Twenty-five years ago, search transformed the digital world. 

At its inception, Google was a fledgling company that revolutionized the Internet with its search engine. It built and expanded its empire thanks, in part, to the ruling in the antitrust case against Microsoft. The tables have turned today, and Google is on the other side of the bench.  

In early August, Google’s loss in the search antitrust case decision marks a landmark moment for the search industry. As it stands, Google forces user searches to be funneled to its search results page, squashing innovation and extracting tens of billions from search advertisers and publishers in the process. 

The industry now awaits proposed remedies to bring competition to the search market. The door is finally open for browsers and other search properties to innovate and improve the consumer search experience in search advertising by shaping consumer intent.

The Rise of a Tech Giant

In 1998, Larry Page and his Stanford friends invented a brilliant search engine that allowed anyone with a web browser to access relevant results to any query instantly and for free. Google now dominates search and most of Big Tech. 

At the time, the company’s algorithms were so much better than competing search engines that the word “Google” became a verb that was, and still is, synonymous with “search.” 

As Google grew, went public, and eventually added free software like Gmail, Maps, and Chrome, it extended its digital advertising empire. At the time, the only losers seemed to be the news and editorial publications who traded analog ad dollars for digital pennies when they raced to give away content for traffic. 

However, to grow search ad revenue, Google began locking out competitors, raising ad rates, and extracting value from the user experience. As it extended its monopoly into new markets over the last ten years, Google’s search revenue has grown fivefold. 

Unlocking Innovation on the Open Web

Google’s stronghold on the search advertising market is largely due to its exclusive search distribution contracts, which force partnerships like Apple to outsource search experiences to Google, making it the default search engine.

Conversely, “Search on the Open Web” is when a person searches for relevant results outside the search engine, such as on the homepage of a privacy browser like Firefox or through a shopping app like Klarna. In 2023, the size of the Open Web search advertising market was $90-100 billion. Over 90% of that revenue went to Google, according to evidence revealed in the U.S. v. Google antitrust trial.

Judge Amit P. Mehta of the U.S. District Court for Washington D.C. determined that Google’s exclusivity prevents the largest Open Web search properties from controlling ad selection or experimenting with their results. The tech conglomerate is also guilty of removing search results and ads provided by Google. 

Now that Google has been found liable, the door to competition, innovation, and experimentation has opened. Most importantly, the consumer will benefit because the industry is entering a new era of curated search results. 

How Can the Consumer Benefit?

Search on the Open Web opens the door to innovative, generative AI solutions. When Open Web search properties compete to experiment with search, consumers benefit from a more modern, personalized, relevant, and dynamic experience. With a curated search experience, users can find the best result or offer from the browser or property they are searching on and skip the SERP altogether.

Google’s exclusivity contracts currently prohibit this innovation. As a result, Open Web search properties generate less than 10% of total Open Web search revenue. Today, few Open Web search properties can refuse to forgo Google ad revenue altogether — but that is poised to change. 

What’s at Stake for Advertisers and Publishers?

The Court is poised to require Google to compete in search to create incentives for open Web search properties to innovate the search experience. Breaking Google’s exclusivity would bring transparency and efficiency to advertisers, as publishers could show their search results or ads or curate those from direct sources.

Whether it’s privacy search or Generative AI, everyone from DuckDuckGo to Apple Safari to your favorite shopping app could show Google and their own search results and make revenue from their search media.

For advertisers, tens of billions of dollars in wasted ad spend is at stake – as well as the return of transparency and control over their budgets. With Google’s exclusivity deals prohibited, these advertisers can “go direct,” reducing costs and gaining transparency.

The Future of Search Will Be Curated and Driven by Consumer Intent

Search on the Open Web will more effectively serve the needs of consumers in today’s increasingly fragmented and modernized search journey.

The Court’s decision suggests that it will fashion the remedy most likely to create competition in the search results and ad markets, similar to the Microsoft remedy in the early 2000s.

A potential structural remedy, such as the divestiture of Chrome and Android, would incentivize Google to participate in search markets where competitors produce innovative user search experiences and deliver transparency and efficiency to advertisers.

However, the remedy phase plays out, and one thing remains certain: the future of search will be built around valuable moments of consumer intent that can open up the market for $500 billion in consumer spending.

The post Back to the Future of Search: Google’s Loss In The Search Antitrust Trial Unlocks Innovation appeared first on AdMonsters.

Our interest in the federal government’s antitrust suit against Google took a huge dive when we learned it would be centered around search. While mainstream publications trotted out the tired descriptor “landmark” for the headlines when the suit became public, many of us in the industry shook our heads and sighed.

Time and again, we’ve seen that the dominance of Google’s search engine is a consumer preference. And even then Amazon has been making gains on Google because consumers are going directly to the e-commerce giant for searches (particularly on mobile devices). Trying to reframe the Microsoft antitrust suit (guess the feds heard the ‘90s are back!) for Google search is a fool’s errand, and we see this suit (as is) going down in flames.

Why oh why did the feds spend six months focusing on Google’s search business? Well, reporting suggests that Attorney General William Barr thought the ad tech angle was too complicated and not sexy enough to sell… Sell to whom? 

Yes, this is an antitrust suit in search of a reason to exist. You can imagine Barr frowning at his desk and muttering, “I know Google’s a monopoly; I just don’t know how!”

