Google quietly manipulates ad prices, drawing criticism and accusations of downplaying

Google has admitted to quietly tweaking advertising auctions to meet revenue targets, which has raised concerns and allegations of downplaying the extent of price manipulation.

During the U.S. v. Google antitrust trial, Google Ad executive Jerry Dischler revealed that the search engine frequently adjusts ad auctions, increasing the cost of ads and reserve pricing by as much as 5%, and sometimes even up to 10%, without informing advertisers. This admission has stirred controversy within the digital marketing community.

Controversial figures and accusations of conservatism

While Google acknowledges a 5% increase, marketers argue that this figure is conservative, and the actual inflation rate may be considerably higher. Christine Yang, Vice President of Media at Iris, believes that the range of inflation can sometimes exceed 100%. Some have observed significant price hikes, with the cost per click (CPC) for certain campaigns surging dramatically.

Lack of transparency and regulatory concerns

The lack of transparency in Google’s pricing adjustments has frustrated advertisers, and some accuse Google of self-regulation in its practices. Giovanni Sollazzo, CEO of Italian media agency Aidem, noted that CPC for Google search brand campaigns can increase far beyond 5%, sometimes reaching three to five times higher.

Impact on Google’s antitrust trial

Google’s manipulation of ad prices is a central point in the U.S. Justice Department’s case against Google, alleging illegal monopolisation of the online search market. This manipulation is seen as a way to meet revenue targets set by CFO Ruth Porat and has raised concerns about Google’s market dominance.

Google’s response and the need for transparency

Google maintains that search ad costs result from real-time auctions where advertisers never pay more than their maximum bid. The company claims to continually work on improvements to benefit advertisers and users.

As the trial unfolds, the debate over Google’s ad pricing practices underscores the need for greater transparency and oversight in the digital advertising industry. Advertisers and industry experts are calling for more clarity and regulation in an era where platforms like Google wield significant influence over the advertising landscape.

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