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The Department of Justice (DOJ) filed an antitrust lawsuit against Google last week, accusing the tech giant of abusing its dominance in the digital advertising market and threatening to break up parts of its business.
The US government has said it believes Google should sell its sell-side advertising assets, Ad Manager Suite, a business that accounts for about 12% of Google’s revenue and also plays a significant role in the company’s overall sales. of search engines. This includes not only advertisements in the search environment, but also technologies for embedding advertisements on company websites. Advertisers criticize, among other things, Google for acting with insufficient transparency.
Proceedings in the case are expected to open in September 2023.
Stronger case against Google this time?
Kristina Podnar, a digital policy consultant, said that although there is increased competition in the online advertising market – from rivals such as Apple, Microsoft and social media companies, including the company mother of Facebook Meta – Google still essentially dominates.
“It’s going in the right direction, but can anyone else compete with [Google parent company] Alphabet? Not really,” she said. “I think that’s where the DOJ came from.”
Podnar added that she thinks this is the first time the DOJ has had a strong enough case that will hold.
“It’s about how Google corners the market and how its monopolistic behavior extends across the industry,” she said. “I think the DOJ case has a lot of teeth this time around.”
Not Surprised by DoJ’s Action Against Google
Andrew Savitz, CMO of Azul, a Java platform, said it’s no surprise the DOJ is going after Google.
“Google has been the dominant leader in the ad tech space in the United States and globally for over a decade,” he said. “Just look at its platforms Google Search, Youtube, Google Ads, Google Analytics, DV360, SA360, to name a few.”
While some of the platforms, such as SA360, integrate with rival ad tech companies like Facebook and Microsoft Advertising, the platform is still primarily focused on ease of integration with the ad tech ecosystem. of Google and advertising formats to generate advertising revenue.
He explained that there is a general feeling among businesses that you need to appear on the first page of search engine results (SERPs), whether organically or paid.
“For large companies that are in direct competition with Alphabet companies, it doesn’t always appear to be on a level playing field, because it’s hard to tell whether Alphabets own companies are benefiting others based on how their digital content appears in search engine results,” Savitz said. said.
He pointed out that one of the challenges businesses have faced over the past decade is the decline in organic traffic. The cause is twofold, Savitz said: First, as Google updated the layout and design of its SERPs, organic listings and non-paying opportunities for businesses to appear moved lower on the page. , leading to a reduction in “free” organic traffic.
Second, the increase in click-free searches – users search on Google, and in many cases Google pulls content directly from third-party sites and includes it at the top of the SERP as an instant answer or part of the knowledge pane.
“Searchers get a response, but the websites providing the content don’t get the traffic — Google benefits directly from the content of businesses and keeps searches within the Google ecosystem,” Savitz said.
He said a break from Google’s online advertising business would hopefully increase competition in AdTech, providing more places to advertise and reducing costs.
“Today, with only a handful of key advertising platforms on which ‘everyone’ feels like they have to advertise to reach potential customers, costs are steadily rising, making it harder to be profitable. year after year,” he said.
Related article: How did Google gain a stranglehold on the digital advertising market?
The benefits of breaking Google’s online advertising suspension
Ana Milevskaja, Acting CMO at Productsup, added that more diversity in digital advertising can be a good thing for businesses, as it creates more opportunities to reach more end users at more points of contact. contact.
“At the same time, companies are already struggling to manage their advertising campaigns across various channels and software as they are,” she said. “For as powerful a marketing tool as digital advertising can be, it’s also a very complex ecosystem.”
She pointed out that any potential change in Google’s business would upend the way marketers manage their product data. They will therefore need to have full visibility and control over their feeds to avoid any performance gaps.
Brian Mandelbaum, CEO of Attain, said advertisers and marketers will benefit from this potential disruption as transparency will emerge where it currently does not exist.
“Google will no longer have complete control over inventory, giving advertisers and marketers the right to choose,” he said. “More broadly, there will be creative competition across all of the demand-side platforms that currently exist.”
He added that advertisers and digital marketers would gravitate toward more detailed and concise datasets through first-party data.
“They will also be able to make more transparent decisions because Google would no longer control the entire inventory,” he explained. “Publishers will be able to make more money since their source of demand will increase, which would bring a higher return to competing media companies.”
Related article: Using Performance Max in Google Ads
Will Google still dominate online advertising?
Fiona Campbell-Webster, chief privacy officer at MediaMath, pointed out that Google will vigorously defend the claims and may even decide to divest itself of some of the lines of business or separate all of those lines of business into a different entity.
“If the DOJ wins the case, then if the outcome doesn’t just result in fines and the DOJ demands real restrictive measures and Google’s divestiture of some of its business lines, it could open up a significant opportunities for small and medium enterprises in AdTech,” she said. “This could still translate to revenue benefits for publishers and greater choice of revenue paths for advertisers.”
Savitz said the separation from Google would have a direct impact on online advertising as it would reduce the amount of data available and shared in its ecosystem (Chrome browser, DSP, Google, Youtube, etc.) and auction automation.
“Our business has directly benefited from adopting smart bidding strategies that use AI models and data from across the Google ecosystem to make our advertising more effective,” Savitz added.
Campbell-Webster said that while there is a breakdown of Google-owned and operated properties playing in the AdTech space, the question remains whether Google will still have dominance over the impact of its proposed write-down. third-party cookies by having the ability to reduce the scale and scope of the open web.
“If they do what they promised, it will mean that data for targeting purposes will be focused on companies that have a large number of logged-in users, and buyers will have to buy directly from these companies to gain access. users with enriched data – all to the benefit of Google,” she explained.
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