Google’s ‘Project Bernanke’ Benefitted Its Ad-Buying System

Google used a secret program called “Project Bernanke” for years to increase its clients’ chances of winning bids for competitive ad space, the Wall Street Journal reported on Saturday, citing court documents filed in the Texas-led antitrust suit against Google. The state argues that the program gave Google an unfair competitive advantage against rival ad buying tools and allowed it to pay publishers less for winning bids.

Ironically, the company spilled the beans on its own secret program. The Journal affirms that the court documents in question—which were reviewed by the outlet, although Google has since refiled them under seal—were filed by Google earlier this week in response to the Texas suit and were not properly redacted when uploaded to the court’s public docket. Google acknowledged the existence of Project Bernanke in its response.

For anyone who’s not familiar with the complex digital ad world, here’s a very basic breakdown. Publishers, or the technical name for any website that serves ads, sell ad space on their website. Advertisers put down bids for a particular ad space on ad exchanges, which are like auction houses where whoever bids the highest price wins the coveted ad space. You can find a more detailed and technical explanation here.

Now back to Google. In the court documents, Google explains that Project Bernanke used data about historical bids made through Google Ads to adjust client—which refers to advertisers working with Google and paying to do so—bids there and tip the odds in their favor at ad auctions, per the Journal. These efforts increased Google clients’ chances of winning auctions that would have otherwise been won by rival ad tools and also put millions of dollars in revenue in Google’s pockets. 

Google did not inform publishers who sold ads through its ad-buying systems about the existence of Project Bernanke.

Exactly how many millions Google’s made from Project Bernanke isn’t mentioned in the Journal report. However, Google did confirm that the project was expected to generate $230 million in revenue in 2013.

According to the Journal, in the filing Google denied that there was anything wrong about using the exclusive information it had to inform its client bids. The company said that this was “comparable to data maintained by other buying tools.”

The revelation of Project Bernanke is bound to lead to increased scrutiny for Google, which has a strong grip on both the seller’s and buyer’s side of the digital ad market with its products. In a House Judiciary Committee antitrust meeting on big tech in the summer of 2020, lawmakers cited a study that found that Google controlled between 50-60% of the publisher market, or the players that sell their ad space, and 50-90% of the advertiser’s side, referring to those who buy that ad space. The majority of Google’s revenue comes from its advertising business.

In fact, Google’s dominance in the digital ads market is the subject of the Texas antitrust lawsuit. Texas Attorney General Ken Paxton, who also has his own bevy of legal problems, is alleging that Google repeatedly abused its monopoly power to control the way ads are priced and rig ad auctions. This behavior, Paxton claims, allows Google to “continually illegally profit by taking money away from those web pages and putting it in their own pockets.”

“In this advertising monopoly on an electronically traded market, Google is essentially trading on ‘insider information’ by acting as the pitcher, catcher, batter and umpire, all at the same time,” Paxton said in a statement in December. “This isn’t the ‘free market’ at work here. This is anti-market and illegal under state and federal law.”

The documents also shed light on Google’s Jedi Blue deal with Facebook, the deal in which Facebook held off going all in into the header bidding business and instead route that ad business through Google’s ad platform. The Journal stated that under the agreement, Facebook was required to spend $500 million or more in Google’s Ad Manager or AdMob auctions in the fourth year of the deal, among other details.

Gizmodo reached out to Google for comment on Sunday about the Journal report but did not receive a response by the time of publication. We’ll be sure to update this blog if we hear back.

In a statement to the Journal, Google spokesman Peter Schottenfels said the complaint “misrepresents many aspects of our ad tech business. We look forward to making our case in court.”