Exec Claims Google Increases Ad Prices to Meet Targets

In the Department of Justice’s (DOJ) case against Google, a current Google executive made the claim that Google tweaks its advertising auctions to meet revenue targets on a regular basis.

What is Google doing?

During its ongoing federal antitrust trial in the US, Jerry Dischler (vice president and general manager of ads) testified that Google adjusts its advertising auctions to meet its revenue targets. He went on to add that Google tends “not to tell advertisers about price changes”.

These adjustments are frequently carried out and include price increases of around 5% (and in some cases 10%) with advertisers not being informed. By raising the rates or minimum spend required to secure ad placements, can affect which ads appear at the top of search results.

This could have huge implications in the antitrust case as if Google are raising these prices without any competition, then it can strengthen the Justice Department’s case that Google indeed holds an illegal monopoly and uses underhand tactics to achieve its goals of being the world’s leading search engine.

Why are Google on trial?

The Department of Justice (DOJ) states that their case is “about the future of the internet and whether Google’s search engine will ever face meaningful competition”. Currently, Google holds around 90% of global search. This case makes the claim that Google has monopolised the market by brokering deals to make its search engine the default on many devices. This in turn makes competition difficult for smaller search engines to level the playing field.

Google has refuted these claims and proposes that the reason they have a high market share is that they are offering a superior product than that of their competitors. They also argue that on Windows-powered devices, the default search engine is Bing (which holds around a 5% market share). Furthermore, they argue that the most used search query on Bing is “Google”.

How can LOCALiQ help you with ads?

Worried about Google eating up your search advertising budget? At LOCALiQ we manage numerous search engine marketing campaigns for our clients and we optimise them to generate the most leads at the lowest cost per lead. Our intelligent, proprietary optimisation technology takes the guesswork out of search ads and automatically makes changes to your campaign to ensure it is running at the most optimal level possible.

With our technology, your campaign’s keyword bids are optimised twice daily. The bids are increased on the keywords driving the most conversions and lowered on the ones that aren’t, meaning that our technology is potentially making thousands of changes to your campaign, every day!

Here at LOCALiQ UK, we want to ensure that you have as much information about paid advertising as possible. We have compiled our search benchmark report from data compiled from our own paid search campaigns over the past 2 years.

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