Google is promising big changes to how its ad tech operates in a settlement of an antitrust case over its advertising practices.
On Monday, Google announced it would implement new rules around internet advertising auctions, changes that publishers and ad tech partners have wanted for years. In particular, publishers and ad tech companies have asked for more transparency about what goes on behind the scenes in Google’s advertising platform, such as more visibility into pricing and more flexibility to work with partners outside of Google.
French regulators settled an antitrust case with Google after accusing it of monopolistic practices and fining the company $268 million. Google accepted the penalty and agreed to make changes that would address long-standing issues with how it runs digital ad auctions. In Google’s latest-reported quarter, ending in March, it generated $44.7 billion in digital advertising revenue. Google’s ad tech tools dominate the digital ad industry, and on Monday, Google said in its announcement that 700 advertising platform rivals and 80 publishing platforms rely on its ad auction infrastructure.
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Google is facing antitrust inquiries in the U.S., as well. The U.S. Department of Justice and dozens of state attorneys general have opened cases against Google, exploring how it wields its position atop the digital ad world to potentially favor its own services and products.
The changes Google committed to on Monday are likely the first step the search giant will have to take to ameliorate publishers and advertisers that have been suspicious of its power.
The changes coming to Google advertising will have broader implications, outside the European and French markets. A Google representative said some of the changes regarding header bidding, pricing transparency, and sensitive ad categories, will be open to U.S. advertising technology partners, too.
Publishers and advertisers have been concerned that Google acts on behalf of both the buyer and seller of online ad inventory, representing skewed incentives for the company. Now, Google says, there will be more transparency around its ad auctions, like revealing the dynamics of the bidding prices. In one update, Google will disclose “minimum bid to win” data, which provides advertisers with information about the pricing of individual auctions to help them refine bidding strategies.
For publishers, Google promises more flexibility, giving more tools so publishers can pick the ad tech partners they want to use, and not feel pressured into using Google for every service. “We will not limit Ad Manager publishers from negotiating specific terms or pricing directly with other sell-side platforms (SSPs),” Google said in its announcement. “And we will continue to provide Ad Manager publishers with controls to include or exclude certain buyers at their discretion.”
Google said the changes will be tested and developed over the coming months before being rolled out more broadly.
