Google has been accused of downplaying the quiet increase in ad auctions.
The search engine admitted in the federal antitrust case that it “often” increases ad prices by up to 5% without telling advertisers — sometimes as much as 10%.
But marketers accuse the search engine of being too “conservative” with these numbers because, in their opinion, the actual number is significantly higher.
Why it matters to us. Advertisers are increasingly dissatisfied with Google due to long-standing suspicions of manipulating advertising prices and a lack of transparency. Although the industry recognizes that the search engine has the right to set minimum price thresholds, there is a lack of transparency about how these thresholds may change over time and directly impact advertisers’ performance
Shady business. Christine Yang, vice president of media at Iris, told Ad Week that she believes the actual variability can sometimes be as high as 100%. She said:
- “”[Google] Saying 5% is a more conservative number to make it sound like the natural ebb and flow of a market,” said Christine Yang, vice president of media at Iris.
- “The level up to that [price manipulations] We don’t know what’s happening. They are shady business practices because there is no regulation. They regulate themselves.”
Why it’s important to quietly increase ad prices. Google’s ability to raise ad prices, especially without strong competition, could potentially bolster the Justice Department’s claim that Google is maintaining an unlawful monopoly. While this argument does not apply to Google’s free search engine, it can be used to address concerns such as privacy standards that might have been mitigated in a more competitive search industry.
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What did Google say? Following Dischler’s comments, a Google spokesperson told Search Engine Land:
- “Search ad costs are the result of a real-time auction where advertisers never pay more than their maximum bid. We’re constantly rolling out improvements to make ads better for both advertisers and users.”
- “Our quality improvements help eliminate irrelevant ads, improve relevance, increase advertiser engagement, and deliver high-quality user experiences.”
Deep dive. Read our Google search article on antitrust case updates for the latest news from the courtroom.
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