With Google’s Latest Policy Change, Publishers Feel Control Slipping Away

Whenever Google changes how its ad server works, publishers fear that Google will wrest control over how they run their digital advertising.

Those concerns often have merit.

So when Google added rules about how publishers could prioritize different ad exchanges earlier this week – and buried those changes in a confusing help center document instead of briefing publishers on the change – alarm bells went off.

First of all, the publisher community couldn’t figure out what the documentation meant. The new “System maximum and limits” rules seemed to imply that private marketplaces (PMP) run through a non-Google exchange would always be second in line.

If this were the case, it would handcuff header bidding and cause serious problems for publishers who use non-Google ad exchanges to power their PMPs. After urgent calls with their Google reps over the past two days, that turned out not to be true. Despite being non-guaranteed, private marketplaces were in fact considered “guaranteed demand,” earning them a spot in the newly restricted sponsorship section.

The updated rules actually close loopholes publishers discovered after Google implemented its unified pricing rules year. Less than 1% of publishers used line items for “unintended purposes,” Google said in a note describing its policy change.

Of the publishers misusing line items, 75% put AdSense in a house line item, and 25% put ad exchanges in the house line item section, which allowed them to sidestep the new unified pricing rules. Through the latter setup, a publisher could force demand coming through Google’s exchange to pay a higher price and improve yield.

“A pretty smart hack,” noted one publisher, who had planned to test the setup this quarter after recently learning of the technique. Another publisher even had their Google rep recommend they use the technique last year. Still, others weren’t interested in trying it out because it made reporting too complicated.

Less control by a thousand cuts

By tightening up how line items are used, Google makes its still-new unified pricing rules work as intended.

Initially extremely unpopular, the unified pricing rules restricted the ways publishers could tweak ad auctions and pricing in their ad server to improve yield.

“The reason publishers do these things is because Google takes control out of the publishers hands, making decisions that benefit Google and not publishers,” said Stephanie Layser, VP of advertising technology at News Corp. The publisher is unaffected by the change.

So it makes sense that some publishers would try to regain some of the control they lost.

But even the majority of publishers who weren’t misusing the line items felt frustrated by how and why Google made the change, which exemplifies their two main gripes about the tech giant.

The first complaint is that every Google product change takes a bit more control from publishers, limiting their flexibility in how they set up their stack.

“It’s part of an attempt to standardize how auctions work and prevent publishers from customizing auctions in ways they wanted to,” said Rubicon Project CTO and Prebid head Tom Kershaw. “That’s the fundamental, philosophical issue. Should publishers have the freedom to run the auctions however they want to, even if it’s not fair to all the participants? Our position is yes.”

The second complaint is that Google doesn’t listen to them. In this case, even one-way communication was lacking.

“We wish they would make moves that give publishers more controls, and inform us and consult with us before making moves that could be impactful to our business,” said Nicole Lesko, SVP of data, ad platforms and monetization at Meredith.

The lack of communication irked many publishers, some of whom still weren’t sure how the change would impact them.

“We are finding this out via social media, which is crazy,” said one publisher, who wanted to remain unnamed to protect its tenuous relationship with Google. In the past, Google reps would communicate upcoming changes, incorporate publisher feedback and then make the change, the person remembered.

“Now they know they have us in this vulnerable spot, where publishers need to make money,” the publisher said. “So they’re telling us what’s good for us without hearing our problems.”

Yet another publisher voiced “disappointment” about how the change was (not) communicated, blindsiding affected publishers who needed to prepare for the change. “It feels like they are trying to rob us of revenue in the middle of the night.”

Offering fairness for less control

Publishers have long developed ad server hacks to dismantle advantages Google created for itself through its close integration of its ad server, ad exchange and DSP.

Six years ago, publishers discovered header bidding, a widely popular “hack” that let outside exchanges compete for every impression, just like Google AdX.

Later, publishers discovered that they could get Google AdX to pay more by creating a rule that the exchange had to pay 10% more instead of just a penny more to win an ad impression. Because Google had better data and seamless ID syncing, demanding a higher price from Google worked.

But when Google implemented unified pricing and moved to a first-price auction last year, it told publishers they couldn’t set a higher price just for AdX anymore. And it also reduced the number of rules, another way publishers tweaked pricing.

As a concession, Google also got rid of “last look,” which allowed AdX a final chance to win an impression. The change reduced Google’s advantage, which also reduced publishers’ incentive to develop workarounds within Google’s ad tech.

Despite this allowance, publishers don’t feel like Google has completely leveled the playing field.

Google doesn’t share its “minimum bid to win” data with header-bidding partners, nor does it compete in the header. It doesn’t face the same ID syncing challenges as other exchanges because it uses the same ID across the buy side and sell side. And publishers are still piecing together how the recently implemented unified pricing rules, open bidding and the move to a first-price auction could shift the power balance between Google and everyone else.

“They want everyone on an 'even playing field' when they've been giving themselves the upper hand since the acquisition of DoubleClick,” Layser said.

So Google’s latest policy change is just another restriction on how publishers use Google’s ad server. If they want to go around Google’s new pricing rules, Google will clamp down instead of letting them continue.

How publishers interpret the latest policy change depends on how they feel about Google.

“If you’re a Google skeptic, it’s hard to swallow them taking away functionality,” said one publisher who understood both Google’s reasoning and why other publishers are upset.

Some publishers are distrustful of anything the company says, suspecting an ulterior motive. Others feel that the company still has the ability to call a spade a spade.

“It is very legitimate for publisher to have skepticism about these changes,” Kershaw said. “It’s right for them to say, ‘Prove it.’”

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