The Feds Finally Nailed Google. So What.
Hard to see a windfall for the rest of the web, or Google really getting hurt
It’s official: according to the US government, Google is an ad tech monopoly. A breakup may be in the offing. Many have called the decision a “true watershed moment.”
So why does it feel like the Feds are 15 years late and about $500 billion short?
While many in ad tech circles spent last week rejoicing or “I told you so-ing” I found myself wondering, “does this even matter?” Will breaking up Google’s stranglehold on the pipes of programmatic advertising have much impact on the future of the digital ad industry? Or is this like grounding your kid for sneaking out to a high school party on his 30th birthday?
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Let’s try and break this down.
Last week, the IAB released its annual digital advertising spending report, which revealed that 91.8% of digital ad dollars in the US in 2024 went to just 25 companies. Breaking up Google’s ad tech stack is supposed to be good for the open web - yet there doesn’t seem like much of a long tail to begin with.
So where is the money going? Maybe it’s my former Mediaweek, Watergate-meets-advertising training, but to me, the budgets tells the story in this industry. Folks in ad tech circles get a little too hung up on the leftovers.
Per the IAB - no surprise - retail media is booming
That category is dominated by sudden ad titan Amazon (which if anything, is following the Google full ad tech stack playbook), followed by upstarts like Walmart, Instacart and Target. Google’s ad tech doesn’t really play a role here, and who cares if shoppers use Chrome or Safari, as long as they convert.
Of course, search still rules (which is great for Google, and won’t be impacted if they have to sell off their exchange, for example)
Social media is surging, jumping 36.7% last year. Google doesn’t really have a play here
Digital video is again hot, and guess what - Google owns YouTube, which dominates there. One remedy to the anti-trust ruling that has been floated is letting other DSPs access YouTube inventory. Guess who still gets paid there? Google. As Derrick Coleman would say, well whoop de damn do!
Plus, the $259 billion the IAB tracked in 2024 does not even include connected TV, one of the hottest sectors in advertising. Again, thanks YouTube - Google has become a major player there - yet is at little risk of becoming a monopoly.
Ok, so let’s look at Google’s future and what it tells us about whether ad tech matters all that much. Here are the company’s priorities as I see them:
With Gemini, Google has to stay relevant in AI search without blowing up its cash cow. That’s actually a really competitive sector!
It’s about YouTube
It’s about the cloud
Meanwhile, Google’s ‘network’ is shrinking, and no longer seems very strategic.
“Display was always a defensive move for Google in my opinion,” said Jonathan Mendez, founder and CEO of Neuralift AI, who ran the ad network Yieldbot in the early 2010s. “It was meant to protect and improve their core search business in the heyday of web publishing when it was actually vulnerable. That publishers allowed them to come in and become their ad server and inventory manager and own the second side of the market is an indictment on the short term thinking of publishers.”
In 2025, how much would it really sting to spin off AdEx, GAM, etc.?
Ok, well what about Chrome? You tell me - how much would that really hurt their search business? Yes, Google would lose a distribution wedge, and lots of data, but they may lose those advantages in the the anti trust case anyhow. Is that the end of the world? The company wouldn’t have to deal with the headache that is Privacy Sandbox, right?
Sure - but isn’t this case about leveling the playing field? Aren’t the feds trying to undo a monopoly, which theoretically should be great for the rest of the industry, and advertisers?
Well:
The Web is shrinking, and AI isn’t replacing the traffic. As Axios reported recently, “experts believe we are at the beginning of a terminal decline in overall search traffic.”
In fact, I had Raptive Chief Innovation Officer Marc McCollum on my podcast this week, and he shared such worries. Raptive is comprised of a network of small to mid-sized publishers - travel bloggers, cooking creators, etc. So it’s basically ground zero on the open web. What are those publishers worried about? Per McCollum It’s not which DSPs are allowed to access Google inventory or not. Rather, it’s Google making its own rules on what it prioritizes in today’s search results. And more importantly, what role if at all publishers play in an AI Search Future?
“We've seen some of the mid-size and smaller sites really be hit hard,” he said. “It's absolutely a problem. And it's one of several problems.” As “Google's shifting its model from being a search engine to being an answer engine,” not only does that lead to examples of blatant copyright infringement, McCollum said, but small and mid sized publishers “losing 25 % or more of their search traffic would put them out of business.”
So how does a Google ad tech breakup help there?
To be sure, the IAB’s report last week found that old school display advertising is growing. And McCollum reported that Raptive’s demand has been solid. Yet I’d question, for how long?
Lately, open web advertising has been plagued by both made for advertising sites and a seemingly endless string of scandals uncovered by Adalytics.
It’s not as though the Google verdict will suddenly make would be market leaders like Turn or Tubemogul into the programmatic giants they were supposed to be. It’s too late.
Even the champion of the open web little guy, The Trade Desk, has named a top 100 list of ‘publishers’ that includes the likes of Disney+, Discovery, HGTV, Paramount+ Tubi, Samsung TV Plus, Bloomberg, Bravo, Telemundo. Folks, these are not exactly mom and pop websites. Most of these are closed CTV apps. This should tell you something. You have to wonder whether big brands say thanks but no thanks to the open web.
Ad tech veteran Art Muldoon, Co-founder & CEO at ArcSpan, is more optimistic. “The timing is interesting thinking we are now in an new era marked by new first-party data and AI-driven automation,” he said. “Most publishers still generate 70% of their ad revenues through open programmatic channels…I am looking to see how the Google news can become a catalyst for publishers to retool andupdate their audience monetization models and strategies.”
Muldoon is right that AI is taking over ad buying. Guess which companies can compete there? Google, Meta, Amazon, maybe a few others. As that by nature opaque category expands, will it matter who or who doesn’t own ad serving? So how does breaking up Google change these dynamics?
Well, before I get accused of not offering any solutions here, I suppose that regulators could:
Try to somehow dictate how search works, so that small publishers get a fairer shake
Or force some kind of compensation for publishers as AI Answer Search takes over
Or make Google open sources Gemini
Or maybe make Google sell Performance Max
Are any of these likely outcomes? There are people who understand anti trust law far better than I who could answer that question.
In the meantime, what do you think? Am I wrong?
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