News Corp. considered switching away from Google's advertising products in 2017 but abandoned the idea after it thought it would have cost the company at least $9 million in revenue, a former executive at The Washington Post publisher testified on Tuesday.
Despite providing tools, Google maintains a monopoly on digital advertising “It's cumbersome and slow” Stephanie Lazer, who worked as an advertising technology executive at News Corp from 2017 to 2022, said the company is ignoring requests to add new features.
Despite those problems, Google's dominance in the market meant it was effectively the only service publishers used to do ad transactions, said Lazer, who was testifying on the second day of the Justice Department's massive antitrust case targeting the online advertising empire.
“I felt like I was being held hostage,” Lazer said.
According to court documents in the non-jury trial, News Corp. made $83.3 million from ads sold through its digital ad technology tools as of 2016.
The bulk of the transactions were made through Google's ad exchange, which generated $18.4 million in revenue from advertisers working on the platform, according to the records.
In exploring a possible exit, News Corp estimated that about half of the $18.4 million was spent by advertisers that had exclusive stakes in Google's network, according to documents discussed during the trial.
That means the news giant would lose more than $9 million if it abandoned Google.
By the time Lazer's term at News Corp ends in 2022, 70% to 80% of the company's advertising deals will have been made through Google tools, she added.
Lazer's testimony came a day after the Department of Justice charged that Google maintains a “trinitarian monopoly” by controlling the advertising tools used by publishers who sell ads, advertisers who buy them, and the ad exchanges that connect the two.
The Justice Department charges that Google has used its dominance in online advertising technology to siphon off as much as 35 cents of every dollar that flows through its system.
Google's lawyers, led by Karen Dunn, an adviser to Sen. Kamala Harris, argue that the Justice Department's lawsuit is based on a flawed understanding of how the digital advertising market works and that government intervention could cause significant harm to businesses that rely on the company's service.
U.S. District Judge Leonie Brinkema has sole discretion over the outcome of the trial, which is expected to last about four weeks.
The federal government wants to force Brinkema to dismantle Google's ad tech empire, including the sale of its Ad Manager tool.
With post wire