This reeks of a political shakedown similar to the constant beating of the “Repeal Section 230!” by prominent conservatives in and out of government. A repeal of Section 230 would actually accelerate the supposed bias against and censorship of conservatives, because the social platforms would be liable for published content and would have to take extreme mitigation measures to avoid legal action. Repeal is an empty threat, but it sends a message, especially coming from people in office—be “nicer” to (cough, promote) conservatives and their causes, or we will give you headaches.

The antitrust suit feels like similar blackmail—a conservative government demanding Google prop up its causes or suffer the nuisance of bogus legal maneuvers. Fighting the suit means bumping up legal resources (potentially ponying up more lobbying cash) and suffering bad press and sour public sentiment. The government already received the “landmark case” headlines it was looking for.

The situation is an abuse of government power that at the same time kicks the legs out from a real and deserved look at anticompetitive by Google in the ad tech space. There are several papers laying out anti-competitive practices in Google’s display and video ad tech business. Even the monster-sized Congressional inquiry/report featured criticism about Google’s ad tech practices and using its girth to control industry groups, from W3C to the IAB. And search is tied to this through the promotion of AMP pages, a framework that may be open-sourced but still with Google controlling the gates to monetization.

Let’s be clear—we are not “rooting” for Google to lose an antitrust case. However, within Google’s ad tech business we see a great deal of conflicts of interest, questionable practices, and unreasonable challenges faced by our publisher base. We merely think an investigation is warranted—one that’s driven by the actual situation, not what appears to be a politically motivated shakedown.

But this ain’t over. We’ve been telling you for some time that all 50 states’ attorneys generals were building a parallel antitrust suit against Google. The state AGs and feds were talking about joining forces, and 11 (Republican) state AGs jumped on the fed suit. (Texas AG Ken Paxton, who seems to be chief spokesperson for these state AGs, was just accused of bribery by two whistleblowers—that he subsequently fired!) 

A joint statement from several AGs—from Iowa, Nebraska, Colorado, Tennessee, New York, North Carolina, and Utah—that declined to join the fed case announced they were forging on with their investigation, planning to close up pieces of it in the next few weeks (after the upcoming elections…). They announced a plan to conjoin with the federal case if they decide to file—and indeed the federal case is open to amendment, with reports suggesting it will expand. 

The Washington Post’s background sources suggested that not all the attorneys were comfortable with the federal direction of the case, “while others fear the potential for a disruption in the lawsuit in the event that President Trump loses the 2020 election — a result that would shake up the federal government’s ranks and delay what is widely regarded as one of the most significant antitrust lawsuits in decades.”

Since the World Series is on, let’s go with the baseball analogy—this is the first inning for the Google antitrust suit, and the federal government just walked the first 10 batters or so. There’s time for the state AGs (or U.S. voters) to make a major switch at the mound.

The post A False Start for the Google Antitrust Case appeared first on AdMonsters.

The government probe is being led by Texas Attorney General Ken Paxton, who said it will focus on Google’s “overarching control of online advertising markets and search traffic that may have led to anticompetitive behavior that harms consumers,” according to Reuters

In response, there’s an entire blog post, written by a VP, Product Management at Google denouncing the Attorney Generals’ claims, arguing that, “Competition is flourishing, and publishers and marketers have enormous choice.” Sure, there are loads of players in the space, but is it a level playing field?

Surprising to no one (but Google apparently) ad tech executives can think of a gazillion reasons why the market is unfair and leaning in Google’s favor, including the ad titan’s stronghold of search and acquisitions of seller tools like DoubleClick and AdMob, among many other practices, according to Reuters.

According to eMarketer, in 2019 Google is positioned to remain the biggest digital ad seller in the world, accounting for 31.1% of spending, which is equivalent to $103.73 billion. So when the Google blog post mentions companies like Facebook and Google as competition it makes sense, especially in the US where all three eclipse the competition.

So when the post mentions ad tech leaders like Telaria, Rubicon Project and The Trade Desk, who rake in millions from ad spend, we’re not really talking about competition here now are we? Leaders from the Trade Desk and Telaria responding to CNBC Markets, note that since Google has such a long arm across the entire ecosystem that it’s really not a free and open pool they’re swimming in.

Advertisers feel that Google exerts too much power over rates and favors their own services.

Publishers see the irony in Google’s rebuttal as well:

Literally anyone in ad tech knows this blog post is a giant PR joke. I’ll file this one next to how much FB cares about privacy. https://t.co/8qWl8qmjUS

— Stephanie Layser (@slayser8) September 13, 2019

If Google were forced to break up, what might the future of ad tech look like? Would Google have to spin-off search or YouTube? And exactly what would that look like?

Would it mean that companies like The Washington Post (which really is Amazon after all) would have a real chance at garnering a reasonable market share with the new ad tech platform they launched this week called Zeus Prime (yeah, seriously we didn’t make this up) a self-service, real-time ad-buying tool aimed at other newspapers? Or would it mean that publishers would no longer be at the mercy of the walled gardens? Or would publishers build walled gardens of their own?

Depending on who oversees—the FTC or DOJ—Google’s antitrust case, we could end up with things remaining exactly as they are. You do remember that the FTC did approve Google’s acquisition of DoubleClick back in 2007, don’t you?

Whichever way the cookie crumbles, the ad tech ecosystem we know (and love/hate) today will invariably change, hopefully for the good toward an open and impartial marketplace.

The post Does Google Really Not See Their Digital Advertising Dominance Is a Legit Thing? appeared first on AdMonsters.