le accused of downplaying the ad-price manipulation //
Google is accused of understating how much its silently increased ad auctions.
The search engine admitted at the federal antitrust trial that it “frequently” inflates ad prices by as much as 5% without telling advertisers – sometimes 10%.
Marketers, however, believe that the actual number is much higher.
Why advertisers are frustrated. Due to long held suspicions about ad pricing manipulation and a lacking transparency. The industry acknowledges that the search engine is entitled to set minimum prices, but the lack of transparency in how these thresholds are changed over time can have a direct impact on advertiser performance.
Unsavory business. Christine Yang is the vp for media at Iris. She told Ad Week she believes that real fluctuations can be up to 100%. She said:
- “[Google]’s claim of 5% is more conservative to make it seem like the natural ebb-and-flow of a market,” said Christine Yang.
- We don’t even know the extent of [price manipulating]. There’s no regulation, so it’s shady practices. They regulate themselves.”
Why inflating prices quietly is important. Google’s ability to raise ad rates, even without strong competition, may support the Justice Department’s claim that Google has an illegal monopoly. This argument does not apply to Google’s free search engine but it can be used in order to address privacy concerns that may have been addressed if the search industry was more competitive.
What has Google said about it? Google’s spokesperson responded to Dischler after his comments:
- Search ads are priced according to a real-time bidding system where advertisers can never bid more than they want. We are constantly improving ads for advertisers and users.
- Our quality improvements eliminate irrelevant ads, increase relevance, drive greater advertising value, and deliver a high-quality user experience.
Dig deep into the Google antitrust trial update article to get the latest updates from the courtroom.
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