 "google, google logo")
Meta Platforms Inc. entered into a 2018 deal with Google after concluding internally that it couldn’t successfully compete against it. (Photo: Shutterstock)
Meta Platforms Inc. entered into a 2018 deal with Google after concluding internally that it couldn’t successfully compete against the search giant, because of its monopoly over the technology underlying online display advertising, a former Facebook advertising executive testified as part of a US Justice Department antitrust trial.
Brian Boland, who headed Facebook’s advertising technology between 2009 and 2019, told a Virginia federal court that the social network initially aimed to directly challenge Google in the market for display ads sold on websites. The Facebook Audience Network sought to allow marketers to run ads on the company’s social networks, Facebook and Instagram, as well as buy them on websites and in apps.
But by 2017, Facebook had concluded that it would struggle to effectively compete against Alphabet Inc.’s Google because of its “monopoly” and the advantages the search giant gives itself within its advertising tools.
“Google sits between us and the impressions we want to buy,” a July 2017 strategy memo about the Facebook Audience Network said. Google’s tools give it “the opportunity to cherry pick the best supply.”
“Knowing there would be a layer between us” and advertisers “was a concern,” Boland told Judge Leonie Brinkema, who will decide on the Justice Department’s allegations that Google illegally monopolized advertising technology markets. Google’s advertising exchange gave it a so-called “last look” in online auctions, allowing the company to decide after an ad was auctioned off that it wanted to buy it.
Boland likened the technique to Google being able to select the 30 best apples from a crate before anyone else got the chance to buy.
“You’re left with the leftovers,” Boland said.
Boland oversaw six months of negotiations between Facebook — whose corporate name was changed to Meta Platforms in 2021 — and Google for a deal that was eventually signed in 2018. The agreement, internally nicknamed Jedi Blue, gave Facebook preferential treatment when bidding through Google’s exchange for web or mobile app ads within its Facebook Audience Network.
The pact between Google and Facebook, the No. 1 and no. 2 players in the online advertising market, was approved at the highest levels of both companies, with Facebook Chief Executive Officer Mark Zuckerberg and Google chief Sundar Pichai personally signing off.
The details of the Facebook-Google deal, officially named the “Network Bidding Agreement,” weren’t revealed in Friday’s court testimony. But documents shown in court said that Google was “looking for Facebook to pay 15 percent of working media cost in order to remove” the last look advantage.
A group of state attorneys general, who sued Google in 2020 over alleged monopolization of the ad tech market, initially said that the companies’ agreement violated the antitrust law. They alleged that Google offered the deal to Facebook in exchange for the social media company abandoning plans to adopt a new type of technology, known as header bidding, that would have undercut Google’s monopoly.
A judge in New York threw out those allegations, saying “there is nothing inexplicable or suspicious” about what led the companies to enter into the agreement. European antitrust enforcers, who also looked into the deal, closed their investigation into it in March 2022 without taking any action.
When the Justice Department sued Google last year for monopolizing the advertising technology market, they didn’t allege the agreement was anticompetitive, instead highlighting that even a tech giant of Meta’s size couldn’t compete.
Boland, who left Facebook in 2020, said he expressed concern internally about the Facebook network’s lack of growth in online display advertising. The project eventually stopped buying display ads on the web, instead shifting its focus entirely to mobile ads.
First Published: Sep 14, 2024 | 7:50 AM IST
Thank you for taking the time to read this article! I hope you found the information insightful and helpful. If you enjoyed this type of content, please consider subscribing to our newsletter or joining our community. We’d love to have you! Feel free to share this article with your friends and family, who might also find it interesting.
Rishabh Singh is the Editor-in-Chief and CEO of Latestnews24.com. He has also completed his graduation in BSC Aviation and has 2+ years of experience in blogging and digital marketing. Have worked with many businesses and blogs, He is also interested in Entertainments/movies/web stories and new foods recipes news, Actually this is his favorite subject. So he is always ready for discussion and written about this topic.