While the government kept its focus on exhibits like these discussing competition, Google successfully reframed parts of the case on the second day of its case-in-chief, as we head into the final days of the trial.
“By midday, Google, in my view, had successfully muddied the waters. It is not that the government did not put forth a compelling case on this—it’s just hard to tell whose version of events, more specifically, whose technical explanation of how this works under the hood, is more likely than not the correct version.” …
“But more than this, Google has also steadily been building up a classic tech industry framing—that Google is not actually making bids, setting prices, or controlling the process—it is in fact the advertisers and publishers doing so.”
It seems to me, the devil is in the details. It comes down to the highly technical (as though everything else here is fluff, hardly), but how does the software code itself actually perform? Does it really prevent the advertiser from paying a penny more than necessary? Even if it does, what about the government’s alleged harm to the ad agencies and ad exchanges, is a lack of competition a harm if the advertiser doesn’t directly suffer?
My bottom line question: If Dr Milgrom is fair and accurate in describing how the Google ad system works overall, why all the before the scenes document shredding to keep out what evidence presumably not favorably to Google’s official defense?
I look forward to seeing the timeline/waterfall because your description of the testimony suggests Google’s argument is that they always assumed the market was demand based bidding.
But before they bought double click, the idea was a performance based marketplace where advertisers could see a causal relationship between advertising and sales. Unfortunately for GOOGLE, they learned that advertising doesn’t work like direct marketing.
The pivot was to mimick the business model of legacy media (not direct marketing) and shifted from performance based to demand based pricing. That’s why they bought Doubleclick.
Demand based pricing makes money the way legacy media does, not based on what works but based on what was spent last year. (which really isn’t a smart way to do media planning but makes for a quick summary at the shareholder meeting).
When more money floods the market, increasing demand, for example, political advertising in a presidential election year, the price per eyeball goes up. To lower the price, in a bidding market, the market needs to expand the supply. That’s when display ads and ad fraud became a thing.
Sure GOOGLE starting buying tech that sounds curative for ad fraud, but there isn’t really any way to know, at least not before the advertiser pays.
At least legacy media provides an audit of where ads ran (so they couldn’t dump everything in the middle of the night or bury a print ad in some extra pages that fall out and go right in the trash.) And agencies didn’t pay until they reviewed these audits.
Googles platform hurts competition by controlling supply in a demand based bidding platform and being opaque. No competitor with a more transparent, performance based pricing alternative could enter.
And that’s too bad because there’s a lot of opportunity relative to the “long tail” days when GOOGLE bought Double click. By “long tail” I mean in those days each digital ad reached very few people because websites had tiny audiences. Today, it’s possible to reach the scale of audiences that we once saw back in the days of 3 networks, when real time reach could be nearly every person (whose not in the bathroom) in every house with a TV in prime time.
Maybe this reasoning would help to give the judge some good questions to ask.
Regarding Mr. Bjorke's testimony and the area of spam, security, &c, I wonder whether that area could have any impact on the relevant market definition, if it's the case that anti-spam is an entirely different thing in Google's area than within the walls of Facebook or Amazon or elsewhere. They may not be competing if a necessary piece of the whole is completely different in each case.
Also, from reading your write-up of his testimony (and everything prior), I wonder whether the government could look at how Google is presenting itself as entirely on the side of advertisers, and turn around and file an algorithmic pricing collusion suit like that against RealPage...
I won't take the time to count the "I"'s in this article, but it isn't about you, Mr. Blakely . . . I think . . . I believe . . . I saw. Tell us what the suit is about, what the government presented, what Google lawyers presented, and compare them, and what is at stake if Google loses. There is not enough time in the year for us out here to process every reporter's conjectures and pats on the back over how clever they think they are.
“By midday, Google, in my view, had successfully muddied the waters. It is not that the government did not put forth a compelling case on this—it’s just hard to tell whose version of events, more specifically, whose technical explanation of how this works under the hood, is more likely than not the correct version.” …
“But more than this, Google has also steadily been building up a classic tech industry framing—that Google is not actually making bids, setting prices, or controlling the process—it is in fact the advertisers and publishers doing so.”
It seems to me, the devil is in the details. It comes down to the highly technical (as though everything else here is fluff, hardly), but how does the software code itself actually perform? Does it really prevent the advertiser from paying a penny more than necessary? Even if it does, what about the government’s alleged harm to the ad agencies and ad exchanges, is a lack of competition a harm if the advertiser doesn’t directly suffer?
My bottom line question: If Dr Milgrom is fair and accurate in describing how the Google ad system works overall, why all the before the scenes document shredding to keep out what evidence presumably not favorably to Google’s official defense?
This is disheartening. If what they have done/are doing is legal and ok, we have to change the definition of what is legal and ok.
I look forward to seeing the timeline/waterfall because your description of the testimony suggests Google’s argument is that they always assumed the market was demand based bidding.
But before they bought double click, the idea was a performance based marketplace where advertisers could see a causal relationship between advertising and sales. Unfortunately for GOOGLE, they learned that advertising doesn’t work like direct marketing.
The pivot was to mimick the business model of legacy media (not direct marketing) and shifted from performance based to demand based pricing. That’s why they bought Doubleclick.
Demand based pricing makes money the way legacy media does, not based on what works but based on what was spent last year. (which really isn’t a smart way to do media planning but makes for a quick summary at the shareholder meeting).
When more money floods the market, increasing demand, for example, political advertising in a presidential election year, the price per eyeball goes up. To lower the price, in a bidding market, the market needs to expand the supply. That’s when display ads and ad fraud became a thing.
Sure GOOGLE starting buying tech that sounds curative for ad fraud, but there isn’t really any way to know, at least not before the advertiser pays.
At least legacy media provides an audit of where ads ran (so they couldn’t dump everything in the middle of the night or bury a print ad in some extra pages that fall out and go right in the trash.) And agencies didn’t pay until they reviewed these audits.
Googles platform hurts competition by controlling supply in a demand based bidding platform and being opaque. No competitor with a more transparent, performance based pricing alternative could enter.
And that’s too bad because there’s a lot of opportunity relative to the “long tail” days when GOOGLE bought Double click. By “long tail” I mean in those days each digital ad reached very few people because websites had tiny audiences. Today, it’s possible to reach the scale of audiences that we once saw back in the days of 3 networks, when real time reach could be nearly every person (whose not in the bathroom) in every house with a TV in prime time.
Maybe this reasoning would help to give the judge some good questions to ask.
Regarding Mr. Bjorke's testimony and the area of spam, security, &c, I wonder whether that area could have any impact on the relevant market definition, if it's the case that anti-spam is an entirely different thing in Google's area than within the walls of Facebook or Amazon or elsewhere. They may not be competing if a necessary piece of the whole is completely different in each case.
Also, from reading your write-up of his testimony (and everything prior), I wonder whether the government could look at how Google is presenting itself as entirely on the side of advertisers, and turn around and file an algorithmic pricing collusion suit like that against RealPage...
I won't take the time to count the "I"'s in this article, but it isn't about you, Mr. Blakely . . . I think . . . I believe . . . I saw. Tell us what the suit is about, what the government presented, what Google lawyers presented, and compare them, and what is at stake if Google loses. There is not enough time in the year for us out here to process every reporter's conjectures and pats on the back over how clever they think they are.