Google's sky-high fees silenced our journalism - Daily Mail exec
A siege of display ads left the market-leading publisher unable to cut ties without losing millions in ad revenue that funded its work...
Google’s grip on global ad supply strangled a monetary lifeline and damaged the Daily Mail’s ability to invest in journalism, a top exec told the antitrust trial yesterday.
Chief digital officer Matthew Wheatland spent 90 minutes on the stand and is one the last witnesses for the Department of Justice, which is winding up after eight days.
Before we get to his evidence, join me in welcome to new subs overnight from Future Media in my former hometown of Bath in the UK, Foxtel, Google, the UK’s Kelsey Media, independent agency Hatched, Irish communications experts FINN, ZipStream TV, Resolution Digital, ThinkAnalytics, Dynasty Gaming, Pixid.ai, among others.
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It was the Daily Mail’s turn in the witness box to explain the impact of Google’s ad syphoning and high charges on journalism.
CDO Matthew Wheatland said the global news giant wanted to cut ties with Google’s ad server but couldn’t as it would cost them millions in lost ads.
“We’re a news publisher that produces content that we believe Americans find important and interesting, and monetisation we receive is generated by display advertising which runs through Google,” he told the court.
“Google suppressing prices for publishers ultimately reduces publisher revenue which, in turn, means we do not invest in journalism in a way that we potentially otherwise could.”
The DoJ alleges that Google has built an ad monopoly by controlling 91 per cent of publisher ad servers, and 80 per cent of ad demand, as well as the exchange that matches them together.
The court has heard this network delivers 13 billion ads to publisher pages every day, and charges a 36 per cent levy on every ad.
This includes a 20 per cent charge for ads sourced through its ad exchange AdX, which is 10x the fees charged by credit cards or for stock market trades.
Even Googlers have admitted the charges are excessive in testimony.
Earlier this week, a former News Corp executive revealed it abandoned plans to quit Google’s ad tech because it would cost millions in lost ad supply.
News Corp VP of ad tech Stephanie Layser said it wanted to innovate around ads, but was unable to escape Google’s “20 to 30 years old”, “slow and clunky” tech.
Dumping Google would cost News US$9 million-a-year in lost ad revenue, leading to journalists losing their jobs, and innovation being de-funded.
“I felt like they were holding us hostage,” she testified. “I’m talking about every feature they shoved down our throats.”
And when she complained, the court heard Google dismissed her as “emotional” and “unproductive”.
Since she left, News has increased its reliance on Google to four in five of its total ad dollars, the court heard.
It was a similar story yesterday.
Mr Wheatland said DailyMail.com looked at leaving Google's ad tech but estimated it would lose 28 per cent of its ad revenue. That amounted to US$350,000-a-month.
Google Ads was the “largest pool of advertisers on the planet” and losing it would be commercially catastrophic.
Mr Wheatland told the court: “We are unable to move ad servers because it means we would have to forego that revenue. It’s not financially feasible.
“We are still using DFP because losing AdX would be financially detrimental to us.”
Sixty per cent of DailyMail.com’s programmatic ads come from AdX, he testified, with the second largest exchange contributing just “six or seven per cent”.
He also shared that the 20 per cent AdX charges was more than double its rivals.
The court has already heard testimony from a Google ad chief that quitting its ad stack takes “an act of God”.
The court also heard from an antitrust economist Dr Rosa Abrantes-Metz, who said AdX’s high charges amounted to a “tax”.
“The advertisers and publishers both paid the extra tax so they were both harmed,” she said.
“Advertisers are paying too much, the publishers are receiving too little, and AdX in the middle is taking an extra chunk.”
She told the court that because publishers were “getting less money” there was less investment into journalism and “consumers of those adverts are likely to have been harmed”.
The prosecution is now wrapping up its evidence, before Google begins its defence. The case is listed to run for another four weeks.
Let’s wrap up with the numbers:
Google keeps 13 months of data on the two billion people using its products.
Its biggest rival Bing would need 17 years to build the same knowledge graph.
Google controls 90 per cent share of global searches, and 95 per cent on mobile.
It spent more than $20 billion paying off Apple, and others, to be the default.
Google Ad Manager (GAM) has a 91 per cent share of the global ad server market.
It delivers 13 billion ads a day.
Nine in 10 global publishers rely on it.
So do eight in 10 of the world’s advertisers.
Two fifths of global video ads are traded there.
Four in five of News Corp’s ad dollars come through GAM.
Three in five of Daily Mail’s ads come from Google.
Shifting from Google would cost Daily Mail US$4 million-a-year.
Google charges a 36 per cent levy on every ad traded globally through its tech.
Its charges earned Google $30 billion-a-year from publishers.
Credit cards and stock market traders are between one and three per cent.
Google spent $400 million on an ad tech rival and shut it two years later.
Lost ad revenue led to job losses and cuts at News Corp and Daily Mail.
USA Today publisher said collapsing ads forced it to fire 22,000 employees.
More than half of global journalists have been fired in past 20 years.
Half of American now has no local news coverage at all.
Google made $238 billion from advertising last year.
The UK has already ruled Google’s ad tech is anti-competitive.
Its ad network diverts ~$2.7 million a day from publisher coffers.
Google banks the earnings of the global publishing industry every three days.
But it’s not done. Google is busy syphoning ads from publishers to its owned and operated sites google.com and YouTube.
And that means AI Overviews is on the horizon.
More tomorrow, but remember, the judge has already asked what would happen if she just blew Google up. Interesting times…
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Very good, as always 😊