"Former Facebook Ad Chief Reveals Challenges in Competing with Google's Ad Dominance"

In a recent US Justice Department antitrust trial, Brian Boland, who led Facebook’s advertising technology division from 2009 to 2019, testified about the difficulties Facebook faced in competing with Google in the online display advertising market. Boland’s testimony highlighted how Facebook, now Meta Platforms Inc., struggled against Google’s “monopoly” and the advantages it leveraged within its advertising tools.

Boland described how Facebook initially sought to challenge Google directly in the display ad market through the Facebook Audience Network. This network aimed to allow advertisers to run ads across Facebook, Instagram, and various websites and apps. However, by 2017, Facebook realized it was unlikely to effectively compete due to Google’s dominance and its control over ad technology.

A strategy memo from July 2017 revealed concerns that Google’s tools allowed it to “cherry pick” the best advertising inventory, effectively positioning itself between Facebook and the ad impressions it sought. Boland likened Google’s practice of having a “last look” in online auctions to selecting the best apples from a crate before anyone else had the chance.

In response to these challenges, Facebook and Google engaged in six months of negotiations, leading to the signing of the “Network Bidding Agreement” in 2018, internally known as Jedi Blue. This deal provided Facebook with preferential treatment in bidding through Google’s ad exchange for web and mobile app ads. The agreement was signed by Facebook CEO Mark Zuckerberg and Google CEO Sundar Pichai, and it aimed to counterbalance Google’s competitive advantage by allowing Facebook to remove the last look advantage by paying a 15% media cost.

The agreement between the two tech giants was scrutinized by state attorneys general and European antitrust regulators, who investigated potential anticompetitive practices. While the state attorneys general initially claimed the deal violated antitrust laws, these allegations were dismissed by a judge. European regulators closed their investigation without taking action. The Justice Department, in its ongoing antitrust case against Google, has not focused on the specifics of the deal but instead emphasized the difficulty even a major player like Facebook faced in competing with Google’s market dominance.

Boland, who left Facebook in 2020, noted internal concerns about the stagnant growth of Facebook’s display ad network, which eventually shifted its focus from web display ads to mobile advertising.