Marketing Expert Warns of Google Ad Changes Creating Uncertainty

An expert testifying on behalf of the federal government in an ongoing antitrust trial against Google has revealed that Alphabet Inc.’s Google has discreetly implemented modifications to its advertising platform. These changes have considerably restricted the level of information available to marketers regarding the allocation of their expenditures.

“Google controls the rules and influences the results of its auctions, and these auctions are a black box for advertisers,” said Columbia Business School marketing expert Kinshuk Jerath, who testified in federal court in Washington as part of the U.S. Justice Department’s case. .

In September 2020, Google changed what information it provides advertisers about text ads that appear at the top of the search results page, Jerath said. The change to so-called search query reports reduced the data advertisers receive by at least 20 percent of their text ad spend, he said. Google said at the time that it made the change to protect user privacy.

The result is that advertisers now have less information about the ads they’re buying and, along with another Google change, it’s also harder for them to opt out of certain ad auctions, Jerath said. to higher prices.

The Department of Justice claims that Google has sought to maintain a monopoly in online search and online search advertising. About two-thirds, more than 60%, of Google’s total revenue comes from search ads, a Google employee previously testified, more than $100 billion in 2020. Since 2012, the company’s search ad revenue growth has been in the “high teens” every year, according to documents released by the Justice Department.

A Bank of America Corp. executive called the move “one of the most egregious examples of Google stripping advertisers of transparency under the guise of privacy,” Jerath said, citing internal emails produced as part of the lawsuit.

The limited information in the reports hurts advertisers because it’s harder for them to know which keywords they’re buying and which ones are useful to them, he said.

“This means advertisers weren’t even told what surveys they were buying with 20 percent of their spend,” he said. “You should have a right to know that I spent my money on this.”

Google also made another change called “expanded exact search,” which adds keywords like synonyms or misspellings to any terms an advertiser wants to buy from a text ad. Google doesn’t allow advertisers to opt out of extended advanced search except for negative keywords, or words they don’t want to buy ads for, Jerath said.

“It takes time to let go of an extended match,” Jerath said. Extended Exact Match “makes it easier for advertisers to participate in auctions, but much harder not to participate in auctions.”

The combined changes will lead to “fatter auctions and unwanted ad spend for advertisers,” Jerath said. “Advertisers are losing control.”