The AdExchanger team will be off for Presidents Day on Monday, February 16. We’ll see you back here on Tuesday, February 17, with the next Daily News Roundup. Enjoy the long weekend!
Google’s Cozy Couch
Google faces yet another EU antitrust probe, this time over allegations that it rigged search ad auctions by “artificially increasing the clearing price,” according to a letter sent to affected businesses, Bloomberg reports.
“Google Search ads help small businesses compete with the biggest brands, driving economic growth and keeping the web free for everyone,” a Google spokesperson tells Bloomberg. “Ad prices are determined by a real-time auction designed to show people the most relevant ads, taking into account factors like advertiser competition and ad quality.”
Notice that Google doesn’t refute the allegations.
The exact details of the EU investigation haven’t been reported, but Google is no doubt still feeling burned after evidence surfaced in the DOJ’s 2023 search antitrust trial about its opaque search ad pricing. Jerry Dischler, then GM and VP of Google Ads, testified that Google would increase ad prices by up to 10% when it needed to meet investor revenue expectations.
He jokingly referred to the practice as “shaking the couch cushions.”
The Buck Stops Elsewhere
Americans are divided in their media habits, but overwhelmingly agree on one thing: They don’t want to pay for the news.
Eighty-three percent of Americans haven’t paid for news sources in the past year, according to a survey of more than 3,500 US adults conducted by Pew Research in December. Only 11% believe that subscriptions should be a news organization’s main revenue stream.
So how do Americans suggest publishers pay their bills? Nearly half (45%) say the news should be funded by advertising.
That’s a bummer for news pubs, though, many of which are still blacklisted and keyword-blocked by brand safety and verification tech, despite efforts by the IAB and other orgs to reassure marketers that it’s not a brand safety risk when ads appear adjacent to news.
Ironically, the public is pretty uninformed about the plight of news pubs. Thirty-seven percent believe news orgs are doing somewhat well financially, while roughly one-third believe they’re doing very or extremely well.
In reality, 40% of local news outlets have shuttered in the past 20 years.
K-Shaped Attention Economy
But maybe the reason consumers don’t pay for reporting is because a lot of people are having trouble paying for … well, anything.
As Reuters reports, earnings from major US retailers and brands signal a clear shift in consumer spending. While high-end brands like Ralph Lauren and Tapestry (which owns Coach and Kate Spade) are exceeding expectations, mass-market companies like PepsiCo and Kraft Heinz report strain among middle- and lower-income consumers in the US.
This type of “K-shaped economy” – where high- and low-income groups diverge sharply – creates a unique challenge for advertisers. Higher-income households favor ad-free entertainment, making them harder to reach than lower-income ones. (Or, to paraphrase a favored refrain of NYU marketing professor and podcast personality Scott Galloway: “Advertising is a tax that the poor and digitally illiterate pay.”)
Luxury brands aren’t really sweating the K-shaped economy, because they’re all about exclusivity. But for the performance marketers that increasingly use CTV to achieve specific campaign outcomes, there may come a point when the math doesn’t work, as low-income viewers get even more frugal.
But Wait! There’s More!
Don’t use TikTok? The app might still be tracking you, thanks to the unusual way that its pixels operate compared to those of its competitors. [BBC]
The IAB’s new legal framework for simplifying direct ad deals is now open for public comment. [release]
Warner Bros. Discovery denies reports that it blocked wrestler Brody King – an outspoken critic of the Trump administration’s immigration crackdown – from this week’s episode of AEW Dynamite on TBS over fears fans would chant “Fuck ICE” again if he made a live appearance. [Sports Illustrated]
The OpenAI researcher who resigned over the introduction of ads speaks out. [NYT]
X subscriptions have hit $1 billion in annualized revenue, according to head of product Nikia Bier. [The Information]
Internet publishers are facing a wave of unexplained bot activity linked to IP activity in Lanzhou, China. [Wired]
Despite CEO Tim Cook’s sidling up to President Trump, the FTC still alleges that Apple News is biased against right-wing media outlets. [Business Insider]
Some US law enforcement agencies have bought access to GeoSpy, an AI geolocation tool. [404 Media]
You’re Hired!
Mediavine appoints Fay Wu as VP of client experience. [release]
OpenX hires Natalie Fisher-Brown as regional VP of EMEA buyer development. [release]
Out-of-home advertising platform Stic appoints Sarah Zurell as CMO. [release]
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