The English word “yield,” derived from Old English, is a relic of a time when a ruling class might demand anything cultivated by those beneath them. So the word encapsulates two seemingly opposing definitions: There is “yield,” as in crops, and “yield,” to surrender or hand over.
Which makes it an apt headline for Ari Paparo’s new book on Google’s ad tech antitrust saga. The full title pulls no punches: Yield: How Google Bought, Built, and Bullied Its Way to Advertising Dominance.
“I tried to write it so it’s not exclusively for ad tech nerds,” Paparo told AdExchanger. “And I mean that affectionately.”
However, for the ad tech nerds out there, be warned: This book may leave you boiling in rage. It is not light, fun summer book list material.
Programmatic veterans may find it strange to read a nonfiction narrative featuring a cast of characters they know: Stephanie Layser, Jana Meron, Brian O’Kelley, Michael Barrett, Michael Rubenstein and many other industry leaders play prominent roles. But the strongest emotions are an uncomfortable mix of vindication of your paranoid suspicions being proven true and fury at the same.
The story
The scene-setter for Yield is a 2019 meeting with major publishers hosted by Google to outline new ad exchange policies, including “Unified Pricing” rules that forbid publishers from setting different pricing floors for certain supply-chain partners.
Unified Pricing was a bald power-grab move by Google. These new rules prohibited many “common techniques that were proven to generate incremental revenue” for publishers, as Paparo writes, because doing so disempowered Google’s ad tech model.
The meeting was a disaster. Publisher execs lost their decorum. Paparo cites AdExchanger’s Sarah Sluis, who dryly summed the matter up at the time: “It did not go well.”
Paparo draws a dotted line from this epic fail of a product announcement to the Department of Justice’s ongoing antitrust lawsuit. In April, the DOJ found Google guilty of operating a sell-side ad tech monopoly (in the publisher ad server and ad exchange markets, specifically).
Prior to this 2019 meeting, Paparo writes that publishers were in a “low-grade conflict” with Google over its ad tech policies and their own dependence on Google ad revenue.
After the infamous 2019 meeting, Google’s “malfeasance was nakedly apparent,” Paparo writes.
Building a monopoly
Yield can be broken loosely into two sections.
The first half documents the construction of what eventually would become a monopolistic behemoth. This is based primarily on interviews with early product leaders from Google and companies like DoubleClick, Invite Media and AdMeld that Google acquired.
Paparo had a front-row seat to some early renovation work, having joined Google via the DoubleClick acquisition. He was also on the team that spearheaded Google’s Invite Media acquisition.
The second part of the book concerns the secret policy changes and internal rationales that fractured Google’s relationship with major publishers. In particular, Google aggressively sought to quash header bidding. These facts are documented more by legal disclosures and testimony during the ad tech antitrust trial.
There are also some fun miscellaneous tidbits, especially from the early days of Google’s ad tech.
Michael Rubenstein, one of the creators of Google’s Ad Exchange product (the one-time AdX, which remains universally known as “AdX” although that brand has long since ceased to exist), says the name “AdX,” including the exact camel-case capitalization, came to him in a dream. Also, the Googler in charge of two rounds of massive headcount reductions at DoubleClick was Patricia Severynse, pronounced “severance.”
Just move past it.
Early on, though, many of Google’s decisions weren’t necessarily anticompetitive, Paparo told AdExchanger.
Rather than one or two flagrantly immoral decisions, Paparo said that Google’s internal messages reveal “a lot of these deferred, incremental, not-in-the-customer’s-interest kind of decisions” accruing over time.
And some important pieces of evidence against Google are based on grand extrapolations of small words. In one internal Google email from 2010 touted by the DOJ antitrust prosecutors, Neal Mohan, now CEO of YouTube, discusses buying a publisher ad exchange startup “and parking it somewhere.” The idea being Google would offer its own version eventually. Google would go on to do this with AdMeld.
From an offhand internal email from 15 years ago, the word choice and specific parameters meant by “parking” became the center of serious courtroom debate during one of the country’s most important antitrust trials.
Which is an indicator that no sure-fire smoking gun email was identified with Google execs clearly outlining an illegal case for one of their acquisitions or important policy changes.
Google’s guilty conscience
The DOJ may have no explicitly incriminating internal message or Google statement. But, on the other hand, Google’s efforts to cover its tracks reveal a guilty conscience, or at least some self-awareness that the market, if not law enforcement, would disapprove of its behavior.
Project Poirot, Project Bell, Project Bernanke, Project Jedi Blue, Project Liberty, Project Wolf and Project Centillion is a non-exhaustive list of the secret Google undertakings from Yield.
