Google is illegally monopolizing online advertising tech, judge rules

I don't think this article explains it well. Google sells ad space on behalf of the publishers and also sells the ads on behalf of the advertisers. It also runs the auction that places the ads into the ad space. See this graphic https://images.app.goo.gl/ADx5xrAnWNicgoFu7. Parts of this can definately be broken up without destroying Google.

When a media buyer puts $1.00 in on one side of the system, on average only $0.60 makes it to the publisher. In some cases less than $0.50 gets to them.

Advertising is an intentionally complex system so that companies can clip the ticket at multiple stages throughout the process. Google should be broken up, but the whole ad tech system needs to go into the bin if these problems are going to ever get fixed.

https://www.forbes.com/sites/augustinefou/2021/02/15/how-muc...

The (Open)RTB system makes things more competitive and reduces costs for advertisers by making unsold inventory available to an automated marketplace while also increasing revenue for smaller publishers who otherwise wouldn't have been able to create first party relationships with advertisers. The middlemen are various identity providers and other tracking/data enrichment services, as well as third party exchanges, DSPs and SSPs. Believe it or not this system makes it a lot cheaper than just having someone buy ad space directly on a website

> Three industry studies showed less than 50 cents of every dollar goes to showing ads.

Every penny of what is spent goes to showing ads, by definition. However, that doesn't mean that every penny goes to the publisher. The advertiser may look at the 60 cents being spent on everybody between them and the publisher and say "hey, I'm getting ripped off! I could be paying 4 cents/CPM instead of 10 cents/CPM!" but each middleman (usually) adds some kind of value to increase acquisition rate. For example:

* Identity providers who have lists of user IDs that belong to "high CTR" audiences (users more likely to click ads)

* Geo providers who tell the bidders where the User's location is so that they can target locally-focused advertisements to them

* User intent plugins, "abandoned cart" retargeting, product recommendation providers, etc. who look at user interaction events and build profiles of people who can be retargeted

* Exchanges which conduct auctions across multiple DSPs to get a better price for publishers while also making more inventory available to advertisers

At one company I worked for, we allocated impressions ahead of time. Based on prior years' data and viewer ratings of TV shows, we could predict the future, determining how many viewers a video or TV show would get, and then selling the advertising inventory based on that prediction. That shit ain't free!

All of these things are designed to increase your acquisition rate from x% to y%, where x > y. Sure, you could just pay $5,000 a month to a website to show a banner ad directly, but a larger % of your money would be wasted on users who are utterly uninterested in your banner.

> each middleman (usually) adds some kind of value

This is the argument that gets made, but very rarely is it true.

From Neumann et al in 2019 [1]

"When investigating gender (being male) and age (three different tiers: 18-24, 25-34 and 35-44 years) individually, we find that digital audiences for gender are on average less often correct than random guessing (accuracy of 42.3%)."

If the accuracy of targeting is worse than random guessing on average then it's value is less $0.00. Advertisers would reach more of their target audience by simply buying more media instead of spending money on 'targeting' even after you discount wastage to $0.00 in 'value'.

I agree with everything you're saying about programmatic *in theory*, but I would argue that in practice the whole system is just broken.

[1] https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3203131

I have tried to sell ads and never been able to fill all my inventory and often the rates are poor and the ads brand destroying. If you are The New York Times it is different but a site that makes $1000 /mo in ads can’t afford an ads salesperson and in the big scheme of things that is royalty.