Google attempted to bribe agencies with hundreds of millions of dollars to influence media purchases

According to documents submitted last week in preparation for the upcoming antitrust trial against Google, led by the U.S. Department of Justice, Google planned to spend hundreds of millions of dollars to incentivize agencies to purchase certain types of their media.
The documents reveal how Google’s incentive program for agencies and advertisers operates. The program offered agencies discounts, special benefits such as research, and cashback in exchange for agreeing to purchase specific media through Google.
Arielle Garcia, Chief Information Officer at Check My Ads, a company that monitors the media industry and who previously worked at a large ad-buying agency UM, described the program as beneficial primarily for Google.
“Google usually recommends things that are more beneficial to them than to advertisers,” Garcia said.
Incentive programs like those described in Google’s documents are common among media companies, said a media audit source who wished to remain anonymous due to sensitive industry relationships. However, they can be controversial, especially if used by agencies that are not transparent with their clients. The risk arises from the fact that agencies recommend media because they are paid to do so, rather than because it is in the best interest of the client.
There are three types of incentives that Google offers.
The first type is DVIP Upfronts, where agencies and advertisers commit in advance to spend on Google’s display and video ads in exchange for a discount on reserved media costs, which is a type of deal where buyers can purchase specific media spaces at a fixed price. Buyers also gain access to a budget called the ‘discretionary incentive fund,’ which advertisers can use for creative production, third-party research, and reducing platform fees.
Google’s executives predicted that they would pay out around $100 million from the discretionary incentive fund to advertisers in 2018.
The second type of incentive is called the Agency Capability Fund (ACF), where Google refunds money to agencies at the end of the year in exchange for achieving YouTube growth targets and meeting year-on-year training requirements. Google expected to pay out over $300 million in rebates to advertisers in 2018.
The last type of incentive is one where agencies receive money at the end of the year for mutually agreed goals related to display and video ads. Google predicted it would pay $45 million for this type of deal in 2018.
Google’s trial is scheduled for September 9th.
“This is a perfect example of how they are able to pull the strings and direct money wherever they want,” Garcia said.