June 26, 2011

Google Ads, Antitrust, and Sour Grapes

A couple of days ago, in "J" is for Jealousy: FTC Investigating Google I suggested that the recently announced FTC antitrust investigation of Google is being largely driven essentially by jealous competitors, and that plenty of competition -- trivial to quickly access -- is available if Google is not your choice.

Today in part two on this topic, let's look at the issue that generated a number of angry "But what about Google Ads? That's where the money is!" retorts in my inbox.

Google's ad serving infrastructure is indeed by far the primary revenue source for the firm. Google pioneered the entire concept of automated Web ad auctions, placements, and associated search and keyword based ecosystems.

So let's explore some of the "popular" accusatory complaints regarding Google and advertising.

--- Complaint: "Google favors its own products in search results" ---

This actually breaks down into two areas -- paid ("Ad") results and natural ("organic") results.

When it comes to Ad placements, it seems completely reasonable that Google would wish to promote its other products and services. The last time I walked into a Home Depot or CVS, their promotions were all for their own array of goods and other offerings, not for competitors such as Lowe's or Walgreens!

So an ad text box at the top of specific, relevant search results noting that, for example, Google Maps is available, doesn't strike me as inappropriate or unfair, so long as other well-placed ad slots are available, and natural search results are honest and fair -- and Google makes an enormous effort to assure the legitimacy of their organic results, even in the face of continuous external "black hat" SEO (Search Engine Optimization) efforts by other firms to manipulate them.

And as far as natural results are concerned, how can we blame Google if their products organically rise to the top?

For example, I just did a simple, no Web History, not-logged-in query for "maps" on Google Search. The top natural result is Google Maps, followed by Yahoo! Maps and MapQuest, with no paid ad above at all. If I do the same search on Google News, the top result at the moment is a political story about North Carolina, with a paid Bing Maps ad above the natural results.

Now let's go over to Microsoft's Bing and do the same search. The organic results: Google Maps on top, then Yahoo! Maps, then a Bing Maps image of Santa Clarita, California (not where I am!), then MapQuest.

Notably, Google Maps is (at this moment) the top natural result for both Google Search and Bing Search. Since Bing seems unlikely to favor Google Maps for any nefarious reason, the conclusion seems clear that for the rankings right now, Google Maps comes out on top, even as determined by Google's main search competitor.

Google, Bing, and other major search engines work diligently to assure the veracity of their organic results. To not do so would be enormously risky and self-destructive. Claims that natural, organic results are inappropriately favoring Google (or Bing for that matter) are just patently unreasonable and untrue.

--- Complaint: "Google collects too much information from their ads and keeps it forever" ---

The nature of Web and Internet technology dictates that servers are provided with significant data related to user connections and activities. Google's services cover a wide range, and so Google does receive a great deal of data.

Of course, your ISP has access to every unencrypted byte that you send or receive, including commonly unsecured file transfers, P2P activities, Voice over IP calls, and everything else, including in most cases knowledge of every Web site and every URL that you visit.

The few giant, dominant U.S. ISPs have access to vastly more comprehensive data on most Internet users than any single other firm, including Google.

Ultimately the issue is, do you trust any given entity to handle your data appropriately? Finding ISP policies on deep packet inspection (DPI) and related data retention issues can be a challenge.

On the other hand, Google lays out very clearly how long they retain various kinds of data, and (in direct challenge to the "they keep everything forever" meme) their schedules for data anonymization and deletion, which generally seem to strike a good balance to both protect users and allow for reasonable use of data for security, quality assurance, and R&D purposes.

If you want something to worry about, spend some time thinking about governments' efforts around the world, including here in the U.S., to mandate non-anonymized data retention for "on demand" access by law enforcement and other agencies.

For that matter, it's certain large ISPs, not Google, that have been found in the past to be providing user data to various government organizations on a "nod and a wink" basis, while Google has openly battled overly broad and legally suspect government data demands.

Now, if someone is going to simply assert that Google is outright lying about how they handle data (which would be an incredibly stupid thing for Google to do, and Google people aren't stupid), I'll gladly point you at conspiracy-oriented Web sites that you might enjoy, explaining how the moon landings were faked and the concept of transistors was stolen from a crashed UFO. Happy paranoia.

--- Complaint: "Google Has a Web Ad Monopoly" ---

Google serves a lot of ads on a lot of sites. But a monopoly? Uh, no. In fact, even a casual look around the Web, including major sites of all sorts, shows an incredible array of dedicated and shared ad availabilities and ad networks that are totally unrelated to Google.

Google doesn't have a gun to anyone's head, forcing them to buy or use Google ads. The fact that so many Web sites and parties wishing to place ads have chosen to use the Google ad networks is a function of the perceived value of those ads and conscious decisions to not similarly patronize other ad systems and networks. If ad buyers chose to focus their advertising dollars elsewhere, Google competitors would grow even larger.

In other words, advertisers perceive the Google ad systems as providing the most "bang for the buck" and as being the most desirable, and specifically choose to buy Google ads tied to various Web sites and/or Google search results, instead of buying particular ads from the many available Google competitors who can also provide excellent advertising opportunities on a vast array of sites.

Then, because so many advertisers have made the same choice -- because everyone naturally wants to be top dog -- we hear loud "sour grapes" complaints since obviously not every advertiser can have their listings and ads at the apex of results for any given Google search.

Just as users can instantly switch between the Google and Bing search services, advertisers can similarly "vote with their dollars" and use non-Google ad services. Those Google competitors run enormous numbers of ads and they'll be happy to work with you. If you're concerned about Google having too large a chunk of the ad market, then support those alternatives.

I can't help but sense an undercurrent of greed in many of the complaints about Google that have led toward the current FTC investigation.

Some Google competitors are upset because users and advertisers have simply found Google's search, ads, email, and other services to be superior. Perfect? Of course not. On the scale that Google operates, even a tiny percentage of users having problems is going to be noticeable, and Google still needs very significant improvements in its user communications and support structures.

But to an extent unparalleled in the history of human knowledge and commerce, the ability of persons to easily and quickly choose among competing services, literally with a few quick finger movements on a keyboard and mouse, is a major part of what makes the Internet such a marvel.

The vast majority of Google users of all stripes are extremely happy with its services, and those who aren't can switch with ease.

The jealousies and sour grapes of Google competitors, other adversaries, and in many cases greedy advertisers, are the driving forces that appear to have been the primary triggers behind the FTC's new investigation of Google.

That this has occurred in today's toxic political environment is discouraging, but unfortunately not at all surprising. The weaponry of economic and political destruction is all too easily wielded now, with little concern for potential collateral damages.

In the case of FTC vs. Google, we will see if saner heads prevail in the end.


Posted by Lauren at June 26, 2011 11:40 AM | Permalink
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