Medibank calls out Google AdWords’ costs and policies in digital platforms inquiry
Health insurer Medibank has called out Google’s market share and the technology giant’s Trademark Adwords policy for driving up marketing costs and not allowing the brand to have meaningful control of its ad spend.
In its submission to the Australian Competition and Consumer Commission’s digital platforms inquiry, the insurance company called for an appropriate metric which would include consideration of both market share and concentration, as it contributes to users’ dependence on the platform and Google’s profits.
The company has said there are now no realistic alternatives to Google
“We consider there are now no realistic alternatives for various users in this ecosystem, including advertisers. Overwhelmingly, many users in this ecosystem only use or concentrate their use on Google for these services,” it said.
“We also consider that Google’s current market share is a substantial contributor to driving up a market for the cost of those services without much by way of effective commercial or legal constraint.”
Medibank said the market dominance of Google has left Medibank forced to invest more than previous decades to obtain and retain customers, “often at a substantial and unknown escalating cost” and with decreased return on investment.
The submission goes on to attribute Google’s Trademark Adwords policy, which became effective from April 23, 2013. The amendment to the policy meant Google would no longer stop advertisers purchasing and using trade marks as keywords in Google Ads in Australia.
“The previous policy meant that ‘what was ours was ours’ and that our brands could only be properly bought and used by us. The change in policy meant that ‘what was ours was up for auction’ and our brands could properly bid on and used by others, including competitors; indeed, anyone could bid on brands which had trade mark registration and therefore protection,” the company wrote.
“Google’s commercial pricing approach of using an auction means that we are unable to exercise meaningful or full control of our spend (that is, we are forced to bid on our own brand). Branded search forms part of an auction and where there is increased competitor activity targeting the Medibank brand, this simply means that the cost inflates, and as a result our cost per click and cost per acquisition increases.”
While Medibank admitted there were large benefits in working with Google, namely data and key insights, it said it did not have full visibility on best performing organic terms for brands and competitors to optimise spend towards.
“Google is unwilling to provide data on what competitors are spending and the size of the market, except an aggregated and anonymous ‘Top 5’ spend. It is one of the only media channels for which we cannot gain visibility for competitive spend,” it added.
Medibank should have no problem covering the rising AdWords costs with their rising premiums!
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So here’s and insurance company complaining about:
a) “substantial and unknown escalating cost”
b) “no realistic alternatives for various users in this ecosystem”
c) “users’ dependence on the and profits”
d) and lack of “visibility for competitive spend”.
Good god.
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“How dare Google profit from us trying to screw our customers!”
Private health insurers must be laughing about the banking royal commission taking the focus off them during rate rise season.
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Mediabank, like other brands, need to consider the (lifetime customer) value of a customer and look beyond the cost of one channel alone. Google Adwords may see more investment and higher CPC’s, however I would bet it’s still their most cost effective channel for converting new customers.
Of course, all of this is pointless unless insurance companies start actually delivering a great customer experience and attracts and retains customers.
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Wah wah wah Google have a monopoly, we do not.Yet. Wah wah wah
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How dare market forces and the fundamental law of economics (supply and demand) dictate pricing and how dare a publisher not breach confidentiality of their clients by telling us what they spend. How dare they….
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Agree with Medibank (and no, I don’t work for them or in the industry) that left unchecked the ultimate sufferers will be us, the consumers, as the rising costs of an acquisition will get passed on.
It’s offensive that Google allows competitors to bid on other companies brand names. That practice alone would see tens of millions of advertising dollars in Australia being funnelled to them that should stay in the companies pocket, or heaven forbid go to another medium that isn’t Google.
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In a last touch attribution world Google always wins funnily enough. It is hard to feel sorry for Medicare though, my premiums go up every year without any decent justification (maybe they will mention Google PPC as a reason next year)….
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… and this coming from a business that gets 30% of its income in the form of a cheque from the government.
Pull the other one.
(Actually you had better not – it’s probably not covered by some loophole.)
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