Google has used a secret program called Project Bernanke for years to increase customers’ chances of winning competitive bidding, Wall Street Journal reported on Saturday, citing court documents filed in Texas-led antitrust suit against Google. The state claims that the program gave Google an unfair competitive advantage over rival ad buying tools and allowed it to pay publishers less for winning bids.
Ironically, the company shed the grain in its own secret program. The diary states that the documents of the court in question – which were reviewed by the outlet, although Google reloaded them under seal –were filed by Google earlier this week in response to the Texas lawsuit and were not properly worded when they were uploaded to the public court case. Google acknowledged the existence of the Bernanke project in its response.
For anyone unfamiliar with the complex world of digital advertising, here’s a very simple breakdown. Publishers or the technical name for any website that runs ads sell advertising space on their website. Advertisers pay bids for a certain ad slot on ad exchanges, which are like auction houses where anyone who bids the highest price wins the coveted ad slot. You can find a more detailed and technical explanation Here.
Now go back to Google. In court documents, Google explains that Project Bernanke used data about historical offers made through Google Ads to adjust the customer – which refers to advertisers who work with Google and pay to do so –bidding there and tilting the odds in their favor in advertising auctions, according to the Journal. These efforts have increased Google’s chances of winning auctions that would otherwise have been won by rival advertising tools and would also bring millions of dollars in revenue into Google’s pockets.
Google did not inform publishers who sold ads through its purchasing systems about the existence of the Bernanke Project.
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Exactly how many millions made by Google in the Bernanke Project are not mentioned in the Journal’s report. However, Google confirmed that the project was expected to generate revenue of $ 230 million in 2013.
According to the Journal, in the submission Google denied that there was anything wrong with using the exclusive information it was supposed to provide client offers. The company said this is “comparable to data held by other purchasing instruments”.
The unveiling of the Bernanke Project is likely to lead to increased control for Google, which has a strong grip on both the seller and the buyer in the digital advertising market with its products. At an antitrust meeting of the House Judiciary Committee in the summer of 2020, lawmakers cited a study which found that Google controls between 50-60% of the publisher or player market that sells its advertising space and 50-90% of the advertiser, referring to those who buy that advertising space. most of Google’s revenue comes from its advertising activity.
In fact, Google’s dominance of the digital ad market is the subject of the Texas antitrust lawsuit. Texas Attorney General Ken Paxton, who also has his own legal issue, is claiming that Google has repeatedly abused its monopoly power to control how ad prices are and to bid on ads. This behavior, Paxton claims, allows Google to “continuously profit illegally by taking money from those web pages and putting it in their own pockets.”
“In this advertising monopoly in an electronically traded marketplace, Google is essentially trading ‘insider information’, acting at the same time as a pitcher, catcher, batsman and referee,” Paxton said in a statement. statement in December. “It’s not the ‘free market’ in the workplace. This is anti-market and illegal under state and federal law. ”
The documents shed light on Google Jedi Blue deals with Facebook, the transaction in which Facebook gave up everything to enter the header bidding business and, instead, to run the advertising business through the Google advertising platform. The newspaper said that under the agreement, Facebook was forced to spend $ 500 million or more on Google Ad Manager or AdMob auctions in the fourth year of the transaction, among other details.
Gizmodo contacted Google on Sunday for comments on the Journal report, but did not receive a response until the date of publication. We will be sure to update this blog if we hear back.
In a statement to the Journal, Google spokesman Peter Schottenfels said the complaint “distorts many aspects of our advertising technology business. We look forward to bringing our case to court. “