google bernanke

Did Google’s Project Bernanke Cost Advertisers Millions?

Sam Carr

Sam Carr

April 13th, 2021

Sam Carr is a content marketer at PPC Protect with 10 years of digital marketing experience. With a keen interest in ad fraud, Sam shares all his insights on the PPC Protect blog.

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Over the past several years, Google has been caught up in plenty of high-profile legal cases with different countries around the world.

And yet again, it seems Google has been caught in more legal trouble with the latest accusations of them running an insider trading program on their own ad platform.

Since 2010, Google has been fined an estimated $10 billion for several antitrust charges, and it still looks like more of Google’s shady secrets are coming to light.

In recent filings from one of their ongoing Texas lawsuits, Google accidentally revealed the name of some of its internal projects with unredacted documents revealing some worrying information.

What Is Project Bernanke?

federal reserve bernanke

One of the biggest leaks from the unredacted Texas court documents was the confirmation of an internal program called Project Bernanke. It’s speculated that the project was named after the former chair of the Federal Reserve, Ben Bernanke, from 2006 to 2014, which was around the same time the project started.

Project Bernanke allegedly used historical bidding data to give Google a major advantage over its competitors on their ad exchange.

Since Google acts as both a buyer and seller on their own exchange, by having access to the private historical bid data of other parties, this gave them a huge advantage. With this data, they could guide clients and advertisers towards the real price they would have to pay to secure an ad placement.

Some industry experts explained the project as insider trading in digital ad markets because Google had private and exclusive information about what other ad buyers were willing to pay.

In addition to the project giving Google an unfair advantage, they also kept the project secret from publishers and other rivals when it was in operation.

According to an internal presentation from Google, which was also leaked, Project Bernanke was estimated to bring in $230 million in additional revenue during 2013 alone. How long the project ran for is not yet known, but with profits in the hundreds of millions per year, it’s likely to have been several years.

The fact that the leaked presentation showed Google made “additional revenue” from the project is cited as proof that Google benefited from its unfair advantage.

The Discovery Of Blue Jedi

blue jedi

If allegations of running an insider ad trading program for several years weren’t shocking enough, Google also let slip another of their secrets.

This time named Blue Jedi, this program revealed an agreement between Facebook and Google where they wouldn’t compete with each other on certain ad networks. In exchange for doing this, Facebook would receive better treatment on their Google Ads platform in the form of winning a fixed percentage of ad auctions.

The deal also reportedly said that Facebook had to spend $500 million or more per year on Google Ads in the 4th year of the agreement.

The court documents also showed that this Blue Jedi agreement was signed by Google’s senior vice president Phillipp Schindler and Facebook’s chief operating officer Sheryl Sandberg.

If the Blue Jedi deal turns out to be true, this will surely be another antitrust violation being added to their ongoing Texas lawsuit.

Google’s Response

googles response

In response to the alleged project Bernanke, Google has denied any wrongdoing on their part and simply put it down to a misunderstanding.

One of Google’s spokesmen Peter Schottenfels, said the complaint “misrepresents many aspects of our ad tech business. We look forward to making our case in court.” He also stated that there had been an analysis conducted by an unnamed U.K. regulator that concluded Google didn’t appear to have had an advantage from the project.

According to the WSJ, in the court filings, Google also denied there was anything wrong about using the information it had to inform its client bids. And that the data was “comparable to data maintained by other ad buying tools”.

Although it’s still early days for the accusations, it looks like Google will have to do a lot of proving to show they didn’t have an unfair advantage.

In response to the Blue Jedi Facebook deal, Google acknowledged they had made a deal with Facebook to help them identify 80% of mobile and 60% of desktop users in ad auctions. But they denied Facebook was given any advantages over other advertisers and clients.

Similarly, Facebook also said it doesn’t believe it was given any special treatment compared to other partners using the Google Ads platform.

Can Google Be Trusted?

The thought of Google taking advantage of their own clients and advertisers while making shady backstreet deals with Facebook is very worrying.

Although the alleged allegations haven’t been confirmed yet, it’s understandable why more and more advertisers are now looking for 3rd party ad verification platforms.

With Google being the judge, jury, and executioner, it’s understandable that advertisers want a second opinion on whether they are getting the best deal.

Here at PPC Protect, we regularly audit client’s ad accounts to ensure they’re only paying for genuine clicks. This peace of mind can go a long way with advertisers, especially when they are considering increasing their ad spend.

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