Google Opens Its Black Box And Shares Fees Across DV360, Google Ads And Google Ad Manager

Google ad tech fees
Google’s tech fees have long been a source of speculation in an ad industry where hidden fees are common.

Google attempted to put to rest questions about its fees in a pair of blog posts Tuesday that shared the take rates for its buying portals, Google Ads and Display & Video 360, as well as its publisher tech, Google Ad Manager. It is the first time that Google, under scrutiny from regulators, has made these fees public.

When an advertiser’s $1 in media spend starts and ends with Google tech, publishers receive 69 cents of every dollar, or 69%. Google takes the other 31%, according to 2019 aggregate data.

Google’s DSP, DV360, takes an average of 13 cents of every $1 an advertiser spends. Then, Google Ad Manager charges an average of 18 cents to the publisher.

Google Ads, where advertisers extend search campaigns into display, takes an average of 14% of every $1 an advertiser spends. The ad network charges advertisers on a cost-per-outcome basis but pays publishers on a CPM basis, so the average varies.

Google also disclosed how much it takes from publishers when they’re selling ads both directly and programmatically.

An analysis of 100 top news publishers using Google found they sold three-quarters of their inventory directly or through other partners. Google charges fee based on volume of ad requests, about 1%, in that setup.

For the remaining quarter of ads, which are filled programmatically, Google charged around a 16% fee for the impressions it handled. Google claimed that given how many impressions publishers fill directly, it takes around 5% of these news publishers’ overall revenue.

There are a couple of caveats: Publishers may be paying higher or lower fees if they’re selling ads through different ad exchanges or DSPs. And Google’s analysis lumped in ads sold through open bidding, which charges a 5% to 10% fee, with those sold by Google Ad Manager, which charges up to a 20% fee, slightly lowering the average take rate for those impressions.

Google also didn’t exactly share how AdSense fits into the equation. Google previously shared the take rate for its AdSense product, which averages 68%. But Google wanted publishers to know that it doesn’t double-stack its fees when a Google Ad Manager publisher uses AdSense for backfill within Ad Manager.

Why share this data?

Transparency is a good look for Google right now.

Google anticipates an antitrust case this summer, where many parts of its business will be put under a microscope. This Friday, the Justice Department and state attorneys general plan to meet to discuss the case, according to The Wall Street Journal. Google’s ad tech fees could be part of the case.

One antitrust paper released last year faulted Google for not sharing its end-to-end fees. “No one (other than Google) has visibility into what happens between AdWords and AdX,” the paper said.

There’s also been a broader push for transparency across the programmatic ecosystem. Buyers and sellers realized that their contracts with tech partners only partially revealed all the fees they were being charged from one end to the other.

Nearly three years ago, independent ad tech companies including AppNexus and Rubicon Project shared their take rates and slashed fees amid pressure to rid the industry of hidden fees. And when The Trade Desk went public, it began sharing its fees on a yearly basis.

To uncover hidden fees, industry organizations such as ISBA have audited the supply chain. Marketers have turned to blockchain and other new tech Buyers have made requests for log-level data. All of these moves signaled the urgency with which advertisers and publishers view the lack of transparency in programmatic. Google may be trying to assuage these concerns by publicly sharing data it’s never disclosed before.

This article has been updated to clarify some of Google's fee structures.

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1 Comment

  1. That's great but begs the question...how much was the $1 before it cam into contact with the Agency? $1.5 - $2??

    Reply

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