On the internet, Google controls what you see, and Google controls who makes money.
No company should have this much power.
The Google antitrust trial could change the entire way the internet runs. So we’re helping you understand it.
To kick this explainer series off, we broke down the overall adtech ecosystem. Then, we dove a little deeper, breaking down the buy side of the adtech industry (that’s where the “demand” comes from in the digital advertising transaction).
In both of those pieces, we told you how Google has its fingerprints all over the place.
For our third explainer, we’re breaking down the sell side of the digital ad industry: where the product being sold to advertisers — ad space — actually comes from.
We’ll talk about what kinds of websites are making money from the $700 trillion digital ad industry, which players are helping them to pocket those profits, and the opacity that creates a monetary incentive in dark corners of the internet.
What is the sell side?
If you’ve already read our last two explainers, you have a general sense of how the adtech industry is set up.
You now know that the process of buying and selling ads is mostly automated these days, with a sell side offering up ad space, a buy side making an offer, and an ad exchange automating that auction process.
The sell side is made up of three main players: the websites themselves, which are the publishers with ad space for sale, the ad server they use to put this ad space up for sale, and a Supply Side Platform (SSP) (and/or an ad exchange) that automates that sale and brings it to auction.
When someone visits a website, this auction is triggered and takes place on an ad exchange, which is where publishers offer up any data they’ve collected on the person who clicked on their webpage. This is called a bid request, and the SSP serves it up to the ad exchange.
That ad exchange then sends that bid request to the advertisers through the ad networks and demand side platforms that give them auction access.
Then advertisers — through their DSPs or ad networks — assess the value of that person’s eyeballs and the ad space being offered, and place their bids. These are called bid responses.
The winning bid response pays the bill, and that’s the ad the person sees when the page loads. This all happens in the blink of an eye.
And Google plays a part in basically every step of this rapid-fire process.
How does Google dominate the sell-side?
The sell side of the adtech industry is where Google’s dominance really shines. Pretty much everyone uses the same ad server: Google Ad Manager (GAM), which used to be known as DoubleClick for Publishers.
GAM enjoys a totally-not-monopolistic 90 percent share of the publisher ad server market, according to the Department of Justice.
This makes sense, because Google made sure there are’t really any alternatives to GAM. Google piggybacked on its Search dominance (which has already been judged to be a monopoly) to build up advertiser demand in Google Ads. Check out our last piece to understand the nitty gritty on that.
Then, when Google also acquired DoubleClick in 2008, it got its hands on the dominant publisher ad server at the time and an ad exchange. It got all the infinity stones, and it snapped its fingers — but instead of making half the universe’s population disappear, this snap shattered Google’s adtech competition.
See, publishers can’t access the many advertisers that use Google Ads if they don’t use Google Ad Exchange. Oh, and publishers also can’t access the bids on the Google Ad Exchange if they don’t use GAM, Google’s ad server.
In tying together all these products, Google could basically do whatever it wanted and pocket the profits. It could manipulate auctions in its favor, pull strings to make competitor revenue plummet, and hoard a bigger portion of advertiser budgets.
Google turned itself not only into the star player and the goalie on both teams, but also the referee — and it writes the rules of the game.
Want to know more? We’re covering the Google trial as it happens on USvGoogleAds.com. Come join us!