(Google Ads buyers could technically bid on other exchanges for the narrower retargeting use case via a program called AwBid, but this program was capped internally to make up a minority of ad spend, according to DOJ evidence).
Using only AdX also lowered Google’s revenues
Internal emails indicate that Google employees thought that Google’s policies biasing spend toward Google’s sell-side adtech undermined their buyers’ success. But it also seemed to undermine Google’s success.
Google does let buyers bid more freely on competing SSPs via DV360, its demand-side platform intended for larger, more sophisticated buyers, than via Google Ads.
But when Google employees ran an experiment within DV360 to see the revenue impact of buyer clients bidding only on AdX, and not bidding on rival exchanges, revenue dropped nearly 48% and impressions served dropped 35%, according to a 2016 email revealed in the Sept. 17 testimony of buy-side exec Nirmal Jayaram. The implication here is that DV360 buyers won fewer transactions when they could only bid through one exchange, therefore making DV360 less money.
Despite the impact on buy-side revenue of limiting bidding to just Google’s SSP, Google later implemented Project Poirot in 2017, which helped tilt DV360’s buying toward AdX, partly in response to the competitive threat posed by header bidding.
By 2019, DV360 was spending 75% of buyers’ budgets on AdX while competitor The Trade Desk was spending approximately 30%-40% of budgets on AdX, according to an internal Google email. This indicates that without Google putting its thumb on the scale, the amount of spend going through Google’s sell-side pipes would be much less.
Inventory sacrifices
AdX includes a wider swath of inventory—including many low-quality websites with few users—than your average SSP, said one buyer source who requested anonymity to discuss sensitive industry relations.
Partly, this is because publishers get onboarded onto AdX via being a part of Google’s ad server, which takes less work for a publisher to set up than to integrate with a pure-play SSP like Magnite or PubMatic, the buyer said.
“It’s easier to monetize through AdX [as opposed to a rival SSP] if you’re a site owner,” said Ana Milicevic, co-founder of programmatic consultancy Sparrow Advisors.
