Google Manipulate Ad Auctions

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Google Tweaks Ad Auctions to Hit Revenue Targets, Exec Says

• Alphabet Inc.’s Google has adjusted its advertising auctions to ensure it meets revenue targets, sometimes raising ad prices by up to 5%, as revealed by Jerry Dischler, vice president for Google’s advertising products, at a federal antitrust trial.
• Dischler Google Executive mentioned that the company often modifies its advertising auctions, which affects the cost of ads or the minimum spend known as the reserve pricing. Google typically doesn't inform advertisers about these pricing changes.
• The U.S. Justice Department alleges that Google has unlawfully maintained a monopoly over online search by paying significant sums to web browsers and smartphone manufacturers to remain the default search option.
• Over 60% of Google’s total revenue comes from search ads, with a growth in search ad revenue every year since 2012.

The problem with that

Auctions traditionally value items based on market demand, but Google Ads' lack of transparency might only benefit Google, not the broader industry or advertisers.

Given Google's dominance and ongoing investigations by the US Department of Justice, more transparency is essential.

What can we do?

We need to always account for additional costs when we budget yearly.

Accounting for hidden factors that impact our CPC, such as:

• inflation cost
• increase competition
• Google auctions reverse prices

By accounting for such hidden costs, we can ensure we plan accurately and have a realistic view of the progression of our KPIs

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