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.


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