Google Prioritizing Revenue Goals in the Ad Auctioning Process
By this point, the DOJ’s antitrust case against Google is old news. However, after hearing Jerry Dischler’s testimony in court last week, the case certainly merits another look. In his testimony, the Vice President for Google’s advertising products revealed critical information on how exactly Google runs its ad auctions, and chances are it’s not how you originally thought.
How Google Claims They Run Ad Auctions
Ad auctions are the historical method by which Google has displayed ads in response to user searches. Google’s automated auction dictates whether a company’s ad is displayed in the user’s search results, and if it is displayed, where exactly the ad will be displayed in relation to the other search results. To complete this auction, Google weighs a number of factors. After a user enters their search on Google, the search engine’s ads system locates all potential ads that contain the same keywords that the user entered into their search. Based on those results, Google eliminates any ads that do not pertain to the information Google has already collected about the user, such as location or previous search history. During this stage, Google also eliminates ads based on their standing with the organization. In the last stage of the auction, Google weighs the company’s bid, the context of the user’s search, and the quality of the company’s ad and format. Once these factors are weighed, the company’s ad placement is determined, and the user’s search results are generated.
What Jerry Dischler’s Testimony Revealed
With this in mind, one would be led to believe that the process of ad auctions should be fairly automated at this point. Yet, Jerry Dischler’s testimony reveals that the process is in fact anything but automated. Instead of following their stated procedure, Google regularly changes the way they facilitate their ad auctions to sell more search ads. One of the most controversial of these changes is RGSP, a process by which the second-highest bidder would actually take the highest bidder’s place, a process that is thought to potentially inflate bids. To make matters worse, Dischler admitted that advertisers are not notified before Google makes these changes, which are sometimes as large as 5-10%. In defense of the tech giant, Dischler advised that revenue simply played into the decision, it did not serve as the sole motivator behind the decision. However, the former statement stands in conflict with previous testimony from Dischler in which he reported that his team had found creative ways to guarantee that the team met their CFO’s quarterly revenue targets.
What This Means for the Future of Advertising
This most recent testimony from the Google antitrust case places even more doubt as to the credibility of what has historically been both advertisers’ and consumers’ preferred search engine. Depending on further testimony and the legal results of the case, the way advertisers promote their products, and how consumers find those products could be altered forever. To ensure that your firm is staying up to date with best advertising practices, contact BluShark Digital for a consultation today.