Google accused of downplaying ad price manipulation

Google has been accused of downplaying how much it quietly increases ad auctions.

The search engine admitted at the federal antitrust trial that it “frequently” inflates ad prices by as much as 5% without telling advertisers – sometimes 10%.

But marketers are calling the search engine out for being too “conservative” with these figures as they believe the real number is significantly higher.

Why we care. Advertisers are becoming increasingly frustrated with Google due to long-held suspicions around ad price manipulation and a lack of transparency. Although the industry accepts the search engine has a right to set minimum pricing thresholds, the lack of transparency regarding how those thresholds change over time and can directly impact advertiser performance

Shady business. Christine Yang, vp of media at Iris, told Ad Week that she believes the real range of fluctuation can sometimes be as much as 100%. She said:

• ““[Google] claiming 5% is a more conservative number to make it sound like the natural ebb and flow of a marketplace,” said Christine Yang, vp of media at Iris.”
• “The level to which [price manipulations] happens is what we don’t know. It’s shady business practices because there’s no regulation. They regulate themselves.”

Why quietly inflating ad prices matters. Google’s ability to increase ad prices, especially without facing strong competition, could potentially bolster the Justice Department’s claim that Google maintains an unlawful monopoly. While this argument doesn’t apply to Google’s free search engine, it can be used to address concerns like privacy standards that might have been mitigated in a more competitive search industry.

What has Google said? Following Dischler’s comments, a Google spokesperson told Search Engine Land:

• “Search ads costs are the result of a real-time auction where advertisers never pay more than their maximum bid. We’re constantly launching improvements designed to make ads better for both advertisers and users.”
• “Our quality improvements help eliminate irrelevant ads, improve relevance, drive greater advertiser value, and deliver high quality user experiences.”

Deep dive. Read our Google search antitrust trial updates article for all the latest news from the courtroom.