Ads for Google Products Top Search Results: Report
An independent study found 91 percent of Google searches for physical products brought up a Google product as the top ad result. Google says it plays fair and the practice doesn't mean other companies have to spend more on advertising.
The Wall Street Journal study wasn't about the search results themselves, but rather the ads that appear on the results page. It took 25 tech hardware products from carbon monoxide detectors to WiFi routers and carried out 1,000 searches for each on a computer, having first blocked its past search history to avoid distortion.
On all but two of the products, the most common top ad result was something sold by Google or a sister company. For 11 products, Google got the top spot for all 1,000 searches. Across all the products, 43 percent of the searches produced Google-related products for both the first and second ads. (Source: wsj.com)
Auction Determines Ad Choice
Unlike newspapers, which generally charge a flat rate for a particular ad space, Google effectively runs a mini auction every time it generates a results page with ads on it. However, it doesn't simply give the slot to the highest bidder: it also takes into account how relevant the ad is to the particular search query.
That process is somewhat complicated by the way Google (through its parent company "Alphabet") is now so heavily involved in tech hardware production and sales, such as its own phone or smart thermostat.
Google says it has rules in place to stop it getting an unfair advantage and that it only gets the top spot if it has the best combination of a high bid and a relevant ad. Although it effectively pays itself the money, it says the cash is counted towards the relevant department's marketing budget.
Results Change After Journalists Ask Questions
It also says that when an ad slot goes to a rival company and it calculates the price that company pays, the calculation ignores how much Google had bid. That might mean the rival company wasn't charged the full amount it had bid. (Source: bbc.co.uk)
Rather oddly, just a week after the Journal showed its findings to Google, many of the ads for its products stopped showing up. When the newspaper reran the experiment, Google products only took the top result 15 percent of the time.
What's Your Opinion?
Does it matter that Google effectively acts as both a seller and a buyer of online ads? Do you buy the argument that the Google product is so often rated as the most relevant for a search term? Should Google be under less pressure to select relevant results with ads as it does the search results themselves?
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Comments
Not surprised
I am not surprised by these findings; the company motto that Google once followed "Don't be evil" does not seem to apply these days - this being a great example.
What I found most interesting from this article is that the Wall Street Journal did the same test after the main story broke only to find the results much different. That goes to show you something is amiss - likely on purpose.
I personally have tried to advertise with Google a few times in the past (via Google Adsense) - perhaps 10 years ago and it was INCREDIBLY expensive. If you don't have a monthly ad budget of $10,000 or $100,000 you will never get any clicks in the auction because there is way too much competition.
In my tests, a click costs 50 cents to $1 or more (with $1 or more being the norm); the kicker is that you typically need 1000 clicks on an ad before someone will actually buy the product. Put another way: if you are selling a product for $29.95 it will end up costing you $1000 to make $29; meanwhile, Google gets insanely rich. The only thing Adsense might be good for is branding or perhaps lead generation - if you can afford to bleed.
Google Ad Manipulation
Yawn! What else is new?
Agree that G ads are WAY expensive
I run an online business and kept getting cards in the mail from Goolge advising me that I had $150 in ad credits so I should start a campaign. I called them and got a spiel about how much better G ads are than Facebook, then they asked how much I wanted to spend. I said $150. I was told that it was pointless. It would buy me essentially no impressions at all.
Does anyone actually click on the ads?
I have an unconscious avoidance of clicking on any google ads. I just hope they keep identifying them as ads. I realize that the masses will click away though.