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Australia’s competition watchdog says Google has a monopoly on online advertising – but how does it work?
Jul
In the pre-digital world, advertising media were mainly press, radio and television.
Today, digital advertising has surpassed these channels, permeating our desktops and laptops, smartphones, tablets and many other internet-connected devices. And perhaps the biggest player in the online advertising space is Google.
Australia’s competition watchdog, the Australian Competition and Consumer Commission (ACCC), says Google currently dominates the country’s online advertising market and should therefore be brought under full control. stopped.
The ACCC maintains that over the past decade Google’s advertising technology has advanced to the point where it has become anti-competitive.
The lion’s share
IN report The ACCC said Tuesday that Google has achieved market dominance through its massive data advantage. The tech giant collects expansive amounts of information about people using Google Search, YouTube, Gmail, Google Calendar, Google Docs, Google Contacts, Google Sites, Google Meet, Google Chat, Cloud Search and more.
AP
The watchdog estimates that 80-90% of all online ad impressions in Australia came through at least one Google product in 2020. An “ad impression” is created when an ad is displayed on an app or website, and is a benchmark that advertisers employ to know how many times an ad has been shown.
In featherlight of these estimates, it is protected to say that Google has the largest share of the Australian digital advertising market, with spending reaching AUD 9.5 billion last year.
The ACCC has recommended a up-to-date industry code to make the end-to-end advertising process more lucid. It also wants to impose rules on how user data is collected for digital advertising and how service fees are calculated.
Full list The aim of this initiative is to curb Google’s potential monopoly position in the digital advertising market.
What does Google say?
In response, Google said the ACCC had failed to take into account other online advertising channels available to Australian advertisers, such as Facebook, Twitter and Snapchat.
Google also highlighted PwC report which estimated that three-quarters of the tech giant’s advertising customers in Australia were tiny and medium-sized enterprises (SMEs) – and that Google’s services contributed A$2.4 billion a year to the Australian economy.
Google spokesperson reiterates company’s willingness to work with ACCC to create ‘hearty advertising ecosystem’ Guardian.
Google’s winning formula
It may be apocryphal that in the early days of Google, when their only product was a revolutionary search engine, a business consultant is said to have asked the founders how they planned to make money. The answer was something like, “We’ll figure something out.” That something seems to have been Google Ads.
Last year, thanks to Google ads, the market value of the American company Alphabet (of which Google is a part) increased by more than 1 trillion US dollarsjoining Apple and Microsoft. It places ads in Google search results, as well as in mobile apps, websites and videos, and is the primary tool through which advertisers can reach customers through Google services.
Every time someone uses Google Search or visits a website that displays ads through Google Ads, an automated ad auction takes place behind the scenes. Advertisers bid the maximum Price per click the amount they are willing to pay for their advertising.
Pay-per-click means that instead of paying for the ad space itself, the winning advertiser pays Google a set amount each time someone clicks on their ad.
Of course, not everyone who clicks on an ad will make a purchase. Only one in ten clicks may result in a sale, depending on how warm or frosty the market is.
So if the cost per click is 50 cents and the click-to-sale conversion rate is one in ten, the advertiser must sell their product for no less than $5 if they want to break even on the ad purchase. But how does that price compare to the competition? They need to do their math carefully.
For your ad to appear in the best spot, your click-through rate must be high enough, your ad must be high quality, and it must contain keywords that are directly related to the search query.
Read more: ACCC ‘world first’: Federal Court of Australia finds Google misled users about personal location data
According to GoogleAds can be targeted based on a number of factors, including audience “demographics” (specific locations, ages, genders, and device types) and by selecting “similar audiences”:
Expand your audience by targeting users with interests that are similar to those on your remarketing lists. These users aren’t directly looking for your products or services, but their related interests could lead them to interact with your ads.
However, the details of this process are not known because Google carefully guards its methods.
What does the future look like?
As artificial intelligence (AI) becomes more crucial in people’s lives, the task of buying things will likely be delegated to AI assistants. This is the vision Peter Diamandisone of the leaders of Silicon Valley, best known as the founder of a non-profit technology organization X Prize Foundation.
How does it work? Well, over time, your personal AI will learn everything about your daily habits, the products you employ, how often you employ them, what brands you like, where you go, who you meet — everything.
It will then make product suggestions based on those patterns. This is an expanded version of what Google already does with its Google Assistant feature.
antonbe/ Pixabay
Amazon does the same thing by sending users messages like “we noticed you were reading this. Other readers who read this also read…”
The next step would be for the AI to go further and buy the supplies it knows you need, when you need them, and deliver them to you—without you even asking for them. That means you won’t run out of things you didn’t know you needed.
On the other hand, this potential future raises stern concerns about our privacy, agency, and consumption behaviors.
Read more: Google is running a massive, secret human experiment. You could be one of the guinea pigs
