – use AdX as your SSP or don’t get access to our demand.”

106. By limiting Google Ads’ demand to the AdX ad exchange, and limiting real-time access to the ad exchange to publishers using Google’s publisher ad server, Google compelled publishers to adopt its ad server for effective access to Google Ads’ demand. Recognizing the importance of real-time competition for ad inventory—which priced an advertisement based on the particular characteristics of a webpage user at that specific point in time—Google blocked publishers using rival ad servers from connecting to Google’s ad exchange in the same way. Google knew that its Google Ads’ advertisers provided a unique, rich source of advertiser demand, and that no other publisher ad server (or ad exchange) could offer similar access to such a lucrative pool of advertiser demand. Many publishers could not afford to use a rival publisher ad server because they could not afford to lose the revenue that Google’s exclusively-linked platforms could provide. In essence, Google dictated publishers’ choice of each key ad tech tool used to sell their inventory: publishers must make their inventory available through Google’s publisher ad server and ad exchange to get the opportunity to sell a portion of it to Google’s extremely valuable Google Ads’ advertisers.

107. By 2015, these restrictions had virtually eliminated competition between publisher ad servers, driving rivals to abandon the market completely. Google’s market share for publisher ad servers soared from 60% in 2008 to 90% by 2015. In a 2016 customer presentation, Google described DFP as the “defacto [sic]” publisher ad server with a “90% market share.” At the same time, it guaranteed to Google Ads—via Google’s ad exchange—preferential access to an unrivaled swath of publisher inventory, as well as the associated contextual and user targeting data, which supported Google Ads’ remaining a dominant, scaled ad network.

108. To this day, Google’s restrictions and conduct essentially foreclose the possibility of entry into the publisher ad server market. To enter the publisher ad server market, a competitor not only would need to offer a full-featured ad server, but also would need to be able to link it to an ad exchange and advertiser demand source of the same size and scale as Google’s ad exchange and Google Ads’ advertiser demand. Without such a full-stack offering, a competitor would need to convince publishers to sacrifice effective access both to Google’s ad exchange as well as access to Google Ads’ unique advertiser demand, an ask that is simply not economically feasible given Google’s successful exclusionary conduct to date.