Jedi Blue, for instance, was a secret deal Google cut with Facebook to divert spend from header bidding and preserve Google’s last-look bidding advantage. Bernanke, and later Project Bell, created a global pool of liquid funds that could be used to inflate bids and bid density for publishers that granted Google preferred auction treatment, while drastically diverting budgets from publishers that gave the same access to a competitor like Criteo.
Wielding a monopoly
One fun speculative game you can play if you have a book club that reads books like Yield is to debate whether Google could have gotten away with it, so to speak, if the company had just displayed an ounce of introspection or common decency toward its customers.
No joke, we are talking about world-historic levels of blind arrogance. This is President George Bush standing before a “Mission Accomplished” banner boasting of being welcomed to Iraq as liberators. It is “Let them eat cake.”
In Yield, Paparo documents Google execs time and again displaying a patronizing attitude toward clients, partners, regulators and other mega-conglomerates like Comcast, to a degree that comes across mainly as contempt. It is like if someone tried to hoodwink you by spelling out words, as an adult might do when talking about “I-C-E-C-R-E-A-M” in front of an excitable child.
For example, even going into the 2019 publisher meeting debacle, most Google higher-ups and product managers seemed honestly to believe that the policy updates would be welcomed by publishers.
One thing that stood out in the hundreds of pages of emails and messages that were disclosed as part of the DOJ suit, Paparo told AdExchanger, is that Google execs publicly and privately were saying, over and over, that publishers were wrong, that header bidding was not sustainable and that publishers did not understand the implications of their decisions.
“Pubs are gambling and can’t actually see the opportunity costs of doing this,” one Google product manager emailed in an internal thread about the surging adoption of header bidding in 2015 (in response to an AdExchanger article, not to brag). Others on the thread confidently predicted that page latency and “suboptimal setups” on sites would preclude adoption.
One customer-facing rep, a Michelle Sarlo Dauwalter, responded: “If we are committed to competition, and we believe competition drives revenue, we should allow for all sources of demand to compete fairly, in real-time (or as close to real-time) as possible. While I can help our Sales team build a story around latency and lost impressions … the fact remains that if we allowed for real-time competition across all demand sources, we wouldn’t even need to have that conversation!”
One imagines her being quietly removed from the chat.
‘Institutional arrogance’
Google’s unique mix of indifference and superiority toward its customers and partners pervades its dealings with regulators and businesses.
Paparo, in an interview with AdExchanger, described Google as having a sense of “institutional arrogance.” Googlers tend to think that what’s best for Google is what’s best and right for the industry, he said, and that Google would “fix the industry, more or less, from all the less sophisticated outside ad tech companies.”
That is not how it played out, however.
In 2017, for instance, Google announced an ad exchange policy update, which was known internally as Project Poirot and released as Optimized Fixed Bidding, that dramatically reduced DSP spend to competitors like PubMatic, AppNexus and OpenX. This became a crisis for third-party ad tech, exacerbated by the fact that Google gave no heads-up to customers and stonewalled all outreach on the topic.
Rajeev Goel, CEO of PubMatic, who was a nine-figure-paying customer of the Google Cloud business and a major SSP partner, was asked during court testimony what Google could have done to forestall the problem.
“Make a phone call,” he said.
Likewise, Paparo writes that one of the precursors to Google’s regulatory antitrust headaches in Europe came about when Google unceremoniously removed Comcast-owned FreeWheel’s right to serve ads to YouTube, which previously had been allowed, without notice or explanation.
Comcast flagged the issue to Congress and EU regulators, and FreeWheel was eventually allowed to resume serving ads to Comcast content on YouTube. But four years of wasted opportunity had passed.
“It is not even clear if Google did any of this out of malice; it seems more likely it was a mixture of indifference and fear of a privacy backlash,” Paparo writes of the FreeWheel incident (of which he may have unique insight, since he founded the DSP Beeswax that sold to FreeWheel).
Google brought the same blustering attitude to its DOJ ad tech antitrust trial.
Paparo recounts one incident when the DOJ brought practitioner witness Matthew Wheatland, who ran the programmatic tech for Daily Mail Group, back to the stand.
“As soon as his name was announced, the courtroom broke into objections,” Paparo writes. As it turns out, and as Google’s attorneys intuited immediately, Wheatland was returning to the stand to counterbalance Mark Israel, an economist and expert witness for Google who had discussed market forces in vague, professorial terms.
Wheatland’s rebuttal testimony, based on practical, real-world knowledge, was “devastating to Dr. Israel’s credibility,” Paparo writes.
If there is any narrative through line with Yield, whether it’s in courtrooms, Slack messages or fancy client meetings, it is an unabashed attitude within Google that everyone who isn’t a Googler is an idiot.
Paparo told AdExchanger that he reached out to Google execs for his book and “got no real response from current Googlers.”
“I had 1,000s of their emails, though,” he added. “So I didn’t really need to talk to them too much.”
