Facebook trial reveals company’s ad struggles

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 undergirding online display advertising, a former Facebook advertising executive testified as part of a US Justice Department antitrust trial, reports Bloomberg.

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.