Advertisers should raise their voices against arrogant Google

In this guest post, Harvard Business School’s Benjamin Edelman argues that Google’s dominance of the online ad ecosystem leads to a bad deal for advertisers and arrogance from the web giant.

When it comes to web search, Google dominates. The crux of an online advertising service is the place where ads are shown. Historically, Google has offered highly-desired placements, namely ads adjacent to users’ search results. But these days, search pages are just one of many places showing Google ads. And that’s where problems creep in.  

qnatasFor example, if a user searches for or enters “www.qnatas.com” (s.i.c.), a slight misspelling of the airline’s domain name, the user receives a page of Google pay-per-click advertisements — most prominent, a link to the genuine Qantas site. To any reasonable user, that link is incredibly tempting, providing quick access to the site the user intended to reach. But down that road lies peril for the advertiser: Measuring apparent advertisement performance, the advertiser will conclude that such clicks often yield sales – grounds for raising its bids when purchasing advertisements from Google. In fact it’s all a ruse: Had a Google partner not registered the typosquatting domain, the user’s browser would have presented a suggestion that led the user to the desired site without Qantas incurring any advertising expense. Far from offering a good deal, these typosquatting domains can be the worst deal. So too for various toolbars, spyware/adware popups, click fraud, and other scams that trick advertisers into overpaying.

Concerned advertisers could reject all traffic from Google’s “Search Network” – instead, buying placements only on Google’s own properties. But then advertisers lose access to Google’s best partners – sites like the Daily Telegraph and Sydney Morning Herald. By bundling the bad with the good, Google makes it hard for advertisers to escape Google’s bogus placements.

Uncovering these problems, a concerned advertiser might try to hold Google accountable for bogus ad placements, unfair prices, and other infractions. But Google’s terms and conditions say Google “disclaims all warranties [and] guarantees … regarding … costs per click, click through rates, … clicks [and] conversions.” Furthermore, any advertiser wishing to pursue a dispute with Google must accept a tortured procedure: Google’s contract (provision 10: “Miscellaneous”) requires all Australian advertisers to send their formal complaints to Google’s Dublin office – one of the few places further from Australia than California! And when advertisers complain to Google, they must do so by “confirmed facsimile with a copy sent via first class or air mail or overnight courier” – even as Google claims the right to reply with a simple, ordinary email.

Google’s treatment of Australian advertisers smacks of arrogance, but Google can afford to be arrogant: Google serves 88% of Australian searches, so Google knows advertisers cannot easily take their business elsewhere. However, advertisers can raise their voices to oppose Google’s unsavory terms. If your site is being penalized, your ads de-prioritized, or your prices inflated, you should let your legislators know. Only speaking out can restore balance to the online advertising marketplace.

Benjamin Edelman is an assistant professor at Harvard Business School. He’s in Sydney this week for the International Advertising Association’s Digital Download event, which runs from 8:30am until midday on Thursday December 2.

DECEMBER 2 UPDATE: Google spokeswoman Courtney Hohne has offered the following response:

After seeing Professor Edelman’s guest post yesterday I wanted to provide a response from Google, since many of his claims are patently false.  In fact, many of these claims have been proven inaccurate in the past by several reporters in the US and in Australia.

Fact: Advertisers have complete control over where their ads appear on Google’s network of publisher sites.
Prof. Edelman contends that Google makes it hard for advertisers to control on what sites their ads appear. This is absolutely false. Advertisers can specify sites where they wish to show their ads using placement targeting, — and specify sites where they don’t wish to appear by excluding sites or categories. Advertisers can even choose to opt out of parked domains — the exact type of webpage that Prof. Edelman refers to in his post. For ads that appear on other sites through Google’s AdSense network, advertisers can review their Placement Performance report, which lists the specific domains and URLs where the ads have appeared.

Fact: Advertisers do not pay for invalid clicks. Google has the industry’s most stringent policies on invalid clicks.
Prof. Edelman claims that advertisers pay for clicks on their ads that are fraudulent or the result of deliberate deception. This simply isn’t true. At any time an advertiser can see in their account which clicks have been classified as invalid and are therefore not charged to them.  In fact, Google leads the industry in developing technology that protects advertisers from click fraud, and we’re innovating on and improving it all the time.

Google also has a zero-tolerance approach to publishers who engage in click fraud. If we determine that an AdSense publisher may pose a risk to our AdWords advertisers, we will disable that account to protect our advertisers’ interests. Publishers whose AdSense accounts are closed because of invalid click activity are not permitted to have another account.

Fact: Advertisers can leave Google and take all their campaign data at any time if we’re not helping them meet their business goals.
Prof. Edelman claims that advertisers can’t take their business away from Google easily. Not true. On the web, competition is only one click away. We want to earn people’s loyalty by building good products and constantly improving them, not by locking them in artificially.  Our policy is that advertisers own their data. They can export data from AdWords into CSV files and utilise the data as they see fit in a matter of minutes, which includes importing it into Yahoo, Bing, or other search advertising systems. There are no restrictions on how advertisers can use the data that they enter into Google’s ad system.

As the online advertising market has grown, so have advertisers’ choices. The vast majority of our top advertisers also advertise on other search engines and in a range of other on- and off-line media. They will stay with Google as long as they continue to get a high return on their investment. Just as there are no costs to users to using another search engine, there are no costs or contracts to prevent advertisers switching from Google.

Fact: AdWords advertisers in Australia get prompt support online.

There are tens of thousands of AdWords advertisers in Australia and they have the same support resources available to them as advertisers anywhere in the world. If they have questions about their accounts or their terms and conditions, they can go to the AdWords Help Centre to search and browse hundreds of articles and post a question to the AdWords Help Forum, which is monitored constantly and answered directly by Google experts. Google also offers a number of other types of online support, such as email, live chat, or phone support.

Finally, I believe your readers deserve to know the full story behind people writing guest posts on Mumbrella.  We absolutely welcome discussions about making it easier for advertisers to use online advertising and online media with confidence, but it’s important that these discussions are based on accurate information and that the motivations of the participants are clear. Professor Edelman is a paid consultant to Microsoft and other major corporations. He says as much in his own biography. A number of reporters have drawn the connection between Professor Edelman’s criticisms of Google and his financial support from Microsoft (AdAge, 10/13/09; Washington Post, 6/4/09). It seems reasonable that this information would be included in your disclosure about Professor Edelman as necessary background for your readers.



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