Former Google Ad Exec Testifies Its Ad Operations Resisted Innovation And Its Ad Server Team Was ‘Lazy And Slow’

A former Google advertising executive testified in the US antitrust case against Google, painting a picture of a company where it can be difficult to make change.

The Department of Justice is trying to prove that Google’s ad business is a monopoly with tools that control how both advertisers and publishers buy and sell digital ads. Eisar Lipkovitz, a former vp of engineering of display and video ads at Google, testified on behalf of the Department of Justice on the second day of the trial.

Lipkovitz was one of the witnesses Google objected to, claiming his “lack of personal knowledge.”

The US Department of Justice brought forward two separate depositions of Lipkovitz. One was read by a member of the court staff, and the other was shared on video. Lipkovitz did not appear in person, which meant he couldn’t be cross-examined by Google’s lawyers.

During Lipkovitz’s testimony, he expressed faults with Google’s advertising products, calling the ad-serving team “lazy and slow” and noted how the entire ads operation could be resistant to innovation.

In his testimony, Lipkovitz shared ways Google’s internal politics prevented changes he felt would be helpful to customers. For example, there was a discussion that took place over a year to lower the take rate, or how much money Google collects from advertisers in exchange for using its tools. The talks focused on AdX, Google’s publisher-focused tool that allows publishers to sell their ads to multiple advertisers at once. The talks never amounted to anything and frustrated Lipkovitz.

“No one has authority to make decisions,” he said. He said his frequent losing battles left him “bitter” and said “the machine won.”

In response to a question about whether he ever felt a conflict of interest while representing both advertisers and publishers in his role at Google, Lipkovitz testified that he did.

“The people I prefer [at Google] saw the conflict of interest while the others were making self-interested arguments,” he said, in a filmed deposition presented as evidence by the DOJ. The DOJ is trying to make its case that Google operates an adtech monopoly.

The DOJ alleges Google has an unfair advantage in ads

Lipkovitz said that it would be advantageous for the advertising clients of Google Ads to be able to bid on other exchanges besides AdX. Google Ads is Google’s network of small advertisers.

Lipkovitz’s testimony also focused on AdX having exclusive access to Google Ads inventory, which is a key piece of the DOJ’s case against Google. The DOJ alleges that Google’s tying of multiple ad products shows that Google is a monopoly.

In an email from 2015 that entered the public record as a result of this testimony, Lipkovitz wrote that “most of us agree that GDN [Google Display Network, also known as Google Ads] is in an inferior place vis a vis the competition on impressions that go to other exchanges or situations where a buyer has direct relationship with the publisher.”

A 2016 email, now available to the public, showed that Google viewed AdX’s exclusive relationship to Google Ads as a competitive advantage. Jerome Grateau, then Google’s director of global publisher solutions and innovation, wrote to Lipkovitz that Google’s ad server and AdX were built on three core differentiators.

“1/Best “traditional” Adserver 2/ Dynamic allocation,” Grateau wrote, referring to a tool which gave AdX an exclusive first look at all bids. “3/Exclusive access to GDN demand, justifying a 20% rev share and strict Sell Side policy.”

“This value proposition will be diluted if 3rd party exchanges have access to GDN’s 2m+ advertisers with real time pricing integration,” Grateau added.

Google allegedly had high take rates

Another big part of the DOJ’s case focuses on the advent of header bidding that happened about a decade ago. Publishers and Google’s rival publisher-focused adtech firms developed software that allows ads to be sold through multiple publisher-side tech platforms—partly to avoid using Google’s ad tools that work together. Header bidding also gave publishers more ways to sell ads using supply-side platforms.

Header bidding increased competition in the market and led to rival SSPs lowering their take rates. But Google did not lower prices, maintaining a take rate of 20%, Lipkovitz said. This was a significantly higher cut than its competitors. The DOJ argues that Google’s decision to not drop its take rate shows that Google did not need to drop prices to maintain its dominance.

When asked why AdX had a higher take rate than competitors, Lipkovitz said, “Neal decided probably,” referring to Neal Mohan, the current CEO of YouTube who formerly oversaw display and video ads at Google.