Google’s Display Ad Dominance Raises Concerns

Google’s Display Ad Dominance Raises Concerns

The digital advertising industry has long worried about Google using its dominance in the display ad industry to secure market share in other areas, specifically in the complex ad tech industry. And recently, those fears have been realized, according to several advertising executives.

This story was originally published by DigiDay.com

Google is allegedly using its DoubleClick Ad Exchange as leverage to get people to use DoubleClick Bid Manager.

In the latest instance, media buyers report that Google wants them to use DoubleClick Bid Manager — the company’s demand-side buying platform — and it’s using its DoubleClick Ad Exchange as leverage in negotiations.

Executives at media agencies told Digiday that Google is now trying to coerce them to use the two ad tech components together, effectively selling them as a single product in an industry practice referred to as “tying.” Specifically, Google is demanding that ad impressions bought on DoubleClick Ad Exchange, or AdX, be bought using DoubleClick Bid Manager, or DBM, if they are to count toward satisfying the agencies’ buying agreements with Google. That is, Google will not recognize AdX impressions that are not bought via DBM.

The move calls into question the various roles Google plays in the digital advertising system it dominates. Google is the operator of the largest ad exchange, AdX, while also operating a leading DSP, namely, DBM. Pressuring ad buyers to use them together raises questions about fair play since Google can effectively use access to AdX to limit competition within the DSP market.

Some may view Google tying together two products merely as a sound (and common) business practice, but competitors have suggested to Digiday it’s a potential violation of Federal Trade Commission antitrust regulations. The FTC warned in December 2007 that tying would possibly constitute “anti-competitive conduct” when it closed its investigation into Google’s acquisition of DoubleClick.

General counsels at competing advertising technology companies told Digiday that they were contacted earlier this year by FTC attorney Linda Holleran Kopp about whether Google was exercising monopolistic behavior in the display advertising market. An executive at one of those companies said his firm has corresponded with the FTC in recent weeks and has plans to speak with the commission again in the near future.

Read the full article here.